Friends of Fossil-Fuel Subsidy Reform Highlight Role of Transparency During Event in Warsaw

19nov-enbots-event719 November 2013: An interactive session on 'Reaping Emissions Reductions from Fossil-Fuel Subsidy Reform: Learning from Success Stories' was organized by Friends of Fossil-Fuel Subsidy Reform and the International Institute for Sustainable Development (IISD), on the sidelines of the Warsaw Climate Change Conference.

The session was moderated by Simon Upton, Organisation of Economic Co-operation and Development (OECD), who called for synchronized subsidy removal. Tim Groser, New Zealand's Minister of Trade and Minister for Climate Change Issues, explained that overcoming subsidies is a process requiring transparency to raise political awareness. He said the slow embedding of the concept into political awareness will lead to integration into formal frameworks and government cooperation.

Rachmat Witoelar, the Indonesian President's Special Envoy for Climate Change, discussed challenges in transitioning from an oil exporting to importing country. He shared some of the complications related to withdrawing subsidies in Indonesia, underscoring the importance of governance and communication in rolling out new policies.

Laura Cozzi, International Energy Agency (IEA), outlined the IEA's contribution to transparency, highlighting the growing trend of countries to subsidize oil. She reported projections that Gulf countries will be the third largest oil consumers by 2035, while commenting that China is doing “an exceptional job” at deploying energy efficiency on the industrial level. She highlighted market distortion, including that 8% of emissions are currently being taxed, while 16% of emissions are incentivized through subsidies.

Anna Czajkowska, Bloomberg New Energy Finance, reflected that although renewable energy companies have typically lobbied for their own subsidies in order to create a level playing field, it might be wise for these companies to consider lobbying for a removal of all subsidies.

In the ensuing discussion, panelists engaged with the audience to consider: whether consumption or production subsidies are more urgent; how to build capacity to overcome social challenges, such as direct cash transfer to mitigate the impact of reducing direct subsidies; and ways to relate to current climate negotiations and utilize emerging data to influence the political environment. [IISD RS ENBOTS coverage of 'Reaping Emissions Reductions from Fossil-Fuel Subsidy Reform: Learning from Success Stories']