by Brianna Crandall — November 19, 2010—The White House announced on November 12 that the G-20 leaders have reaffirmed their commitment to phase out fossil fuel subsidies in the medium term. According to the White House, phasing out fossil fuel subsidies is important because it encourages energy conservation, improves energy security, helps meet budget goals, and reduces greenhouse gas emissions.
Mexico has already started to phase out motor fuel subsidies, while India has removed controls on gasoline prices and has raised the prices for diesel fuel, kerosene and liquid petroleum gases. In addition, both Russia and China have initiated programs to raise the price of natural gas paid by their consumers.
In the United States, President Obama is committed to working with Congress to phase out more than $3 billion per year in preferential tax incentives for the coal, oil and gas industries, consistent with his budget proposals for fiscal years 2010 and 2011. The White House estimates that a gradual multilateral removal of existing fossil fuel subsidies by 2020 could result in a 10 percent reduction of global greenhouse gas emissions by 2050, relative to business as usual.
The G-20 is the Group of Twenty Finance Ministers and Central Bank Governors, which was established in 1999 to bring together important industrialized and developing economies to discuss key issues in the global economy. Member countries include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, the Republic of Korea, Turkey, the United Kingdom, and the United States.
