The ongoing energy price hike should be an indication that governments should accelerate investment in sustainable energy infrastructure, rather than encourage fossil fuel subsidies, according to the Organisation for Economic Co-operation and Development (OECD) and the International Energy Agency (IEA).
The organisations stated that countries should also meet UN Sustainable Development Goals, particularly SDG 7, which focuses on providing everyone with affordable, reliable, sustainable and modern energy. This follows the pledge made by G20 countries in 2009 to reduce and eventually remove fossil fuel subsidies.
Despite the pledge, the OECD and IEA reported that fossil fuel subsidies are still being encouraged and not enough emphasis is being placed on developing low-carbon alternatives.
Although government support for fossil fuels decreased in 2020 – $351bn, down 29% from 2019 – according to OECD and IEA data, this was mostly the ‘mechanical result’ of falling fuel prices and demand during the Covid-19 pandemic.
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