Following the Money: Fossil fuel subsidy reform en route from Durban to Rio+20

This report summarizes a high-level discussion titled "The Missing Piece? Climate Change Mitigation and the Benefits of Fossil Fuel Subsidy Reform," held as an official side event of the UNFCCC COP 17 on December 7, 2011, in Durban, South Africa. The event focused on the scale of fossil fuel subsidies compared to climate finance and the necessity of reforming these subsidies to enable green growth and reduce greenhouse gas emissions.

• Annual government support for fossil fuels is estimated at US$400–600 billion, which is four to six times larger than the US$100 billion Green Climate Fund.
• Phasing out fossil fuel consumer subsidies in emerging and developing economies could result in a 6 per cent reduction in greenhouse gas emissions by 2050 compared to the baseline, while providing economic efficiency gains.
• Despite commitments from the G-20 and APEC in 2009 to phase out inefficient fossil fuel subsidies, progress has been slow, and some governments increased research, development, and deployment (RD&D) spending to maintain the fossil fuel status quo by 323 per cent in 2009 (rising from a 2000–2008 average of US$1.4 billion to US$5.8 billion).
• The 'Friends of Fossil Fuel Subsidy Reform' is an informal group launched in June 2010 consisting of eight countries: Costa Rica, Denmark, Ethiopia, Finland, New Zealand, Norway, Sweden, and Switzerland.
• Fossil fuel subsidies can hinder green growth by making renewable energy investments unattractive and creating a double or triple cost for some developing countries through the cost of purchase, the cost of subsidies, and the loss of green alternatives.
• Successful subsidy reform requires a gradual approach and targeted support for vulnerable stakeholders to avoid social and competitiveness issues. In Ethiopia, subsidies were adjusted downward on a monthly basis over one year to achieve success.
• There is a consensus that improved transparency and quantification of subsidies are necessary for reform, though participants disagreed on whether reporting should be voluntary or obligatory.
• IISD’s Global Subsidies Initiative submitted a proposal for the Rio+20 conference requesting that participating countries pledge to phase out fossil fuel subsidies that undermine sustainable development and assist other countries in doing the same.

APA

Gerasimchuk, I., & Zamudio, N. (2012). Following the Money: Fossil fuel subsidy reform en route from Durban to Rio+20. International Institute for Sustainable Development. https://www.iisd.org/gsi/sites/default/files/ffs_sideevent_following.pdf

Chicago

Gerasimchuk, Ivetta, and Natalia Zamudio. Following the Money: Fossil fuel subsidy reform en route from Durban to Rio+20. International Institute for Sustainable Development, 2012. https://www.iisd.org/gsi/sites/default/files/ffs_sideevent_following.pdf.

Wikipedia

{{cite report |last1=Gerasimchuk |first1=Ivetta |last2=Zamudio |first2=Natalia |title=Following the Money: Fossil fuel subsidy reform en route from Durban to Rio+20 |publisher=International Institute for Sustainable Development |date=February 2012 |url=https://www.iisd.org/gsi/sites/default/files/ffs_sideevent_following.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{gerasimchuk2012following, author = {Gerasimchuk, Ivetta and Zamudio, Natalia}, title = {{Following the Money: Fossil fuel subsidy reform en route from Durban to Rio+20}}, institution = {International Institute for Sustainable Development}, year = {2012}, month = feb, url = {https://www.iisd.org/gsi/sites/default/files/ffs_sideevent_following.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }