Shifting Public Money out of Fossil Fuels

This research paper by the International Institute for Sustainable Development (IISD) examines the flow of public money in G20 countries that supports fossil fuel production and consumption. It argues that despite international commitments like the Paris Agreement and Sustainable Development Goals, G20 governments continue to provide substantial subsidies, credit support, and state-owned enterprise (SOE) investments to the fossil fuel sector. The document provides eight case studies of reforms in countries such as Indonesia, Canada, Argentina, and India, as well as the European Union, to illustrate how public resources can be shifted toward a low-carbon economy and sustainable development.

• G20 governments continue to provide massive financial support to fossil fuels despite commitments to phase out inefficient subsidies. In 2013-2014, G20 governments provided at least USD 444 billion per year for fossil fuel production through national subsidies, public finance, and SOE investment, while consumption subsidies in the G20 were estimated at USD 354 billion in 2014.
• Indonesia successfully reduced public spending by reforming untargeted gasoline and diesel subsidies in 2015, saving USD 15.6 billion. These funds were reallocated to health insurance, infrastructure, clean water access, and housing for low-income groups.
• Canada and Argentina have implemented reforms to remove certain incentives for upstream fossil fuel companies, resulting in annual savings of approximately USD 260 million for Canada and USD 780 million for Argentina in 2017. However, both nations still maintain various forms of government support for upstream developments.
• The European Union committed to phasing out environmentally harmful subsidies by 2020 and fast-tracked the removal of hard coal mining subsidies by the end of 2018. In Germany, Spain, and the Czech Republic, between 75% and 99% of hard coal sector support was used for decommissioning mining sites and ensuring a just transition for workers and communities.
• Public financial institutions, including multilateral development banks, provided an annual average of USD 72 billion for fossil fuels globally from 2013 to 2015. While there has been a decrease in finance for certain fuels, particularly coal, loans and guarantees still support fossil fuel infrastructure.
• State-owned enterprises (SOEs) in China, India, and Sweden have begun diversifying their activities into renewables. However, globally, SOEs are playing an increasing role in fossil fuel investment.
• India implemented a Clean Energy Cess on coal and lignite dispatch from FY 2010/11 until 2017, collecting USD 12 billion. These funds were partially used to support the viability gap for renewable energy technologies, though the cess was scrapped in 2017.
• The IMF estimated the global under-taxation of fossil fuel consumption at USD 5.3 trillion in 2015, highlighting a significant gap compared to current carbon pricing, which was estimated at USD 52 billion in 2017.

APA

Gerasimchuk, I., Whitley, S., Beaton, C., Bridle, R., Doukas, A., Di Paola, M. M., & Touchette, Y. (2018). Shifting Public Money out of Fossil Fuels. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/stories-g20-shifting-public-money-out-fossil-fuels-en.pdf

Chicago

Gerasimchuk, Ivetta, Shelagh Whitley, Christopher Beaton, Richard Bridle, Alex Doukas, Maria Marta Di Paola, and Yanick Touchette. Shifting Public Money out of Fossil Fuels. International Institute for Sustainable Development, 2018. https://www.iisd.org/system/files/publications/stories-g20-shifting-public-money-out-fossil-fuels-en.pdf.

Wikipedia

{{cite report |last1=Gerasimchuk |first1=Ivetta |last2=Whitley |first2=Shelagh |last3=Beaton |first3=Christopher |last4=Bridle |first4=Richard |last5=Doukas |first5=Alex |last6=Di Paola |first6=Maria Marta |last7=Touchette |first7=Yanick |title=Shifting Public Money out of Fossil Fuels |publisher=International Institute for Sustainable Development |date=November 2018 |url=https://www.iisd.org/system/files/publications/stories-g20-shifting-public-money-out-fossil-fuels-en.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{gerasimchuk2018shifting, author = {Gerasimchuk, Ivetta and Whitley, Shelagh and Beaton, Christopher and Bridle, Richard and Doukas, Alex and Di Paola, Maria Marta and Touchette, Yanick}, title = {{Shifting Public Money out of Fossil Fuels}}, institution = {International Institute for Sustainable Development}, year = {2018}, month = nov, url = {https://www.iisd.org/system/files/publications/stories-g20-shifting-public-money-out-fossil-fuels-en.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }