Search Climate Insights Directory

G7 countries are on track to miss their 2025 deadline to phase out inefficient fossil fuel subsidies, with total subsidies reaching a record USD 282 billion in 2023. The surge was primarily driven by consumer subsidies for natural gas and petroleum to mitigate energy price volatility following Russia's invasion of Ukraine. While some members have implemented domestic reforms or joined coalitions like COFFIS and CETP, the author argues that the G7 must now drop the 'inefficient' qualifier, establish national action plans, and prohibit all subsidies to coal and fossil fuel production to align with 1.5°C climate pathways.

The report provides a comprehensive framework for negotiating international agreements on fossil fuel subsidies (FFS), detailing six key building blocks: objectives, scope, disciplines, carve-outs/exceptions, special and differential treatment (SDT), and enforcement. It analyzes various legal approaches, including those based on the WTO's Agreement on Subsidies and Countervailing Measures (SCM) and the Agreement on Agriculture (AoA), and highlights the Agreement on Climate Change, Trade and Sustainability (ACCTS) as a primary precedent for specific FFS disciplines.

The 2022 WTO Agreement on Fisheries Subsidies (Fish 1) prohibits subsidies for illegal fishing, overfished stocks, and unregulated high seas fishing, though it requires 17 more ratifications to enter into force. Current negotiations (Fish 2) aim to address the root causes of overfishing and fleet overcapacity through a 'hybrid' approach. While most members have converged on a draft text that prohibits subsidies contributing to overfishing unless healthy management measures are proven, full consensus remains elusive due to the demands of two large developing country members for more substantial changes.

The Clean Air Task Force asserts that the EU is missing a strategic opportunity by excluding geothermal innovation from its Affordable Energy Action Plan. The author highlights that utilizing just 1% of Europe's high-temperature geothermal resources could produce 18,000 TWh of electricity. To avoid lagging behind competitors like China and Japan, the document urges the EU to publish a Geothermal Strategy by Q1 2026, include next-generation technologies in funding mechanisms like Horizon, and fully integrate geothermal into its broader energy security plans.

The document provides an overview of the WTO's efforts to regulate fisheries subsidies. It details the 2022 Agreement (Phase 1), which prohibits subsidies for illegal fishing, overexploited stocks, and unregulated high-seas fishing, and examines the ongoing negotiations for 'Phase 2' rules. These proposed additional rules aim to address the root causes of overcapacity and overfishing through a hybrid approach of general prohibitions and specific exemptions for developing nations and sustainable management practices. Despite significant convergence among members as of March 2025, a total consensus remains elusive due to the demands of two major developing countries for more substantial changes.

The report argues that superhot rock (SHR) geothermal energy, defined as leveraging rocks at 374°C or above, has the potential to provide scalable, renewable baseload power at costs competitive with fossil fuels. While much of the necessary technology exists due to progress in unconventional oil and gas and next-generation geothermal, significant gaps remain in materials science, drilling efficiency, and reservoir stimulation. The most critical need identified is the establishment of laboratory and field facilities to test equipment under actual SHR conditions. Key technical hurdles include improving rates of penetration in hard basement rock, developing casing and cement that can withstand extreme thermal swings and corrosion, and creating reliable fracture networks in the brittle-ductile transition zone (BDTZ). Power production is the most mature segment, with most components at TRL 8-9, though integrated system prototypes and cost-effective turbine designs are still needed.

The report argues that the EU ETS continues to reward heavy polluters through free allowances, which in 2023 alone amounted to approximately 40 billion euros. It highlights that sectors like steel, cement, and chemicals often receive more allowances than they emit, reducing the incentive for decarbonisation. The authors critique the Innovation Fund for over-financing carbon capture technologies (CCS/CCU) rather than scalable zero-emission technologies. To accelerate the transition, the report recommends phasing out free allowances by 2030, fully implementing the Carbon Border Adjustment Mechanism (CBAM), and reforming the Innovation Fund to prioritise material savings and renewable energy solutions.

The document argues that while the energy transition is accelerating, current efforts are insufficient to limit warming to 1.5°C, and the shift in energy demand will fundamentally reshape global trade and geopolitics. It highlights a significant investment gap, noting that emerging markets and developing economies outside China account for only about 15% of global clean energy spending. The report identifies several trade-related barriers, including protectionist tariffs on electric vehicles, divergent technical standards, and the persistence of fossil fuel subsidies, which reached $7 trillion globally in 2023. It specifically warns that Border Carbon Adjustment Mechanisms (BCAs) and Investor-State Dispute Settlement (ISDS) provisions in investment treaties may disproportionately burden developing nations. To achieve an equitable transition, the authors recommend reforming WTO subsidy rules, increasing financial support for local value addition in critical minerals, and coordinating the phase-out of fossil fuel production.

The document highlights the 2025 International Year of Glaciers' Preservation, detailing how human-caused climate change is accelerating glacial melt. It emphasizes the role of glaciers as 'water towers' providing freshwater for billions and warns of increasing risks from glacial lake outburst floods (GLOFs), particularly in Asia and the Americas. The text notes that glaciers in 50 UNESCO World Heritage sites are losing an average of 58 billion tonnes of ice annually, with a third projected to vanish within 25 years.

The Clean Air Task Force (CATF) argues that the EU's Clean Industrial Deal must adopt a technology-neutral approach, integrating a diverse portfolio of low-carbon solutions including carbon capture, hydrogen, and small modular reactors. The brief emphasizes the need for coordinated cross-border infrastructure, particularly for CO2 transport and storage to avoid regional cost disparities, and calls for a robust funding strategy to bridge a projected €180 billion gap following the end of the Recovery and Resilience Facility in 2026. It further recommends targeted market measures, such as reforming public procurement and prioritizing clean hydrogen for hard-to-abate sectors like steel and shipping, while warning against the use of public funds for inefficient solutions like hydrogen blending.

In 2024, the Clean Air Task Force (CATF) focused on defending U.S. EPA pollution standards in court, advancing superhot rock geothermal and nuclear energy, and reducing global methane emissions. The organization also worked on simplifying renewable energy siting in the U.S., analyzing the efficiency of hydrogen and carbon capture, and addressing high capital costs for clean energy in Africa. In Europe, CATF influenced the EU's 2040 climate targets and the Net Zero Industry Act, while continuing state-level implementation of federal funding in the U.S.

Carbon Market Watch condemns FIFA's hosting decisions for the 2030 and 2034 World Cups, asserting that the events will cause severe environmental damage. The organization highlights the failure of the 2022 Qatar World Cup's carbon neutrality claims and warns that the 2030 tournament's multi-continental structure and Saudi Arabia's 2034 bid—which includes building 11 new stadiums—will lead to massive emissions from construction and air travel. The statement also links these decisions to the influence of polluting corporate sponsors like Aramco and raises concerns over migrant worker deaths in host nations.

Advanced geothermal energy, including enhanced, closed-loop, and deep geothermal technologies, offers a potential source of emissions-free, dispatchable power and heat. While it faces high upfront costs and a lack of commercial scale, recent innovations and investments—such as the Canadian government's $90 million investment in Eavor Technologies—are moving the sector toward market readiness. The Canadian Climate Institute classifies it as a 'wild card' due to uncertainties regarding performance, reliability, and replicability at scale.

The document examines advanced geothermal energy, categorizing it as a 'risky bet' due to high capital costs and unproven large-scale reliability, despite its potential to provide carbon-neutral, dispatchable power and heat globally. It highlights three primary technologies: advanced geothermal (using hydraulic fracturing), closed-loop systems, and deep geothermal. While companies like Calgary-based Eavor Technologies and Fervo Energy are launching commercial projects in Germany and the US, the technology must significantly reduce costs—potentially by 90% by 2035 according to US Department of Energy goals—to compete with gas and nuclear power.

The report evaluates the integration of permanent carbon removals—specifically BioCCS and DACCS—into the EU ETS. It identifies a critical tension: while direct integration can drive deployment and maintain market liquidity as the emissions cap approaches zero, it risks 'abatement deterrence' where removals substitute for necessary emissions reductions. The authors warn that without supply controls, BioCCS deployment could exceed sustainable biomass limits, potentially harming biodiversity and LULUCF carbon sinks. To mitigate these risks, the report recommends a gradual integration strategy that maintains the gross emissions cap, implements technology-specific supply controls, and introduces differentiated allowances. It also emphasizes that the EU ETS alone is likely insufficient to incentivize high-cost technologies like DACCS or to achieve net-negative emissions post-2050, necessitating additional public funding tools and long-term policy frameworks.

The report finds a positive trend in European pension funds' commitment to sustainable investing, with significant growth in the adoption of mitigation targets and climate risk management. However, a persistent gap remains between these commitments and actual real-economy impact, as pension funds rarely invest directly in projects and often hold fragmented indirect ownership. The analysis highlights that larger funds, those in net-zero coalitions, and funds in countries with strong regulatory frameworks—such as the Nordic countries, the Netherlands, and France—are leading the transition. Key challenges include the gap between asset ownership and management, the difficulty of transitioning passive investments, and limited capital flow to emerging markets and developing economies (EMDEs).

The document argues that while WTO rules provide significant policy space for LDCs to invest in agriculture through the 'Green Box' and 'Development Box', the primary barrier to increasing agricultural productivity is a lack of fiscal space rather than regulatory constraints. It suggests that new WTO rules should focus on reducing trade-distorting 'Amber Box' subsidies in developed and large developing countries to make LDC agriculture more competitive and attractive to private investors. Additionally, it recommends improving LDC market access by simplifying sanitary and phytosanitary (SPS) and technical barriers to trade (TBT) measures and expanding duty-free market access for key agricultural exports.

The document argues that while WTO rules provide significant policy space for LDCs to invest in agriculture through 'Green Box' and 'Development' categories, these countries are primarily constrained by fiscal limitations rather than trade rules. It suggests that food security in LDCs can be improved by reducing trade-distorting 'Amber Box' subsidies in developed nations for key products like cotton and rice, and by easing non-tariff barriers and import duties to stimulate LDC exports.

The document outlines critical technological needs for superhot geothermal systems (SHR), specifically those operating at or above 375°C. It identifies well construction and design as the most frequent point of failure and highlights permeability creation as the least mature technology vertical. The response recommends R&D in deep drilling (rotary, hybrid, and direct-energy), high-temperature materials like nickel alloys and ceramics, and the development of end-to-end surface power plant systems to bridge the gap between individual component readiness and commercial viability. It also suggests leveraging the existing U.S. oil and gas workforce and exploring ancillary revenue streams such as direct heat delivery for industrial processes.

In a speech delivered on 4 July 2024, WTO Deputy Director-General Jean-Marie Paugam outlines the evolving relationship between the WTO and environmental protection. He notes a paradigm shift where climate change is now actively disrupting trade, citing examples like the Panama Canal drought. While the WTO has made progress through the 2022 Ministerial Declaration and the Fisheries Subsidies Agreement, Paugam warns that uncoordinated national actions—such as the nearly 70 carbon tax schemes in development and varying green steel standards—risk fragmenting world trade. He advocates for a "reglobalization" approach that combines green industrialization with trade cooperation, suggesting the WTO may need to adopt new rule-making models, including plurilateral commitments or non-binding frameworks similar to the Paris Agreement, to remain relevant.