A new report documents G20 member states giving $63.9 billion in subsidies per year to King Coal, while professing the urgency of the climate crisis. The study says this may “underestimate the actual amounts of support provided,” due to lack of transparency in finance figures
Story Transcript
DIMITRI LASCARIS This is Dimitri Lascaris reporting for The Real News Network from Montreal, Canada. Heads of state at the recently completed G20 summit, with the exception of United States President Donald Trump, waxed poetic about the urgency of the climate crisis. France’s Prime Minister Emmanuel Macron, for one, said he would not sign any G20 agreement lacking the Paris Climate Agreement in it. Even the Crown Prince of oil-soaked Saudi Arabia, Mohammed bin Salman, paid homage about the need to act on the climate. But perhaps the most outspoken was Theresa May, Prime Minister of Great Britain, speaking at her last summit as Prime Minister. Let’s listen to what she had to say.
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PRIME MINISTER THERESA MAY In recent months, we have heard hundreds of thousands of young people urge us, their leaders, to act on climate change before it’s too late. I am proud that the UK has now enshrined in law our world-leading net-zero commitment to reduce emissions. And I have called on other countries to raise their ambition and embrace this target.
DIMITRI LASCARIS As it turns out, however, none of the leaders at the G20 have clean hands when it comes to the climate crisis. That’s the conclusion of a report that came out right before the summit began published by organizations such as the Overseas Development Institute, Oil Change International, and Natural Resources Defense Council. Titled “G20 Coal Subsidies: Tracking Government Support to a Fading Industry,” the report documents that G20 member countries have given about $63.9 billion in subsidies per year to the coal industry— and that’s the money that can actually be traced. Here to talk about that report is one of its co-authors, Leo Roberts, who works as a Senior Research Officer for the Overseas Development Institute and is based in London in the UK. Leo, thanks for joining us on The Real News today.
LEO ROBERTS Thank you. Pleasure.
DIMITRI LASCARIS Leo, while President Donald Trump continued to deny the science of climate change and opposed solutions to the problem at the G20 summit, other leaders did not and spoke to the urgency of the crisis. What do you make of these dynamics and how do they align with what you found in doing the research for your report?
LEO ROBERTS So the interesting thing is that perhaps Trump is the worst in that he’s not admitting climate change is even really a problem or how to solve it, but all of the leaders in the G20 have a problem here. They are all, well, many of them are talking about the importance of the climate crisis, while propping up the coal industry. Our report has found that, as you mentioned, there’s approximately 63-64 billion US dollars per year going into the coal industry from governments across the G20. This has increased massively over the last few years. As well, in the last three years, we’ve seen an increase in coal power and public support for coal power. It was $17 billion three years ago. We’re now looking at almost triple that— 47 billion US dollars per year still flowing into coal. And we shouldn’t forget coal is by far the most polluting of the fossil fuels. This industry should be dying. It should be on its way out if we’re to keep the world under a two-degree or ideally a 1.5-degree warming scenario, as recommended by the IPCC.
DIMITRI LASCARIS And in terms of coal subsidies and the G20, which states are the principal culprits according to your report?
LEO ROBERTS So it varies depending on the type of support they provide, but objectively, there are three big bad guys. So China, Japan, and India are providing huge sums between them. China is investing both at home and abroad. Japan is primarily supporting coal projects overseas, so if you want a coal project financed and you can’t find the money anywhere else, your first pot of gold is the Japanese public banks. They’re most likely to sort you out. The US is providing extensive support to coal mining, and various other governments are also providing subsidies.
DIMITRI LASCARIS You and your co-authors said right up front that the subsidy numbers you crunched are conservative and likely constitute an undercount. How exactly did you do your research into this subject, and how hard is it to figure out just how much money G20 member states are giving to the coal industry?
LEO ROBERTS We used the World Trade Organization definition of a subsidy. This is a watertight definition of a subsidy accepted by all of these countries. The way we look at it is to assess the countries on how much they’re giving through public financing. How much are taxpayer-owned banks providing for coal? How much are they giving in fiscal support— so tax breaks and other forms of tax benefits to coal companies? And also, what are state-owned companies providing? So how much money is going through companies owned by the state into coal? The problem with this is that, as you allude to, a lot of these governments would say that what they’re doing isn’t a subsidy, and they are very cagey about how much information they provide, so we’ve had to do a huge amount of digging. The data is very robust and it comes from reliable sources, but there’s just a lot that governments don’t report on. So this $64 billion figure is a very bare minimum, and in reality, the figure could be a lot higher.
DIMITRI LASCARIS Now, as you mentioned, this is a particularly carbon-intensive industry— coal. You know, confronted by a climate crisis and given the statements of global leaders about the need to act urgently, one would think that this would be an industry whose decline is being promoted, whose rapid decline and ultimate phase-out is being sought by these governments, but these country-level subsidies of coal are on the rise. How do you account for the fact that this is an industry that, you know, in many ways is in decline, ought to be in decline, and yet these subsidies seem to be increasing sharply?
LEO ROBERTS Yeah. It’s a very good question. So we looked mainly at the scale of this report rather than the reasons behind it, but we suspect that one of the reasons this is happening is that private investors are fleeing. Private capital has recognized the writing is on the wall for coal. They know they won’t get their money back. They know that in 20 years’ time, water or climate policy or fuel costs or competition for renewables will mean that their operations just won’t be financially viable. They’re really, really backing out and what we suspect is that governments are stepping in. As I mentioned, if you want to finance your coal power station in Vietnam, it’s hard to find a private bank that will do that. But if you go to one of the Japanese or Chinese public banks, they will probably step in or they might step in, so this is what we suspect is happening.
DIMITRI LASCARIS And lastly, please talk to us about why this is an industry whose days are numbered? Why is this such a—To what extent is this a more environmentally damaging industry than other forms of fossil fuel extraction and consumption?
LEO ROBERTS I mean, coal is just by far the highest emitting. It produces the most carbon dioxide and has by far the highest impacts on climate change. It’s a massive driver of climate change. Much bigger than oil or gas, which are still hugely problematic in themselves. But the other thing that is often neglected is that coal is also hugely polluting, and it kills people all over the world. The pollution is terrible. The costs on healthcare systems are terrible. This is a climate problem. Yes, it’s causing climate change and is worsening it and it needs to be an industry that’s gone, but it’s not just because of the climate. It’s also because of the local environmental impacts, and there’s no reason for it to survive anymore. In many countries in the world, you’ve got renewables that are half the cost of coal. It’s not the cheapest. It’s not the cleanest. It’s not the most effective. It shouldn’t be propped up by the G20 governments.
DIMITRI LASCARIS Well, we’ve been speaking to Leo Roberts of the Overseas Development Institute about a major new report showing increases, rather large increases, in global fossil fuel subsidies amongst the G20. Thanks very much for joining us today, Leo.
LEO ROBERTS Thank you.
DIMITRI LASCARIS This is Dimitri Lascaris reporting for The Real News Network.
