BRISBANE: Timed to coincide with the G20 meeting, a report from the Overseas Development Institute (ODI) and Oil Change International claims the world's wealthiest countries continue to provide US$88 billion a year in subsidies for oil, gas and coal exploration.
The report identifies three types of support: Investment by state-owned enterprises of US$49 billion; national subsidies via direct spending and tax breaks of US$23 billion and public finance from banks and financial institutions an additional US$16 billion.
Global fossil fuel subsidies are estimated to be $775 billion a year.
The report says the combination of rising exploration costs and falling oil and coal prices has highlighted the waste of taxpayers' money in pursuit of fossil fuel.
The ODI argues that with the falling cost of alternative energy, every dollar invested in renewables attracts US$2.5 in investment, compared to US$1.3 from funding fossil fuels. It says that scrapping the subsidies "would begin to create a level playing field between renewables and fossil fuel energy".
The report claims the U.S. provided US$5.1 billion in subsidies for fossil fuel exploration last year - almost double the level in 2009; Australia subsidies totaled US$3.5 billion for off-shore and inland fossil fuel resources; Russia provided US$2.4 billion for annual exploration; and Britain has introduced subsidies valued up to US$1.2 billion a year.
Also highlighted is US$521 million in public finance for fossil fuel exploration provided by development banks – the majority from the World Bank despite its declaration of driving low carbon development.
Oil Change International's director Stephen Kretzmann commented: "Five years ago, G20 governments pledged to both phase out fossil fuel subsidies and take action to limit climate change. Immediately ending exploration subsidies is the clearest next step on both fronts."