New Delhi: Global investors and insurers with more than $742 billion in assets under management on Wednesday urged the G20 to end fossil fuel subsidies by 2020, warning about the severe risks this continued government support brings to the financial sector.
The group of nine investors, including Aviva and Sarasin & Partners, have signed a joint statement calling for G20 governments, meeting in Argentina this week, to set a concrete timeline to end all forms of government support to fossil fuels by no later than 2020.
Prime Minister Narendra Modi will be taking part in the 13th G20 meeting in Buenos Aires during which he will have several bilateral meetings, including with Chinese President Xi Jinping.
In a statement to IANS, investors warn that continued government support for fossil fuel increases the risk of creating stranded assets within the energy sector and can also decrease the competitiveness of key industries, including low-carbon businesses.
New research published on Wednesday by International Institute for Sustainable Development, the Overseas Development Institute, Oil Change International and Fundacion Ambiente y Recursos Naturales shows some G20 governments have made progress in shifting support away from fossil fuels and increasing taxation of fossil fuels.
However, the report "Stories from G20 Countries: Shifting public money out of fossil fuels" warns this shift must accelerate significantly if the G20 is to meet the Paris Agreement targets and the Sustainable Development Goals by 2030.
The report includes examples from around the world of where progress has been made and where countries could do more like Indonesia saved $15.6 billion by cutting back on inefficient subsidies for petrol and diesel in 2015.
India collected $12 billion in revenue between 2010 and 2018 through taxing coal production.
And since 2011, Canada has either completely phased out or reformed seven policies that subsidised the production of oil, gas and coal.
Steve Waygood, chief responsible investment officer at Aviva Investors, said: "Governments beginning to take stock of their commitment to Paris are falling at the first hurdle if they refuse to factor in fossil fuel subsidies for producers, including tax concessions and placing the burden of decommissioning the sector's infrastructure on taxpayers."
"As corporates are being asked to disclose the potential impact of climate risk on their balance sheets, we as investors are also asking governments to disclose the impact that fossil fuel subsidies have at country balance sheet level, providing us with useful information so that we can support economies as they make this important change."
Investors and insurers Aviva, CCLA Investment Management, Earth Capital, Environment Agency Pension Fund, Glenmont Partners, Joseph Rowntree Charitable Trust, Sarasin & Partners, USS and WHEB Asset Management have $741,535.68 billion in assets under management.
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Updated Date: Nov 28, 2018 16:02:27 IST