Canada-Argentina Fossil Subsidy Review Brings ‘Critical Issue to the Forefront’
Canada and Argentina are earning praise for promising yesterday to conduct peer reviews of their plans to phase out “inefficient” fossil fuel subsidies.
“As respective 2018 presidents of the G7 and G20, Canada and Argentina have today pulled a critical issue to the forefront of the global agenda,” said Climate Action Network-Canada (CAN-Rac) Executive Director Catherine Abreu. “We can’t invest properly in solutions to the climate crisis as long as we keep dumping money into the problem. Phasing out subsidies to fossil fuels is essential, and peer reviews such as the one announced today are a step in the right direction.”
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“This is a key moment for Argentina and Canada to move forward on the clean energy transition,” said Enrique Maurtua Konstantinidis, senior climate policy advisor at Argentina’s Fundación Ambiente y Recursos Naturales (FARN). “For many years, both countries have been subsidizing fossil fuels very heavily, and stronger measures need to be undertaken in order to ensure the transition away from fossil fuels towards renewable energy while ensuring economic stability for people.”
CAN-Rac explains binational peer reviews as “a tool to promote increasing transparency and accountability in the current commitment of many economies to reform subsidies acting against sustainable development. The process aims to share experiences between countries to identify best practices and challenges and look into subsidy reform,” consistent with G7 and G20 promises to phase out subsidies that are considered economically inefficient. Past peer reviews have been undertaken by United States and China in 2016, and by Germany and Mexico in 2017, and CAN-Rac says a process for Italy and Indonesia is in the works.
Canada’s peer review will be conducted by Finance Minister Bill Morneau and Environment and Climate Minister Catherine McKenna.
The G20 committed to a fossil subsidy phaseout in 2009, and in 2016 Canada agreed to achieve that goal by 2025, Natural Resources Canada notes in a release. “Phasing out inefficient fossil fuel subsidies is an important step in the transition to a low-carbon economy,” the department states. “By conducting a peer review of its inefficient fossil fuel subsidies, Canada is further reaffirming its commitment to climate action and to sustainable economic growth at home and abroad.”
Natural Resources Minister Jim Carr said the peer review partnership with Argentina “demonstrates our commitment to ambitious climate and energy policies. Transforming how we make and use energy presents huge economic opportunities for Canada and will result in good, middle class jobs for Canadians and a cleaner planet for future generations.”
“These subsidies distort energy markets, place a strain on public budgets, reduce our energy security, impede investment in clean energy sources, and undermine efforts to deal with the threat of climate change,” said Juan José Aranguren, Argentina’s Minister of Energy and Mining.
“The peer review with Canada contributes to make subsidies more efficient and direct them to those who really need it,” he added. “Likewise, we aim to diversify our energy matrix by adding more renewable energies, a source of employment and development for all the country and our global contribution to reduce greenhouse emissions.”