Stockholm (NordSIP) – This week NordSIP spent some time perusing a new Stanford University study that highlights the huge barriers to entry faced by producers of plant-based or lab-grown meat substitutes in the EU and US. The lobbying power of the incumbent livestock industry is such that they continue to benefit from vast state subsidies and seem free to continue business-as-usual in a sector that accounts for 14.5% of global greenhouse gas (GHG) emissions. This is part of a clear pattern of behaviour by incumbent high-carbon industries that is drastically slowing down progress towards the global transition to sustainable alternatives. The conclusions of the Stanford study are reflected in an International Institute for Sustainable Development (IISD) examination of fossil fuel subsidies that was published on 21 August 2023.
The IISD’s report Fanning the Flames: G20 provides record financial support for fossil fuels highlights the enormous discrepancy between the USD 1 trillion in fossil fuel subsidies granted by G20 nations in 2022 alone and the relatively paltry sum of USD 265 million granted to renewable power generation over the last three years. While part of the funding was aimed at mitigating the short-term effects of the global energy price crisis on consumers, at least a third of the money went directly to supporting new fossil fuel production. This flies in the face of the International Energy Agency’s urgent call for no new oil and gas projects if we are to stand a chance of maintaining 1.5-degree pathways.
Wading through treacle
Those of us working in the field of sustainable investment are having an increasingly frustrating time lately. On the one hand, the so-called ESG backlash rumbles on, with a low-level debate often based on outdated or highly simplistic opinions of what the devil “ESG” represents. On the other, what should be an urgent global effort to implement science-based, existing, cost-effective solutions to the climate crisis seems persistently bogged down in a mishmash of feebly-worded COP statements and gigantic greenwashing exercises by high-emitters. Last week Al Gore shouted at us all again and good for him. By now it should be clear to most sustainability professionals that the planet will not be saved by individual actions like foregoing an Easy Jet flight or cleaning out your yoghurt pots for recycling. The world needs systemic change on a massive scale, and it is not happening.
The IISD report should be a timely alarm call for governments – and the voters who choose them – to start addressing the glaring contradiction between their Paris Agreement commitments and their day-to-day practices and policies. The report provides a useful breakdown of state support for fossil fuels, which can be in the form of investments by state-owned enterprises, lending from public financial institutions, under-taxation as well as the more obvious direct subsidies. The IISD believes all developed G20 nations should adopt the G7’s 2025 deadline for eliminating fossil fuel subsidies, with 2030 more appropriate for developing countries. It also stipulates that some of the existing funding should be carefully directed towards a softer landing for low-income consumers, workers, and communities in the spirit of a just transition. Perhaps governments’ inaction stems from a fear of being the first to jump, and of potentially being outcompeted by those that do not. However the simple and urgent message to the wealthy G20 is conveyed in the IISD report’s tile: stop pouring more oil onto the fire!
