Why fossil fuel producer subsidies matter

Around the globe, governments have pledged to remove support for coal, oil and gas, noting that such fossil fuel subsidies “undermine efforts to deal with climate change” by keeping greenhouse gas emissions higher than they otherwise would be. Jewell et al. used results of integrated assessment models to infer that eliminating subsidies would yield “limited emission reductions…except in energy-exporting regions”, and described the emission reduction benefits as “small”. This characterization is potentially misleading, and here we use a simple, sector-specific model to show how the emission reductions from producer subsidy reform could be more material than Jewell et al. suggest. Fossil fuel producer subsidies delay a low-carbon transition in ways both material and political, and they deserve greater attention and transparency in global modelling analyses, as well as in policy-making.