G7 Finance Ministers Urged to Take Action on Fossil Fuel Subsidies

Finance ministers from the G7 countries are meeting this week in Italy, and the spotlight is on their commitment to phasing out inefficient fossil fuel subsidies. Despite numerous pledges over the years, global direct fossil fuel subsidies reached a staggering $1.5 trillion in 2022, nearly doubling from the previous year.

With the urgent need to halve emissions by 2030 and reach net zero by 2050 to limit global temperature rise to 1.5C, increasing fossil fuel subsidies is clearly incompatible with these goals. The G7 has previously reaffirmed its commitment to phasing out inefficient fossil fuel subsidies by 2025, but as we approach the midway point of 2024, the time for action is now.

Finance ministers have the opportunity to lead the way in aligning financial commitments with the transition away from fossil fuels, as agreed at COP28. This includes setting targets and timelines for phasing out unabated fossil fuels and supporting countries in the Global South to develop net-zero pathways.

The transition to clean energy will also require upskilling and reskilling to ensure affected communities are not left behind. Ambitious plans need proper planning and financing, and the G7 finance ministers meeting this month have a crucial role to play in steering the world towards a more sustainable future.