IISD calls for countries to phase out all fossil fuel subsidies

Reforming eliminating fossil fuel subsidies would save governments billions of dollars while significantly reducing greenhouse gas emissions and freeing up monies for incentives on cleaner forms of energy, according to the International Institute for Sustainable Development (IISD), a Canada-based research institute.

Though long overdue, the IISD says this potentially transformative issue will reach the international level in June of 2012 at Rio+20 – the United Nations Conference on Sustainable Development.

The challenge, according to the IISD, lies in the implementation of an international framework that phases out all fossil fuel subsidies. At Rio+20, the IISD will push for countries to pledge to support the elimination of fossil fuel subsidies that, "undermine sustainable development." The IISD claims subsidies are costly, lead to increased global and local pollution and are socially regressive.

Though the IISD will use Rio+20 to pitch its pledge to end fossil fuel subsidies, the research institute suggests that subsidizing even biofuels and renewables may not be in Mother Nature's best interest:

Subsidies to renewables-based electricity often come in the form of mandates or portfolio standards, green certificate trading systems, feed-in tariffs and premiums, or investment and production tax credits. ... Like all subsidies, these policies can lead to perverse outcomes (e.g., favouring some renewable energy technologies at the cost of driving away investment from others that are equally as promising) or can be captured by powerful industry groups. Reform should focus on ensuring that the subsidies are achieving their policy objectives cost-effectively.

Sounds like IISD will have its work cut out for itself at Rio+20.