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We are pleased to report from Copenhagen that after years of searching, long term funding for climate finance has been found…but the question is whether we can pry it out of Big Oil and Coal’s hands. The pledge by G20 nations championed by the U.S. is potentially a huge new source of funds for developed country finance obligations that can and should be shifted to helping, rather than harming the climate. Leaders have already agreed that we must phase these subsidies out – the questions are: by when and where does the money go?

How much money will be freed up by eliminating fossil fuel subsidies in the developed countries? While no definitive study exists, ECO notes that one Jonathan Pershing authored (.pdf) in 2004 that cited $57 billion annually in OECD (developed country) subsidies. The same paper notes that per-capita subsidies in the OECD are more than twice a high as those in the developing world. Other studies range as high as $150 billion in developed country fossil fuel subsidies. However that comes out, it’s a huge dent in the .

G20 leaders agreed in Pittsburgh to phase out subsidies over the “medium-term.” One way to move forward both financing and emissions reductions goals would be to set firm dates for developed country subsidy phase-out.

that fossil fuel subsidies were worth $300 billion and that their elimination would lead to a 10% reduction in greenhouse gases by 2050. Readers may be interested to know that the study referenced by the G20 excluded all developed country fossil fuel subsidies, and instead only quantified developing country subsidies. Therefore additional money and more emissions reductions can be expected from developed subsidy phase-out.

There is elegance to subsidy shift that is compelling for the public and politicians who will have to explain long-term finance to their electorates. Stop funding the problem, start funding the solution. Long-term finance will have to come from somewhere. Instead of giving , as the Obama Administration did just last week, shouldn’t part of the solution here in Copenhagen be to use the money that has previously been given to the fossil fuel industries?

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