In a few days, COP21 will bring together Heads of State, business leaders and civil society groups with the hope that the negociations between 191 countries will give us a framework to decarbonize our economies. In order to catalyse change we are convinced that we need a carbon price to enable deep de-carbonization pathways through innovative low carbon solutions as well as the elimination of subsidies for fossil fuels such as coal, oil and natural gas. That is why we support this initiative through The Prince of Wales Corporate Leaders Group because like the other member companies we believe that carbon pricing combined with fossil fuel subsidy reform is a significant pathway to real decarbonisation

As we approach the Paris climate talks and a turning point where the transition to a low-carbon future becomes inevitable, it is becoming ever more clear that fossil fuel subsidies, which we know both hinder the development of low carbon solutions and disproportionately benefit the well-off in society, need to be put in the past. I am delighted that together with the other members of the Corporate Leaders Group on Climate Change, we have the opportunity to endorse the Friends of Fossil Fuel Subsidy Reform Communiqué and add our voice to this critical issue.

By supporting the FFSR Communique, our members, leading businesses from across the world, are being loud and clear, end perverse fossil fuel subsidies now for the benefit of sustainable and low carbon economic development.

Read the full Corporate Leaders Group’s press release here.

Momentum behind the Communiqué is building. Phasing out fossil fuel subsidies is now a hot topic as business and government leaders recognise it will deliver a significant decrease in emissions.

While impressive progress is being made in some parts of the world to phase out fossil fuel subsidies, they remain stubbornly persistent: based on our latest estimate they amounted to almost USD 500 billion last year. Fossil fuel subsidies encourage wasteful consumption of finite resources with very detrimental economic and environmental consequences. To make matters worse, the benefits mainly go to richer households as they consume more energy: only 8% of the money spent typically reaches the poorest 20% of the population. I am convinced that subsidy reform can and should be a key pillar of a comprehensive strategy that can lead to a near-term peak in energy-related GHG emissions. I therefore endorse the Fossil Fuel Subsidy Reform Communiqué to Paris COP 21 and I commend this initiative to others.

Fossil-fuel subsidy reform has both economic and climate benefits. Reform will free up financing for sustainable development. Norway will contribute 100 million Norwegian kroner (app. USD 12.5 million) to fossil-fuel subsidy reform, and we strongly encourage other countries to increase their efforts and support the call for reform.

Keeping prices artificially low in my view, is also something which encourages population but also the Industry to waste consumption, to not to take care about efficiency and that is not what we want at the end of the day

We are all going to have to get rid of things which are frankly inefficient from the perspective of protecting the poor from the perspective of growing and from the perspective of decarbonizing. And the answer to all of that is fossil fuel subsidy reform.

To be clear, this is not about just telling people to change their light bulbs or to buy a hybrid car. This disaster has grown BEYOND the choices that individuals make. This is now about our industries, and governments around the world taking decisive, large-scale action. (…) Now is our moment for action. We need to put a price tag on carbon emissions, and eliminate government subsidies for coal, gas, and oil companies. We need to end the free ride that industrial polluters have been given in the name of a free-market economy, they don’t deserve our tax dollars, they deserve our scrutiny. For the economy itself will die if our ecosystems collapse.

The only way we are going to do that (establishing a zero emissions economy by 2050) is by unpicking a whole range of subsidies on fossil fuels which, unfortunately, last year alone grew by thirty per cent.  The trouble with those subsidies is that they tend to boost emissions rather than encourage a reduction.