New report exposes Government hypocrisy on fossil fuel subsidies

Posted on
04 June 2013
The New Zealand government is subsidising the oil and gas industry to the tune of $46 million annually, an investment at odds with its claims on the world stage to be ‘spearheading’ efforts to reform fossil fuel subsidies, says global conservation organisation WWF.

A new report released today from WWF-New Zealand highlights the contradiction in the government’s rhetoric overseas and their domestic policy which has seen these subsidies more than double since coming to power in 2009.

Peter Hardstaff, WWF-New Zealand climate change campaigner, said: “Climate Change Minister Tim Groser is travelling around the world talking up New Zealand’s leading role in reforming fossil fuels subsidies, while back home Energy Minister Simon Bridges is giving hand outs to the oil and gas industry. This smacks of hypocrisy and further undermines New Zealand’s reputation on climate change, which has already taken a hammering from pulling out of binding global commitments under Kyoto II.”

Financial subsidies that encourage the production and consumption of fossil fuels are increasingly being recognised internationally as a major barrier to global efforts to reduce greenhouse gas emissions. According to the Ministry of Foreign Affairs: “Production subsidies…inhibit innovation and the development of cleaner technologies, and they reduce incentives to produce and use fossil fuels more efficiently.”

The National-led government has significantly increased its support for oil and gas through indirect subsidies such as taxbreaks and support for exploration data and research – up from $6 million in 2009 to $46 million today. In total, support for consumption and production of fossil fuels has risen from $40.6 million to almost $85 million.

The money freed up from eliminating support for oil and gas extraction would be better spent on more environmentally and socially beneficial initiatives, such as a multi-year programme to install grid-connected solar panels onto the roofs of Housing New Zealand’s 70,000 homes, the report argues.

Peter Hardstaff said: “We question the use of public money to encourage an already wealthy industry to extract fossil fuels leading to more pollution. The government needs to transition away from polluting oil and gas and start investing in a clean energy future for New Zealand, for the benefit of the planet and the health and wellbeing of New Zealanders.”

Science shows that if the planet is to have a good chance of staying below 2 degrees Celsius - the internationally agreed target for limiting global warming - then three quarters of all fossil fuel reserves must remain in the ground.


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