Weekly News Review - 1st September 2023

Fossil fuels being subsidised at rate of $13m a minute, says IMF

Analysis from the International Monetary Fund (IMF) has found that fossil fuels benefited from record subsidies of $13m (£10.3m) a minute in 2022. Subsidies for oil, gas and coal totalled $7tn (£5.5tn) across the year which represents 7% of global GDP. Despite frequently pledging to phase out fossil fuel subsidies, G20 nations spent $1.4tn (£1.1tn) of public money on subsidies in 2022.

The Russian invasion of Ukraine and the resulting rise in energy prices caused many countries to increase investment in fossil fuels to improve energy security. The IMF have said that ending the subsidies would be a key factor in limiting the impacts of climate change. Research has shown that this would also prevent 1.6 million air pollution deaths a year and increase government revenues by trillions of dollars.

Ian Parry of the IMF said that cutting fossil fuel subsidies “needs to be the centrepiece of efforts over the next few years to get on track with limiting global warming to below 2C. Ideally this is done through carbon pricing [and] some of the revenues from reforms should be used to compensate poor and vulnerable households.”

“We are in this situation because it can be very difficult to increase taxes on fossil fuels, not least when countries are acting unilaterally. We recommend that large emitting countries coordinate on carbon pricing or similar policies to help scale up global action.”

Ipek Gençsü, a subsidies expert at the ODI think-tank, said: “The IMF report shows that, at a time when the world is starting to experience worsening impacts of climate change, governments continue to pour fuel on to the fire by providing record levels of subsidies for fossil fuels.”

“If we are to have any chance of avoiding irreversible and tragic consequences of climate change, governments simply have to show bolder leadership, by phasing out their support for production and consumption of fossil fuels.”

Government announces further £341 million investment in Sizewell C

The government has announced measures to speed up preparations for Sizewell C construction by providing an additional £341 million of funding. The extra money will help prepare the site for construction, procuring key components from the project’s supply chain, and expanding its workforce. The funding builds on the government’s existing £870 million stake which has been built up since November 2022.

Sizewell C is being developed by EDF, who are currently constructing Hinkley Point C in Somerset. Like Hinkley, it will comprise of 2 reactors with a total generating capacity of 3.2GW. Once constructed it would be able to power around 6 million homes, meeting 7% of the UK’s electricity needs. It is estimated that Sizewell C could save up to 9 million tonnes of CO2 emissions each year over the project’s 60 year lifespan.

Minister for Nuclear and Networks Andrew Bowie said: “Sizewell C will be a significant part of the revival of nuclear energy in this country – providing clean, home-grown power to millions of homes, providing thousands of jobs and ending reliance on foreign electricity to bolster our energy security.”

“Today’s funding announcement is a clear demonstration of the government’s commitment to this vital project, and will mean the site will be shovel-ready, and work able to start, much more quickly.”

Sizewell C Company Joint Managing Director, Julia Pyke, said: “This is great news and puts us in an even stronger position to start full construction. It will also allow us to implement several community schemes over the next few months.”

“We want people living near Sizewell C to see the benefits of the project as soon as possible and we’re looking forward to getting started on a range of proposals which will bring real improvements to the area well before the main construction gets underway.”

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