Global Renewable Fuels Alliance (GRFA) President Bliss Baker is calling on national leaders to eliminate all fossil fuel subsides, especially in light of the current low price per barrel costs. According to the International Energy Agency (IEA), the estimated global fossil fuel subsidies are worth $490 billion. IEA is also predicting global oil demand will drop 25 percent in 2016 to 1.2 million barrels per day. Theoretically fossil fuel subsidies are supposed to increase energy access during periods of high prices; however, with the current state of global energy markets these subsidies, says Baker, are only succeeding in discouraging investment in energy efficiencies and renewables.

“The persistent oversupply of oil, and the resulting low prices, gives countries an opportunity not seen in recent memory to eliminate fossil fuel subsidies and encourage a transition to viable low-carbon energy sources like ethanol,” Baker said. “World leaders couldn’t ask for better circumstances to take action.”

A landmark agreement on combating climate was reached in Paris last December during COP21. The goal is to keep the global temperature rise from exceeding 2°C above pre-industrial levels in this century. This is to be achieved by shifting to a global low carbon economy and encouraging the development of clean technologies as the basis for future development.

Baker notes that over the past year 30 countries have reduced their fossil fuel subsidy programs (the U.S. is not included in this number) in recognition of the fact that current low oil prices reduces the impact of eliminating consumer fossil fuel subsidies. Baker adds that these subsidy reductions also results in lower domestic national emissions of greenhouse gases.

“It is blatantly counter productive for governments to continue to subsidize the industry that contributes the majority of global greenhouse gas emissions, especially after 195 countries agreed that drastically cutting back GHG emissions was necessary to combat climate change.” Baker concluded, “It’s time to take the brakes off of clean technology development and meaningfully begin the transition to a sustainable future.”