In September 2009, G20 leaders took a key step towards reforming energy subsidies at their summit in Pittsburgh, United States. Together, they committed to “rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption”. This move was closely mirrored by Asia-Pacific Economic Cooperation (APEC) leaders in November 2009. These commitments were made in recognition that inefficient fossil-fuel subsidies distort markets, impede investment in clean energy sources and undermine efforts to deal with climate change.
During the Pittsburgh Summit, the G20 requested the IEA, OECD, World Bank and OPEC to prepare a Joint Report on the scope of energy subsidies and suggestions for the implementation of their phase-out initiative. The Joint Report was presented to the G20 Toronto Summit in June 2010, during which country-specific implementation strategies and timetables were tabled.
The IEA, OECD, and World Bank were subsequently requested to prepare a second report for the November 2010 G20 summit meeting to be held in Seoul, Republic of Korea. This work extends the analysis presented in Toronto in June 2010, in particular by updating the quantitative findings to include data for the year 2009 and providing a road map for phasing out fossil fuel subsidies.