If you could give €21bn in tax breaks and other hand-outs to support a struggling sector, where would you start? The NHS? The police force? Or maybe action against climate change? Well 11 EU member states including the UK have decided to focus their financial efforts on a different “struggling” sector entirely: diesel.
Adding Fuel to the Fire
New research from a left-leaning UK think tank, the Overseas Development Institute, and the Climate Action Network Europe, an umbrella body for environmental campaign groups, shows that diesel continues to receive extraordinary government support despite mounting evidence of the danger it poses to people and the environment.
The report claims that €112bn was awarded each year in 2014-16 by 11 European states and the EU itself to support coal, oil and gas production and consumption, with diesel transport getting €21bn of that annual sum. Shelagh Whitley, head of climate and energy at the ODI, said she was shocked by the scale of support given to diesel and transport as it goes against the international pledges many countries are now making.
“What you are basically doing is falsely incentivising something you are trying to get rid of,” she said. “People will be driving diesel cars for longer than they would have, for economic reasons.” UK and EU money and environmental efforts are effectively being wasted. “It is money the Government then doesn’t have to use for other things – it makes it that bit harder to build a clean energy system.”
A Bad History
Some of diesel’s tax support came from the belief it was more environmentally friendly than petrol as it emitted less CO2. In 2001 the UK deliberately cut fuel duty on diesel in order to encourage car owners to switch over from petrol but the idea was misguided.
Studies have since proven that though diesel’s CO2 emissions are lower, its nitrogen oxide pollution levels are extremely high.
It’s this nitrogen oxide that’s now causing so much of London’s deadly pollution. To make matters worse, widespread emission test rigging across the car industry was discovered in 2015.
Cars were being designed to meet emission limits only in test scenarios while they produced excessive pollution in real world conditions. The scandal kick-started EU efforts to introduce a new standard for vehicle testing. The new test was finally introduced two years later in September 2017 but as yet it only applies to new models introduced to the market. Any new cars made in pre-existing model types don’t have to comply until September 2018.
Subsidy Semantics
Thankfully headway is already being made against diesel pollution in particular. Countries across the world are stopping diesel car sales; India by 2030 and France and the UK by 2040. Norway, Austria, Denmark, Ireland, Japan, the Netherlands, Portugal, Korea and Spain are also making plans to stop them. But what about ending subsidies in the meantime?
While the EU has committed to phasing them out, some member states dispute what constitutes a subsidy.
The ODI-CANE research uses World Trade Organisation definitions but unlike the WTO the UK Government doesn’t accept that tax breaks or relief for oil and gas producers are subsidies. Using that definition Britain can continue funding fossil fuels through tax cuts, which the research insists are endangering global environmental efforts.
“To meet global climate objectives, which aim to avoid dangerous climate change, three quarters of known fossil fuel reserves must be left in the ground,” the report says. “However, European governments continue to subsidise exploration for fossil fuels, which puts Europe at serious risk of missing the goals of the Paris Agreement.”
by Jo Davey
The post Climate: Diesel Given €21bn in Subsidies appeared first on Felix Magazine.
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