Fossil Fuel Subsidy Reform and the Just Transition: Integrating approaches for complementary outcomes (GSI)

This report articulates how fossil fuel subsidy reform (FFSR) can contribute to a just transition, and how a just transition framework can contribute to successful reform. The report explores a number of reasons for a framework, including alignment of the objectives of FFSR and just transition and, very importantly, FFSR’s ability to unlock revenues for implementing just transition. Fossil fuel subsidies act against sustainability, while reform is consistent with just transition principles. These subsidies exacerbate greenhouse gas emissions, which contribute to climate change: removing global subsidies to fossil fuel production would save 37 Gt of carbon dioxide emissions by 2050. The elimination of all subsidies to fossil fuel production and consumption globally will reduce emissions by roughly 10 per cent. This report goes into detail about the various ways in which FFSR can be consistent with just transition. The scale of current fossil fuel subsidies in the world coupled with the massive financial needs for transition are early indicators of the benefits of approaching FFSR with just transition in mind. Leveraging this misspent finance to support just transition is just one of many ways in which these issues can coalesce. The report is available for download on the IISD website.