The UK’s Institute and Faculty of Actuaries (IFoA) is calling on G20 governments to follow through on their commitment to phase out fossil fuel subsidies, saying these undermine efforts to mitigate harmful climate change.
The actuarial organisation is signing a statement from the Overseas Development Institute (ODI), a UK-based think tank.
Nico Aspinall, chair of the IFoA’s resource and environment board, told IPE that the actuarial organisation is signing the ODI statement as part of its ongoing work “to raise awareness of climate change risk and the threat it poses for governments, businesses and individuals”.
The IFoA took part in the UN climate change conference in Paris in December 2015 (COP21), he said, and the IFoA is involved in the ODI’s call to action “because it aligns with our work on investment risk owing to stranded assets”.
He added: “Resource and environment issues are a key policy priority for the IFoA and we believe this statement, if implemented, will have a major impact on policy.”
The ODI is due to publish its statement next week in advance of the G20 Leaders Summit in Hangzhou, China in early September, a spokesperson told IPE.
According to the IFoA, the statement asks the G20 governments to implement their long-standing commitment to phase out fossil fuel subsidies and to set a timeframe for this of 2020.
The IFoA said: “As experts in long-term risk management the IFoA believes that climate risk is one of the greatest risks facing current and future generations.”
Aspinall said: “State fossil fuel subsidies form a key structural inhibition of competition and act as a barrier to investment in renewables on the scale needed to deliver carbon commitments made in Paris.”
The G20 pledged to phase out fossil fuel subsidies in 2009, but have yet to do so.
In a communiqué issued after their April 2016 meeting in Washington D.C., the G20 finance ministers and central bank governors said: “We reaffirm our commitment to rationalize and phase-out inefficient fossil fuel subsidies that encourage wasteful consumption, over the medium term, recognizing the need to support the poor.
“Further, we encourage all G20 countries to consider participation in the voluntary peer review of inefficient fossil fuel subsidies that encourage wasteful consumption.”
The ODI, and the backers of its forthcoming statement, would not be the first to call on the G20 to deliver on their pledge.
In November 2014 US economists Jeffrey Sachs and Nouriel Roubini called on the G20 leaders to cut subsidies, saying that this would dry up investment in fossil fuel exploration and help create conditions for a low carbon energy transition.
The G7 have agreed that fossil fuel subsidies should be phased out by 2025.
The move by the IFoA l comes after it launched a “refreshed” strategy in June this year, doing so “not just to reflect the changes in the global landscape today, but to position us and our members as relevant for an uncertain future”.
The IFoA said the tweaked strategy also includes plans “for bolder public affairs activity” and a spokesperson for the body confirmed that its move to sign the ODI statement is an example of this type of activity.