UvA PhD student: “Stop fossil fuel subsidies”
UvA PhD student Naomi Leefmans is appealing today to all university employees in the Netherlands to sign a petition calling for an end to fossil fuel subsidies. Several UvA scientists have already signed, including professors Barbara Hogenboom, Arnoud Boot and Economics Dean Roel Beetsma.
The UN climate summit in Egypt did not deliver the breakthrough needed to secure our climate goals. We therefore appeal to the Dutch government for a measure that brings these goals back into sight. Already in the Paris Climate Agreement in late 2015, all UN member states globally agreed to limit global warming to well below 2 degrees and preferably to no more than 1.5 degrees. Since global warming is directly caused by an increase in greenhouse gases in our atmosphere, we must stop emitting greenhouse gases as soon as possible. Specifically, if we want to meet the Paris climate goals, our global greenhouse gas emissions must be reduced to net zero by 2050. Roughly, this means that in 8 years, by 2030, global emissions must be halved to limit warming to no more than 1.5 degrees, or at least reduced by a third to keep warming well below two degrees.
Financial incentives
Despite the increased effort of countries since the Paris climate agreement, collectively we are still not doing nearly enough to stay even within a maximum temperature increase of 2 degrees. A major reason for this is our heavy reliance on fossil fuels. About two-thirds of global greenhouse gas emissions are caused by fossil fuels, making them by far the largest contributor to climate change. It is therefore crucial to replace the use of fossil fuels with clean, renewable energy sources as soon as possible. Governments can play an important role in this by encouraging their development and discouraging the use of fossil fuels. One way to do this is by setting standards and regulation (for example, the EU ban on new cars with combustion engines from 2035) and by providing the right financial incentives through taxes and subsidies.
$6,000 billion
But governments worldwide are currently providing financial incentives in the wrong direction, thereby actually working against climate goals. In fact, governments provide far more support to fossil fuels than to clean renewable energy sources. For example, according to the IMF, global subsidies (explicit and implicit) on fossil fuels amount to a whopping $6,000 billion. That's about 7 percent of global GDP. Imperfect pricing of the cost of greenhouse gases is part of these subsidies. Global subsidies to clean renewables are only a fraction of that; about 0.1 percent of global GDP.
The Dutch government also provides billions of euros in subsidies to fossil fuels. These are mainly tax subsidies, such as energy tax rebates for large users (for example, TataSteel), excise tax exemptions (on kerosene for airplanes and diesel and fuel oil for inland shipping) and tax exemptions for electricity generation (for coal-fired power plants, for example). According to Dutch government figures in a recent OECD/IEA report, the Netherlands subsidized fossil fuels in the amount of €4.5 billion in 2020. That's more than €250 per person. Former MEP Alman Metten even estimates these subsidies at €17.5 billion, or €1,000 per person. This does not even include the imperfect pricing of the cost of Dutch greenhouse gas emissions. Achieving our climate goals is seriously thwarted by these fossil fuel subsidies.
2030
The Netherlands cannot afford this. The Netherlands is not only far above, by over a factor of 2, the world average of greenhouse gas emissions per person, but is also above the European average. Also, the most recent estimate by the Netherlands Environmental Assessment Agency shows that even if all the Rutte-IV administration's climate plans are fully implemented, they will still be insufficient to achieve the targeted greenhouse gas reductions by 2030. Only with new, additional measures is the European goal of 55 percent fewer greenhouse gas emissions in 2030 still feasible. The government's national goal of a 60 percent reduction in emissions by 2030 requires even more measures.
For the Netherlands
For the Netherlands, it is crucial that we take responsibility now. We call on the Dutch government to immediately stop fossil fuel subsidies. This is necessary to keep our country, which is highly vulnerable to sea level rise due to global warming, and our entire planet livable for current and future generations.
Sign here.
- Naomi Leefmans, Lecturer and Researcher in Macro and International Economics, UvA
- Roel Beetsma, Professor of Macroeconomics, Dean of the Faculty of Economics and Business, UvA
- Pieter van Beukering, Professor of Environmental Economics, Director Institute for Environmental Issues, VU
- Jan J. Boersema, Professor of Foundations of Environmental Sciences, Leiden University
- Arnoud Boot, Professor of Financial Economics, UvA
- Wouter Botzen, Professor of Economics of Climate Change and Natural Disasters, VU
- Robert Dur, Professor of Economics, EUR
- Pieter Gautier, Professor of Economics, VU
- Reyer Gerlagh, Professor of Environment and Economics, Director Tilburg Sustainability Center, UvT
- Henri L.F. de Groot, Professor of Regional Economic Dynamics, VU
- Barbara Hogenboom, Professor of Latin American studies, Director of CEDLA, UvA
- Patrick Huntjens, Professor of Governance of Sustainability Transitions, Maastricht University
- Bas Jacobs, Professor of Economics and Public Finance, VU
- Franc Klaassen, Professor of International Economic Relations, UvA
- Rik Leemans, Professor of Environmental Systems Analysis, Wageningen University
- Sandra Phlippen, beginning 2023 Associate Professor of Sustainable Banking, University of Groningen
- Rick van der Ploeg, Professor of Environmental Economics, UvA and Professor of Economics, University of Oxford, Research Director Oxford Centre for the Analysis of Resource-Rich Economies
- Sjak Smulders, Professor of Economics, UvT
- Daan van Soest, Professor of Environmental Economics, UvT
- Sweder van Wijnbergen, Emeritus Professor of State Economics, UvA
- Aart de Zeeuw, Professor Emeritus of Environmental Economics, UvT
