The world's major economies subsidise oil, gas and coal companies by as much as $88 billion a year to explore new reserves, media reported Tuesday, citing a new study.
The study was conducted by British think tank Overseas Development Institute (ODI) and Washington-based analysts Oil Change International. It draws from the Organisation for Economic Cooperation and Development (OECD), government documents and company reports.
The figures, published ahead of this week's G20 summit in Brisbane, Australia, contain the first detailed breakdown of global fossil fuel exploration subsidies, The Guardian reported.
According to the study, the US government provided companies with $5.2 billion for fossil fuel exploration in 2013, while Australia spent $3.5 billion. Russia, on the other hand, spent $2.4 billion and Britain $1.2 billion.
Most of this support was in the form of tax breaks for exploration in deep offshore fields, the study finds.
This policy followed by the rich countries is inimical to the well being of the planet, given the evidence that most fossil fuels must be left in the ground if the world is to avoid dangerous climate change.
Also Read
Ironically, the major economies had pledged to phase out these "inefficient" subsidies in 2009, the ODI says on its website, adding that it is a policy that marries bad economics with potentially disastrous consequences for climate change.
Britain proved to be one of the most generous countries in terms of offering these subsidies.
In the five-year period to 2014, it gave tax breaks totalling over $4.5 billion to French, US, Middle Eastern and North American companies to explore the North Sea for oil and gas, the study states.
Britain also spent public funds for foreign companies to explore in Azerbaijan, Brazil, Ghana, Guinea, India and Indonesia, as well as Russia, Uganda and Qatar, according to the report.
It shows an extraordinary "merry-go-round" of countries supporting each others' companies.
"The evidence points to a publicly financed bail-out for carbon-intensive companies, and support for uneconomic investments that could drive the planet far beyond the internationally agreed target of limiting global temperature increases to no more than 2 degree celsius," say the report's authors.
"This is real money which could be put into schools or hospitals. It is simply not economic to invest like this. It is undermining the prospects for an ambitious UN climate deal in 2015," said ODI Director Kevin Watkins.
The report further criticises the G20 countries for providing over $520 million a year in indirect exploration subsidies via the World Bank and other multilateral development banks (MDBs) to which they contribute funds.
The authors expressed surprise that about four times as much money was spent on fossil fuel exploration as on renewable energy development.