U.N. Secretary General calls for end to subsidising fuel companies

Apr 25, 2024 ExxonMobil, News, Oil & Gas

UN Secretary-General, António Guterres

…as Guyana continues to dole out concessions galore in latest project

Kaieteur News – As the world continues to grapple with the effects of Climate Change, United Nation’s Secretary General, Antonio Guterres has again reiterated his call to phasing out the use of fossil fuels, implement carbon pricing and to, put an end to subsidizing the fossil fuel industry.

The UN Secretary General, gave his remarks on Monday at the UNDP Climate Promise 2025, where he sought to underscore that “It is not all doom and gloom” and that “many countries have the will to take more ambitious steps on climate action.”

He was adamant however, “the world needs to mobilise to ensure that there is a way.” According to Gutteres, the Climate Promise 2025 – an initiative that is even bigger and bolder – with more partners, more tailored support, and greater focus on linking sustainable development and climate. “Done right, national climate plans double as national investment plans, and reinforce National Development Plans. They can catapult sustainable development — connecting billions to clean power, boosting health, creating clean jobs, and advancing equality.”

According to the UN Secretary General, “they can catapult sustainable development – connecting billions to clean power, boosting health, creating clean jobs, and advancing equality.”

As it relates to the fossil fuel industry, Guterres was adamant in order to meet any of the targets there must be the tackling of the two key causes that have been “creating climate chaos: fossil fuels and deforestation.”

As such, he proffered, “we must have drastically accelerated a just and equitable phase out of fossil fuels.” According to Guterres, the International Energy Agency projects that the proportion of electricity generated by fossil fuels globally must fall to thirty percent by 2030 – from sixty percent today.

With this in mind, he insists that while all countries must play their part, “the G20 – which accounts for around eighty percent of emissions – must lead.”

To this end, he reiterated this requires a commitment to dramatically accelerate fossil fuel phase-out and “I repeat phase-out.” This, in addition to detailing policies and regulations to provide continuity and predictability to markets – from carbon pricing to ending fossil fuel subsidies.

Guyana as a country is a new entrant to the list of oil producing nations and the administration has argued that production of oil offshore Guyana must be accelerated in order to maximize the benefits of the new found resource, given the limited window of opportunity. The window of opportunity referenced frequently by officialdom refers to the phasing out period mentioned by the UN Secretary General.

It would be poignant note that in tandem with his call for reduced subsidies as incentives to the industry, this does not obtain in Guyana. This since, the heavily criticized Production Sharing Agreement (PSA) signed by government with the ExxonMobil led consortium exploring for and producing crude from the Stabroek Block, have been granted a plethora of concessions and tax waivers to the point where critics observe that the country has been losing more than it gains.

Only yesterday this publication reported on the Alliance for Change’s (AFC) Leader’s and former Minister of Public Security, Khemraj Ramjatttan told reporters during his party’s weekly press conference on Friday last that the country is losing more by refusing to renegotiate the contract than it has gained through the enactment of the Local Content Law for instance.

This in addition to the myriad of tax breaks, concessions and other ‘lop-sided’ clauses have been pointed out as evidence of the contention. One such clause, speaks to a US$50 per ton fine for Exxon’s flaring, which activists have also criticized as allowing Exxon to pay Guyana a pittance to pollute. The absence of ring-fencing is also among some of the other deficiencies identified in Guyana’s oil contract, that all serve to incentive or act as a subsidy for the companies operating in Guyana. only recently government approved a sixth oil development field for the ExxonMobil led consortium operating in the Stabroek Block, with the concessions galore remaining enshrined in the PSA.

António Guterres, climate change, grapple, UN Secretary General, underscore

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