Thank you very much, Mr. Chair.
As a UN technical expert, I would speak on this topic in a global context.
In 2020 globally governments spent $423 billion U.S. subsidizing fossil fuel production and consumption. To put this in perspective, when tracking public spending of 87 countries around the world during the pandemic, green recovery spending amounts to only $970 billion U.S. out of total spending of over $18 trillion U.S.
We believe that the reform of these inefficient fossil fuel subsidies can address the triple planetary crises of climate, nature and pollution, and we know very well that the reform of fossil fuel subsidies can help us to meet the Paris Agreement and climate goals. On the nature front, for instance, a study shows that a 10% increase in per capita fossil fuel subsidies increases the ecological footprint up to 1.5%.
The fossil fuel subsidy reform can also support financing green recovery and sustainable developmental goals. Globally, countries are facing very severe fiscal constraints right now to simultaneously respond to the pandemic, build resilience to climate change and get back on track to achieve sustainable developmental goals. The reform of fossil fuel subsidies represents a large potential source for social and green investment. Literature shows that just 10% to 30% of global fossil fuel subsidies could pay for the transition to a clean economy at the global level.
We believe that the first step toward the reform of fossil fuel subsidies is to improve transparency by measuring subsidies and tracking progress. UNEP is a custodian to the SDG indicator 12.c.1 on measuring fossil fuel subsidies and is approaching countries on measuring and reporting fossil fuel subsidies as an amount of fossil fuel subsidies per unit of GDP in a partnership in many countries.
Globally, countries are increasingly taking actions to reform fossil fuel subsidies. Between 2015 and 2020, at least 53 countries reformed their fossil fuel subsidies.
Overall, the successes and failures of past subsidy reforms illustrate economic and political complexity and underscore the need for tailored and effectively designed reforms. The current context of rapid increase in energy prices may make it all more politically challenging to address fossil fuel subsidy reform; however, it is important to note that the fiscal burden they bring is also swelling, and countries that fail to address the issue early on will pay a costly price later on.
We highly encourage Canada to continue its commitment to undertake the G20 peer review and advance internal reform efforts as committed under G7 to phase out by 2025 and encourage and enable others to follow suit.
Thank you very much.