The threat that the COP21 Paris talks might bring the end of fossil fuel subsidies is starting to loom over the head of big fossil fuel dependent companies. As the conference starts its second week since it began last Monday, November 30th, it seems apparent that all the political parties involved want to cut greenhouse gas emissions completely.
If this goal will eventually be brought to fruition, the second-largest industry on the planet, the fossil fuel one, will find that its government subsidies have been officially cut. This is due to the fact that fossil fuels are the biggest greenhouse gas emitters on Earth, making their use very likely to be prohibited in the near future.
This news will most likely make companies either plan ahead and focus on cleaner energy sources or they might actually attempt to boycott the pledge signed at the COP21. This signed agreement expects the parties involved to basically remove their greenhouse gas emissions almost completely, thus making the fossil fuel market extremely unstable. An emphasis on renewable and clean energy production is also highly advisable.
Steps towards the cut of government subsidies have already been made back in 2009, with the signing of an agreement between 20 nations. This agreement focused on phasing out subsidies and during that year, over $150 billion have been saved.
These payments made by governments towards fossil fuel companies helps in keeping the regular gas prices fairly low so that normal everyday consumers will still be able to use their cars.
The fact that in the US, the oil and fossil fuel industry has experienced a massive boom in the past years, alongside an increased investment from the government, will likely make US oil companies rethink their policies. Movements from different parties in order to quell the growing oil industry have already been seen.
For example, states residing on the US East Coast have proposed a bill in order to stop the offshore drilling planned to take part in the Atlantic ocean due to the fear of potential environmental disasters that may occur if an oil spill happens.
Repercussions from the elimination of government subsidies, if it occurs at some point in the near future, will boost gas prices by a fairly large amount. This might even make people completely give up on using their cars for travel due to the high cost.
The question if the COP21 Paris talks might bring the end of fossil fuel subsidies will more than likely be answered in the coming week. If the 200 nations will reach a common agreement, this might bring the end of the fossil fuel market as we know it.