The Gulf of Mexico spill is the US’s biggest ever environmental disaster, causing untold damage to a fragile ecosystem and threatening the livelihoods and way of life of tens of thousands of people. One of the greatest ironies of this situation is that the US taxpayer helped to fund it through tax-breaks. Subsidies for fossil fuel production in OECD countries like the US are estimated at $100 billion a year. There is increasing public outrage that at a time of considerable financial hardship, public money is being used in this way.

In the UK, these subsidies take various forms, including promised tax breaks to companies to support offshore drilling in the UK, Export Credit Guarantees for UK oil, gas or coal companies overseas, ‘aid’ finance flowing through the World Bank’s energy programmes and UK-funded regional development banks.

In 2009, the G20 nations, including the UK, committed to phase out these subsidies. The Coalition Government has also given an explicit commitment to end fossil fuel support through the ECGD. Now is the time to act. The Government must:

• Publish details of the scale of all fossil fuel subsidies provided by the UK Government, including international development aid flowing through the World Bank Group, regional development banks and money used to provide Export Credit Guarantees.
• Publish and act on an implementation plan to phase out these subsidies, in order to meet commitments made at the G20. This must include all subsidies which are not narrowly focussed on providing energy access for the poor.
• Immediately halt fossil fuel support through the Export Credit Guarantee Department where it does not genuinely alleviate poverty.
• Scrap plans to provide tax breaks to drilling off the UK coast – this policy is madness in the face of the disaster in the US and the threat of runaway climate change.
• Insist on an end to fossil fuel lending by the World Bank that has no clear benefit for the poor – only supporting a new Bank Energy Strategy IF it has a timetable for phasing out fossil fuel lending by 2015.
• Vote no to any new World Bank loans for coal plants in middle income countries, where civil society organisations in those countries are clear that these plants will not contribute towards poverty reduction.
• Recycle the money saved into support for climate adaptation, forest protection and clean technologies in developing countries.