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Target 12.c

Fossil Fuel Subsidies

target 12.c

Rationalize inefficient fossil-fuel subsidies that encourage wasteful consumption by removing market distortions, in accordance with national circumstances, including by restructuring taxation and phasing out those harmful subsidies, where they exist, to reflect their environmental impacts, taking fully into account the specific needs and conditions of developing countries and minimizing the possible adverse impacts on their development in a manner that protects the poor and the affected communities.

Indicator 12.c.1

Amount of fossil-fuel subsidies per unit of GDP (production and consumption) and as a proportion of total national expenditure on fossil fuels.

SDG 12.c.1 measures the amount of fossil-fuel subsidies at the national, regional, and global level. The 2030 Agenda outlines bold, transformative steps to shift the world onto a sustainable and resilient path. Inefficient fossil fuel subsidies undermine the ability of governments to achieve key goals, such as reducing poverty, improving health, reaching gender equality, providing access to energy, and addressing climate change. While fossil fuel subsidies are sometimes advocated as a poverty-fighting measure, they often disproportionately benefit wealthier segments of the population. Reallocating fossil fuel subsidies effectively to other development strategies and social supports can help governments reach the SDGs. As a global and national indicator of fossil fuel subsidies, SDG 12.c.1 will enable comprehensive tracking of consumer and produce subsidy trends and serve as a guide for energy interventions that reinforce the 2030 Agenda.

To measure fossil fuel subsidies at the national, regional, and global level, UNEP recommends three sub-indicators for reporting on this indicator: 

  1. Direct transfer of government funds;
  2. Induced transfers (i.e. price support);
  3. Tax expenditure, other revenue foregone, and underpricing of goods and services.

Countries should gradually phase out global datasets and develop national datasets that cover these sub-indicators, building on existing domestic statistical systems as much as possible. Nationally reported data would collectively provide a dataset that is grounded in national realities and allows for policy analysis at the national level. The SDG monitoring of fossil fuel subsidies will help catalyze fossil fuel subsidy removal and facilitate movement towards a sustainable future.

Global and Regional Progress

Custodian Agencies

United Nations Environment Programme (UNEP)

The UN Environment Programme (UNEP) has been promoting the shift to Sustainable Consumption and Production (SCP) patterns for the past two decades. It is the custodian agency responsible for 8 out of 12 indicators under SDG 12.

UNEP guides policy development for SCP through its global frameworks, networks, programmes and partnerships, through knowledge-sharing and facilitating access to science, policy guidance, technical tools and best practices.

UNEP contributes to SDG 12.2, “achieve the sustainable management and efficient use of natural resources”, by strengthening and communicating the knowledge and scientific base for resource efficiency and SCP. This includes scientific information on natural resource use and “decoupling opportunities” as a basis for evidence-based policymaking.

Additionally, UNEP works on strengthening the sound management of chemicals and waste by supporting parties to the multilateral environmental agreements to meet their respective obligations. This work supports SDG 12.4 ‘achieve the environmentally sound management of chemicals and all wastes in order to minimize their adverse impacts on human health and the environment.’ UNEP also hosts the secretariats for several waste and chemicals-related multilateral environmental agreements and implements initiatives targeting various types of waste, including food waste and hazardous waste and chemicals.

As part of its actions towards SDG 12.6, “Encourage companies to adopt sustainable practices and to integrate sustainability information into their reporting cycle.”, UNEP collaborates with the private sector in partnerships promoting innovation, technological solutions and financing to tackle our most pressing global environmental challenges. UNEP fosters partnerships with business and industry to promote green investments and apply sustainable business practices across value chains. It also promotes and builds capacity in corporate sustainability reporting.

Joy Aeree Kim

  • Senior Economic Affairs Officer, Economic and Fiscal Policy Unit
  • United Nations Environment Programme (UNEP)
  • joy.kim@un.org

UNEP Science Division

  • SDG Unit
  • United Nations Environment Programme (UNEP)
  • unep-science-sdgs@un.org

Guidance material

Methodology

Measuring Fossil Fuel Subsidies in the Context of the Sustainable Development Goals

External source
Metadata
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Metadata 12.C.1

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Training

UNEP-ECLAC SDG 12c1 Indicator Training Workshop

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E-Learning

Online Course: Environmental SDG Indicators

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