It's not easy being green: Fossil fuel subsidies

For several years now, politicians have been pledging to cut fossil fuel subsidies and invest in green energy.

Speaking at the UN Global Climate Summit in September, U.K. Prime Minister David Cameron said, "We need to give business the certainty it needs to invest in low carbon. That means fighting against the economically and environmentally perverse fossil fuel subsidies which distort free markets and rip off taxpayers."

And while politicians may be using emotive language to preach change, for some the reality is different.

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"Fossil fuel subsidies are enormous," Dimitri Zenghelis, Principal Research Fellow at the London School of Economics' Grantham Research Institute on Climate Change and the Environment, told CNBC's Energy Future.

"We're talking about – according to both the OECD and the IEA – something like half a trillion dollars a year," Zenghelis added.

In 2009, the G-20 group of nations made bold a commitment to "rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption."

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Five years down the line, are we on the way to seeing this pledge become a reality? According to the Overseas Development Institute think-tank, which this year released a report on the subject, not really.

"What our report highlighted was, specifically, this perversity about fossil fuel subsidies and the objectives that these countries have on addressing climate change," Shelagh Whitley, Research Fellow, Climate and Environment , told Energy Future.

"What they're doing is subsidizing fossil fuels to the tune of $88 billion a year, which means that they're completely undermining their climate change targets," she added.

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According to the ODI's report, the United States is providing $5.1 billion, "in national fossil fuel exploration subsidies each year." The report also states that in the U.K., the figure for fossil fuel exploration subsidies is up to $1.2 billion annually.

With this in mind, are we just getting empty rhetoric when it comes to fossil fuel subsidies?

"It's a rather regressive form of policy, but it's one that politicians find quite advantageous," Zenghelis said.

"A lot of politicians argue that producers will suffer from a reduction in energy subsidies – that's not actually likely to be the case. It's very difficult to dislodge energy subsidies… hands up who's not in favour of a hand-out?"

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For the ODI's Whitley, though, there is far more value in renewable subsidies. "For fossil fuel subsidies, you're getting about 1.3 dollars of investment for $1 of subsidy," she said.

"For renewables, it's about $2.50 to $1. You don't have to explore for the sun, it's just there," she added.

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