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CCTV Script 19/12/14

This is the script of CNBC's news report for China's CCTV on December 19, Friday.

Fossil fuel subsidies are big business for major economies around the world. Costing governments almost half a trillion dollars per year, is the target set by the G20 in 2009 to eliminate all subsidies by 2020 realistic?

CNBC's Seema Mody files this report.

David Cameron

"Fighting against economically and environmentally perverse fossil fuel subsidies."

Barack Obama

"The countries that are most efficient not only do they not subsidies energy, in fact they tax energy use."

For Years it's been the ultimate political power play. Cut the Fossil fuel subsidies, and build green! But in politics, Rhetoric and Reality are often 2 very different sides of the barrel.

[Dimitri Zenghelis / Principal Research Fellow, LSE] "Fossil fuel subsidies are enormous, we're talking about something like half a trillion dollars a year"

In 2009 the G20 agreed to completely wipe out all Fossil Fuel Subsidies by 2020.

But a new report issued in November this year from the ODI a think tank on international development revealed a startling increase in exploration subsidies of the very fuels, governments say they're trying to eliminate.

[Shelagh Whitley - Overseas Development Institute (ODI)] "What our report highlighted was specifically this perversity about fossil fuel subsidies and the objectives that these countries have on addressing climate change. What they're doing is subsidising fossil fuels to the tune of $88 billion a year, which means that they're completely undermining their climate change targets."

And whilst the majority of that spend is in emerging markets, developed economies are barrelling forward too,

* Australia provided $3.5 billion in exploration subsidies last year.

* The UK? $1.2 billion.

* The US has almost doubled on 2009 levels, due in part to congresses failure to pass subsidy cuts proposed by President Obama.

* And that's just what's spent on home soil. The US and UK also spend billions in other countries like Brazil, Colombia and Mexico.

So is all the rhetoric just hot air?

And economists say, there's a reason for that. Fossil Fuel Subsidies are big business on both sides of the political landscape. In the west for social programmes and manufacturing incentives, move east and even producer nations use it to distribute oil revenues.

[Dimitri Zenghelis / Principal Research Fellow, LSE] "it's a regressive form of policy but one that politicians find quite advantageous, developing countries in particular don't even pay taxes, so you can't really bribe them through tax cuts. A lot of politicians argue that producers will suffer from cuts in energy subsidies, that's not actually likely to be the case"

it's very difficult to dislodge energy subsidies, first of all, nobody actually wants to pay a higher cost for energy. Hands-up who's not in favour of a hand-out.

But despite the political deadlock analysts say, the 2020 deadline might now have a strong albeit unlikely ally to get the fossil fuel subsidies rolling.. The fuels themselves.

[Dimitri Zenghelis / Principal Research Fellow, LSE] "Now is quite a good time to start reducing energy subsidies, energy prices across the world, oil and gas in particular have come down, so from the political perspective you'll get less flack if you reduce energy subsidies now than if you were to do so at a time that energy subsidies were very expensive part of consumer expenditure"

Combine commodity drops with a UN commitment just last week to aid emerging markets as they scale back subsidies. The analysts say the investment play for governments could be huge.

Fossil fuel subsidies you're getting about 1.3 dollars of investment for 1 dollar of subsidy, For renewables it's about 2 and a half to 1

You don't have to explore for the sun, it's just there.

Something everyone from the environmentalists to economists agrees could be the key to a brighter, more sustainable, Energy Future.

Reporting from Singapore, I'm CNBC's Qian Chen.

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