TTIP and Fossil Fuel Subsidies: Using international policy processes as entry points for reform in the EU and the USA

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In this report, we assess the potential of three relatively promising international processes – the focus on fossil fuel subsidy (FFS) reform in the G20 group, the Sustainable Development Goals (SDGs), and the Transatlantic Trade and Investment Partnership (TTIP) – to act as possible routes to reform in a transatlantic context.

Phasing out fossil fuels on both sides of the Atlantic would:

create stronger price signals in favour of energy efficiency and low-carbon innovation;
internalise at least some of the costs of FFS and thus reduce market distortions;
bring about a shift towards low-carbon enerfy and thus boost employment in the renewable energy sector;
bring about GHG emissions reductions in the US and the EU;
could contribute to reducing budget deficits with the least possible negative impact on growth and employment.

Within the TTIP process, a possible model for reform could be:

Get FFS reform on the negotiation agenda, e.g. through the TTIP Advisory Group
Agree national reporting processes - develop a detailed template for all countries to identify and quantify FFS within a transparent framework;
Cost-benefit analysis of FFS reform, estimate distributional impacts;
Develop a coherent reform policy on the basis of 2 and 3;
Build support with a good communications strategy and disseminate information about pricing reforms before they are introduced;
Set up an independent body to assess progress and deal with legal questions.