Review of fossil fuel subsidies stalls as Argentina ceases communication with Canada – Vancouver Is Awesome

Report on the Status of Fossil Fuel Subsidy Peer Review between Canada and Argentina

Background and Context

In 2018, Canada and Argentina initiated a peer review of fossil fuel subsidies as part of a G20 commitment aimed at eliminating all “inefficient” fossil fuel sector subsidies. This initiative aligns with the Sustainable Development Goals (SDGs), particularly SDG 7 (Affordable and Clean Energy), SDG 13 (Climate Action), and SDG 12 (Responsible Consumption and Production).

The peer review process was originally scheduled to be completed within approximately two years, serving as a mechanism to:

• Independently assess each country’s fossil fuel subsidies.
• Better define what constitutes a subsidy.
• Evaluate whether subsidies achieve their intended impact.

Current Status and Challenges

As of 2025, the peer review between Canada and Argentina has stalled indefinitely. The delay was first evident by 2019, and the process has since been disrupted following Argentina’s 2023 national election and subsequent government change.

Key developments include:

1. Argentina ceased communication and participation in the peer review after the election of President Javier Milei, a right-wing populist who has publicly dismissed climate change as a “socialist lie.”
2. Argentina’s domestic policies shifted significantly away from environmental and climate change commitments, impacting SDG 13 (Climate Action).
3. Argentina’s negotiators withdrew from the 2024 annual UN climate talks, with reports suggesting possible withdrawal from the Paris Agreement.

Canada’s Environment and Climate Change department confirmed that no progress has been made since Argentina’s election, despite some initial engagement on planning the peer review process.

Comparative Analysis of Peer Reviews

Other G20 peer reviews have been completed within 12 to 24 months, including those between:

• The United States and China
• Germany and Mexico
• Italy and Indonesia

By 2021, 11 G20 peer reviews had been finalized, contributing to enhanced transparency and better structuring of fossil fuel subsidy inventories, supporting SDG 12 and SDG 13 objectives.

Canada’s Approach to Fossil Fuel Subsidies

In 2023, Canada took steps to end fossil fuel subsidies deemed “inefficient,” defined as subsidies that:

• Support fossil fuel consumption disproportionately benefiting the fossil fuel sector.
• Do not fall under specific categories such as:
• Funding for clean energy or clean technology (supporting SDG 7 and SDG 9 – Industry, Innovation, and Infrastructure).
• Funding for essential energy services in remote communities.
• Temporary emergency response measures.
• Programs encouraging Indigenous economic participation (supporting SDG 10 – Reduced Inequalities and SDG 8 – Decent Work and Economic Growth).

Environmental and Economic Implications

Despite these efforts, environmental organizations report that Canada continues to spend billions supporting the oil and gas sector, which poses challenges to achieving SDG 13 (Climate Action) and SDG 15 (Life on Land).

According to a 2024 report by Environmental Defence:

• Canada allocated nearly $30 billion in support to the fossil fuel sector.
• This includes $1 billion under the Canada Growth Fund for Strathcona Energy’s carbon capture initiatives.
• $10 million was directed towards clean fuel projects, including fossil fuel hydrogen.

Conclusion

The stalled peer review process between Canada and Argentina represents a significant setback in global efforts to phase out inefficient fossil fuel subsidies, a critical component of meeting the Sustainable Development Goals related to climate action and sustainable energy. Continued transparency, international cooperation, and policy alignment remain essential to advancing these goals.

Report compiled by Nick Murray, The Canadian Press, June 24, 2025.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 7: Affordable and Clean Energy
   • Article discusses fossil fuel subsidies and funding for clean energy and clean technology.
2. SDG 12: Responsible Consumption and Production
   • Focus on eliminating inefficient fossil fuel subsidies that encourage consumption.
3. SDG 13: Climate Action
   • References to climate change policies, Paris climate pact, and peer reviews related to fossil fuel subsidies.
4. SDG 10: Reduced Inequalities
   • Mentions funding measures that encourage Indigenous economic participation.

2. Specific Targets Under Those SDGs

1. SDG 7: Affordable and Clean Energy
   • Target 7.a: Enhance international cooperation to facilitate access to clean energy research and technology.
   • Target 7.b: Expand infrastructure and upgrade technology for supplying modern and sustainable energy services.
2. SDG 12: Responsible Consumption and Production
   • Target 12.c: Rationalize inefficient fossil fuel subsidies that encourage wasteful consumption.
3. SDG 13: Climate Action
   • Target 13.2: Integrate climate change measures into national policies, strategies, and planning.
4. SDG 10: Reduced Inequalities
   • Target 10.b: Encourage development assistance and policies that promote economic participation of marginalized groups, including Indigenous peoples.

3. Indicators Mentioned or Implied to Measure Progress

1. Indicator for SDG 12.c
   • Amount of fossil fuel subsidies that are inefficient and support consumption (e.g., Canada’s reported $30 billion in fossil fuel sector support).
   • Progress in peer reviews of fossil fuel subsidies between countries as a transparency and accountability measure.
2. Indicator for SDG 7.a and 7.b
   • Funding amounts allocated to clean energy and clean technology projects (e.g., $1 billion for carbon capture, $10 million for clean fuel projects).
3. Indicator for SDG 13.2
   • Participation and commitment to international climate agreements such as the Paris climate pact (e.g., Argentina’s potential withdrawal).
   • Integration of climate policies in national agendas as reflected by government actions and peer review engagement.
4. Indicator for SDG 10.b
   • Funding measures that encourage Indigenous economic participation.

4. Table of SDGs, Targets, and Indicators

Source: vancouverisawesome.com