This Government are committed to better understanding both the extent and distribution of subsidies to energy sources, and the impact of such subsidies on trade, development and climate change. The Department for International Development has recently committed £300,000 over a four year period (starting 2008-09) to a major research project being undertaken by the International Institute for Sustainable Development. The project will clarify the scale of fossil fuel subsidies and their impacts on sustainable development, and propose measures to reduce, eliminate or redirect these where appropriate.
At the London Energy Meeting in December, where over 35 countries were represented (including the main consumers and producers of oil, and leading companies and international organisations), participants agreed on the importance of measures to promote stability in the oil market, and the importance of promoting energy efficient, and carbon-reducing technologies. Participants also noted that better-functioning markets would give more consistent price signals to enable producer and consumer countries to have greater confidence in making investment and purchasing decisions.