Fossil fuel subsidies rising

The report by UK think tank the Overseas Development Institute and US advocacy group Oil Change International found that G20 governments give "generous public subsidies" to the tune of $88 billion (70.8 billion euros) to companies involved in fossil fuel exploration, dwarfing the amount of private capital these firms use.

"Governments are spending almost double what companies are spending on exploration," Shelagh Whitley, research fellow at the Overseas Development Institute (ODI) and one of the authors of the report, said in a video statement on the ODI's website. She says the high amount of subsidies suggest that without them exploration would often not happen as it wouldn't be economical.

Finding new reserves has become more expensive as many remaining oil and gas fields are hard to reach and thus cost more to explore. A desire to diversify supplies away from crisis regions such as Russia and the Middle East is behind governments' eagerness to find new fossil energy sources.

In 2013, the world's top 20 oil and gas companies invested just $37 billion in exploring reserves of oil, gas and coal.

The US, for example, spent $5.1 billion that year on subsidies for the fossil fuel industry, almost twice as much as in 2009, when G20 states committed themselves to scrapping inefficient subsidies for fossil fuels. The pledge was reiterated last year in Saint Petersburg.

Other countries that heavily subsidize fossil fuel exploration are Russia ($2.4 billion a year), Australia (US$3.5 billion) and the UK ($1.2 billion).

Renewables getting cheaper

But the report argues this money would be better spent on renewables, which are becoming less expensive and offer better returns.

"Despite the widespread perception that renewables are costly, our research reveals that finding new fossil fuel reserves is costing nearly $88 billion in exploration subsidies across the G20," Shelagh Whitley, research fellow at the Overseas Development Institute (ODI) and one of the authors of the report, said in a press release.

"Scrapping these subsidies would begin to create a level playing field between renewables and fossil fuel energy," she added.

The report also finds that G20 governments are funding oil, coal and gas exploration overseas, with the US, the UK, China, Brazil and Russia at the forefront.

In addition, $521 million in public finance is being spent globally on fossil fuel exploration through multilateral development banks, of which the World Bank is responsible for two-thirds.

The report was published ahead of the G20 summit, which will be held on November 15 and 16 in Brisbane, Australia.