Obama's G20 victory promises historic boost for global clean tech

If only it were this easy in Congress. Earlier this week, president Barack Obama gave what has been widely acknowledged as his first underwhelming speech, an address to the UN's special summit on climate change – widely criticised for failing to provide the detailed commitments needed to reignite the stalled Copenhagen talks.

In fact, the only commitment of any real substance was a pledge to push leaders at this week's G20 summit in Pittsburgh to phase out fossil fuel subsidies - a proposal that was immediately filed under "nice idea, but no chance" by much of the world's media.

However three days on, if the draft communiqué reportedly seen by Reuters is anything to go by, Obama is already on the verge of achieving a truly historic breakthrough.

The document, which is currently being debated by leaders of industrialised and emerging economies, not only includes the now ever-present pledge to accelerate negotiations to agree a successor to Kyoto, it also includes a commitment that might actually ensure a deal is reached.

It commits the G20 to phasing out fossil fuel subsidies in the "medium term" , stating that the current subsidy regimes for carbon intensive industries " encourage wasteful consumption, distort markets, impede investment in clean energy sources and undermine efforts to deal with climate change".

Now, there is a lot of difference between a draft and a final version, and there is even more difference between a G20 commitment and its actual delivery. But this is currently shaping up to be a significant victory for the president, and more importantly, a massive boon to the global clean tech industry.

According to the IEA, governments dish out $310bn (£193.7bn) a year on direct fossil fuel subsidies while providing countless billions more in the form of indirect subsidies such as tax breaks.

Amid the never-ending debates over which complex economic instrument represents the best way to encourage businesses to cut emissions, it is easy to forget that the simplest answer is to stop encouraging businesses to produce those emissions in the first place.

That the massively mature fossil fuel industry is still propped up with that amount of taxpayers' money, on the grounds that it helps the poor and bolsters employment, is as big a scandal as bankers rebuilding their bonuses on the back of taxpayer largesse.

The IEA estimates that simply phasing out fossil fuel subsidies, and making people pay the real price for the carbon intensive fuel and energy they use, would deliver cuts in global emissions of 12 per cent by 2050. That is over a fifth of the cut scientists say is needed to avert global catastrophe.

The money saved could then be diverted to those worst effected by rising fuel prices, helping them to invest in more fuel efficient technologies.

In addition, phasing out these subsidies would bring the point at which renewable energy technologies become cost-competitive with fossil fuels forward years, if not decades.

Sadly, there is a long way to go for this draft communiqué to turn into reality. Obama knows only too well the damage that a well-funded vested interest can do to a widely supported progressive policy. But the fact that 20 of the world's most powerful leaders agree in principle to the phasing out of this 20th century anachronism does inspire hope that a broader agreement on tackling climate change can be reached.

Now, if only Obama's magic touch worked as effectively on the embattled US climate bill – then we really would have something to celebrate.