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Eliminating Fossil Fuel Subsidies to Curb Carbon Pollution

Eliminating Fossil Fuel Subsidies to Curb Carbon Pollution

At it's spring meetings, the World Bank will discuss reductions in fossil fuel subsidies as a means to curb climate change.

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idea_bulbWorld Bank President Jim Yong Kim made headlines on the eve of the annual spring meetings of the World Bank Group and the International Monetary Fund last week with this simple declaration: “We need to get rid of fossil fuel subsidies now.” With the consumption of these subsidies reaching $550 billion in 2013, there is a lot of work to be done.

At the spring meetings themselves, slashing fossil-fuel subsidies surged toward the top of the agenda—which is where it should be ahead of the U.N. Framework Convention on Climate Change negotiations this December in Paris. Such subsidies not only inflate the use of polluting fuels and encourage waste, but also tilt the playing field against renewable energy sources. Globally, the consumption of fossil fuels is subsidized at more than four times the rate of renewable energy.

Furthermore, while fossil-fuel subsidies are often justified as a way to provide assistance to those in need, they are often highly regressive. In developing countries, the richest 20 percent of the population captures, on average, six times more of the value of fuel subsidies than the poorest 20 percent. There are many far more effective and efficient ways for countries to meet the energy demands of those in need.

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