World Bank Urges Scrapping Fossil Fuel Subsidies To Help Poor Nations Adapt To Climate Change
Echoing what countless NGOs, economists and the UN have said previously, the World Bank apparently will be weighing in on fossil fuel subsidies. According to draft documents leaked to The Guardian, the World Bank will tell G20 finance ministers that the $50 billion in subsidies given to the fossil fuel industry worldwide each year should be eliminated, so as to help poor countries adapt to climate change.
The draft paper says,
A starting point should be the removal of subsidies on fossil fuel use. New OECD estimates indicate that reported fossil fuel production and consumption supports in Annex II countries [24 OECD countries] amounted to about $40-$60bn per year in 2005-2010 ... if reforms resulted in 20% of the current level of support being redirected to public climate finance, this could yield $10bn per year...Reform of fossil fuel subsidies in developed countries is a promising near-term option because of its potential to improve economic efficiency and raise revenue in addition to environmental benefits."
Of the $50b in fossil fuel subsidies, about one quarter of that goes to coal and natural gas, and amounts to twelve times the support given to renewable energy sources.