Fossil fuel subsidies are bad economic policy, bad social policy and bad for the environment. Yet, many countries have some type of fossil fuel subsidy. In 2013, those subsidies added up to nearly $550 billion.
Why are so many countries spending so much on what is simply bad policy? And how can they reform these subsidies? This is what a panel of government ministers who have implemented reforms debated during the IMF/World Bank Group Spring Meetings in an event organized by ESMAP and co-hosted by the World Bank Group, the United States, and Friends of Fossil Fuel Subsidy Reform.
The panelists – representing countries as different as Angola, Egypt, Honduras, and Ukraine – described the countries’ varied experiences, but out of these varied experiences, four common messages emerged:
At this year's climate ministerial of the World Bank Group/IMF Spring Meetings, 42 finance and development ministers discussed phasing out fossil fuel subsidies, putting a price on carbon and mobilizing the trillions of dollars in finance needed for a smooth, orderly transition to a low-carbon economy. World Bank Group Vice President and Special Envoy for Climate Change Rachel Kyte describes the conversations in the room and the key takeaways.
Feike Sijbesma is CEO of Royal DSM, a health, nutrition, and materials company that has evolved from its original purpose (it was established by the Dutch government in 1902 to mine coal) into a science-based company that develops sustainable materials. It takes its name from the original Nederlandse Staatsmijnen, or Dutch State Mines.
“I think, first of all, we need to agree that climate change is real.
Also available in: Português
World Bank Group Vice President and Special Envoy for Climate Change Rachel Kyte talks about Brazil's shift toward green, inclusive growth and how innovative practices developed there have gone global. The next challenge: developing business models to invest in the restoration of degraded land.
Agriculture is central to feeding the world and reducing poverty.
But conventional forms of agriculture are often unsustainable and drive land degradation. Agriculture is also the world’s leading anthropogenic source of methane (52 percent) and nitrous oxide (84 percent) emissions, and the principal driver of deforestation worldwide. Agriculture and agriculture-driven land-use change contribute 24 percent of global greenhouse gas emissions.
We can’t fix what we don’t measure, which is why quantifying greenhouse gas emissions from agricultural production is a necessary step for climate-smart agriculture (CSA). Greenhouse gas accounting can provide the numbers and data that are important to solid decision making.
In the village of Aharkandhi in northeastern Bangladesh, life has changed since homeowners began installing solar panels on their roofs. At night, families gather at the local grocery store to watch TV, which boosts business. Children study longer than before.
This is due in part to a World Bank-financed electrification project to promote off-grid electricity in rural communities. This year, the project became the first renewable energy program in Bangladesh to be issued carbon credits for lowering greenhouse gas emissions and the world's first Programme of Activities for solar home systems under the UNFCCC’s Clean Development Mechanism (CDM) to generate carbon credits.
With access to electricity, people are finding new ways to increase their income, and the word is spreading quickly across villages.
In 2014, Tajikistan applied climate analysis to maximize investments in an aging hydropower system upon which half a million people depend. Morocco continued the phased development of a 500 MW concentrated solar power complex — the first of its kind in Morocco and one of the largest in the world, promising to bring electricity to 1.1 million Moroccans. Indigenous peoples’ groups in Brazil presented and received approval for a $6.5 million plan to advance their participation in sustainable forest management.
These are just a few of the many progressive steps that 63 developing and middle income countries are taking to shift to low carbon, climate-resilient economies with support from the Climate Investment Funds (CIF).
With more than $8 billion in resources expected to attract at least an additional $57 billion from other sources, the CIF is accelerating, scaling up, and influencing the design of a wide range of climate-related investments in participating countries. While this may be only a small portion of the resources needed annually to curb global warming, the CIF is showing that even a limited amount of public funding, if well placed, can deliver investments at scale to empower transformation.
Five months after the UN Climate Leadership Summit, with its unprecedented call to action for putting a price on carbon, low oil prices have provoked governments to look again at whether they have prices right and to consider how to exploit a golden opportunity to reset signals within their economies for lower-carbon growth.
Business leaders in closed-door and public sessions in Davos last month talked of the inevitability of effective prices on carbon and the need for an orderly transition to lower-carbon growth. There was a sense that business, not normally reticent when pointing out how policy can negatively affect operations, needs to use its voice to urge smart, early policy action on carbon pricing. The bottom line was that this price signal will be essential, if insufficient on its own, to steer economies closer to a pathway that can keep warming below 2 degrees Celsius.
The voices were CEOs, from all sectors of the economy and all regions of the world. They recognize the risks climate change poses to their supply chains and businesses.
Last week, we heard those arguments again as organizations that have come together since the summit into a Carbon Pricing Leadership Coalition (CPLC) met to assess progress and plan for 2015.
By Jeff Swartz, Director of International Policy at the International Emissions Trading Association (IETA)
With carbon pricing policies emerging around the world and the recent show of public support for carbon pricing from 74 national governments and more than 1,000 businesses, one piece of the puzzle that needs to be solved is how to connect systems to create an international carbon pricing framework.
In the lead up to the Paris negotiations this December, governments from around the world – including China, South Africa and Russia – have signaled their willingness to apply a price on carbon, yet businesses and civil society know that we will not be able to move towards a fully functional low-carbon global economy by operating under a fragmented system of international carbon pricing policies. Furthermore, the IPCC’s verdict on the need to increase international cooperation on climate mitigation policies highlights the need for an international carbon pricing framework.