How to Finance Climate Change Mitigation and the Energy Transition

Developed countries have pledged US$ 30bn until 2012 and US$ 100bn until 2020 for mitigating climate change. In all likelihood and considering the dire state of many public finances, a promise involved politicians don’t expect to keep. Therefore, the question arises where the money could come from. A surprising yet intriguing suggestion is put forward in a report by the World Bank. Cutting US$ 40-66bn of annual fossil fuel subsidies in OECD states and investing them into financing climate change mitigation measures would not only cover the better part of the pledged money but also foster economic efficiency and of course reduce waste of energy and thus carbon emissions. The bank also suggests a levy on the basically tax-free yet particularly CO2-emissions intensive aviation and maritime transport industry as a means to raise more money without significantly burden the overall economy.

ON-green-policy! Global solutions are good and of course very much required in order to tackle global warming. In some cases, however, western politicians use the call for global action (including binding reduction goals for emerging economies) in order not to act themselves. Therefore, despite the absence of global action, it is hard to see why politicians in developed countries shouldn’t at least implement actions that are clearly beneficial to their economies. Fossil fuel subsidies are free money to an already highly profitable industry, which creates relatively few jobs but huge and unaccounted for environmental problems. A wise politician would certainly not wait for China to join climate measures until doing something about that.

Source: The Guardian

Sorry, comments are closed for this post.