World Bank urges using ‘wasted’ subsidies to fight climate change

Trillions of dollars which could be used to tackle climate change are being wasted on harmful and unnecessary subsidies, the World Bank said in a report Thursday.

“People say that there isn’t money for climate but there is — it’s just in the wrong places,” World Bank Senior Managing Director Axel van Trotsenburg said in a statement.

“If we could repurpose the trillions of dollars being spent on wasteful subsidies and put these to better, greener uses, we could together address many of the planet’s most pressing challenges,” he added.

The World Bank report said $1.25 trillion in direct subsidies are currently given to the agricultural, fishing and fossil fuels sectors each year.

Fossil fuel subsidies alone make up around six times what countries pledged to mobilize annually under the Paris Agreement for renewable energies and low-carbon development, the bank said.

As well as the $1.25 trillion in direct subsidies, the World Bank report also identified around $6 trillion in what it called “implicit subsidies” being wasted each year.

The World Bank said implicit subsidies represent the “costs on people and the planet from pollution, greenhouse gas emissions, road congestion, and the destruction of nature ultimately resulting from the subsidies.”

Subsidy reform can “remove distorted incentives that obstruct sustainability goals but it also can unlock significant domestic financing to facilitate and accelerate sustainable development efforts,” the Bank said.

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© Agence France-Presse

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