The 2011 Annual Meeting of the World Bank and IMF is underway in Washington D.C. At Thursday’s opening press conference, President Robert Zoellick made some remarks which seem to corroborate the Guardian’s recent report of leaked World Bank draft report entitles “Mobilizing Climate Finance.” The report urges rich countries to eliminate $50B a year in fossil fuel subsidies they give to poorer countries to help them “address climate change.” According to the Guardian, the world’s leading economies requested the report.
“I just got an email report this morning–and one issue that they all emphasized–it’s kind of a “sleeper” issue–is the huge energy subsidies that are available in developing and developed countries which lead to overuse of the resource and also lead to inefficiency in production. So here is another good example of a structural change if you move toward reducing the subsidies and even just have market pricing for energy, to say nothing of the effects that it might have on carbon.”
A “sleeper issue” – yes, you might call it that! At the very least, subsidizing fossil fuels as a way to address climate change is one perplexing strategy – unless, maybe, you’re looking through the eyes of an oil company, coal producer, or natural gas provider. In fact, the draft report “suggests that half the $50bn-a-year fossil fuel subsidies go to the oil industry, and around a quarter to coal and natural gas.”
Worldwide energy from fossil fuel receives 12 times as many subsidies as renewable energy. Unraveling this imbalance shifting from our reliance on fossil fuels is sadly quite time consuming. Yet, if the World Bank is emerging as an agent of change that can only be a good thing. The World Bank does carry a lot of clout. Hopefully, their upcoming World Development Report on jobs (the first in 16 years), will outline a connection between job creation, renewable energy, and climate change.