Ending fossil-fuel subsidies would help climate and economy, U.N. says
Ending fossil-fuel subsidies around the world could slash greenhouse-gas emissions by up to 6 percent and help the economy at the same time, according to a new United Nations report [PDF]. Globally, governments spend some $300 billion on fuel subsidies that encourage consumption, delay transition to cleaner energy sources, and mainly benefit the already-rich even though most of the programs are intended to help the poor with fuel costs. “In the final analysis, many fossil-fuel subsidies are introduced for political reasons but are simply propping up and perpetuating inefficiencies in the global economy,” said U.N. Environment Program director Achim Steiner. “Governments should urgently review their energy subsidies and begin phasing out the harmful ones.” Instead of subsidizing dirty energy, the report recommends employing more direct programs to help the poor as well as enacting tax breaks and other financial incentives to promote cleaner energy sources. Russia is the largest fuel-subsidy spender, throwing down some $40 billion a year mainly to subsidize natural gas; Iran is in second place, spending about $37 billion a year on fuel subsidies.