World leaders should take advantage of low oil prices to ditch fossil fuel subsidies

World leaders should take advantage of low oil prices to ditch fossil fuel subsidies

World leaders need to make it clear that they choose an inclusive and sustainable economy over the ageing, carbon-intensive dirty economic model based on burning fossil fuels.

To go further, we in business need for them to set up well-structured financial tools and rules that will give us stability and certainty, unleashing investment in everything from clean energy alternatives to smart infrastructure to agricultural technology.

They should also take advantage of plummeting oil prices and continuing low interest rates in developed countries to stop funnelling some $600bn a year in taxpayers’ money to fund fossil fuel subsidies, which often disproportionately benefit the rich who use more energy, investing this money instead in renewable sources and supporting innovation.

Not only would this benefit the climate, but begin to address issues of rising social inequality. This is just one example of the climate action agenda and the development agenda are so mutually reinforcing.

Powerful vested interests in high-carbon businesses are desperately opposing these changes, using obscure scientific data to question any action, or saying that it is too difficult, too expensive or not necessary. Do not be fooled.

The Global Commission on the Economy and Climate, of which I am a member, issued a report last year showing that the best strategies for pursuing sustainable economic growth go hand in hand with lowering carbon emissions. The world will invest around $90trn in infrastructure in the next 15 years, and the commission, which includes leaders from business, government and academia, including two Nobel laureates, found that better choices in how this is spent will deliver better quality growth as well as a better climate.

Source: The Guardian

Date: February 2015

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