Scrapping fuel subsidies can help climate: U.N. study
Tuesday, August 26th, 2008ACCRA (Reuters Tue Aug 26, 2008) - Abolishing subsidies on fossil fuels could cut world greenhouse gas emissions by up to 6 percent and also nudge up world economic growth, a U.N. report showed on Tuesday.
Subsidies on oil, gas or coal are meant to help the poor by lowering the price of energy but the report, issued on the sidelines of a 160-nation U.N. climate meeting in Ghana, said they often backfired by mainly benefiting wealthier people.
The study said fuel subsidies totaled about $300 billion a year, or 0.7 percent of world gross domestic product (GDP).
“Cancelling these subsidies might reduce greenhouse gas emissions by as much as 6 percent a year while contributing 0.1 percent to global GDP,” it said.
“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,” he said in a statement.
Governments in
ZED COMMENT: In that hydrogen fuel can be produced directly from the electrical grid and water by electrolysis, it requires no subsidy such as that enjoyed by coal mining or ethanol producers. Compared to the extensive infrastructure needed for petroleum production, there is no need for subsidy because hydrogen production is on-site, and the electrical grid pre-exists. Elimination of all carbon fuel subsidies would both reduce pollution, and make available substantial funding for socially responsible programs.