Eliminating subsidies could curb climate change while providing funds to help poor through a fuel transition - economist
LONDON (AlertNet) – Eliminating fossil fuel subsidies – and using some of the savings to help the poorest cope with rising energy prices – could curb climate change and energy waste, cut government costs and reduce social inequality, a report on sustainable development suggests.
Such a transition to cleaner energy sources “is definitely do-able”, said Balazs Horvath, an economist and a lead author of the United Nations Development Programme report, which looks at how development efforts could be made more sustainable and inclusive in Europe and Central Asia.
The elimination of large-scale fuel subsidies two decades ago with the collapse of the Soviet Union – and Europe and Central Asia’s subsequent economic growth and fall in greenhouse gas production – “give quite a bit of weight to the argument that this can work”, said Horvath, a poverty reduction expert in the region.
Between 1990 and 2008, Europe and Central Asia saw a 28 percent fall in carbon emissions - the largest of any region of the world - even as GDP grew by 22 percent, according to the European Bank for Reconstruction and Development.
Climate-changing emissions still remain among the highest in the world per capita in some countries of Eastern Europe, the Caucasus and Central Asia – but those countries are also the ones where fossil fuel subsidies remain in place, the report noted.
Its authors argue that curbing climate change, inequality, waste and overuse of natural resources are all key to creating a sustainable development blueprint that will be more equitable and work effectively in the emerging countries of Europe, Central Asia and beyond.
“The more we postpone the transformation, the higher will be the cost,” noted Jan Kubis and Kori Udovicki, two U.N. economic and development experts, in a foreword to the report.
Inevitably, in the medium and long term, new lifestyles and production and consumption patterns will emerge, they added.
Creating sustainable growth, the report argues, depends not just on putting in place economically sustainable policies but also social and environmentally sustainable plans.
“All three are prerequisites to say development is sustainable,” Horvath said in a telephone interview. He noted that economic weakness brought down socially and environmentally solid Iceland in 2008, for instance, while the Maldives now are threatened by a debilitating environmental problem – sea level rise linked to climate change – despite their relative economic and social strength.
Besides calling for an end to fuel subsidies, the report makes a range of other recommendations, including that women – who often make choices about household consumption and strongly influence what their children learn – are consulted in sustainable development policy decisions.
Young people also need a strong voice, the report said, not least because sustainable development, in essence, is about “meeting the needs of the present generation without compromising the ability of future generations to meet their needs”.
Creating transformative economic and social change is never easy, Horvath admitted, and the report’s recommendations may be a hard sell to policymakers, he said.
“I’m the first to concede this willingness is not yet there,” he added. “But my feeling is it will be there (eventually) because right now we are on an unsustainable path, and at some point that will be obvious to everyone.
“When pressures are imminent enough, politicians will begin scrambling around to do something,” he said. “And at that point, luck favours the prepared.”
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