Switching subsidies for universal access to services

Reforming fossil fuel subsidies could release enough funds to finance universal access to water, sanitation, and electricity in many countries, as well as helping to cut global greenhouse-gas emissions, new research in Nature Climate Change suggests. Redirecting fossil fuel subsidies to infrastructure investments could also close a large share of current infrastructure access gaps across the world.

Michael Jakob and colleagues analysed global fossil fuel subsidies, worth US$550 billion per year. They find that redirecting only a fraction of the US$8.2 trillion of expected fossil fuel subsidies between 2015 and 2030 could provide universal access to key products and services in many countries, as well as having significant environmental benefits.

The proportion of funds necessary for redirection would vary between countries. In Nigeria, only 4% of projected fossil fuel subsidies over 15 years would be needed to provide universal access to water. In China, almost half would be required. In India, investing 18% of fossil fuel subsidies over the same period could cover the cost of universal sanitation. The authors comment that such reform would need to be gradual, however, to ensure energy prices did not rise in the short-term.

Jakob and colleagues argue that highlighting alternative uses for fossil fuel subsidies could pave the way for reform and, ultimately, more ambitious action to tackle climate change.