How to Finance the Green Economy? End Polluter Handouts.

16 June 2012

It comes as little surprise that some of the biggest sticking points in this Rio+20 process concern on Means of Implementation. There have been numerous proposals for ambitious new goals, but what good are they if there is no new funding provided? Securing stable funds for development is always a challenge, but it seems particularly difficult at Rio due to the current stress on western economies following the financial crisis.

With painful cuts being made at home, how can these countries be expected to commit money to programs that will have only indirect benefits for their own citizens? The challenge is daunting and it drives much of the cynicism that surrounds Rio+20 both in the media and in quiet conversations at Rio Centro.

This cynicism can become a self-fulfilling prophecy, but as Mr. Sha has reminded the conference “failure is not an option.” ECO agrees, funding for sustainable development must be found. And we have a suggestion.

Over a million global citizens have already thrown their support behind this incredibly obvious solution: stop giving money away to polluters. Nearly $1 trillion is spent on fossil fuel subsidies each year. If countries are at all serious about tackling the challenges of sustainable development, these subsidies are the first thing that needs to go.

The window for action on climate is closing, yet we're still pouring public money into this deadly industry. Rich nations claim austerity and continue spending billions in subsidies to oil, gas, and coal producers. You can't build a green economy on a dirty foundation.

Fossil fuel consumption subsidies, primarly in developing countries, also do not generally help the poor. the IEA has shown that only about 8% of consumer subsidies go towards the poorest 20%. And numerous reports have shown that fossil fuel subsidies are ineffective ways to promote energy access or provide social safety nets.

Clearly, this trillion dollars of dirty money could be better spent and should be viewed by delegates as one of the best sources of alternative finance.

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