The World Bank is asking for the redirection of subsidies in the climate crisis

He the world bank This Thursday, he pointed to the trillions of dollars “wasted” spent on subsidies for agriculture, fishing and fossil fuels that harm the planet and called on governments to rethink and redirect the use of those resources.

In a report released today, the agency says subsidies for these three sectors exceed seven trillion dollars a year, about 8% of world GDP, and are not helping to curb global warming.

He The Chief Economist of the World Bank for Sustainable Development, Richard Damania, At the press conference, he pointed out that these subsidies have a harmful effect on people, the planet and economies.

“Every year we spend roughly the equivalent of a medium-sized economy like Mexico on things that hurt, and in many countries they spend more money on environmentally damaging subsidies than on health, education and poverty reduction,” Damania said.

Global direct public spending in the three sectors is $1.25 trillion per year.

Just to subsidize the consumption of fossil fuels, countries spend about six times more than they committed to mobilize annually in the Paris Agreement for renewable energy and low-carbon development.

In this sense, Damania pointed out that the goal of the report is “encourage governments to spend better rather than simply spend more”, because the trillions of dollars needed are “wasted”.

Likewise, in 2021, close to 577,000 million dollars have been allocated to artificially lower the prices of fuels that pollute the environment, such as oil, gas and coal. The report estimates that redirecting those government subsidies could generate at least half a trillion dollars toward more productive and sustainable uses.

In addition, those who benefit from these subsidies are the richest population, since the richest households consume much more energy than the poorest in most countries. In this way, the reform of subsidies for fossil fuels would compensate the poorest.

When it comes to agriculture, the richest countries are the ones that give the most subsidies, from which the richest farmers profit the most because they produce more.

Agricultural subsidies, about $635 billion a year, encourage excessive use of fertilizers that degrade soil and water and harm human health.

In addition, subsidies for products such as soybeans, palm oil and beef are pushing farmers to the forest edge and are responsible for 14% of forest loss each year, according to the report.

On the other hand, aid to fisheries exceeds 35,000 million per year, which strengthens fishing fleets and reduces fish stocks.

According to the analysis, in a context where more than one billion poor people mainly feed on fish, it is necessary to restore the reserves of these animals to “healthy” levels.

Damania clarified that the data is “approximate” and could be even worse, firstly because most of it is before the pandemic, but also because many developing countries do not have the statistical capacity to provide it.

“We don’t know the full size of subsidies in many developing countries, so we know we’re underestimating what’s going on,” warned.