States have the means necessary to ensure the climate transition in the world if they stop wasting them by supporting destructive activities “for the planet and its inhabitants”, according to a report published Thursday by the World Bank.
According to the document, subsidies for just three sectors—fossil fuels, fishing and intensive agriculture—amount to US$1.25 trillion a year globally.
However, for several months, the international financial institutions, the World Bank and the International Monetary Fund (IMF) have been stressing that the transition and resistance of developing countries to the effects of climate change will require an investment of 1,000 billion dollars.
“We hear that there is not enough money for the climate, but in reality there is, it is simply not spent in the right place”, underlined the managing director of the World Bank, Axel van Trotsenburg, quoted in a press release.
“If we manage to reallocate these funds to more positive and clean uses, we could solve many of the most pressing problems on our planet,” added Mr. van Trotsenburg.
But the problem is broader, says the World Bank: these state subsidies lead to what is called an “implicit subsidy” which, by including the cost to the planet of pollution, greenhouse gas emissions, traffic jams and, more generally, the destruction of nature, is equivalent to 6000 billion dollars.
According to the report, States still spend on average almost six times more on fossil fuels than they had committed to mobilizing for the energy transition during the Paris Agreement in 2015.
In total, 577 billion dollars were mobilized worldwide in 2021 to “artificially lower the price of polluting energies”, which “reinforces global warming, air pollution, inequalities and poverty. ‘inefficiency’, emphasizes the World Bank.
On the agricultural side, 635 billion dollars are spent each year, leading to “excessive use of fertilizers, soil and water degradation and harming human health”, but also the destruction of 14 % of the world’s forests each year.
“Best practices in terms of subsidies are already widely known, but putting them in place is not easy because of the political challenges that this can represent and the defense of special interests”, however recognized the chief World Bank Sustainable Development Economist Richard Damania, also quoted.