Removing harmful subsidies for the sake of sustainable development - the English version of a short piece on harmful subsidies in WEITBLICK
Whether nationally or globally: the numbers are so shockingly high, they are hard to imagine. Nine billion euros, for instance, are annually granted to German industry in savings on electricity costs. Worldwide, subsidies are estimated at a whopping one trillion US dollars – subsidies that harm the climate, the people and the environment, not helping deliver a better future. When governments declare that they have no money for urgent investments to bring about a social and ecological economy, this is more than hypocritical.
The money is there – it is just being given to the wrong people for the wrong things. For example, the millionaire-family Vidal from Spain uses illegal fishing practices to empty our oceans, yet at the same time pockets € 12.5 million in EU fisheries subsidies. Or how about the rich producers and users of fossil fuels (the Exxon Mobils of this world), who, with an estimated $ 750 billion per year, collect the lion's share of harmful subsidies worldwide. According to the International Energy Agency, only eight percent of fossil fuel subsidies reach the poor.
There is another way. Costa Rica has introduced a tax on oil, whilst reducing and redeploying its fossil fuel subsidies. Ethiopia has abolished subsidies for fossil fuels – and thereby reduced the import of kerosene (with a positive impact on the public purse). Why is it then, that not more countries follow these examples? The answer is easy to give and hard to overcome: It's a question of power. Fishing and oil barons have undue influence over our governments. So they manage to defend their privileges and shift the social and environmental costs of their actions onto the community - onto all of us.
In Germany, the overall social and environmental costs of electricity from lignite and coal-fired power plants, for example, add up to 15.6 and 14.8 cents per kilowatt hour respectively. For nuclear energy it's even more – at least 16.4 cents per kilowatt hour are due. Yet for one kilowatt hour of wind power, the accrued costs are just 8.1 cents. Nonetheless, powerful energy companies manage to ensure that the discussion on the streets and in the tabloid press is about supposedly "expensive" green energy. A debate that completey ignores the fact that the true - social and environmental - costs of electricity are not paid for by those powerful companies, but by all of us.
Besides transparency, clear policy objectives (such as the elimination of harmful subsidies by 2020 at the very latest) and a tax system in which social and environmental "bads" are charged adequately, one thing is needed above all: In order to change the current subsidy and tax policy, the power of large polluter-companies must be broken.
Who is being supported to do what is a question of democracy. Only when the people, not the industrial lobby, determine the actions of our rulers, will the billions that flow today into the destruction of our future, finally fund poverty reduction and environmental protection.
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