Letters | Climate change: why are governments still funding fossil fuels?

Instead of subsidising energy that ruins the environment, tax it heavily and use the resulting income to subsidise people’s other basic needs
Doing so would generate more revenue, help the environment and nudge people to be more conscientious about energy efficiency and their energy habits

Climate change

Letters

Published: 12:30am, 28 Dec 2021

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Like many other young citizens, I will witness the effects of global warming and climate change in the next 60 years, including environmental damage to wildlife and sea level rise. I am worried about the effects of these changes on my generation and on the world as we know it.

After all the talk and warnings from the scientific community, I would expect climate change to be common knowledge and governments across the world – especially the most advanced economies – to be taking drastic measures to solve the problem. However, even countries regarded as pioneers of environmental protection laws are subsidising fossil fuels instead of curbing them by heavier taxation.

The European Union, for example, provided €52 billion (US$58.9 billion) worth of subsidies just in 2020. This decision is often masked as an economic need, or the argument that households and industries need cheap energy sources.

This decision is bizarre since meeting climate change pledges should instead generate the opposite outcome – reducing fossil fuel use. In other words, they should heavily tax fossil fuels and use the resulting income to boost energy efficiency and clean energy sources.

“What about my electricity and gas bills? They are already expensive, I cannot afford to pay more,” you may say. Yes, but you could afford to if your food, education and other basic needs were cheaper.

03:07

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Subsidising fossils fuels to make energy bills affordable is simple market manipulation. So if manipulating the market is fine, how about doing it towards the right goal? Why not reduce oil and gas subsidies to zero and use those funds to subsidise food, education and environmentally friendly consumables?

These subsidies would equally benefit the same households with no negative impact on their monthly net savings. However, the long-term impact of this shift would be positive for everyone.

If a large percentage of people’s monthly expenses was related to energy, they would be more focused on energy saving and improving their energy use habits. Consumers would be more oriented towards buying energy-efficient appliances and, when possible, thermally insulate their homes to reduce energy consumption.

Households are bound to their economic needs, so fighting climate change requires wise choices by governments to support families as they reduce carbon emissions. The goal is clear and the funds are ready to be allocated. Will we again have to witness our taxes being used to subsidise coal, gas and other fossil fuels in 2022?

Alessio Belotti, Hang Hau