The discussion on the fight against climate change has been the agenda of different nations in the world. He World Bank (WB) In its most recent report, it revealed that globally every year large amounts of money are spent on subsidies to the agriculture, fishing and fossil fuels which often are inefficient and harmful for him environment.
In the document, the entity proposes to reorient global subsidies, a fact that could free up at least US$500 million annually “an amount that can be used for more productive and sustainable purposes”, they stand out.
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According to figures from the entity, explicit subsidies, that is to say those that are direct expenses of the governments and implicit ones, which are those that are not within the budgets, to fossil fuels, agriculture and fishing exceed the $7 billion, which represents about 8% of the global gross domestic product (GDP).
“Explicit subsidies in agriculture, fisheries, and fossil fuels total about $1.25 trillion, about the size of a large economy like Mexico’s. Implicit subsidies, a measure of the impact of subsidies on people and the planet, amount to more than US$6 billion a year and the burden falls mainly on the poor”, says the World Bank.
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However, looking at other specific factors of climate change, the document argues that governments worldwide continue to spend large amounts of money on these subsidies. Without contributing to solving the environmental problem.
For this reason, the group highlights that only subsidies to the agricultural sector are responsible for the loss of 2.2 million hectares of forest per year, or in other words, 14% of global deforestation. Only in this activity, the subsidies exceed US$635,000 million that lead to the excessive use of fertilizers that deteriorate the soil and water.
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Likewise, the use of fossil fuels, “which is incentivized by subsidies”, lead to the 7 million premature deaths annually, “due to air pollution”.
While fishing subsidies exceed $35 billion each year, contributing to the decrease in the fish population, the oversized fishing fleets and the drop in profitability.
According to the World Bank report, there are a number of solutions to the excessive use of subsidies in favor of contributing to the environment.
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In the first place, there is talk of the reuse of these “big” sums of money, as this will help guarantee a green and just transition that can generate employment and opportunities in the countries.
On the other hand, a reform to subsidies is proposed. In this section, the World Bank assures that there is a belief that the modifications affect the poorest population, however, “In some cases, such as energy subsidies, the rich benefit more from higher consumption.”, they assure.
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In this way, the document argues that “to protect vulnerable groups during subsidy reforms, it is recommended to compensate those who may suffer the most, using measures such as direct cash transfers”.