Now that we finally have a global climate agreement it is time to deliver!
Making the transition to a climate-smart economy involves all facets of our global community. If we are going to be able to meet the two-degree target, a billion dollars ($1,000 milliard) will need to be invested in renewable energy systems each and every year for the next decade. That’s a total of ten billion dollars!
INVESTMENTS MUST BE STEERED AWAY FROM FOSSIL ENERGY SOURCES
A third of this money is already being invested, but the rest of the money has to be re-directed from, for example, investments fossil energy. To bring this about, politicians around the world have to take a close look at regulations, taxes and subsidies, so that it is more profitable and less risky to make investments in solutions to climate change rather than investing money in processes that have a negative impact on the climate.
TODAY FOSSIL FUEL COMPANIES ARE BEING SUBSIDISED
According to the International Monetary Fund (IMF), the world’s fossil energy companies are subsidised to the tune of $5 billion annually. Expressed in other terms, that's $600 million per hour! This is more than the nations of the world spend on health care.
How did the IMF calculate this extreme amount? This is due to the fact that the indirect costs of air pollution, flooding and drought that are caused by climate change are included in the term subsidy, and fossil energy companies do not foot the bill for the costs of their activities to society.
INCREASE TAXES FOR FOSSIL FUEL COMPANIES
If higher taxes for fossil energy companies were set so that their costs better reflected actual costs to society, they would have a greater incentive to take measures to improve the climate. It would also better reflect their actual competitiveness in regard to other energy sources. According to the IMF, global emissions of carbon-dioxide would be reduced by 20% if subsidies for fossil energy were abolished.