The United Nations Development Program confirmed in the Human Development Report in Egypt 2021 that the Egyptian government has embarked on a bold program to reform energy subsidies, which aims to gradually eliminate energy subsidies within five years, pointing out that there is a shift from energy subsidies, primarily oil and electricity, to supporting programs Social protection directed to the most vulnerable groups, to increase distributive justice and combat poverty.
A new study issued by the United Nations Development Program – today, Wednesday – indicated that the world spends a staggering amount estimated at about 423 billion US dollars annually to subsidize the consumption of fossil fuels, from oil and electricity generated by burning other types of fossil fuels such as gas and coal. The amount is four times the amount needed to help poor countries cope with the climate crisis, which is one of the sticking points ahead of the COP26 World Climate Conference, which begins next week.
This amount, which is spent directly on fossil fuel subsidies, could be used to provide vaccines against (Covid-19) for every person in the world or to cover the estimated annual cost of eradicating extreme poverty in the whole world three times.
And if we take into account the indirect costs of this support, including negative effects on the environment, the total amount is close to $6 trillion, according to data recently published by the International Monetary Fund.
UNDP analysis highlights that this money, borne by taxpayers, ultimately deepens inequalities and impedes the action needed to tackle climate change.
Achim Steiner, Director of the United Nations Development Program – in the study – said: “The (Covid-19) pandemic has revealed aspects of the global economy that must outlive time, such as the countries of the world continuing to spend billions of dollars on fossil fuel subsidies, at the same time hundreds of people live in Millions of people are in poverty and the climate crisis is accelerating. In this regard, we must ask ourselves: Is subsidizing fossil fuels a rational expenditure of public money?
Fossil fuel subsidies are ineffective and unfair. In all developing countries, according to the International Monetary Fund, the richest 20% of the population accounts for about half the amount of public resources spent on subsidizing fossil fuel consumption.
George Gray Molina, chief economist in the UNDP Office of Policy and Program Support and co-author of the study, said: “Fossil fuel subsidy reform is a politically thorny issue, but the facts show that reform is necessary and, if implemented correctly, would support the poor. It creates jobs and protects the planet,” he added, “and we hope that this study will stimulate serious discussion about the critical role that reform can play in driving green and equitable transitions in all countries.”
The study – which is being published ahead of the upcoming G-20 meetings and the United Nations Conference on Climate Change COP26 – comes in the context of the recognition by many economists and policy makers as well as the International Monetary Fund and the World Bank of the need to reform fossil fuel subsidies, which has also been strongly advocated by UN Secretary-General Antonio Guterres.
As part of a new campaign, the United Nations Development Program has produced a compelling short film depicting one of the world’s most famous extinct animals, the dinosaur, addressing the United Nations General Assembly urging world leaders to shift away from fossil fuel subsidies and “choose not to go extinct” to highlight the impacts. The massive negative of fossil fuel subsidies on humans and the planet.
The “Don’t Choose Extinction” campaign, voiced by a group of celebrities from around the world, aims to raise public awareness of how fossil fuel subsidies are hindering the significant progress made so far in the quest to reduce climate change and increasing inequality by benefiting the rich. . The Egyptian artist and UNICEF Goodwill Ambassador, Donia Samir Ghanem, performed the only Arab voice for the global campaign, emphasizing the positive and awareness-raising role played by art to support development efforts.