The IISD (International Institute for Sustainable Development), a Canada-based, public policy research institute, is recommending that the upcoming Rio+20 meeting—the United Nations Conference on Sustainable Development gathering scheduled for 4–6 June 2012—focus on a few high-impact initiatives that will help create the enabling framework for sustainable development.
Specifically, IISD is pushing for a national pledge to phase out fossil-fuel subsidies to free up valuable fiscal resources that can be redirected to fund other sustainable development priorities, provide the opportunity to introduce more targeted measures to support low-income households, reduce greenhouse gas emissions and help incentivize investments in renewable energy.
IISD is also suggesting a second component: that pledging countries assist other countries phase out fossil-fuel subsidies that undermine sustainable development.
Governments use fossil-fuel subsidies as policy tools to achieve objectives such as alleviating energy poverty; increasing domestic production; reducing living costs of the poor; or gaining political support, IISD notes. However, the organization points to the unintended consequences that come with the use of subsidies: subsidies are generally costly; they significantly increase global and local pollution; and they are socially regressive.
What we choose as our energy future will be vital to how sustainable our development is. Subsidies to nuclear, biofuels and renewables should also be estimated and evaluated against the policy goals they are designed to meet. Renewables will play a major role in any sustainable future energy system, and there are strong reasons to support them. Nevertheless, evaluating the performance of subsidies and reforming them to be more effective and efficient in meeting their policy goals would be a very useful exercise as the world moves towards a major scaling up of renewables-based electricity generation.
The proposed Pledge focuses only on fossil-fuel subsidies, but an alternative option could extend the scope of the pledge to cover all energy subsidies. A pledge to reform all energy subsidies would need to be supported by more research to understand the scale and impact of the subsidies for nuclear energy, biofuels and renewables-based electricity.—IISD