World Bank seeks end to fuel subsidies

Sept. 22, 2011 at 6:16 AM

WASHINGTON, Sept. 22 (UPI) -- Leading world economies should get rid of subsidies for fossil fuel use to help developing countries adapt to climate change, a draft World Bank report says.

A draft climate finance paper prepared by the World Bank ahead of this year's climate summit in Durban, South Africa, states public funding might not be available for the $30 billion pledged to help developing countries deal with climate change, The Guardian newspaper in London reports.

The paper, the draft obtained by the newspaper indicates, said financial backing for "climate stabilization and adaption" will mostly likely come from the private sector in the long run.

The draft notes that half of the estimated $50 billion per year in fossil fuel subsidies goes to the oil industry and another 25 percent goes to coal and natural gas.

A starting point to raise money for developing countries, the report states, is the removal of subsidies on fossil fuel use.

"Reform of fossil fuel subsidies in developed countries is a promising near-term option because of its potential to improve economic efficiency and raise revenue in addition to environmental benefits," the draft reads.

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