Accelerate global phase-out of fossil fuel subsidies

Accelerate global phase-out of fossil fuel subsidies

Global fossil fuel subsidies total US$600 billion per year, and subsidy reform can help reduce and shift vehicle trips, decreasing emissions and air pollution.

Eliminate fuel subsidies

Global fossil fuel subsidies total US$600 billion per year, and subsidy reform can help reduce and shift vehicle trips, decreasing emissions and air pollution. Consumer fossil fuel subsidy removal in the area of transport could have significant air quality impacts in rapidly growing cities in developing countries, as gasoline and diesel pollution in congested urban centres take a growing toll on public health.

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India, Indonesia and Egypt all undertook FFSR in 2015. Some countries have invest in social measures to offset the costs to citizens of rising oil prices during the process of reform (as in Indonesia, the Philippines and Iran). Other countries have chosen to investment back into the energy sector and towards renewables (such as Morocco and Ethiopia).

A study estimates that in Mexico 34 million tonnes of CO2e could be saved every year from 2014-2035, through a mix of Green Growth Transport measures including FFSR, giving a NPV of USD 193,300 million in that period. The fiscal space created by subsidy savings in Indonesia has allowed increased funding for state owned enterprises, including in transport.