Bank leader calls for increased scrutiny into costly controversial subsidies: ‘I don’t believe that $1.25 trillion qualifies’
During the recent annual World Bank-International Monetary Fund meetings, World Bank president Ajay Banga called for increased scrutiny into subsidies for industries that have negative impacts on the environment — mainly the dirty energy industry, but also agriculture and fisheries, reports Reuters.
According to Banga, countries around the world spend $1.25 trillion every year subsidizing gasoline, crop farming, and fish farming, and these industries, in turn, cause up to $6 trillion in environmental harm.
“I’m not saying to get rid of all of those. I consider some of those subsidies mission-critical to the social contract with the government and its citizens. But I don’t believe that $1.25 trillion qualifies,” said Banga, the former CEO of Mastercard who took over as president of the World Bank earlier this year.
Banga’s leadership on environmental issues marks a departure from the previous direction of the World Bank, as he took over from David Malpass, who drew frequent criticism for challenging the scientific consensus on dirty energy being responsible for the overheating of our planet.
Getting rid of subsidies can be a controversial topic, as it may immediately lead to things like gasoline becoming more expensive, driving up the cost of living for average citizens. However, according to a recent World Bank report, most subsidies benefit the rich.
According to the International Energy Agency (IEA), dirty energy subsidies harm people more than they help them in the long run. “It is far better for governments to spend time and money on structural changes that bring down fossil fuel demand, rather than on emergency relief when fuel prices go up,” the IEA wrote.
The agriculture industry also drew Banga’s focus, as it receives $500 billion in subsidies per year, as reported by Euronews Green, while being the second highest contributor of planet-warming pollution, as well as a host of other negative environmental impacts.
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