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IISD-GSI, UNEP, IMF, GIZ Workshop Promotes Fossil-Fuel Subsidy Reform

gsi-giz-unep-fum29 April 2014: The Global Subsidies Initiative (GSI), the UN Environment Programme (UNEP), the International Monetary Fund (IMF) and the German International Cooperation Agency (GIZ) co-hosted a workshop on 'Reforming Fossil-Fuel Subsidies for an Inclusive Green Economy'.

The event, which took place from 28-29 April 2014, in Nairobi, Kenya, brought together approximately 80 representatives from finance, environment and energy ministries, international, regional and non-governmental organizations (NGOs), academia and local UN missions. Participants, who came from 25 countries, gained an increased understanding of fossil-fuel subsidies, which are estimated at US$500 billion annually. The IMF finds that eliminating these subsidies could decrease carbon dioxide emissions by 13%.

The workshop focused on changing fiscal policies to remove support for fossil fuels and redirect public finance toward sustainable development. Participants learned about options for reform, fossil-fuel subsidies' connection to green investment and policies that are supporting fossil fuel consumption. Experiences in reform from a sampling of countries were also shared. In addition to assessing fossil-fuel subsidies and fiscal policies to support their reform, sessions also focused on sector-specific reform in the petroleum and electricity industries.

UNEP Executive Director Achim Steiner opened the event, noting that funds spent on fossil-fuel subsidies represent significant costs to governments and compromise their ability to invest in other priorities. Presentations at the event further stressed that potential benefits of reforming subsidies include reduced fiscal deficits, and freed resources for investment in social safety nets and sustainable energy. However, participants also noted the challenges of subsidy reform and focused on overcoming obstacles to reform in one of the workshop sessions.

The GSI is a project of the International Institute for Sustainable Development (IISD) designed to put the spotlight on subsidies and the effects they can have on environmental quality, economic development and governance. [UNEP Press Release] [Reforming Fossil-Fuel Subsidies for an Inclusive Green Economy Workshop Webpage] [IISD-GSI Website] [UNEP Green Economy Website] [IISD RS Sources]