By Adedapo Adesanya
The Director-General (DG) of the World Trade Organisation (WTO), Mrs Ngozi Okonjo-Iweala, has urged countries to prioritise subsidies that tackle the climate crisis, saying governments must start to distinguish between the good subsidies they need to fight the crisis and the bad ones that are increasing greenhouse gas emissions.
According to the former Nigerian minister of finance, she said subsidies and other incentives to burn fossil fuels and encourage poor agricultural practices, amounting to about $1.7 trillion a year, are distorting world trade and hampering the fight against climate breakdown.
She gave the example of clean cooking stoves in the developing world, saying that countries instead of subsidising fossil fuels, could subsidise clean stoves that use solar power or electricity instead of burning wood.
“These kinds of subsidies, no one would be against,” she said.
Mrs Okonjo-Iweala lamented that developed countries devote more money to fossil fuel subsidies than the poor world, so if they reduced those emissions-increasing subsidies, they could free up cash for the poor world, to pay into climate finance such as the loss and damage fund for poor and vulnerable countries.
She also urged countries to bring their trade policy in line to limit global temperature rises to 1.5C (2.7F) above pre-industrial levels.
“Countries need to review the import tariff regimes to make sure they’re not charging less for polluting items, and charging more for the green items,” she said. “At the WTO, we’ve noticed that import tariffs in many countries on renewables are on average higher than tariffs for fossil fuel goods.”
She also said that in many countries the tariffs on imports of secondhand petrol or diesel cars are lower than those on hybrid or electric vehicles.
“So you’re disincentivising the very thing that will help you get to net zero,” she warned.
“Trade is an important and positive force for the net zero transition,” she said. “But it’s not being paid attention to as a positive force.”
She also urged governments to make sure all their public procurement was aligned with the 1.5C goal.
Modupe Gbadeyanka