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Reducing CO2 subsidies—fighting poverty
The interactive MCC subsidy map shows just how much the reduction of fossil fuel subsidies can help combat poverty and provide the poorest with access to water, electricity and sanitation. In almost 80 countries, the population lacks access to basic infrastructure. More than 70 states could provide clean water to all citizens, if they only ceased subsidizing fossil fuels. More than 50 countries could ensure access to electricity networks and more than 60 could provide their citizens with sanitary facilities.
As a user of this map, you decide yourself how much you want to reduce subsidies and where to invest the money. In the upper left corner, you can move the control for "Reduction of fossil fuel subsidies" to the right to up to 100%. Afterwards, you may adjust the access rate targets for water, electricity, sanitation and telecommunication with the controls below. Following the United Nations Sustainable Development Goals, we assume that the funds released by cutting subsidies will be invested in infrastructure facilities over a period of 15 years. The different colors of the countries on the map then indicate which of them can accomplish the access targets you selected by using the freed up subsidy money.
This approach is particularly interesting for countries that have substantial infrastructure access gaps. Countries, on the other hand, that already provide access to all four infrastructure types to at least 90 percent of their population are not considered in this map—these are light blue. If you want to simulate, for example, that 50 instead of 35 percent of the people in Angola have access to electricity, just set the control for electricity to 50 percent. The access target automatically applies to all countries on the map, which means that countries which already have an access rate of 50 percent and above do not need to invest any more money in this particular infrastructure.
By moving the mouse over the individual countries, you can see the respective amounts of money that is missing to achieve the target rate you chose. If you would like to consider just one type of infrastructure at a time across all countries, you can turn off the others at the top of the screen. Of special interest may be the Republic of the Congo, Zimbabwe, Zambia, Cape Verde, Angola and Nigeria, as well as Indonesia or India. These countries have particularly high fossil fuel subsidies and—at the same time—a huge need to catch up in terms of infrastructure access.
Article in Nature Climate Change
In this map, only direct financial support for the consumption of fossil fuels is considered a subsidy. It is calculated as the difference between the world market price and the respective national selling price. Tax reductions as well as the social costs of using fossil fuels (e.g., air pollution) are not included in the data.
The map is based on calculations by the MCC published in the article "Development incentives for fossil fuel subsidy reform" in the journal “Nature Climate Change”, which was written by the MCC scientists Michael Jakob, Claudine Chen, Sabine Fuss, Annika Marxen and Ottmar Edenhofer. For their calculations the authors used data from the International Energy Agency (IEA), the World Bank, as well as numerous studies on infrastructure costs.
In 2011, fossil fuel subsidies amounted to about 550 billion US dollars. The calculations are based on the assumption that the countries use the freed up funds to advance infrastructure expansion until the year 2030. Subsidies for countries with complete infrastructure data amount to about 330 billion US dollars. Employing the expected population growth, the researchers projected the share of people around the world without access to water, electricity, sanitation and telecommunications into the future.