The government gives a lots of subsidies on the fossil fuels every year – more than a trillion dollars in 2022! But using fossil fuel also causes problems for the environment and people’s health, which end up costing over 5 trillion dollars a year. Considering the challenges that today’s world is facing, there are other more effective alternatives towards which these billions and trillions of dollar should be diverged to, i.e. towards more sustainability driven initiatives.

Studies have found that air pollution from fossil fuels causes around 8.7 million early deaths each year. Plus, it’s messing up the climate big time. It’s a huge number, and it means that the fossil fuels when subsidized result in the suffering of humans from the bad health and environmental issues, which must be stopped. So, it’s high time to change our priorities and put our money into renewable energy like wind, solar, and hydro power. It will not only help us in the fight against the changing climate, but it’ll also create new jobs for us. Ideally, we should use this cash to create a more sustainable future for everyone.

Also, to set things in a more clear perspective before I start putting in my thoughts on how we can repurpose it is that, if we factor in the social cost of carbon (SCC), estimated at around $50 per ton of CO2, we can see the true impact of these subsidies. With $1 trillion in fossil fuel subsidies, we’re indirectly supporting the emission of around 20 billion tons of CO2. So, my intent in this blog is to give my own perspective, that is my individual perspective on different ways we could utilize this fund in a much better way. And I would love to hear your perspectives in the comment, or maybe your ideas.

CASE 1 – The Standard approach

_{50% of $1 Trillion Fossil Fuel Subsidies towards}
Renewable Energy and Storage Solutions

The global energy demand is expected to rise by 50% by 2050. If we reallocate 50% of the $1 trillion fossil fuel subsidies, that’s $500 billion, towards renewable energy and energy storage solutions, we can accelerate the clean energy transition. This investment could help deploy an additional 880+ GW of renewable capacity (based on an average cost of $0.57/W), reducing our reliance on fossil fuels and meeting the growing energy demand sustainably.

_{25% of $1 Trillion Fossil Fuel Subsidies towards}
Energy Efficiency Improvements

If we could redirect just 25% of the $1 trillion in fossil fuel subsidies, that’s $250 billion. Now, imagine using this amount to invest in energy efficiency improvements. Studies suggest that for every $1 invested in energy efficiency, we can save $2 to $4 in energy costs. That means we could potentially save up to $1 trillion in energy expenses! It’s clear that investing in a sustainable future is not only good for the planet but also makes economic sense.

_{25% of $1 Trillion Fossil Fuel Subsidies towards}
Transportation

With $1 trillion in fossil fuel subsidies, imagine reallocating just 25% ($250 billion) to promote electric vehicle (EV) adoption. If the average EV incentive is around $7,500 per vehicle, we could support the purchase of over 33 million EVs! This shift would substantially reduce greenhouse gas emissions, improve air quality, and decrease our dependence on fossil fuels.

Summary

CASE 2 – Beyond Standard approach

_{30% of $1 Trillion Fossil Fuel Subsidies towards}
Reforestation

If we were to redirect just 30% of the $1 trillion fossil fuel subsidies towards reforestation efforts, we could invest $300 billion in restoring our forests. With an average cost of $0.10 to plant a tree, we could plant 3 trillion trees! These trees would not only absorb massive amounts of CO2 but also create habitats for countless species, combat soil erosion, and provide numerous other ecosystem services.

_{5% of $1 Trillion Fossil Fuel Subsidies towards}
Education and Awareness

By diverting just 5% of the $1 trillion fossil fuel subsidies, we’d have $50 billion to invest in climate education programs worldwide. This could help us reach millions of students, empowering them to become climate leaders and innovators. This investment in knowledge would have a long-lasting impact, driving the adoption of sustainable practices and creating a more resilient future for all.

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_{15% of $1 Trillion Fossil Fuel Subsidies towards}
Climate Resilience

If we redirect 15% of the $1 trillion fossil fuel subsidies, that’s $150 billion, towards climate adaptation and infrastructure projects, we could greatly enhance our resilience to climate change impacts. This investment could help protect millions of people from the increasing frequency and severity of extreme weather events, reduce economic losses, and safeguard our communities for generations to come.

_{10% of $1 Trillion Fossil Fuel Subsidies towards}
Water Resources

Allocating just 10% of the $1 trillion fossil fuel subsidies ($100 billion) to improve water infrastructure and management could make a world of difference. This investment could help provide clean drinking water to millions, enhance irrigation systems for sustainable agriculture, and mitigate the impacts of droughts and floods.

_{7% of $1 Trillion Fossil Fuel Subsidies towards}
Reducing Food Waste

By channeling just 7% of the $1 trillion fossil fuel subsidies ($70 billion) towards improving food supply chain efficiency and storage, we can significantly reduce global food waste. Considering that roughly 1.3 billion tons of food are wasted annually, this investment could save millions of tons of food, reduce greenhouse gas emissions, and help fight world hunger.

_{8% of $1 Trillion Fossil Fuel Subsidies towards}
Research and Development (R&D)

Investing just 8% of the $1 trillion fossil fuel subsidies ($80 billion) in R&D for clean technologies could significantly accelerate our transition to a low-carbon economy. This funding would drive breakthroughs in renewables, energy storage, carbon capture, and more. As a result, we’d create new industries, generate jobs, and foster sustainable economic growth.

_{6% of $1 Trillion Fossil Fuel Subsidies towards}
Empowering Local Communities

By allocating 6% of the $1 trillion fossil fuel subsidies ($60 billion) to community-based renewable energy projects, we can create decentralized, resilient energy systems. This investment could provide clean and affordable energy to millions, particularly in rural and remote areas, while also promoting local job creation and economic development.

_{10% of $1 Trillion Fossil Fuel Subsidies towards}
Sustainable Agriculture

By allocating 10% of the $1 trillion fossil fuel subsidies ($100 billion) to promote sustainable agriculture, we can support the transition of millions of farmers to climate-resilient farming practices. This investment could fund research into innovative techniques, provide training and resources for farmers, and improve soil and water management. As a result, we could increase global food security, reduce greenhouse gas emissions, and protect biodiversity.

_{5% of $1 Trillion Fossil Fuel Subsidies towards}
Green Job Training Programs

Redirecting 5% of the $1 trillion fossil fuel subsidies ($50 billion) towards green job training programs could prepare millions of workers for employment in the renewable energy sector and other sustainable industries. By investing in education and skill development, we can ensure that displaced fossil fuel industry workers can transition to new careers, reducing unemployment and fueling the growth of the green economy.

_{4% of $1 Trillion Fossil Fuel Subsidies towards}
Environmental Conservation

By repurposing 4% of the $1 trillion fossil fuel subsidies ($40 billion) for environmental conservation efforts, we can protect and restore critical ecosystems around the world. This investment could fund the creation and management of protected areas, habitat restoration projects, and the conservation of endangered species. These efforts would help safeguard our planet’s biodiversity and promote the overall health of our ecosystems.

Summary

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Closing Note: Repurposing $1 trillion fossil fuel subsidies towards sustainability

Repurposing the $1 trillion in fossil fuel subsidies towards a range of sustainability initiatives can transform our world and can create a more resilient future. By strategically investing in areas like research and development, local communities, climate resilience, water resources, food waste reduction, reforestation, education and awareness, renewable energy, energy efficiency, transportation, sustainable agriculture, green job training, and environmental conservation, we can significantly accelerate the global transition to a low-carbon economy in a meaningful way.

“The greatest threat to our planet is the belief that someone else will save it.” – Robert Swan

Just imagine the world where we can successfully redirected 100% of these fossil fuel subsidies towards sustainable initiatives. With this shift, we could potentially:

1. Drive innovation and development of clean technologies, leading to breakthroughs in solar, wind, and other renewable energy sources.
2. Empower local communities by creating decentralized, resilient, and affordable energy systems.
3. Increase climate resilience by investing in adaptation and infrastructure projects to protect millions from the devastating effects of climate change.
4. Improve water infrastructure and management, providing clean drinking water to millions and enhancing irrigation systems for sustainable agriculture.
5. Reduce global food waste by 50%, saving approximately 650 million tons of food annually, and effectively fighting world hunger.
6. Reforest vast areas of land, planting 3 trillion trees that would sequester billions of tons of CO2, create new habitats for countless species, and provide invaluable ecosystem services.
7. Reach millions of students with climate education programs, fostering a generation of climate leaders and innovators.
8. Deploy an additional 880+ GW of renewable capacity, meeting the growing global energy demand sustainably.
9. Save up to $1 trillion in energy expenses by investing in energy efficiency improvements.
10. Support the purchase of over 33 million electric vehicles, substantially reducing greenhouse gas emissions and improving air quality.
11. Transition millions of farmers to climate-resilient farming practices, increasing global food security and protecting biodiversity.
12. Train millions of workers for employment in the renewable energy sector and other sustainable industries.

By taking bold steps to redirect the vast amount of resources currently allocated to fossil fuel subsidies, we can tackle some of the most pressing global challenges while promoting economic growth, job creation, and sustainable development. This transformative approach has the potential to create a healthier planet and to enhance the quality of life for millions of people worldwide, and of course to secure a brighter future for generations to come.