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Countries should do away with fuel subsidies: World Bank chief

Countries should do away with fuel subsidies: World Bank chief

Countries should do away with subsidies for fossil fuels to help mitigate the impact of climate change, World Bank chief Jim Yong Kim today asserted, but felt removing them would be "politically difficult".

He made the comments while discussing ways to tackle climate change issues at the World Economic Forum (WEF) here. India and many other countries provide subsidies on fossil fuels like diesel and kerosene.

"We should be removing fossil fuel subsidies in every country in the world," the World Bank President said. Citing the example of Tunisia, Kim said fossil fuel subsidies do not help in protecting the poor.

"The other issue is that we have fossil fuel subsidies. I was just in Tunisia and they are struggling to find a way to limit fossil fuel subsidies. (They said) that fossil fuel subsidies help richer people who drive cars.

"(Fossil fuel subsidies) are fundamentally not progressive. We want to protect the poor and the fossil fuel subsidies don't do that... But it is politically very difficult," Mr Kim said.

Noting that there are many, different solutions to deal with climate change, the World Bank chief said they would help countries in finding a way forward.

"Lot of different solutions... What are the big things we can do to tackle (climate change). One thing that we need and everyone has said this for a long time, we need a stable price for carbon and we need to find a way to make a market that works for carbon," he said. 

According to Mr Kim, having more green cities would be another way of tackling climate change.

"We want to ensure that whatever we do is in line with efforts to mitigate climate change," he added.

In November last year, a World Bank report had said temperature globally is going to increase by another four degree Celsius, marked by extreme heat-waves, declining global food stocks, loss of ecosystems and biodiversity, and life-threatening sea level rise.

Meanwhile, Kim today said efforts should be made to end poverty and also share the world's prosperity with women as well as the future generations, especially since many youth remain unemployed.

Regarding global economy, he said that emerging nations are playing a major role in maintaining overall growth.

"Lion's share of global growth has come from emerging nations... Rich countries should thank the developing nations for maintaining the growth that we have seen in the last five years," he added. 

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