Experts on Health, Gender, and Communities Echo the Need for People-Centred Fossil Fuel Subsidy Reform
On September 7, 2021, IISD, supported by the International Energy Agency (IEA) and the Government of Denmark, hosted a webinar that brought together experts on health, gender, and communities to discuss how fossil fuel subsidy reform (FFSR) can contribute to clean energy transitions (CETs). The event aimed to inform the recommendations that will be presented by the Global Commission on People-Centred Clean Energy Transitions at the United Nations Framework Convention on Climate Change’s 26th Conference of the Parties (COP 26).
- Vulnerable groups bear the brunt of the negative impacts of fossil fuel combustion and are also affected by FFSR. Pollutants jeopardize the health of those who cannot afford (or lack access to) clean energy, while fossil fuel subsidies often disproportionately benefit high-income households as opposed to those who most need support. Women and marginalized groups are particularly exposed to these adverse impacts.
- If reforms are to accelerate CETs while helping alleviate these socio-economic hardships, they must be people centred. Policies must be tailored to national needs and consider inclusivity, gender equality, and access. People who experience hardship must be brought to the decision-making table to ensure that no one is left behind and that transitions are just.
On September 7, 2021, the IISD, supported by the IEA and the Government of Denmark, hosted a webinar on how FFSR can contribute to CETs. Experts from the World Health Organization (WHO), the Climate Action Network-International (CAN) and Indonesia’s National Team for the Acceleration of Poverty Reduction (TNP2K) provided insights on how to implement practical, just, and people-centred FFSR and CET, taking into account impacts on gender, health, communities, and other issues.
Opening the event, Brian Motherway, IEA Head of Energy Efficiency, introduced the purpose, work, and goals of the Global Commission on People-Centred Clean Energy Transitions. The Commission brings together 30 global leaders working to increase the inclusivity of transition policies with recommendations based on the experiences of a wide range of communities around the world. Four overarching themes emerge from the Commission’s work: ensuring that CETs:
- Create good jobs and support communities and individuals impacted by job losses
- Enhance socio-economic development
- Integrate equality and inclusivity
- Recognize all stakeholders as active participants.
Insights from this session will inform the recommendations that the Global Commission will bring to COP 26 in November 2021.
Heather Adair-Rohani, Team Leader on Household Energy and Health of the WHO, then explained how fossil fuels present a double-edged sword when it comes to health. She emphasized that fossil fuel combustion and energy pollutants risk people’s health and contribute to millions of deaths every year. However, she indicated that liquefied petroleum gas (LPG) can serve as a safer alternative to solid fuels or kerosene for cooking in poorer households, as the price and reliability of cleaner fuels are still out of reach. To reverse this, Adair-Rohani stated, FFSR needs to be tailored to national needs and ensure no one is left behind.
Ruddy Gobel, Head of Communications and Partnership at TNP2K, Indonesia, continued in a similar vein, shedding light on concerns that many subsidy policies disproportionately benefit high-income households compared to poorer households.
According to Gobel, Indonesia’s current subsidy scheme inflates wealth disparity, encourages increased LPG consumption, and facilitates hoarding and corruption. The Indonesian government has recognized these issues, and alternative policies—ones that target poor and vulnerable households while saving government funds—are currently under development. Still, Gobel stressed, these direct-targeted policies will not necessarily solve the problem of inequality. Focused and effective policy designs and new, reformed mechanisms are essential to achieving inclusivity, gender equality, and access.
Impacted, vulnerable, and marginalized groups, who, at the community and micro levels, live and experience hardship, must be brought to the decision-making table. However, for this to happen, international financial support, meaningful inclusion and tripartite+ engagement are crucial, said Tasneem Essop, Executive Director of CAN.
For FFSR and CET to be globally equitable, just, and feasible, world leaders must facilitate international financial support and cooperation. Leaving no one behind necessarily demands that developing economies receive the aid needed to partake in this worldwide transformation. Similarly, to develop subsidy reforms in a way that includes people meaningfully, policy-makers must first gain a concrete understanding of the societal barriers. Finally, Essop underlined, viewing workers, employers, and governments as the only stakeholders in CETs is not sufficient. A tripartite+ model that includes communities and civil society more broadly must be employed.
Shruti Sharma, IISD Associate and Energy Specialist, demonstrated how FFSRs can empower women and safeguard their access to clean energy. Using India as a case study, she explained how LPG subsidies can save women time, reduce drudgery, and bring health benefits. However, India’s existing subsidy schemes focus only on up-take, failing to consider other factors, such as poverty and education. According to Sharma, redesigned, comprehensive strategies that mainstream gender considerations by identifying knowledge gaps are needed.
Ultimately, speakers agreed that FFSR can accelerate CETs and help alleviate socio-economic hardships if decision makers carefully consider the needs of those impacted and bring them to the table. Furthermore, to achieve successful people-centred transitions, cross-sectoral approaches are required. All domains, including energy, health, and finance, must be considered in this global transition.
As summarized by Dr. Motherway, “The clean energy transition is already happening. The question is whether it will be just or not.” Clean energy transition policies should remain focused on ensuring that the socio-economic benefits are maximized and that those negatively affected are adequately supported. This discussion made clear that ensuring all CETs are truly inclusive and people centred is the best way to secure success at the pace and scale required.