WTO official eyes trade rules on fossil fuel subsidies

14th October 2010, Comments 0 comments

A senior World Trade Organisation official said Thursday that hard thought must be given to WTO-enforced restrictions on multibillion dollar subsidies for polluting fuels such as oil and coal.

"Fossil fuel subsidy reform is undoubtedly one of the major tools in the hands of the international commuhnity to fight climate change," WTO Deputy Director General Harsha Vardhana Singh said at a conference hosted by the organisation on the issue.

"Reflections on the link between trade and climate change, and on the eventual role of the WTO rulebook on an issue such as fossil-fuel subsidies, must take place," Singh told the meeting.

"We must prepare ourselves intellectually for the moment when we may be required to act," he added, warning that "much brainstorming remains to be done."

Leaders of the G20 group of emerging and developed nations agreed in September 2009 to a US plan to work toward phasing out some government subsidies for fossil fuel blamed for global warming, a joint statement said.

However, the issue is highly contentious and complex, with subsidies taking a range of direct and indirect forms including tax breaks, credit or insurance support, as well as incentives for producers and consumers, while several emerging and industralised nations are reluctant to shed them.

"The magnitude of fossil fuel subsidies to producers and consumers could reach over 700 billion dollars a year," said Steven Stone, chief of the UN Environment Programme's (UNEP) economics and trade branch.

© 2010 AFP

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