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IMF suggests eliminating fuel subsidies and applying carbon taxes

IMF suggests eliminating fuel subsidies and applying carbon taxes

According to Lagarde, it is the ministers of Economy and Finance who have a great interest in combating climate change.

"What happens is that many of them need to obtain more income, since they have already used their fiscal reserves in various initiatives and without results," he noted.

Therefore, he said, they are always looking to have money buffers to face future crises.

"For this reason, I believe that it is the right time to introduce a tax on carbon emissions, which are highly polluting and the main cause of climate change," he said.

Likewise, Lagarde said that it will also be important to eliminate subsidies applied to fuels. The executive commented that annually 5.4 trillion dollars are lost worldwide due to this type of subsidy.

“It is time to focus these resources in the right direction and that they are of much greater help to sustained development. If they want more income (the finance ministers), it is the opportunity to include these externalities ”, he specified.

The managing director of the IMF assured that a probable elimination of subsidies must be accompanied by the establishment of fair prices.

“Today fossil fuels are cheap and it is not fair. We must improve and fund initiatives for environmentally sustainable growth. This will translate into a great improvement for the world economy, "he said.

Lagarde participated in the seminar Responding to the Challenges of Climate Change, organized within the framework of the Meeting of Ambassadors of the IMF and the World Bank, which is held in this city.

Andean


Video: Q and A: Energy Subsidy Reforms (July 2021).