Bretton Woods Committee | Fri, Sep 8, 2023
by Miguel Schloss
The following blog post is in reference to the piece, "The Elephant in the Room; Preaching or Working on Climate Change" by Miguel Schloss published in the Global Journal of Science Frontier Research.
Economic growth over the past decades has been propelled by massive expansion of energy supply, powered by fossil fuels and their attendant greenhouse gas emissions. Achieving both growth and decarbonizing economies, to curb global warming threats, will be one of the most challenging developments over the long-term.
To do so, there are a wide range of ways that are being debated to address the issue: from the instituting of stronger environmental regulations forcing enterprises and societies to reduce emissions (in one end of the debate), all the way to enhancing enabling conditions for environmentally-friendly investments through pricing and taxation policies or other such incentives that facilitate resource mobilization to allocate for appropriate investments (in the other end).
In recent years, a growing number of countries, particularly in developed economies, have promoted, almost single-mindedly, the introduction of renewable power generating solutions aimed at reducing CO2 emissions. The war in Ukraine evidenced the absence of properly balanced and well-grounded policies to deal with the issue. A lack of foresight, and consequently low energy security triggered an energy crisis and spiraling oil prices globally. This situation prompted the 51 largest economies to double support for fossil fuels in 2021, and even more in 2022 — to essentially mitigate energy price increases for consumers, while generating incentives for increased fossil fuels supply to achieve a quick response to overcome the crisis.
This clearly undermined the removal of inefficient and distorting subsidies, flagrantly undermining the declared environment-friendly policies and pledges, and any tangible progress in reducing CO2 emission. A balanced approach that reconciles more effectively energy security, affordability and environmental implications will be the only way to provide conditions for decarbonizing the world economy, while doing so in an efficient and effective way.
Miguel Schloss is a BWC member with more than 35 years of experience in economic development issues and has held leadership positions in multilateral agencies, the private sector, and non-governmental organisations He was Director of Corporate and Budget Planning at the World Bank as well as Executive Director of Transparency International during its formative (1998-2002) years. He is currently President of Surinvest Ltda. and Board member and Executive Director of Virtus-Atlas SpA.