From Bjorn Lomborg's page on Facebook:
The United Arab Emirates just cut its fossil fuel subsidies significantly following the lead of countries like Indonesia and Malaysia, who have also managed to cut their subsidies.
That means less pollution, lower CO2-emissions and not least more money for more important areas such as health and education.
In its most recent report, the International Energy Agency estimates that the world spends $548 billion a year subsidizing fossil fuels. That’s $548 billion that could have been spent much better.
For the Copenhagen Consensus Centre, an expert panel including several Nobel Laureate economists found that phasing out subsidies for fossil fuels is one of the smartest things the world should focus on over the next 15 years.
The economists estimate that every dollar spent (you still need to help the most vulnerable to energy access) will create benefits for society and the environment of more than $15. The billions of dollars that governments save from phasing out fossil fuel subsidies could be spent on providing better health, education and nutrition, which could benefit hundreds of millions of people.
Plummeting oil prices is a window of opportunity to reduce the subsidies. Other countries with heavy subsidies should also grasp at this opportunity.
More on Dubai's subsidy cuts here:
http://www.economist.com/…/21660490-emirates-move-improve-i…
My op-ed in The Globe and Mail on the topic:
http://www.theglobeandmail.com/…/its-time-…/article24002168/
The Copenhagen Consensus Center's latest research on energy:
http://www.copenhagenconsensus.com/post-2015-consens…/energy
He made these comments on Facebook, linking to this article in The Economist. He has an excellent way of identifying the problems of opportunity costs and spin-off effects.
Cut the fossil-fuel subsidies and it reduces massive distortions and inefficiencies in the economy.
An added benefit is that cutting fossil-fuel subsidies will lead to less use of fossil fuels [the reduced subsidy to sellers shifts the supply curve to the left, leading to an increase in the equilibrium price and a reduction in the quantity demanded]. And this reduction in the consumption of fossil fuels will lead to reduced CO2 emissions and (assuming there is a relationship) reduced global warming.
