Worlds of Education

Fossil fuel subsidies and educational performance

published 8 December 2023 updated 22 December 2023
written by:

Around the world, companies, NGOs, policymakers, academics and national publics are increasingly calling on governments to phase-out fossil fuel subsidies (FS) - measures that support the consumption and production of natural gas, coal and oil – as a vital step for combatting climate change and building a more just and sustainable world.

In the lead up to the Dubai Climate Conference, or COP28, as it is known in the jargon, 48 countries have signed up to the World Trade Organization’s Fossil Fuel Subsidy Reform Initiative to eradicate inefficient subsidies. [1] As part of its drive to become the global leader on climate action, the European Council highlighted the need for global phase-out of unabated fossil fuels as part of its negotiating position for COP28, announced in October 2023. To date, over 131 companies representing nearly $1 trillion in global revenue have signed an open letter urging governments to phase-out fossil fuels and ramp up clean energy.

Countries that spend more of their national income on FS tend to perform badly on multiple indicators of educational performance such as investment in education and educational attainment.

Yet despite the nominal commitment to subsidy reform, the share of world income spent on FS continues to rise. According to a 2021 report from the International Monetary Fund, FS globally accounted for 6.8% of GDP (or 5.9 billion US$) in 2020 and is expected to increase to 7.4% of GDP by 2025. The growing lag between nominal commitment to phase-out and actual funding for FS has resulted in increased efforts to understand the implications of FS for the economic, social and environmental dimensions of sustainable development that underpin the United Nations Sustainable Development Goals.

In a recent report for Education International, I explored the relationship between FS and education and found that countries that spend more of their national income on FS tend to perform badly on multiple indicators of educational performance such as investment in education and educational attainment. Globally, FS tend to be associated with poor educational outcomes. However, the worst effects appear to be experienced by low-income countries, where even small increases in FS spending (relative to GDP) are associated with clear declines in primary and secondary school completion rates, in contrast to high-income countries, where FS spending is not usually associated with poor educational outcomes. The educational consequences of FS are ultimately shaped by prevailing conditions such as a country’s level of fossil resource endowment, reliance on fossil rents and economic development, which demonstrates the need for a case by case approach to understand the (unique) obstacles to and opportunities for phase-out in individual countries.

Recommendations for the global education movement

With links to local agents who could enable new skills development and knowledge transfer around the world, education unions are well placed to support FS reform in five key areas:

1. Education and green skills development

Successful reforms are often underpinned by extensive education campaigns that teach stakeholders about the potential costs and benefits of FS and reform. Yet beyond this, multiple actors including young people, engineers, natural scientists, energy providers, policymakers and, at some level, publics at large, will need to develop a range of key ‘green skills’ for navigating and regulating the broader socio-economic changes that would accompany phase-out.

2. Trust-building

By helping stakeholders understand the trade-offs associated with reform, education unions could help stakeholders formulate well-informed opinions towards FS, which would increase engagement and help ensure that reform was implemented through deliberative inclusive process. Educators could further improve transparency by disseminating accessible information relating to countries’ performance on phase-out.

3. Organise reform beneficiaries

Beneficiaries of FS tend to consist of well organised groups such as fossil fuel lobbies and recipients of consumer subsidies whereas pro-reformers, such as renewable energy companies, environmentalists, education and health services and the poor, tend to be more widely dispersed. Education unions could use their links to educators to unite potential beneficiaries of phase-out and foster synergies.

4. Pick low-hanging fruit

Reformers need to make critical decisions about: which sector(s) to target first, the level of ambition (i.e. is the goal to eradicate FS completely or reduce to a certain level?), choice of compensatory measure and priority beneficiaries of reform. Education unions could use their local connections to access vital ground-knowledge to help policymakers design tailored strategies that address the specific (short and long-term) reform challenges within their country.

5. Tap into international fora

The drive for global decarbonisation and net-zero has increased the drive of several international organisations to promote phase-out. In November 2022, the UNEP, OECD and IISD developed a methodology to assist governments collect and share FS statistics (though few have actually submitted data). Other complementary developments include the creation of the WTO FSRI, OECD and IISD Fossil Fuel Subsidy Tracker and inclusion of FS data in the IEA annual World Energy Outlook database. Yet recent events such as the COVID pandemic and Ukraine war have driven many governments to adopt new subsidies to shield their economies from rising energy prices and supply shortages. At this critical moment of increased reform impetus, on the one hand, and contradictory disincentives against phase-out on the other, education unions can help tip the scale in favour of reform by working with international organisations to raise awareness about the costs, benefits and reporting requirements of phase-out. With links to local NGOs and educators, education unions are well placed to act as an interlocuter for disseminating emerging international norms surrounding fossil phase-out and global data needs. They can also provide a channel for local stakeholders to provide international organisations with valuable ground knowledge about the specific costs and benefits of reform and reporting challenges in their own country, which could help steer necessary (international) funding and expertise for supporting national reform pathways.

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Namely: Albania; Austria; Belgium; Bulgaria; Chile; Colombia; Costa Rica; Croatia; Cyprus; Czech Republic; Denmark; Estonia; European Union; Fiji; Finland; France; Germany; Greece; Hungary; Iceland; Ireland; Italy; Latvia; Liechtenstein; Lithuania; Luxembourg; Mali; Moldova, Republic of; Montenegro; Netherlands; New Zealand; North Macedonia; Norway; Panama; Paraguay; Poland; Portugal; Romania; Samoa; Slovak Republic; Slovenia; Spain; Sweden; Switzerland; Tonga; United Kingdom; Uruguay and Vanuatu.

The opinions expressed in this blog are those of the author and do not necessarily reflect any official policies or positions of Education International.