Which country has taken a lead on clean tech? The answer may surprise you.

Marakesh Traffic Jam - Karolina Lubryczynska

By MAURA FORREST

July 24, 2014

The world should look to Morocco as a model of successful clean-tech policy, according to Rachel Kyte,the World Bank’s special envoy for climate change.

In January, Morocco ended gasoline and fuel oil subsidies and began making substantial cuts to diesel subsidies.

At a recent environmental conference in Finland, Kyte said other developing nations should adopt similar measures.

Morocco’s subsidies were eliminated largely due to financial necessity, rather than environmental concerns.

The International Monetary Fund (IMF) approved a $6.2-billion precautionary credit line for Morocco in 2012, but put pressure on the country to reduce its deficit. In response, the government budgeted 30 billion dirham ($8.2 billion US) for food and fuel subsidies in 2014, down from 53 billion dirham ($14.4 billion US) in 2012. 

Morocco is not the only country slashing fuel subsidies to save money. Indonesia, Iran, and Jordan have all taken similar steps. But Kyte pointed out that Morocco has done more than cut subsidies.

“They started to incentivise investments in renewable energy, domestic and foreign,” she said in an interview with Responding to Climate Change.

In fact, investments in clean energy have already jumped from $300 million to $1.8 billion US. Morocco plans to supply 20 per cent of its energy demand with renewable power by 2024, up from 8 per cent today.

In a 2013 report, the IMF estimated that fossil-fuel subsidies cost almost $2 trillion worldwide. The report suggested that eliminating global subsidies “could lead to a 13 per cent decline in carbon dioxide emissions.”

Data from the same report showed that Canada spends $34 billion in fossil fuel subsidies annually. Relative to government revenue, that’s more than any other developed nation, barring the United States and Luxembourg.

In 2009, Canada and other members of the G20 pledged to “phase out over the medium term inefficient fossil fuel subsidies.”

But a 2012 report found that no fossil-fuel subsidies had yet been eliminated as a result of that commitment. Instead, governments were underreporting the amount they spent.

So when it comes to fuel subsidies, it might be fair to say that Morocco is a global leader.



Photo Credit: Karolina Lubryczynska