Removing Fossil Fuel Subsidies and City Leadership are the Key to Climate Action

By Mike Bloomberg - SEP. 28, 2015

Remarks by UN Secretary-General’s Special Envoy for Cities and Climate Change Michael R. Bloomberg as prepared for delivery at the Climate Week Signature Event on September 28, 2015


Thank you for the opportunity to join you here this morning – and let me begin by saying I think all of us have good reason to be hopeful. Because, in several very important ways, the Paris summit – which is still a few months away – has already been successful. It has pushed national governments around the world to set higher goals for reducing carbon, it has showed that international cooperation on climate change really is possible and it has focused the world’s attention on just how much work remains to be done.

There is an old expression in the English language that I think sums up the challenge before us today: You get what you pay for. In short--you can’t pay for one thing and expect to get something better. And yet, that is exactly what the nations of the world are doing when it comes to climate change.

Government leaders will soon gather in Paris to discuss how to reduce greenhouse gas emissions. Yet all over the world, governments are encouraging those emissions by subsidizing them. The International Energy Agency has estimated that governments are providing $550 billion in subsidies to fossil fuel companies every year. At the same time, countries are providing renewable energy companies with only about $120 billion in subsidies. So for every dollar that governments use to encourage the development and use of renewable energy, they are spending four and a half dollars to encourage the development and use of fossil fuels.

You get what you pay for. And right now, we are paying for a hotter planet. If we are serious about slowing climate change, that has to change. We have to start – to use another American expression – putting our money where our mouth is.

At the Copenhagen climate change conference in 2009, O.E.C.D. countries committed to delivering $100 billion per year to developing countries to help them transition to cleaner energy, and adapt to the changing climate. That commitment has not yet been honored. And it must be.

By using public dollars to attract private investment, O.E.C.D. countries could meet their commitment by providing about $60 billion. As it turns out, the O.E.C.D. released a report last week finding that O.E.C.D. countries are spending more than $60 billion in fossil fuel subsidies every year. The math is clear, O.E.C.D. countries could honor our commitment to the rest of the world by redirecting that $60 billion away from fossil fuels – and toward clean energy and modern infrastructure for the global south.

There’s another reason to take this step – and it may be the most important reason of all—governments, NGOs and philanthropists spend billions of dollars in the developing world to improve public health and save lives.

There may be no single action that would do more to improve people’s lives – by giving them cleaner air to breathe – than honoring the commitment we made in Copenhagen. This is a piece of unfinished business that O.E.C.D. countries must take care of, preferably before arriving in Paris – but certainly before leaving it.

Now, that’s not to let the rest of the world off the hook.

Brazil, China, India, Russia, and South Africa – and the entire global community – should join in this effort to begin phasing out fossil fuel subsidies. But the OECD must lead by example. The good news is that business leaders and mayors throughout the OECD are leading, and they are ready to do much more.

Mayors and CEOs see climate change differently than legislators, and differently than scientists. They see it as an opportunity to improve their bottom lines, strengthen their long-term foundations, and hedge against future risks. My own company, Bloomberg L.P., has made significant investments in energy efficiency and renewable energy – not because we’re altruistic, although we are: nearly all of the company’s profits are going to my foundation, Bloomberg Philanthropies. But we’ve done it because it saves us money. It’s just good business.

It also helps us attract employees – young people especially – who want to work for businesses that are environmental leaders. That gives us an edge over our competitors. Mayors see climate change in much the same way.

Making their cities more efficient saves taxpayers money. But more importantly, it helps them clean their air, which gives them a competitive edge over other cities. Because the fact is that people want to live in places with clean air—and where people want to live, businesses want to invest.

During my time as mayor, New York City reduced its carbon footprint by 19 percent – while also far outpacing the rest of the country in job creation. We proved that fighting climate change and spurring economic growth go hand-in-hand. And of course, plenty of other cities are proving this to be true, too. At the same time, cities are struggling to get their national governments to recognize just how much progress they are making.

Last year, the U.N. and Bloomberg Philanthropies worked with three leading global city networks-- C40, ICLEI and United Cities and Local Governments-- to help launch something called The Compact of Mayors. The goal of the Compact is to document the progress cities are making – and encourage more cities to join in this work.

To take part in the compact, cities are required to set a concrete target for reducing their carbon footprint. Then they have to create plans to reach that target … and agree to publicly report their progress using a standardized, common measurement tool.

I’ve always believed: If you can’t measure something, you can’t manage it. When cities are all using the same measurement systems, they can compare results and adopt policies that are proving to be effective elsewhere. I’m glad to say that more than 174 cities have already joined the compact, and they are home to 252 million people.

The Compact is a powerful tool – and so we were excited when a network of state and regional governments created a similar framework, called the Compact of States and Regions. State and regional governments have considerable leeway to act on their own, without needing help or permission from national governments. For instance, Quebec recently pledged to reduce carbon emissions 37% below 1990 levels by 2030 – while Canada’s national goal is closer to a 2% reduction over that period.

Today, I’m glad to announce that we are creating a formal alliance between the Compact of Mayors and the Compact of States and Regions. This alliance will help us align the data and reporting systems that are helping cities and states measure their work. It will also help us increase membership in both coalitions, as cities work to recruit states, and vice versa.

If anyone doubts the collective power of cities, states, regions, businesses, and the public to make huge strides on climate change, let me tell you a quick story. After the federal cap-and-trade bill died in the U.S. Congress in 2009, many in the environmental movement were greatly disappointed. That’s understandable. But consider this: The cap-and-trade bill aimed to reduce emissions by around 10% below 2005 levels by 2015.

Today, thanks largely to the work the Sierra Club has done to retire coal plants, and also the leadership of cities and businesses, we have exceeded that goal. That bears repeating: We exceeded the 2009 cap-and-trade goal – without cap-and-trade. And while the federal government deserves some of the credit, most of it belongs to people, cities, and businesses. So even without national legislation, countries can make great progress if leadership comes from other places.

Of course, we still need national governments to step up. We need them to begin phasing out fossil fuel subsidies and directing that money to helping the global south make the same transition. We also need them to lift rules and regulations that limit cities, states, and businesses from making investments in cleaner energy and more modern infrastructure.

The more we can do to empower sub-national governments with the tools they need to make progress, the better our chances in the fight against climate change—and that’s what this new alliance will help to do, to make the most of these final months before Paris.


U.N. Secretary-General's Special Envoy for Cities and Climate Change and President of the Board of the C40 Cities Climate Leadership Group.


There are so many facets to climate change that make it difficult to address, but you don’t give up just because it’s difficult. You work harder.