Davos: Countries should work towards phasing out fossil fuel subsidies worth billions of dollars every year that encourage carbon emissions, the chief of OECD, a grouping of mostly developed nations, Angel Gurria said Friday.
Making a strong pitch against such subsidies, he also said that they do not necessarily help in reducing poverty.
"While the subsidies are often used to fight poverty, their poor targeting makes them an inefficient way of achieving this goal. Fossil fuel already has a huge advantage as the energy resource of choice. It doesn't need more help," Gurria said in a blog on World Economic Forum (WEF) website.
The Organisation for Economic Cooperation and Development (OECD) is a grouping of mostly advanced nations and account for over 80 percent of the global GDP.
Urgent reform is needed in all countries to phase out fossil fuel subsidies that encourage carbon emissions, he said.
"Reform fossil fuel subsidies. We have to reconsider our approach to subsidies. The OECD recently inventoried support to fossil fuel consumption and production in our member countries.
"The support we uncovered is in the range of USD 55-90 billion per year. This is in addition to the USD 544 billion provided as subsidies to fossil fuel consumers in developing and emerging economies estimated by the IEA," Gurria said.
The call to eliminate inefficient support for the consumption of fossil fuels -- coal, oil and natural gas -- has grown louder over the years but governments have been wary of trimming down such sops.
Asking global leaders to act against carbon dioxide emissions, the OECD chief said, "Our leaders must get to grips with the huge risk that carbon dioxide emissions pose to the economy and the environment. As we know, carbon dioxide is a long-lived gas. It hangs around."
Of every tonne of CO2 emitted this year, some would still be around thousands of years from now, he added.
Gurria said that governments have made important progress, with more than 40 countries having implemented some form of carbon tax or emission trading scheme.
"A key question is whether non-fossil energy investments can currently compete with fossil fuels in terms of their risk-return profile with the policy settings in place domestically and internationally," he said.
First Published: Friday, January 24, 2014, 19:02