Planning Commission Deputy Chairman Montek Singh Ahluwalia on Tuesday said countries should first eliminate energy subsidies if they were serious about a sustainable economy.

Energy economy and a budgeted carbon emission were a means of achieving ecological sustainability; and one way of getting there was to cut “unjustified elements” of subsidies, Dr. Ahluwalia said at a session on sustainability, at the ongoing CII Partnership Summit here.

Politically sensitive

Subsidies were politically sensitive issues, yet countries like India “should each embark on multipronged national strategy and eliminate non-targeted subsidies … and in some way that the poor are protected.”

It would mean higher cost of energy, increase in domestic gas prices, among others. Renewable energy was costly, Dr. Ahluwalia said. He noted that most countries, including the U.S., practise subsidies in some form.

Most industry groups believe that keeping energy price low increases one’s competitiveness. Leaving energy efficiency to companies would not work, he said. Governments must ensure sustainability through regulatory and price-cum-incentives approach and also that companies adhered to the overall national sustainability agendas, he said.

Dr. Ahluwalia regretted that the plan of sharing the global carbon emission burden had not moved an inch forward. Countries must face the fact that there had been no progress on reaching an agreement, he said.

Delegates from Mauritius, Fiji, Macedonia and Singapore spoke on partnerships to tackle global issues.

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