What we committed
At COP28, the World Bank highlighted the high costs of harmful subsidies for the planet, emphasizing the need to redirect energy and agricultural subsidies. We committed to stepping up our efforts to help client countries with analytical work and investments, in partnership with other development partners.
What we delivered
Our work has two tracks: a global advocacy and knowledge sharing track and a country level reforms track.
- At the global level, we have organized five global and regional policy dialogues on reforming agricultural subsidies, secured funds to improve the , and strengthened the Agricultural Incentives Consortium . We have also documented our extensive country-level experience on energy subsidy reforms.
- At the country level, we have scaled up our work to develop deep dives that provide countries options for repurposing subsidies (from 20 in 2023 to 40 in 2024). We have also awarded grants to six pilot initiatives to realign fertilizer support and soil health programs (Bangladesh, Ghana, Indonesia, Mozambique, Malawi, Tanzania). Realigning fertilizer support and soil health programs benefits the planet through reduced water and air pollution. It also allows more targeted support that fosters inclusive growth of agriculture productivity and rural incomes. We have provided Colombia with a grant to make access to finance programs more inclusive and climate smart. In addition, our current energy subsidy reform work provides technical assistance grants supporting initiatives in 75 countries.
Impact
Countries with large fertilizer subsidy programs (e.g., Bangladesh, Indonesia, and Malawi) have shown more willingness to consider repurposing efforts. There are also two examples of recent transformational agricultural reforms:
- The Philippines used to support rice producers through import protections. However, policy changes supported by the World Bank have shifted support to farmers, so they now receive support through the Rice Competitiveness Enhancement Fund.
- In Uzbekistan, World Bank support helped eliminate the costly taxation of cotton and wheat prices (estimated at 1.6 percent of GDP in 2018), abolish forced labor in cotton harvesting, and revisit public expenditures. This paved the way for a vast that prioritizes crop diversification, soil health, and market development.
- On energy, we are also supporting countries in critical policy and regulatory reform steps, including setting energy prices that are more closely aligned with costs and introducing targeted measures to mitigate the impact of price increases. This has contributed to over $4.5 billion in fiscal savings in the 2021-2024 period.
Next steps
We will award two additional grants to countries to support agricultural reforms, while scaling up support to these reforms through World Bank operations. Both energy and agricultural reform work will also focus on filling data gaps. We are working to enhance the data available on fuel prices and subsidy measures. Our new Global Fuel Prices database collects and processes monthly price data for a range of fuels across 140 countries. In complement, our Global Fuel Subsidies and Price Control Measures database analyzes the fuel pricing regime and types of fuel subsidies implemented across 150 countries since 2021. Both databases will be published in early 2025.