Europe, And the World, Should Use Green Subsidies Cooperatively

• Governments around the world are using green subsidies to support the transition to a cleaner economy, but these subsidies should be carefully targeted and not discriminate between firms.
• There is a risk of a harmful subsidy race between the world’s largest economies, which could undermine the level playing field in global trade and impose large fiscal costs.
• Europe is discussing a Green Deal industrial plan, which should be developed in coordination with other countries to develop a common, inclusive multilateral approach to stopping climate change.
• The EU should focus any subsidies on activities where the interventions might have the largest climate benefits and preserve the integrity of its single market.
• The green transition will require workers to have the right mix of skills and be able to move from shrinking industries to growing ones.

Source IMF

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