Green energy revenues offer critical funding for universal health

The green energy transition presents a crucial opportunity to finance universal health coverage (UHC) in low and middle income countries, say experts in The BMJ's climate issue today.

Judite Gonçalves and colleagues argue that a ringfenced share of funds generated by reducing fossil fuel subsidies, introducing carbon taxes, and capturing critical mineral royalties, should be spent on improving health which, ultimately, translates into development gains.

Health systems have a strong claim to a guaranteed minimum share of these green transition revenues, they add, given the enormous health impacts of fossil fuel dependence and mining activities.

In 2024, $733bn was spent on fossil fuel subsidies globally, far outpacing the estimated $20-53bn annual financing gap required to achieve UHC in low and middle income countries, they explain. Reducing these subsidies could free up substantial resources for domestic public health programmes.

Beyond subsidy reform, carbon pricing and royalties from critical minerals such as lithium and cobalt also offer substantial new revenue streams to support health.

However, they say it is critical to ensure that new revenues reach health budgets, rather than disappearing into general revenue or being eroded by tax avoidance and evasion or by pressure from investors to lower royalty rates.

They point to examples of past reforms in Indonesia and Brazil which, whilst bold and innovative, did not translate into the sustained investments in health care that were envisaged. As such, they say health ministries, civil society, and professional health organizations must urgently engage and influence carbon pricing rules and royalty frameworks, which are being locked in now, to secure a dedicated share of revenue.

Furthermore, because green transition revenues flow disproportionately to higher income countries, while UHC financing gaps are concentrated in lower income countries, international mechanisms (such as debt-for-health swaps) are essential to ensure a fair transition, they add.

"The green transition will generate enormous fiscal flows globally, and this opportunity to finance accelerated achievement of UHC in low and middle income countries must not be missed," they conclude.