Realigning incentives: The business case for an affordable, secure and clean energy transition

The document advocates for shifting the $1.1 trillion spent annually on fossil fuel subsidies toward clean energy technologies. It presents a business case where renewables-based power systems drive industrial competitiveness, attract private investment, and reduce exposure to volatile fuel markets. The report details how strategic incentives in China and India have accelerated EV adoption and suggests that power market reforms—such as decoupling electricity prices from natural gas—are essential to unlock the full potential of the energy transition.

• Global fossil fuel subsidies reached $1.1 trillion in 2023, following a record peak of $1.68 trillion in 2022. If implicit subsidies—the negative externalities of air pollution and climate change—were included, the 2022 estimate would rise to $7.1 trillion, or 7.1% of global GDP.
• Fossil fuel subsidies are generally untargeted and disproportionately benefit wealthier households that consume more energy, rather than the poorest citizens. For example, in 2019, the top 20% of households in Indonesia received nearly half of fuel subsidies, while the bottom 40% received less than one-fifth.
• Access to renewable electricity has become a primary driver for business investment and supply chain location. A survey of executives across 15 countries found that 90% prioritize renewable electricity when deciding where to invest, and 85% consider it key for choosing supply chain locations.
• Clean energy technologies are increasingly more cost-effective than fossil fuels; in 2023, 96% of new utility-scale solar PV and wind had lower generation costs than new coal and natural gas plants. Furthermore, the global clean energy sector added 1.5 million jobs in 2023, reaching a total of 34.8 million jobs, surpassing the fossil fuel sector's 32.6 million.
• China's strategic use of supply-side and demand-side incentives—including buyer rebates, tax exemptions, and infrastructure funding—led to the sale of 11 million EVs in 2024, representing half of domestic car sales and nearly two-thirds of global sales.
• Current power market designs often hinder the transition because natural gas frequently sets the marginal price for electricity, causing prices to fluctuate with volatile gas markets. In the UK, wholesale energy costs are dictated by natural gas prices 98% of the time, despite gas accounting for only 30% of total generation in 2024.
• The economic burden of climate-related health impacts and extreme weather is substantial. Lost working hours in 2024 resulted in potential losses of $1.09 trillion (nearly 1% of global GDP), and weather-related extreme events caused $304 billion in global economic losses last year.

APA

We Mean Business Coalition (2025). Realigning incentives: The business case for an affordable, secure and clean energy transition. https://www.wemeanbusinesscoalition.org/wp-content/uploads/2025/11/Realigning-Incentives-White-Paper.pdf

Chicago

We Mean Business Coalition. Realigning incentives: The business case for an affordable, secure and clean energy transition. 2025. https://www.wemeanbusinesscoalition.org/wp-content/uploads/2025/11/Realigning-Incentives-White-Paper.pdf.

Wikipedia

{{cite report |author=We Mean Business Coalition |title=Realigning incentives: The business case for an affordable, secure and clean energy transition |date=November 2025 |url=https://www.wemeanbusinesscoalition.org/wp-content/uploads/2025/11/Realigning-Incentives-White-Paper.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{wemeanbusinesscoalition2025realigning, author = {{We Mean Business Coalition}}, title = {{Realigning incentives: The business case for an affordable, secure and clean energy transition}}, institution = {We Mean Business Coalition}, year = {2025}, month = nov, url = {https://www.wemeanbusinesscoalition.org/wp-content/uploads/2025/11/Realigning-Incentives-White-Paper.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }