The authors described fossil fuel subsidies as government support that keeps energy prices below supply costs, through direct payments, state-owned utility losses, or price controls. These subsidies are large, widespread, and volatile—sensitive to international oil prices. The paper cited a 2022 oil price shock following Russia’s invasion of Ukraine that pushed global subsidy expenditure to $1.4tn. The team also noted a further global subsidy peak was expected in 2026 as governments responded to oil price movements linked to the Iran conflict.
Data cited in the source linked higher subsidy spending to reductions in domestic health financing. A multi-country estimate reported that each additional dollar spent on fossil fuel subsidies displaced $0.35 of domestic health spending in 2015–19. That finding anchors the authors’ central claim: reducing subsidies could free resources that governments might redirect to health provision, including universal health coverage. Yet the study team warned that political economy realities matter — reform windows open when global prices fall, but these windows close quickly and reforms often prove short lived. An analysis of reform attempts in 2016–23 found only 30% persisted for 12 months and just 9% lasted three years.
The study team presented Indonesia and Brazil as contrasting lessons. In Indonesia, the 2014–15 subsidy rollback increased petrol and diesel prices substantially; falling global oil prices at that time reduced consumer backlash, and fuel subsidies fell from 19% of government expenditure in 2014 to under 7% in 2015. The authors reported that these savings supported expansion of the national health insurance scheme (Jaminan Kesehatan Nasional, JKN), with population coverage rising from 50% in 2014 to 98% in 2024, and also funded infrastructure and a national conditional cash transfer programme. However, investigators observed fragility: the price-linking mechanism introduced in 2015 was suspended in 2017 and subsidies rose sharply when prices climbed again in 2022. The authors also noted mistargeting: 74% of subsidy benefits accrued to the richest 60% of the population.
In Brazil, the 2013 Law 12 858 earmarked 25% of oil royalties from new extraction contracts for municipal healthcare. The study team reported that evaluation found no overall effect on health spending or service delivery. Only municipalities with above-average per capita royalties saw significant increases in health spending, and those increases were concentrated in hospital care because rules restricted use of royalties for payroll. The authors singled out two recurring barriers across both cases: fiscal substitution (where central or existing health allocations are reduced when new earmarked funds arrive) and weak absorptive capacity in health systems, meaning workforce, infrastructure, and governance limited translation of revenue into services.
The article identified critical minerals—such as lithium, cobalt, and rare earth elements—as a new revenue stream linked to the low carbon energy transition. Demand projections cited by the authors included a 30% increase for copper and a nearly 400% rise for lithium by 2040. The paper warned that many low and middle income countries lack the fiscal frameworks needed to capture a fair share of these revenues. The authors argued there is a risk of repeating “resource curse” dynamics from the oil and gas era: revenues could be captured by a narrow elite, and fiscal windfalls might not translate into public services. Local environmental and health damages from extractive activities add governance complexity and increase the case for some revenues to be channelled to compensatory public services.
The authors compared potential green-transition resources with the estimated annual financing gap for UHC. They reported the UHC shortfall across low and middle income countries during 2026–30 at $20–54bn per year. The analysis in the source identified two patterns. First, except for low income countries, fossil fuel subsidies were enormous relative to UHC gaps: lower middle income countries spent $187bn on fossil fuel subsidies in 2024, while their UHC financing gap was reported at $2–19bn annually. The authors suggested that even after compensating poor households, investing in renewables, and debt reduction, a modest protected share of subsidy savings could close the UHC gap in many countries.
Second, the distribution of potential revenue was misaligned with need. Upper middle and high income countries account for roughly 75% of both fossil fuel subsidies and projected critical mineral revenue potential, yet they have no UHC financing gap. In contrast, low income countries face the largest UHC shortfalls but could generate only modest annual amounts from subsidy savings and mineral revenues, per the source. The authors therefore argued for international redistribution mechanisms aligned with a just green transition to address this geographic mismatch.
The article listed policy instruments that could mobilise revenue: removal or redirection of fossil fuel subsidies, carbon pricing (taxes or cap-and-trade), and fiscal capture of mineral royalties. The authors emphasised that whether revenues materialise and reach health budgets depends on political choices, governance arrangements, and implementation capacity. They noted practical obstacles: reforms without automatic price adjustment mechanisms have often been reversed; earmarking can be undermined by fiscal substitution; and concentrated royalty flows can leave non-producing regions without needed resources. The study team also pointed to weak absorptive capacity in many health systems, which constrains the conversion of additional funds into expanded primary care or services targeted to vulnerable populations.
The source did not provide detailed fiscal modelling of how redirected funds would be apportioned across budget lines, nor did it specify implementation costs or concrete mechanisms for international transfers beyond general policy proposals. Projections of mineral revenue in the source were described as conservative by the authors, but full projection details and methods were not included in the text provided. The paper leaves open several operational questions that will determine real-world impact: which governance arrangements best prevent fiscal substitution; how to design redistribution mechanisms that reach low income countries; and how to build the absorptive capacity needed for health systems to use extra revenue effectively.
The article therefore concludes with specific policy challenges and evidence gaps rather than broad platitudes, pointing readers to a set of practical questions that must be resolved for green-transition revenues to finance universal health coverage in practice.