A new policy commentary argues that a protected share of revenues linked to the green energy transition should help finance universal health coverage in low- and middle-income countries. The proposal would direct some savings from fossil-fuel subsidy reform, carbon-pricing proceeds and critical-mineral royalties towards health services. It is a recommendation for governments, not an adopted funding policy or a new commitment of public money.
A proposed health share from three revenue streams
The authors argue that health systems have a claim on revenues generated by activities that contribute to pollution and climate-related health burdens, as well as mining that can cause local environmental and health impacts. They say governments should build health into fiscal rules when they design subsidy reforms, carbon-pricing systems and mineral royalty frameworks, rather than decide later whether any proceeds will reach health budgets.
The commentary proposes a guaranteed minimum allocation and transparent monitoring, while cautioning against rigid earmarking that could fragment health funding. Its authors say allocations need to be accompanied by governance safeguards so that money reaches health programmes rather than being offset by cuts elsewhere, lost through tax avoidance, or absorbed into general budgets without a clear health benefit. They also call for affected communities and lower-income households to be protected from the costs of subsidy reform and extraction.
Large sums, but unevenly distributed
The analysis puts global fossil-fuel subsidies at $733 billion in 2024. It compares that figure with an estimated annual universal-health-coverage financing gap of $20 billion to $54 billion across low- and middle-income countries over 2026–30. These figures describe the scale of existing subsidies and an estimated need; they do not mean that the subsidy total is available to transfer to health. The authors acknowledge competing claims on any savings, including support for poorer households and investment in renewable energy and infrastructure.
The authors identify a mismatch between where potential revenues arise and where health financing needs are greatest. Higher-income countries account for a large share of fossil-fuel subsidies and projected critical-mineral revenues, while lower-income countries face significant coverage gaps but may have less capacity to generate these funds. The commentary says domestic reforms alone would therefore be insufficient and suggests international redistribution, including options such as debt-for-health swaps and health objectives in wider transition partnerships.
Past reforms show why safeguards matter
Examples from Indonesia and Brazil illustrate the limits of relying on political choices to sustain health investment. In Indonesia, reductions to fuel subsidies helped create room for expanded health insurance and other spending, but the rules linking prices to international markets were later suspended and subsidies rose again. The authors also note that the benefits of subsidies had been poorly targeted and that the national insurance scheme continues to face financing pressures.
In Brazil, legislation directed a share of certain oil royalties to municipal health care. The commentary describes evidence that the earmarking did not produce an overall improvement in health spending or service delivery, and that gains were concentrated in some higher-royalty municipalities. Restrictions on how royalties could be spent and uneven local capacity were among the obstacles. The cases are presented as lessons about design and implementation, not proof that earmarking can never help.
The authors say health ministries should participate early in decisions on revenue rules and present costed plans for how additional resources could strengthen services. They also argue for public transparency and monitoring, periodic review of protected allocations, and health impact assessments for major fiscal decisions.
A proposal, not a funding decision
The commentary does not announce a government programme, specify a binding percentage for health, or identify an enacted international transfer mechanism. Whether any revenue is raised, protected or redistributed would depend on future decisions by national governments and international partners, as well as the ability of health systems to use the funds. Its central argument is that the transition away from fossil fuels could create an opportunity for health financing, but that the opportunity will not automatically translate into universal coverage.
