A funding proposal amid persistent health shortfalls
The commentary, published October 21 in The BMJ's Climate Issue, calls for a guaranteed minimum health allocation from revenues associated with the shift to renewable and low-carbon energy. The researchers argue that fossil fuel use and mining damage public health, giving health systems a strong claim to some of the money those sectors generate. They say the transition could make billions of dollars available worldwide to improve health and support development.
Lead author Dr. Judite Gonçalves, a health economist at Imperial's School of Public Health, said: "The rules for how much of that money is raised, and how it will be spent, are being written now and will shape budgets for decades. Health should have a guaranteed share."
The team puts the annual financing gap for universal health coverage (UHC) in low- and middle-income countries at an estimated $20 billion to $53 billion. By comparison, global fossil fuel subsidies totaled $733 billion in 2024. Reducing those subsidies, the authors argue, could release substantial funding for domestic public health programs.
A separate World Bank report, published in November 2025 under the title "At a Crossroads: Prospects for Government Health Financing Amidst Declining Aid," illustrates the shortfall in essential services. It estimates that a package of essential health services costs at least $60 per person in low-income countries and around $90 in lower-middle-income countries. In 2024, government and donor spending together reached less than one-third of the first benchmark and about half of the second; spending had stagnated since 2018.
The World Bank projects that combined government and donor health spending will decline by 2030 in 80% of low-income countries and 40% of lower-middle-income countries. It expects development assistance for health to fall by around 20%, with those cuts outweighing growth in domestic government spending.
Subsidy savings, carbon pricing and mineral royalties
The proposal extends beyond fuel subsidy reform to carbon taxes and royalties from critical minerals, including lithium and cobalt. The researchers want a protected portion of these revenues directed to healthcare, rather than assuming that all proceeds can be allocated to health.
Carbon pricing already generates substantial public revenue. The World Bank's State and Trends of Carbon Pricing 2025 report, released June 10, 2025, recorded more than $100 billion in revenue for 2024. It counted 80 operating carbon pricing instruments, five more than the previous year, covering around 28% of global greenhouse gas emissions. More than half of the proceeds were earmarked for environmental, infrastructure and development projects.
The International Monetary Fund's fossil fuel subsidies update, last updated September 14, 2026, distinguishes direct fiscal subsidies from the wider costs left out of fuel prices. It estimates explicit subsidies at $0.73 trillion, or 0.6% of global GDP, in 2024. Implicit subsidies—undercharging for environmental and health costs such as air pollution and climate change—were much larger, at $6.7 trillion, or 5.8% of global GDP.
Local air pollution accounted for 39% of the IMF's combined explicit and implicit subsidy total, making it the largest component. Climate change accounted for 32%.
What Indonesia's reform delivered
Gonçalves said the team's research found that governments spend less on health when higher oil prices push up subsidy costs. Falling prices can create an opening for reform, she said, citing Indonesia's response to the oil price decline in 2014-15.
A May 2016 study by the International Institute for Sustainable Development's Global Subsidies Initiative documents the budget effects. Indonesia's changes to gasoline and diesel subsidies at the end of 2014, together with falling world oil prices, generated savings of IDR 211 trillion, about $15.6 billion, in the revised 2015 state budget. That represented more than 10% of total state expenditure.
The study identifies three main areas of reallocation: an IDR 148 trillion ($10.1 billion) increase in ministry budgets, an IDR 61 trillion ($4.5 billion) capital injection into state-owned enterprises focused on infrastructure, and an IDR 34 trillion ($2.5 billion) increase in transfers to regions and villages. Among nine priority programs covered by the announced reallocation, the KIS health insurance program received IDR 2.6 trillion.
Securing money for health budgets
Raising revenue does not guarantee that healthcare will receive it, the commentary warns. The authors identify several risks: money may be absorbed into general government revenue, lost through tax avoidance or evasion, or reduced by investor pressure for lower royalty rates.
"Not all the savings from reform can go to health, but even a modest, protected share could make a real difference," Gonçalves said.
The commentary discusses ambitious reforms in both Indonesia and Brazil, while also noting how funds can diminish or fail to reach local health services. It urges health ministries, civil society groups and professional health organizations to help shape carbon pricing rules and mining royalty frameworks before those arrangements are locked in.
Why domestic reform is not enough
The authors also identify a geographic mismatch: higher-income countries receive a disproportionate share of green transition revenues, while lower-income countries face the greatest UHC funding gaps. They argue that international arrangements, including debt-for-health swaps, are essential to a fair transition.
Professor Christopher Millett of Imperial's School of Public Health said: "The countries with the biggest health financing gaps aren't the ones set to gain most from green transition minerals and fossil fuel subsidy reform. Domestic reform alone won't be enough, so international partners have a role in making the green transition a fair transition."
The BMJ analysis was written by Judite Gonçalves, Fernando Postali, Moh Shadiqur Rahman and Christopher Millett.
