Oil, gas and coal benefited from $7tn in support in 2022 despite being primary cause of climate crisis
Fossil fuels benefited from record subsidies of $13m (£10.3m) a minute in 2022, according to the International Monetary Fund, despite being the primary cause of the climate crisis.
The IMF analysis found the total subsidies for oil, gas and coal in 2022 were $7tn (£5.5tn). That is equivalent to 7% of global GDP and almost double what the world spends on education. Countries have pledged to phase out subsidies for years to ensure the price of fossil fuels reflects their true environmental costs, but have achieved little to date.
Explicit subsidies, which cut the price of fuels for consumers, doubled in 2022 as countries responded to the higher energy prices resulting from Russia’s war in Ukraine. Rich households benefited far more from these than poor ones, the IMF said. Implicit subsidies, which represent the “enormous” costs of the damage caused by fossil fuels through climate change and air pollution, made up 80% of the total.
Ending the subsidies should be the centrepiece of climate action, the IMF said, and would put the world on track to restrict global heating to below 2C, as well as preventing 1.6 million air pollution deaths a year and increasing government revenues by trillions of dollars. The researchers acknowledged that subsidy reform was politically difficult, but said carefully designed policies that supported poorer households could work, especially if coordinated internationally.
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environment/2023/aug/24/fossil-fuel-subsidies-imf-report-climate-crisis-oil-gas-coal