The Price at the pump is incomplete
As Neo would say, whoa… A new study by the IMF looked into global energy subsidies and found that “post-tax energy subsidies are dramatically higher than previously estimated, and are projected to remain high.” Fossil fuel are the big beneficiaries, global subsidies of $5.3 trillion per year, which isequivalent to about $10 million a minute of every single day!To put things in perspective: “The $5.3tn subsidy estimated for 2015 is greater than the total health spending of all the world’s governments.”
The IMF itself, which is not exactly a hotbed for hippies, calls the findings “shocking” and says that the numbers are an “extremely robust” estimate of the true cost of fossil fuels.
Who said fossil fuels were cheap?
Nicholas Stern, an eminent climate economist at the London School of Economics, said: “This very important analysis shatters the myth that fossil fuels are cheap by showing just how huge their real costs are. There is no justification for these enormous subsidies for fossil fuels, which distort markets and damages economies, particularly in poorer countries.” Stern went even farther: “A more complete estimate of the costs due to climate change would show the implicit subsidies for fossil fuels are much bigger even than this report suggests.”Richard Masoner/Cyclelicious/CC BY-SA 2.0
In its report, the IMF estimates that ending subsidies for fossil fuels would cut global carbon emissions by 20%, and simultaneously reduce the number of premature deaths from outdoor air pollution by 50% – about 1.6 million lives a year. Not bad!