Fossil Fuel Subsidies

We have heard a lot about ‘hubristic green zeal and ‘green subsidies’ putting up energy bills and the government has recently had a bonfire of nine green policies. What we don’t hear about so much are the fossil fuel subsidies that we all pay for and which dwarf all of the “green crap” by a factor of about nine.

The International Monetary Fund (which has not always been known for its green zeal) has recently published a report Counting the Cost of Energy Policies (main report) in which it says that globally energy subsidies are an eye watering US$5.3 trillion in 2015, equivalent to 6.5 % of global GDP. That is:

US$ 5,300,000,000,000

These subsidises are largely due to energy taxes not matching the environmental damage caused by consuming the energy – mainly CO2 emissions and air quality. We all pay for the damage – e.g. Air Pollution in China.

How does the UK fare? Well, despite not being in the top ten subsidisers the total post-tax subsidies in the UK are US$ 635 per person, per year. This figure is mainly made up of costs relating to global warming and local air pollution caused by the burning of petroleum, coal and gas – adding up to 1.37% of our Gross Domestic Product, roughly what government spends on transport each year.

The IMF goes on to say that eliminating these subsidies would drastically reduce deaths related to fossil fuels and their emissions with a revenue gain of US$2.9 trillion, adding “It is generally in countries’ own interest to move ahead unilaterally with energy subsidy reform.” Oh, and it also stops the planet frying.

If you want to practice you spreadsheet skills you can download all of the IMF’s national data here.

Alternatively you could watch this.

 

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