Governments should cut fossil fuel subsidies and save $trillions – IMF
The International Monetary Fund (IMF) are urging governments to phase-out expensive fossil fuel subsidies worth nearly $2 trillion each year to free resources for public spending in areas like education and health care. Almost 9% of all annual country budgets are spent supporting oil, natural gas, and coal industries through direct subsidies, consumer rebates and avoided taxes on pollution, according to an IMF report released yesterday. WWF say that continued maintenance of fossil fuel subsidies is a global scandal and governments should work to transform these subsidies into financing for energy efficiency and renewable energy.
The IMF provide 22 global case studies of subsidy reforms over the past two decades, to help governments fade out fossil fuel subsidies in the ‘right way’. They provide a plan for dirty subsidy reform which emphasises transparency, committed phase-out planning and support for people vulnerable to energy price rises. Speaking in Washington D.C the IMF’s first deputy managing director David Lipton said that now is the time to embrace an end to government support for fossil fuels, and to put a price on carbon emissions. Removing these subsidies would be a major step towards reducing the world’s carbon footprint at a time when scientists suggest the impacts of climate change are accelerating.
Tools and Graphs
- Graphic: Interactive map of global energy subsidies (National Geographic)
- Graphic: World fossil fuel consumption subsidies (International Energy Agency)
- Graphic: Energy subsidies by region (International Monetary Fund)
- Graphic: Breakdown of energy subsidies (International Monetary Fund)
- Report: Fossil fuel subsidies report card (Natural Resources Defense Counsel)
The tree: Subsidies shift to efficiency and renewables needed to tackle global warming