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IMF: Fossil Fuels Subsidized $5.3 trillion in 2015 Alone

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coal-subsidy-graphicAn estimate by the International Monetary Fund (IMF) reveals that the true cost of fossil fuels is expected to total $5.3 trillion in subsidies in 2015. Broken down, the number becomes $10 million every minute(!!!), a shocking fact that has many concerned.

The estimate is much higher than the number released by the IMF in 2013 because the data collected by the World Health Organisation in the intervening two years indicates that the health costs of air pollution are much higher than previously thought. This estimate includes not only the subsidies that directly target gas prices to keep them low; these costs only cover 6% of the true cost of fossil fuels.

It also includes money that will be spent treating health problems caused by fossil fuel global-fuel-subsidiesemissions, such as health problems caused by pollution and the costs associated with lost productivity due to illnesses and premature deaths caused by air pollution. It also includes the cost of global warming.

The coal industry is the largest contributor to both air pollution and carbon emissions, and will receive approximately half of the total cost. Oil accounts for a third of the subsidies, and gas accounts for the rest of the funds. The estimate also reveals which countries contribute the largest share of the subsidies.

China is a country that relies heavily on coal, and is expected to spend $2.3 trillion in annual subsidies. The United States spends significantly less than China, but is the second-largest contributor of subsidies and will spend $700 billion in 2015. Russia, the European Union, India and Japan will also spend billions of dollars on the true cost of fossil fuels.fossil-fuel-subsidy-2015

This news, as negative as it may seem, may actually inspire the leaders of these countries to take action against fossil fuels to keep their costs down. Many countries, including the United States, directly set the price of diesel to keep it low, but recently India has ended their diesel subsidies. This action is encouraging, and hopefully other countries will follow in their footsteps.

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