IMF: Want to Fight Climate Change? Get Rid of $1.9 Trillion in Energy Subsidies.
- By Brad Plumer
The Washington Post, March 27, 2013
Straight to the Source
That’s the core idea behind a large new report (pdf) from the International Monetary Fund, which argues that the world “misprices” fossil fuels to the tune of some $1.9 trillion per year.
Eliminating these subsidies, the IMF argues, and replacing them with appropriate carbon taxes could cut global greenhouse-gas emissions by 13 percent, curtail air pollution, and shore up the finances of many poorer countries now in debt trouble.
So let’s take a closer look at the IMF’s numbers. Energy subsidies, the report argues, come in two very different flavors:
-$480 billion in direct subsidies for consumption. This is what we typically think of as “fossil fuel subsidies.” In 2011, governments around the world spent some $480 billion to lower the price of petroleum, natural gas, coal, and electricity for their citizens.