IMF tots up world’s fossil fuel subsidies at $2trillion

The world’s subsidies for fossil fuels have hit $1.9trillion (£1.2tn), according to a study by the International Monetary Fund. That’s the equivalent of 2.5% of global GDP or 8% of […]

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By Vicky Ellis

The world’s subsidies for fossil fuels have hit $1.9trillion (£1.2tn), according to a study by the International Monetary Fund.

That’s the equivalent of 2.5% of global GDP or 8% of government revenues, found the study, which included estimates of energy subsidies currently available for 176 countries.

Energy subsidies are concentrated mostly in the Middle East and North Africa, Central and Eastern Europe and Asia, according to the figures.

The organisation is urging policymakers around the world to reform subsidies for products from coal to gasoline.

Some countries give so much money to fossil fuels it threatens their economic stability, claimed the IMF’s First Deputy Managing Director David Lipton.

In a speech in Washington D.C. last week, Mr Lipton said: “The paper shows that for some countries the fiscal weight of energy subsidies is growing so large that budget deficits are becoming unmanageable and threaten the stability of the economy.”

He added that IMF research shows 20 countries maintain pre-tax energy subsidies that exceed 5% of GDP.