Subsidies for fossil fuels that cause climate change have soared since 2013, a new study from the International Monetary Fund has revealed.
Oil, gas and coal costs will be subsidized to the tune of US$5.3 trillion a year in 2015. The last time the IMF ran the data it calculated they were worth $1.9 trillion.
Economists say the latest figures are more accurate as they represent the “true” cost of energy, which includes the environmental, health and climate impacts of burning fossil fuels.
“Over half of the increase is explained by more refined country-level evidence on the damaging effects of energy consumption on air quality and health,” IMF officials Benedict Clements and Vitor Gaspar wrote in a blog.
The figure is larger than the health spending of all the world’s governments combined, a reckoning the pair called “shocking”.
Coal is the biggest recipient of polluting subsidies, the IMF found, given its combined impact on air quality and high carbon emissions.
“The most dramatic difference, compared with the pre-tax figures, is for coal which is the biggest source of post-tax subsidies, amounting to 3.0% of global GDP in 2011 and rising to 3.9% in 2015,” says the study.
The World Bank and IMF have been campaigning hard for countries to stop subsidizing fossil fuels, arguing it can help stimulate stronger and more inclusive growth.
In the past three year’s leaders at the Major Economies Forum, G20 and G7 have all called for an end to harmful subsidies.