$5.3 trillion energy subsidies exceed public health spending for the globe – 19th May 2015
Governments around the world are not accounting for the harmful side effects of fossil fuels in the energy prices. The International Monetary Fund (IMF) states that energy prices charged by Governments to consumers do not account for harmful health and environmental side effects and this adds up to a $5.3 trillion “post-tax” subsidy for energy this year.
China is the worst offender with a $2.3 trillion subsidy caused by failing to charge its 1 billion consumers for the pollution created by fossil fuels which are heavily used. The United States is second in line as the worst offender with a $699 billion subsidy, followed by Russia, the European Union, India and Japan.
The IMF has long urged Governments to get rid of “pre-tax subsidies” which allow for the purchase of fossil fuels below their cost of supply. Now they are also turning their attention to “post-tax subsidies” which mean prices do not reflect costs such as deaths from pollution and unfair tax advantages.
Getting rid of fossil fuel subsidies is seen as an important international measure that would help mitigate against rising temperatures. These damages also directly affect domestic consumers, meaning that it is in the countries’ interests to remove subsidies from fossil fuels.
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