Globally, fossil fuel subsidies were $5.9 trillion in 2020 or about 6.8 percent of GDP, and are expected to rise to 7.4 percent of GDP in 2025. 8 percent of the 2020 subsidy reflects undercharging for supply costs (explicit subsidies) and tax breaks another 6%. Rest for undercharging for environmental costs. The U.S. government will provide approximately $730 billion in direct and indirect subsidies to fossil fuel companies this year, a figure that is expected to increase to $850 billion by 2025. EU lawmakers last month voted to continue providing subsidies to fossil fuel companies until at least 2027. Efficient fuel pricing in 2025 would reduce global carbon dioxide emissions 36 percent below baseline levels, which is in line with keeping global warming to 1.5 degrees, while raising revenues worth 3.8 percent of global GDP and preventing 0.9 million local air pollution deaths.
— source imf.org | Sep 24, 2021
