Fossil Fuel Companies Receive $11 Million a Minute in Subsidies

Fossil fuel companies received $5.9 trillion in subsidies last year, which works out at $11 million per minute, the International Monetary Fund (IMF) says in a new report. The subsidies represent 6.8% of the global GDP and are expected to rise to 7.4% by 2025, says the report, which looked into the benefits that fossil fuel companies receive in ​​191 countries. The benefits that fossil fuel companies enjoy include direct subsidies that reduce prices (8%) and tax exemptions (6%), as well as indirect subsidies due to the economic costs of lives caused by air pollution (42%) and extreme weather events caused by global warming (29%), as well as congestion and road accidents (15%). The IMF said scrapping subsidies could help prevent nearly 1 million annual deaths from air pollution alone.

Despite efforts to invest in renewable energy and decarbonize the transportation sector, the IMF found that fossil fuel subsidies have increased in recent years and the organization forecasts that they will continue increasing, even though G7 nations had previously agreed to scrap fossil fuel subsidies by 2025.

— source treehugger.com | Oct 21, 2021

Nullius in verba

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Still Not Getting Energy Prices Right

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

Nullius in verba

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Fossil Fuel Subsidies and Taxation: Two Sides of the Same Carbon Coin

We recently published a two part Tax Justice Focus special on climate crisis and tax justice. This blog reproduces the article by Laura Merrill, in which she outlines how massive direct and indirect state subsidies have overwhelmingly distorted energy markets to favour fossil-fuel consumption, skewing investment decisions and slowing uptake of renewable technologies. Despite vague commitments from G20 countries to phase out subsidies, national governments continue to subsidise their fossil fuel giants, even while mouthing the rhetoric of free-market economics. Click here to download the first and second parts of our Tax Justice Focus special.

Laura Merrill *

Generous government subsidies around the world are, even now, enabling the extraction and burning of fossil fuels that would otherwise remain in the ground. A global technocratic elite that claims to value market forces is blithely ignoring them in a way that could hardly be more ruinous. As

— source taxjustice.net | John Christensen | Jun 3, 2020

Nullius in verba

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