Eye-popping stats on fossil fuel subsidies
July 2019—Subsidies should only be used to support the creation of strategic new industries, provide a social safety net, and encourage behaviors critical to the well-being of our society. So why is the world still subsidizing fossil fuels, and not by a little. These stats are astounding.
A new International Monetary Fund (IMF) study shows that USD$5.2 trillion was spent globally on fossil fuel subsidies in 2017. The equivalent of over 6.5% of global GDP of that year, it also represented a half-trillion dollar increase since 2015 when China ($1.4 trillion), the United States ($649 billion) and Russia ($551 billion) were the largest subsidizers.
If you just look at the US, here’s what you find:
Buckle’s analysis of the inefficiency of fossil fuel subsidies is illustrated best by the United States’ own expenditure: the $649 billion the US spent on these subsidies in 2015 is more than the country’s defense budget and 10 times the federal spending for education . When read in conjunction with a recent study showing that up to 80% of the United States could in principle be powered by renewables, the amount spent on fossil fuel subsidies seems even more indefensible.