Records of Subsidies to Fossil Fuels: A Call for an Energy Transition Is Imperative

Fossil Fuel Subsidies At Record Level, Says IMF

A recent study by the International Monetary Fund (IMF) highlights the historic peak in fossil fuel subsidies, which reached seven trillion dollars worldwide last year. This sum represents more than 7% of the global economy, setting a new record, according to the IMF's announcement in Washington last week. Direct subsidies have more than doubled since 2020.

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Much of this increase is the result of temporary measures, mainly introduced after Russia's attack on Ukraine in 2022, which led to a sharp rise in energy prices. As a result, we can expect a reduction in these subsidies in the future.

According to the IMF, almost half of these subsidies are allocated to the East Asia and Pacific region. Among the recipient countries, China leads the way, followed by the United States, Russia, the countries of the European Union and India. In terms of the distribution of subsidies, around 50% goes to the oil sector, 30% to coal and 20% to natural gas.

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Despite the urgency of global warming and recent heat waves, subsidies for fossil fuels far outstrip those allocated to education. Indeed, the world's governments devote just 4.3% of their economic performance to education. Spending on health accounts for 11%.

The IMF points out that the abolition of subsidies and the adoption of a more coherent, climate-friendly approach by governments would lead to a rapid increase in fuel prices. This would prevent 1.6 million premature deaths each year from excessive air pollution by 2030, while increasing public revenues by 4.4 trillion dollars.

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