Global public subsidies to the fossil-fuel industry total $5.3 trillion a year, according to a May report from the International Monetary Fund. That’s $10 million a minute to feed our oil, gas and coal habit.
The report, “How Large Are Global Energy Subsidies?”, calculates not only the cost in tax breaks and other direct public subsidies to fuel producers. It also estimates the cost of health care dollars spent on illnesses directly attributable to carbon pollution, such as respiratory emergencies, as well as the cost of cleaning up brownfields, coal slag leakage into rivers, and even losses due to floods, droughts and other climatic events that scientists link to fossil-fuel use.
If these costs were built into the price of fossil fuels, the IMF contends, global carbon pollution would fall by 20 percent from today’s annual output and renewable power, such as wind and solar, would be more than competitive in price.
The IMF’s numbers have been attacked from economists who believe the report underestimates the actual cost of climate change’s damage; and from others who point out that actual global government subsidies to the fossil industry are only $492 billion a year and that it’s too hard to parse the costs of cleaning up pollution, treating pollution-related illnesses, and other damage to determine just how much of those costs can be laid at the door of fossil fuels.
Still, David Coady, the IMF official overseeing the report, calls the analysis “extremely robust. It is the true cost associated with fossil-fuel subsidies.”