IMF analysis finds fossil fuel industry gets subsidies of $11 million every minute

International Monetary Fund (IMF) has said in its analysis that the fossil fuel industry benefits from the subsidies of $11 million per minute. As per The Guardian, the IMF has found that the production and burning of coal, oil and gas was subsidised by $5.9 trillion in 2020 and not a single nation priced all its fuels sufficiently in a bid to reflect their entire supply and environmental costs. 

Reportedly, the experts have said that the subsidies were “adding fuel to the fire” of the climate crisis especially when the rapid reductions in carbon emissions were required imperatively. Direct subsidies that reduce the fuel prices accounted for 8% of the total and tax breaks another 6%. The media outlet stated that the biggest factors were unsuccessful in making polluters pay for the deaths and poor health caused by air pollution and for the heatwaves and other impacts of global heating. 

IMF analysts have reportedly noted that setting the fossil fuel prices that reflect the actual cost would ultimately contribute to reducing the Carbon Dioxide emissions by over a third. Furthermore, it would also mark a massive step towards meeting the globally agreed 1.5C target. Notably, keeping that target in reach is also a crucial goal of the United Nations (UN) COP26 climate summit scheduled to take place in November. 

Putting carbon markets rule is COP26 goal

Putting up rules of carbon markets that make it possible for proper pricing of the pollution is also another COP26 goal. Hence, the IMF researchers reportedly said, “Fossil fuel price reform could not be timelier” adding that ending fossil fuel subsidies would also prevent nearly a million deaths every year from dirty air and raise trillions of dollars for governments. 

The media outlet quoted the lead author of the IMF report, Ian Parry as saying, “There would be enormous benefits from reform, so there’s an enormous amount at stake...Some countries are reluctant to raise energy prices because they think it will harm the poor. But holding down fossil fuel prices is a highly inefficient way to help the poor because most of the benefits accrue to wealthier households. It would be better to target resources towards helping poor and vulnerable people directly.”

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