The World Blows Over $5 Trillion a Year on Oil and Gas Subsidies: Report
S E E D E D C O N T E N T
The staggering number shows why failure to account for climate change, air pollution, and other societal ills when it comes to fossil fuel extraction is often described as the biggest market failure ever, and also that maybe the market isn’t going to save us.
Thinking about $5.2 trillion is hard. It’s equivalent to 6.5 percent of the entire world’s annual GDP. It’s more than France and Germany’s GDP combined. It’s $164,890.91 of money wasted per second in a year. But one thing is obvious: it is an absolutely stupid amount of money to be throwing away on something that is actively harmful to life on Earth.
IMF’s report released late last week breaks down where the huge figure comes from. On the one hand, you have you have your direct price subsidies that help offset costs consumers pay for, say gas or heating oil. Those totals are still profound at more than $300 billion in 2017 , but the real subsidies are hidden in the impacts burning fossil fuels have on society. Burning oil, gas, and coal cause widespread health problems tied with air pollution and disrupt the climate, and fossil fuels aren’t paying their fair share.
In their calculations, IMF relies on a metric called the social cost of carbon to estimate these hidden subsidies. It uses a middle of the road estimate of $40 per ton of carbon, with a 3 percent rise annually. While there are lines of research showing a carbon tax of $40 per ton isn’t high enough , that’s how IMF arrives at its $5.2 trillion figure.
Using 2015 data, the report also breaks down subsidies by individual countries. The biggest subsidizer by far is China, which committed $1.4 trillion to subsidizing fossil fuels. The U.S. wasted $649 billion, the equivalent of using $2,028 per person to set the world on fire.
If fossil fuels were correctly priced in 2015, IMF’s research shows carbon emissions would have been 28 percent lower and 46 percent fewer people would’ve died from air pollution, which kills 4.2 million annually . Tax revenues would also have gone up 3.8 percent and the total economic benefits would have been equal to 1.7 percent of global GDP.
As things are currently structured, dirty fossil fuels like coal are an increasingly tenuous bet financially . But then they’ve also become indefensible scientifically as the world inches closer to catastrophic climate change. Despite this, the world continues to kowtow to entrenched interests. And the longer it does, the more this and future generations will suffer the consequences.
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So, what's the solution?
Renewables are not going to get the job done on a global basis, even if heavily subsidized.
- Cut petroleum subsidies by 10% every year for ten years. (The gradualism is to give everyone the possibility to adjust.)
- Spend those trillions on reducing the world's energy addiction. Re-conceive our cities to need less energy - much less - in transport, heating/cooling, ...
- First and foremost, recognize that we must change our ways. To continue as always is to kill our grandchildren.
Crony capitalism at its finest.
"The staggering number shows why failure to account for climate change, air pollution, and other societal ills when it comes to fossil fuel extraction is often described as the biggest market failure ever"
It's definitely not a "Money Maker" Failure for sure.
It is when you count the costs, you know, the ones WE pay for when there are disasters. Called socializing the costs instead of paying for the damage themselves. When you include that little nugget it ain't so great. But they get to keep those profits with the tax codes they wrote.
Like voting to raise taxes on them, as if it will never get passed on to the consumer ?
We'll show them huh !
My States been through quite a few disasters over the years. I'm still a happy camper.
And my Big Ol' Veggie Garden is doing great, in case "Climate Change' comes up.
Well we aren't happy paying for the disasters in your state. We are already paying for them. You think its fine for companies to pass on the costs of their disasters to us, that is unbelievable. You comment implies you don't care that companies socialize their costs to US taxpayers. So you DO like socialism, just to the top.
Your taxes went up ? I know mine didn't. In fact, they went down !
"You think its fine for companies to pass on the costs of their disasters to us, that is unbelievable."
I never said any such thing. The more folks expect, the more it's gonna cost ya. That's just life !
Oh, good lord. if its not in a tax increase and not in the budget, it gets added to our debt. Which we pay for. Or do you think its a freebie?
When you choose to "Want" constantly, the debt goes up ! It's called not having enough money to pay for what you want.
YOU aren't doing a very good job with paying that Debt off, are you. The Debt just keeps going up and up. Wonder when we're gonna hit 30 Trillion.
That deserves a "Party' for sure. We'll call it "Beholding Day". "Independence Day" doesn't exist anymore.
Lol, as if republicans care about the debt. That's why they added so much to it with their tax cuts (to the top, of course). They've cut revenue from their owners and the debt. Now I know republicans want to pretend Obama inherited a booming economy and just racked up debt, but that would be TRUMP adding to the debt when the economy is already doing well. I know you'll try to ignore that, but its part of the equation.
I never said, rising debts are good.
I just asked what you have done to try and help reduce this "Debt".
That's true... but it's more complicated.
All societies need money to accomplish the missions they are tasked. Roads, military, air traffic control... whatever. Therefore... taxes.
The question is "What is the best way to share the tax burden?"
I try to elect people who don't give away everything to the top. I don't like the wealthiest people getting the most benefit and not paying for that. Trump lost billions and he caused other contractors to go under when he stiffed them all. There are A LOT of them. Conservatives are currently showing they don't care about the debt, they just added to it for no reason. They never care about the debt when they spend, only when a democrat is in office. Look it up if you are inclined to dispute that.
What am I doing? What else can we do except elect the right people? Coming here and calling out bullshit is another. What are YOU doing? A shame so many get caught up in ideology instead of looking at each policy and deciding. It really is so much easier to look at the truth when you don't belong to a party. How anybody could be a part of the current republican party is beyond me. I can't ignore the lies, racism, ignorance (it starts at the top), the damage being done while the gop just circles the wagon to protect the liar, not the country, which is who they work for. I don't care how many times it gets denied, Trump is doing great damage to this country and its institutions and the Constitution. The gop is basically ceding its constitutional authority to the executive branch. Unprecedented.
When YOU……….. choose to penalize those that pay most of the taxes in this country, YOU .... Mr./Mrs. Joe the Plumber ............…. will lose every friggin time.
Didn't you notice what happened to "The Plumber" Guy and Gal, when Obama got that joke of an "Insurance" rule passed ? "The Plumbers" work Hours got cut. The Major Tax Payers didn't blink one fucking eye. They didn't lose a thing.
TRUMP PAID ZERO TAXES FOR YEARS. THE TAX CODE IS WRITTEN FOR THOSE AT THE TOP.
Many of the largest companies don't pay taxes, or pay very little. it's not a damn act of God, its those same companies paying for the legislation that allows that. You seem to think the natural flow of wealth should just automatically go to the top. It's not natural, its bought and paid for. Are you one of those who celebrates when Trump loses billions and cheats contractors down the line out of their earned income? Are you ok with all the benefits just going north instead of more evenly distributed? Because like I said, its not natural, they made it happen by buying politicians. And I won't even get into insurance or the ACA with you, because its clear you can only regurgitate the gop lies and misinformation.
Yup.
I use our TAX CODE for my gain all the time.
Who knew Lowly ME, was a top of the heap type.