Global Fossil Fuel Subsidies Remain Large: An Update Based on Country-Level Estimates
IMF Working Papers, May 2, 2019
Source details
- Canonical URL
- Global Fossil Fuel Subsidies Remain Large: An Update Based on Country-Level Estimates
Other formats
Bibliographic details
- Authors: David Coady, Ian W.H. Parry, Nghia-Piotr Le, Baoping Shang
- Published: May 2, 2019
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781484393178.001
Methodology and scope
- Subsidies are defined as fuel consumption times the gap between existing and efficient prices (i.e., prices warranted by supply costs, environmental costs, and revenue considerations).
- Estimates cover 191 countries.
- Paper length: 39 pages; Series: Working Paper No. 2019/089; DOI: https://doi.org/10.5089/9781484393178.001.
Key findings: magnitude and distribution
- Global subsidies in 2015: $4.7 trillion (6.3 percent of global GDP).
- Projected global subsidies in 2017: $5.2 trillion (6.5 percent of GDP).
- Largest subsidizers in 2015:
- China: $1.4 trillion
- United States: $649 billion
- Russia: $551 billion
- European Union: $289 billion
- India: $209 billion
- About three quarters of global subsidies are due to domestic factors.
- Fuel composition: coal and petroleum together account for 85 percent of global subsidies.
Environmental and fiscal impacts of efficient pricing
- Efficient fossil fuel pricing in 2015 would have:
- Lowered global carbon emissions by 28 percent.
- Lowered fossil fuel air pollution deaths by 46 percent.
- Increased government revenue by 3.8 percent of GDP.
Policy implications and analysis
- Energy pricing reform is largely in countries’ own national interest because about three quarters of subsidies stem from domestic factors.
- Targeting coal and petroleum would address the bulk of the subsidy problem, given their 85 percent share of global subsidies.
- Achieving efficient fossil fuel pricing delivers simultaneous environmental (large reductions in emissions and air pollution deaths) and fiscal (notable revenue gains) benefits.
David Coady, Ian W.H. Parry, Nghia-Piotr Le, and Baoping Shang. "Global Fossil Fuel Subsidies Remain Large: An Update Based on Country-Level Estimates", May 2, 2019.
Content in this bundle
- Working Paper