{
  "title": "Fuel for Thought: Ditch the Subsidies",
  "publication": "IMF Blog, August 14, 2019",
  "sourceUrl": "https://www.imf.org/en/blogs/articles/2019/08/14/fuel-for-thought-ditch-the-subsidies",
  "canonical": "https://www.imf.org/en/blogs/articles/2019/08/14/fuel-for-thought-ditch-the-subsidies",
  "overlayPath": "/en/blogs/articles/2019/08/14/fuel-for-thought-ditch-the-subsidies/index.md",
  "summary": "Removing fossil fuel subsidies could gain up to 4 percent of global GDP in additional resources over the medium term.",
  "sections": [
    {
      "heading": "Key finding: potential fiscal gains from removing fossil fuel subsidies",
      "content": "- Removing fossil fuel subsidies could gain up to 4 percent of global GDP in additional resources over the medium term.\n- Fossil fuel subsidies are defined broadly to include:\n  - government funding to artificially reduce the price of energy below cost: 0.4 percent of global GDP\n  - under taxation of fuel consumption: 6.1 percent of global GDP\n- Total subsidies, by this definition, amount to 6.5 percent of GDP globally."
    },
    {
      "heading": "Rationale and distributional note",
      "content": "- Energy consumption contributes to global warming, local pollution, increased traffic congestion and more accidents.\n- These subsidies typically benefit the rich more than the poor."
    },
    {
      "heading": "Policy implications and priorities",
      "content": "- Resources freed by removing subsidies can be redirected to growth-enhancing investment:\n  - pensions, education, healthcare\n  - better infrastructure (classrooms, hospitals, roads)\n  - technology and climate change mitigation\n- Reallocating spending to these priorities can:\n  - help raise long-term economic growth\n  - reduce the burden of high public debt\n  - spread economic benefits more widely within and across countries\n  - help restore public trust in institutions necessary for economic stability"
    },
    {
      "heading": "Upcoming IMF work",
      "content": "- The IMF’s Fiscal Monitor in April 2019 emphasizes that government policies on taxes and spending should adapt and shift to growth-enhancing investment.\n- In October the IMF will publish the next Fiscal Monitor that will focus on climate change.\n\nSource: The Editors, August 14, 2019 — \"Fuel for Thought: Ditch the Subsidies\" (Chart of the Week, Climate change)\n\n---\n\n\n References\n\n- climate change\n- Fiscal Monitor\n- https://www.imf.org/wp-content/uploads/2019/08/Subsidies-COTW-eng-march-26-fm1-3.jpg\n- Fiscal Monitor\n\nSource: https://www.imf.org/en/blogs/articles/2019/08/14/fuel-for-thought-ditch-the-subsidies"
    }
  ],
  "bullets": [
    "[Markdown version](/en/blogs/articles/2019/08/14/fuel-for-thought-ditch-the-subsidies/index.md)",
    "[Structured JSON version](/en/blogs/articles/2019/08/14/fuel-for-thought-ditch-the-subsidies/index.json)",
    "[Bundle manifest](/en/blogs/articles/2019/08/14/fuel-for-thought-ditch-the-subsidies/bundle-manifest.json)",
    "Authors: The Editors",
    "Published: August 14, 2019",
    "Removing fossil fuel subsidies could gain up to 4 percent of global GDP in additional resources over the medium term.",
    "Fossil fuel subsidies are defined broadly to include:",
    "Total subsidies, by this definition, amount to 6.5 percent of GDP globally.",
    "Energy consumption contributes to global warming, local pollution, increased traffic congestion and more accidents.",
    "These subsidies typically benefit the rich more than the poor.",
    "Resources freed by removing subsidies can be redirected to growth-enhancing investment:",
    "Reallocating spending to these priorities can:",
    "The IMF’s Fiscal Monitor in April 2019 emphasizes that government policies on taxes and spending should adapt and shift to growth-enhancing investment.",
    "In October the IMF will publish the next Fiscal Monitor that will focus on climate change.",
    "[climate change](https://blogs.imf.org/2019/05/03/getting-real-on-meeting-paris-climate-change-commitments/)",
    "[Fiscal Monitor](https://blogs.imf.org/2019/04/10/high-debt-hampers-countries-response-to-a-fast-changing-global-economy/)",
    "[https://www.imf.org/wp-content/uploads/2019/08/Subsidies-COTW-eng-march-26-fm1-3.jpg](https://www.imf.org/wp-content/uploads/2019/08/Subsidies-COTW-eng-march-26-fm1-3.jpg)",
    "[Fiscal Monitor](https://www.imf.org/en/publications/fm)"
  ],
  "alternates": {
    "markdown": "/en/blogs/articles/2019/08/14/fuel-for-thought-ditch-the-subsidies/index.md",
    "json": "/en/blogs/articles/2019/08/14/fuel-for-thought-ditch-the-subsidies/index.json",
    "bundleManifest": "/en/blogs/articles/2019/08/14/fuel-for-thought-ditch-the-subsidies/bundle-manifest.json"
  },
  "generatedAtUtc": "2026-08-27T18:09:23.070Z"
}