Global Fossil Fuel Subsidies Remain Large: An Update Based on Country-Level Estimates

By David Coady, Ian W.H. Parry, Nghia-Piotr Le, Baoping Shang

May 2, 2019

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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, (USA: International Monetary Fund, 2019) accessed November 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper updates estimates of fossil fuel subsidies, defined as fuel consumption times the gap between existing and efficient prices (i.e., prices warranted by supply costs, environmental costs, and revenue considerations), for 191 countries. Globally, subsidies remained large at $4.7 trillion (6.3 percent of global GDP) in 2015 and are projected at $5.2 trillion (6.5 percent of GDP) in 2017. The largest subsidizers in 2015 were China ($1.4 trillion), United States ($649 billion), Russia ($551 billion), European Union ($289 billion), and India ($209 billion). About three quarters of global subsidies are due to domestic factors—energy pricing reform thus remains largely in countries’ own national interest—while coal and petroleum together account for 85 percent of global subsidies. Efficient fossil fuel pricing in 2015 would have lowered global carbon emissions by 28 percent and fossil fuel air pollution deaths by 46 percent, and increased government revenue by 3.8 percent of GDP.

Subject: Consumption, Energy subsidies, Environment, Expenditure, Fuel prices, National accounts, Non-renewable resources, Prices

Keywords: Accident cost, Air pollution, Asia and Pacific, Consumption, Cost, Deadweight loss, Efficient taxation, Emission rate estimate, Energy subsidies, Environment, Estimate, Europe, Fuel price elasticity, Fuel prices, Fuel-price responsiveness, Global, Non-renewable resources, Revenue, Road damage cost, Supply cost, Term, WP

Publication Details

Pages:

39
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2019/089
Stock No:

WPIEA2019089
ISBN:

9781484393178
ISSN:

1018-5941

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