IMF Finds $5.3tn Subsidy Estimate For Fossil Fuels In 2015.It Is Greater Than The Total Health Spend
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The IMF said that the revelation estimated figure is extremely robust which should be taken as a huge wake up call that alerts those who defend the use of fossil fuels .To give you a better idea- The $5.3tn subsidy estimated for 2015 is far larger than the total health spending of all the world’s governments.Shocking, isn’t it?
So why is the subsidy this large? The main reason accounts for emitters evading paying the costs imposed by governments .Fossil fuel manufacturing which involves the burning of coal, oil and gas harms the planet in many was such as air pollution and affecting people across the globe by the floods, droughts and storms driven by climate change.so its clear that the opportunity cost of using fossil fuels are way higher.
A renowned climate economist at the London School of Economics, Nicholas Stern stated that, this is a very important analysis which shatters the myth that fossil fuels are cheap by showing just how huge their “real cost” is. What the governments where major fossil fuel emitters are resided take into notice is that there is no rationalization for these massive subsidies for fossil fuels, which in turn distort markets and injure economies, predominantly in poorer countries.”
According to Stern even the IMF’s vast subsidy figure is a substantial underestimate: “implicit subsidies for fossil fuels will surely be much bigger even than this report suggests ,if a more complete estimate of the costs due to climate change would be carried out.
Just think about it.What if the governments cut down the fossil fuel subsidies and use the resources freed on other services?This could be an economic “game-changer” for many countries –its almost common sense isn’t it? Governments would be able to drive economic growth in their countries and pave new avenues for poverty reduction through better investments in infrastructure, health, education etc and by cutting taxes that limit economic and social growth. So why do governments still allocate huge subsidies to fossil fuel companies is beyond my understanding.