The Strategist

IMF notes record fossil fuel subsidies in the world in 2022

08/25/2023 - 03:39

The fund reports that the total number of subsidies reached $7 trillion.
According to a research by the International Monetary Fund (IMF), global subsidies for fossil fuels reached a record $7 trillion in 2022.

"Governments supported consumers and businesses during a period of sharp increases in energy costs," the study states. "Subsidies for fossil fuels rose to a record $7 trillion last year." The spike, according to the fund's analysts, was brought on by Russia's invasion into Ukraine and the "economic recovery from the coronavirus pandemic.

The IMF stressed that the cost of oil, coal, and natural gas subsidies amounts to 7.1 percent of the world's gross domestic product, despite the fact that the world is working to prevent global warming of more than 1.5 degrees Celsius and that excessive heat is affecting regions of Asia, Europe, and the United States. The sum amounts to more than governments spend each year on health (10.9%) and education (4.3% of worldwide income combined).

Globally, "fossil fuel subsidies have increased by $2 trillion over the past two years," according to the data provided. The fund notes that the amount was close to $6 trillion in 2021. According to IMF forecasts, there might be additional increases in the years to come.