Government Fossil Fuel Subsidies Topped $1 Trillion In 2022


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Axios cites research from the IMF and International Energy Agency, which estimates fossil fuel subsidies doubled from the previous year. The Russian invasion of Ukraine prompted much of the subsidies, which served as “policy interventions” shielding people from the brunt of highly volatile pricing in the global energy market. And yet, people still felt the effects of this volatility with high gasoline prices throughout 2022. That makes the subsidies that much more offensive since these come from public money.

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Even so, the blame isn’t squarely on volatile energy pricing, because the G20 has consistently failed to meet its goals since 2009. It’s been nearly a decade and a half since the global summit that proclaimed government investments would be sunsetted, but subsidies show no sign of slowing down. One of the main problems behind these subsidies is that public help makes fossil fuels seem cheaper than renewable energy sources. That’s less true as renewables scale, and yet subsidies keep masking the true cost of our continued reliance on fossil fuels.

The IMF sees total subsidies topping $7 trillion (!) last year when they add “implicit” support — a more abstract tally that includes “undercharging” for estimated air pollution, climate impacts and other externalities.

To make matters worse, the subsidies may be much higher depending on how we classify them. Axios reports total subsidies could exceed $8 trillion when accounting for both direct and indirect help from global governments:

In 2022, global governments subsidized fossil fuels to the tune of $1.3 trillion, according to the International Monetary Fund. It seems member countries of the G20 just can’t wean themselves off oil and gas. So much for all the big promises made by the G20 back in 2009, when subsidies were reportedly going to be phased out. Thanks, Obama. State-sanctioned subsidies for fossil fuels — including coal — have reached record-breaking highs this year, despite major countries pledging to reduce their reliance on these energy sources.