The more interesting element of the IMF report, however, is the conclusion that some $5 trillion of the total it estimated for global hydrocarbon subsidies is in the form of unpaid compensation for harm done by hydrocarbon use.
According to the fund, it is the affordability of hydrocarbons that is the problem. And this affordability is supported by direct subsidies. The solution to this problem is price reform.
"Full fossil fuel price reform would reduce global carbon dioxide emissions to an estimated 43 percent below baseline levels in 2030 (in line with keeping global warming to 1.5-2oC), while raising revenues worth 3.6 percent of global GDP and preventing 1.6 million local air pollution deaths per year."
In other words, the IMF proposes that governments make hydrocarbons too expensive to use in order to remedy the harm they do to the environment and people, and to reach Paris Agreement temperature goals.
Indeed, the IMF believes all forms of subsidies for the industry need to go. "We estimate that scrapping explicit and implicit fossil-fuel subsidies would prevent 1.6 million premature deaths annually, raise government revenues by $4.4 trillion, and put emissions on track toward reaching global warming targets."
According to the fund, it is the affordability of hydrocarbons that is the problem. And this affordability is supported by direct subsidies. The solution to this problem is price reform.
"Full fossil fuel price reform would reduce global carbon dioxide emissions to an estimated 43 percent below baseline levels in 2030 (in line with keeping global warming to 1.5-2oC), while raising revenues worth 3.6 percent of global GDP and preventing 1.6 million local air pollution deaths per year."
In other words, the IMF proposes that governments make hydrocarbons too expensive to use in order to remedy the harm they do to the environment and people, and to reach Paris Agreement temperature goals.
Indeed, the IMF believes all forms of subsidies for the industry need to go. "We estimate that scrapping explicit and implicit fossil-fuel subsidies would prevent 1.6 million premature deaths annually, raise government revenues by $4.4 trillion, and put emissions on track toward reaching global warming targets."