The $5.3 Trillion Energy Subsidy Problem
Date: Monday, May 25, 2015 @ 03:19:14 EDT
From NextBigFuture: US$5.3 trillion; 6½ percent of global GDP—that is the IMFs latest reckoning of the cost of energy subsidies in 2015.
The figure likely exceeds government health spending across the world,
estimated by the World Health Organization at 6 percent of global GDP,
but for the different year of 2013. They correspond to one of the
largest negative externality ever estimated. They have global relevance.
And that’s not all: earlier work by the IMF also shows that these
subsidies have adverse effects on economic efficiency, growth, and
What are energy subsidies ?
We define energy subsidies as the difference between what consumers pay
for energy and its “true costs,” plus a country’s normal value added or
sales tax rate. These “true costs” of energy consumption include its
supply costs and the damage that energy consumption inflicts on people
and the environment. These damages, in turn, come from carbon emissions
and hence global warming; the health effects of air pollution; and the
effects on traffic congestion, traffic accidents, and road damage. Most
of these externalities are borne by local populations, with the global
warming component of energy subsidies only a fourth of the total...
Full story: http://nextbigfuture.com/2015/05/the-53-trillion-energy-subsidy-problem.html