5 August 2015, Renew Economy, Australia still subsidising fossil fuels at rate of $1,712 per person a year. In a week punctuated by heavy criticism of financial support for renewable energy in Australia, a report from the International Monetary Fund has reminded us that the age of entitlement for fossil fuels never really ended, with subsidies to the sector averaging at around $US1,000 a year for every citizen living in the G20 group of the world’s leading economies. New figures from the IMF have revealed that Australia still provides $US1,260 per head – or $A1,712 – in fossil fuel subsidies in 2015, while the US – the second-worst offender (in dollars), behind China – provides $US700 billion a year, equivalent to $2,180 for every American.
The report finds that the bulk of energy subsidies in most countries are due to undercharging for domestic environmental damage, including local air pollution – especially in countries with high coal use and high population exposure to emissions – and broader externalities from vehicle use like traffic congestion and accidents. “In many top subsidisers in percent of GDP and in per capita terms, these also reflect the setting of domestic energy prices below their supply cost.” The rest of the IMF estimates for 2015 come from payments, tax breaks and cut-price fuel. The IMF, which published a global estimate – $5.3 trillion a year – of fossil fuel subsidies in May, calculates that ending fossil fuel subsidies would slash global carbon emissions by 20 per cent. It has also estimated that this would lead to a 50 per cent cut in premature deaths caused by air pollution, while also being an economic “game-changer” for many countries, freeing up much needed funds. For advanced economies, like Australia, the IMF estimates eradicating fossil fuel subsidisation would gain enough revenue to halve corporate income tax or cover one quarter of public health spending. Read More here