The IMF, Carbon Pricing and Explicit and Implicit Fossil Fuels Subsidies
Here are two terms that anyone who wants to preserve a stable climate needs to know: explicit fossil fuel subsidies and implicit fossil fuel subsidies.
Explicit fossil fuel subsidies from governments directly reduce the price of fossil fuels, thus making it attractive to investors and consumers to buy. Implicit fossil fuel subsidies are the costs taxpayers and insurance are paying for the air pollution and climate impacts experienced because of dirty fossil fuels.
On August 24, 2023, the International Monetary Fund (IMF) released a report. The conclusion of this report was that subsidies for oil, coal, and natural gas cost the equivalent of 7.1% of global gross domestic product.
Explicit subsidies have more than doubled since 2020 but are still only 18% of the total subsidy amount, while nearly 60% is due to implicit subsidies.
Here is a hopeful conclusion from the report: “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 1.5-2C), while raising revenues worth 3.6 % of global GDP and preventing 1.6 million local air pollution deaths per year.”
Making polluters pay (a.k.a carbon pricing) offers us the exact tool needed to ensure this price reform. In fact, the IMF Managing Director Kristalina Georgieva at the Paris Summit in June said, “Our analysis shows that without a carbon price, there is no chance that we will meet the 1.5 degrees Celsius target by 2030. We will miss it.”
Our only home, Earth, has just passed through the hottest three months on record. With the fires, floods, horrendous storms, cryosphere melting and the threats to the Gulf Stream, it is obvious that the impacts of climate change are no longer just a concern for future generations, but are a very real threat at our doorstep. We must listen to the experts and cooperate to enact or strengthen our essential climate policies such as carbon pricing going forward. Happily there are 70 carbon pricing initiatives world wide and the African Summit issued a unanimous call for world leaders to support global price on carbon pollution on September 6, 2023.
The Fossil Fuel Industry Funded Climate Disinformation for Decades
Even to this day, there are individuals who deny or downplay the link between the burning of fossil fuels and the impacts that pollution has on our climate and health. How did this happen?
Key players in the fossil fuel industry knew decades ago that burning coal, oil, and methane gas to warm our homes, power our cars, and generate electricity was warming the planet. Instead of acting on the knowledge, they began financing a massive disinformation campaign. Now, as a consequence, youth are having to fight for their inalienable right to have a safe and liveable future.
Happily, when you inform people that the fossil fuel industry funded a climate disinformation campaign for decades, people are more likely to believe you when you present solutions.
- Climate Cover-Up (2009) By James Hoggan and Richard Littlemore
- Merchants of Doubt: How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Climate Change (2011) by Naomi Oreskes
- Oil’s Deep State: How the petroleum industry undermines democracy and stops action on global warming – in Alberta, and in Ottawa (2017) Dr. Kevin Taft
- The New Climate War: The Fight to Take Back Our Planet (2021) By Michael E. Mann
- The Petroleum Papers: Inside the Far-Right Conspiracy to Cover Up Climate Change (2022) By Geoff Dembecki