States directly subsided fossil energies with nearly $500 Billions in 2014, according to IEA (1).
Directs Subsides Mainly In Oil Countries
Hydrocarbon producers are the main funders of fossil energies. Over the period 2009-2014, fossil-fuel subsidies for those countries have, on average, been equivalent to more than one-quarter of government expenditure. More than half of the money goes to oil. And five countries (Iran, Saudi Arabia, Russia, India and Venezuela) spent more than half of direct subsides to fossil energies.
Ten Times More of Indirect Subsidies
To direct subsidies can be added the indirect ones, that can be defined as externalities that are not included in prices, but covered by public funds, so citizens.
Fossil energy generate damages which costs are not included in prices, such as pollution, environmental destruction, health… So States, through public budgets, pay for those externalities and participate to subside indirectly fossil energies.
Indirect subsidies are estimated at $5.3 trillion (so 6.5 percent of global GDP) in 2015 according to a study from the IMF (2). Eliminating those subsidies “could raise government revenue by $2.9 trillion, cut global CO2 emissions by more than 20 percent, and cut pre-mature air pollution deaths by more than half”, the study mentions.
Sources:
(1) International Energy Agency: http://www.worldenergyoutlook.org/resources/energysubsidies/fossilfuelsubsidydatabase/
Subsidy is estimated from difference between reference price and end-user price.
(2) International Monetary Fund: http://www.imf.org/external/pubs/ft/survey/so/2015/NEW070215A.htm
