IMF Report Highlights Leading Countries in Fossil Fuel Subsidies

The International Monetary Fund (IMF) has released a report titled “IMF Fossil Fuel Subsidies Data: 2023 Update,” revealing that China, the USA, Russia, the EU, and India are the leading countries in aggregate global fossil fuel subsidies.
The report points out that globally, total fossil fuel subsidies amounted to $7 trillion in 2022, equivalent to almost 7.1 percent of global Gross Domestic Product (GDP).
Explicit subsidies, which involve undercharging for supply costs, make up 18 percent of the total, while implicit subsidies, involving undercharging for environmental costs and forgone consumption taxes, account for 82 percent.
The report highlights that underpricing for local air pollution and global warming makes up nearly 60 percent of global fossil fuel subsidies.
By fuel product, undercharging for oil products constitutes nearly half of the subsidy, followed by coal at 30 percent, and natural gas at nearly 20 percent.
East Asia and the Pacific region account for nearly half of the global subsidy, with China being the largest subsidizer of fuels, followed by the US, Russia, the EU, and India.
The IMF suggests that fully reforming fossil fuel prices by removing explicit fuel subsidies and imposing corrective taxes, such as a carbon tax, could significantly reduce global carbon dioxide emissions and avert premature deaths caused by air pollution.