This is a bold claim to make, and one that you might expect from radical groups like Friends of the Earth or Greenpeace. But it came from that staid, wholly establishment organisation, the International Monetary Fund.
The IMF estimates that in 2017 global fossil fuel subsidies reached a mind-blowing 5.2 trillion dollars, or 6.5 percent of global GDP, up from $4.7tn in 2015.
These costs include not only direct subsidies but also tax breaks that dinimish national budgets, health care costs from fossil fuel related pollution, the cost of traffic congestion, and so on. It's a pretty thorough assessment of all the indrect costs to society.
Worldwide subsidies for coal is about $2tn, subsidies to oil and gas about $2.5tn.
Now here's the truly gobsmacking thing about all this: The leading oil and gas companies had a net income of $91bn in 2018. Add the $111bn of profits made by Saudi Aramco, and the $8.4bn from Rosneft, to arrive at $210bn. Those are the largest companies.Add in $61bn for the largest coal companies (2017 number). Let us be generous and say that all fossil fuel companies made a net income around $500bn a year.
That's less than ONE TENTH of worldwide subsidies.
Let me say that again: Fossil fuel companies live off of a fraction of taxpayers' handouts. Besides wreaking havoc on our lungs, our endocrine systems and our climate. It's very trumpian.
The narrow measure of subsidies, termed pre-tax subsidies, reflects differences between the amount consumers actually pay for fuel use and the corresponding opportunity cost of supplying the fuel. Even by this narrow definition, the pre-tax subsidy is $296bn worldwide. That's only a little less than fossil fuel companies' profit.
This also makes excruciatingly clear why fossil fuel companies work so hard to influence governments all over the planet. And why they are working to pre-empt the lawsuits that an ever increasing number of cities are serving them now: they could not possibly put up the cost. Much like Trump, these companies know that if they ever lost their grip on governments, that would be the end of them as companies.
We already know who is bearing the cost. The thing to do is to quit paying at least the ones we have direct control over: the tax breaks and the concessions over which companies pay pennies on the dollar. More than that: we simply need to shut down these companies. And we need to do it before the climate costs overwhelm the GDP entirely.
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