From Truth Out: http://truth-out.org/news/item/15580-subsidies-play-significant-role-in-climate-change-imf-says
By Carey L. Biron
Sunday, 07 April 2013
Washington – The International Monetary Fund (IMF) is urging national governments around the world to roll back or eliminate subsidies on petroleum-based energy sources, estimating that this alone could result in a 13-percent decline in global carbon dioxide emissions.
In an unusual new paper marking its full entry into the climate change debate, the Washington-based fund on Wednesday said the cost of “pre-tax” subsidies for these products, when consumers pay less than the cost of supply, stood at about 480 billion dollars in 2011.
Further, the “post-tax” cost of these subsidies – wherein a government doesn’t charge enough to take into account the negative ramifications of energy consumption, including environmental impact – are far higher. Suggesting a figure far higher than previous estimates, the IMF puts this number at around 1.9 trillion dollars, or 2.5 percent of global GDP.
While developing countries and emerging economies account for much of the pre-tax subsidies, IMF researchers have found that developed countries make up some 40 percent of the post-tax total. The United States leads all countries in this regard, at nearly a half trillion dollars in annual subsidies, followed by Russia and China.
The implication is that these countries should be charging consumers far higher for coal, gasoline and other petroleum products, both in order to offset their negative impacts and to give consumers a clearer understanding of the full consequence of their use. Following on previously stated policy, the IMF is also reiterating its support for some sort of carbon tax.
Continue reading at: http://truth-out.org/news/item/15580-subsidies-play-significant-role-in-climate-change-imf-says
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