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Global fossil fuel subsidies and costs hit record $7tn in 2022, IMF reports

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By illuminem briefings

· 2 min read

illuminem summarizes for you the essential news of the day. Read the full piece on The Financial Times or enjoy below

🗞️ Driving the news: Global fossil fuel subsidies reached an all-time high of $7tn in 2022, driven by governments attempting to protect consumers from rising energy prices due to Russia's invasion of Ukraine, as estimated by the IMF

🔭 The context: The surge in subsidies for coal, oil, and natural gas in 2022 equated to 7.1% of the global GDP 
• This is more than what governments globally spent on education and two-thirds of healthcare spending
• The majority of these subsidies are "implicit", where environmental costs of burning fossil fuels aren't charged

🌎 Why does it matter for the planet: The record subsidies come at a time when the world is experiencing its hottest average monthly global temperatures
• Scientists attribute the rise in temperatures mainly to the burning of fossil fuels

⏭️ What's next: Despite G20 leaders pledging to phase out inefficient fossil fuel subsidies, increased living expenses and the ongoing energy crisis have prompted governments to introduce energy price caps and fuel subsidies
• World leaders now face scrutiny from climate experts as the UN COP28 conference in Dubai looms

💬 One quote: "Emissions need to be cut by 43% by 2030 to keep to the 1.5C warming threshold... but have continued to rise annually instead" (Aime Williams, climate reporter at Financial Times)

📈 One stat: Explicit subsidies have tripled since the previous IMF assessment in 2020, moving from $0.5tn to $1.5tn in 2022

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