IMF: $5.3 Trillion Energy Subsidy Problem

The IMF direct blog writes [imf.org] about new estimations on the scope of energy subsidies, among which subsidies for energy derived from non-renewable resources. The blog has more links to technical papers.

US$5.3 trillion; 6½ percent of global GDP—that is our latest reckoning of the cost of energy subsidies in 2015. These estimates are shocking. The figure likely exceeds government health spending across the world, estimated by the World Health Organization at 6 percent of global GDP, but for the different year of 2013. They correspond to one of the largest negative externality ever estimated. They have global relevance. And that’s not all: earlier work by the IMF also shows that these subsidies have adverse effects on economic efficiency, growth, and inequality.