U.S Spends Ten Times More On Fossil Fuel Subsidies Than Education.

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U.S Spends Ten Times More On Fossil Fuel Subsidies Than Education.

A new International Monetary Fund (IMF) study shows that USD$5.2 trillion was spent globally on fossil fuel subsidies in 2017. The equivalent of over 6.5% of global GDP of that year, it also represented a half-trillion dollar increase since 2015 when China ($1.4 trillion), the United States ($649 billion) and Russia ($551 billion) were the largest subsidizers.

Despite nations worldwide committing to a reduction in carbon emissions and implementing renewable energy through the Paris Agreement, the IMF’s findings expose how fossil fuels continue to receive huge amounts of taxpayer funding. The report explains that fossil fuels account for 85% of all global subsidies and that they remain largely attached to domestic policy. Had nations reduced subsidies in a way to create efficient fossil fuel pricing in 2015, the International Monetary Fund believes that it “would have lowered global carbon emissions by 28 percent and fossil fuel air pollution deaths by 46 percent, and increased government revenue by 3.8 percent of GDP.”

The study includes the negative externalities caused by fossil fuels that society has to pay for, not reflected in their actual costs. In addition to direct transfers of government money to fossil fuel companies, this includes the indirect costs of pollution, such as healthcare costs and climate change adaptation. By including these numbers, the true cost of fossil fuel use to society is reflected.

The United States is the world's second largest subsidizer of fossil fuels, after China.

Nations worldwide have continued to support the natural gas and petroleum industries. This is evident by the energy policies of the United States and Australia, who have continued to rely heavily on fossil fuels. Meanwhile the world’s largest subsidizer of fossil fuels, China has actively looked to follow efficient fossil fuel guidelines and continues to spend record-amounts on fossil fuels.

As the prices associated with fossil-fuel power generation continue to increase and become harder for utility companies to justify, the price of renewable energy has also plummeted. Along with the IMF report, the International Renewable Energy Agency (IRENA) released its own study looking into how the renewable energy industry has grown over a similar time period. The cost of onshore wind power generation has dropped 23% since 2010, while solar electricity saw a decrease of 73%.

With renewable energy production becoming cheaper and fossil fuels following the opposite trend, it has left many industry experts asking why subsidies for the latter have increased. The IMF’s study identifies more than just direct subsidies to the fossil fuel industries but also the costs on society, public health and climate change that are caused by the coal, petroleum and natural gas sectors.

A coal barge is positioned as a backdrop behind President Donald Trump as he speaks during a rally... [+] at the Rivertowne Marina in Cincinnati. President Donald Trump personally promised to activate emergency legal authorities to keep dirty or economically uncompetitive coal plants from shutting down.