The folks at the IMF – yes, that great Satan of the ’90s – just released a working paper on how much we all pay to subsidize fossil fuels like oil, gas, and coal.
Seriously. All the humans currently on this planet. They tallied up what we pay to help energy companies get fossil fuels out of the ground. The technical term for that is “pre-tax subsidies.”
Then they tallied up what we pay out for traffic accidents, and the health bills for those people whose pink little lungs are affected by air pollution, and so forth. The technical term for that is “post-tax subsidies.”
This is a big deal. Looking only at pre-tax subsidies is kinda like saying “Hey man, cigarettes curb my appetite, so I spend less money on food.” It may be worth it on your weekly Trader Joe’s run, but dammit that hospital bill is expensive.
Then they added both the pre-tax and the post-tax subsidies together. Voila! An almost-inconceivable number!
Is this a little weird? And sort of like a conceptual art project? Yes. So is the IMF.
This isn’t the first time the IMF has gone all mathematical on fossil fuels. Back in 2013, the fund did an earlier version of this project, and settled on a nice big number: $1.9 trillion.
What did they conclude this time? Well, the video above explains it all (plus a shout-out to sweaty thighs).
If you want to skip the video, here’s the takeaway:
The IMF’s total is $5.3 trillion in 2015*. Or $10 million a minute. Or more than the entire health spending of all the world’s governments.
So, if we’re selfish (looks that way), this is a compelling reason for individual countries to tax fossil fuels according to their real price. Everyone is paying for the pollution that is leading to climate change — not just flat little islands threatened by sea-level rise. Paying the real price for energy won’t just be good for “the planet” or “our future” — it will be good for local economies too.
What’s next? More talking. This IMF document is a working draft – it’s meant to be studied and talked about. At least in the U.S., carbon taxes are incredibly unpopular. But when an organization like the IMF spends this much time calculating the true cost of fossil fuels, it could be a sign that a carbon tax — or something like it — is becoming a mainstream idea.
*This article has been updated to provide clarification.