Thursday

2nd Apr 2020

Coal, oil, gas subsidies higher than public health spending

Around 1.6 million premature deaths would be prevented annually if the world's governments stopped subsidising fossil fuels, a study by four researchers from the International Monetary Fund found.

The most relative gains could be made in eastern Europe and Turkey, where 60 percent of the people who die as a result of air pollution are estimated could be saved.

Read and decide

Join EUobserver today

Support quality EU news

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or join as a group

The IMF study, published Monday (18 May), calculated the “true costs” of the widespread practice of giving tax benefits and other subsidies to companies in the fossil fuel industry (coal, oil, gas). It was a “shocking” figure, the authors themselves said: $5.3 trillion, or about €4.7 trillion.

The figure is higher than what governments worldwide spend on public health.

In their calculation, the researchers included “its supply costs and the damage that energy consumption inflicts on people and the environment”.

They argue that most of the costs of health and environmental problems that fossil fuels cause are not paid by the industry but by governments and its taxpayers.

The burning of fossil fuels contributes to air pollution, which in turn is estimated to cause around 400,000 people in the EU to die prematurely each year. The EU commission has put the annual economic costs of the health impacts of air pollution at between €330 and €940 billion for the EU.

According to the IMF researchers, governments in the EU account for $330 billion of fossil fuel subsidies – about €292 billion.

While renewable energy sources like wind power and solar are sometimes said to be only economically feasible when subsidised, the study argues that fossil fuel subsidies “discourage needed investments in energy efficiency, renewables, and energy infrastructure, and increase the vulnerability of countries to volatile international energy prices”.

Fossil fuels also contribute to climate change by emitting greenhouse gases. If the subsidies for oil, coal, and gas were to end, governments could reduce carbon emissions by more than 20 percent.

The authors caution, however, that their estimates “are based on plausible—but debatable—assumptions”.

Emissions trading scheme

The EU's flagship policy tool to reduce emissions of greenhouse gases is the emissions trading scheme (ETS). According to the Commission, the 11,000 power plants and manufacturing installations that are obliged to hand in carbon permits under the scheme, reduced their emissions by 4.5 percent in 2014.

The reduction “shows that economic growth and climate protection can go hand in hand”, climate commissioner Miguel Arias Canete said in a statement Monday (18 May).

Stakeholder

The EU cannot let its patients down

Public health is being pushed into the background at EU level, while a cooperative and patient-centred approach could help to achieve a fairer and better healthcare system for European citizens.

Germany led EU's $5bn coal splurge

A larger portion of EU taxpayers' money than previously thought was used in recent years to help build coal-fired plants, the dirtiest energy source.

What will Brexit mean for climate action in EU and UK?

The UK is leaving the EU after playing a key role in climate action - just as COP26 comes to Glasgow. With so many policy negotiations ahead, a split between London and Brussels post-Brexit could undermine the 2050 emissions-neutrality goal.

Timmermans: EU climate law will 'discipline' rogue states

The first EU-wide climate law will be a "disciplining" exercise to implement the Green Deal - although the Polish climate minister Michal Kurtyka warned the EU Commission about the social cost of delivering the green transition.

Stakeholders' Highlights

  1. UNESDAMaking Europe’s Economy Circular – the time is now
  2. Nordic Council of MinistersScottish parliament seeks closer collaboration with the Nordic Council
  3. UNESDAFrom Linear to Circular – check out UNESDA's new blog
  4. Nordic Council of Ministers40 years of experience have proven its point: Sustainable financing actually works
  5. Nordic Council of MinistersNordic and Baltic ministers paving the way for 5G in the region
  6. Nordic Council of MinistersEarmarked paternity leave – an effective way to change norms

Latest News

  1. Journalism hit hard by corona crisis
  2. EU fighting shortages and faulty medical supplies
  3. New EU navy operation to keep migrant details secret
  4. MEP: Constituents are our window into this tragedy
  5. Without European patriotism, EU decline is inevitable
  6. EU cancels April Fool's 'fake news'
  7. A coronavirus 'Marshall Plan' alone won't be nearly enough
  8. Trying to think straight about coronavirus

Join EUobserver

Support quality EU news

Join us