Sunday

25th Jun 2017

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.

Dear EUobserver reader

Subscribe now for unrestricted access to EUobserver.

Sign up for 30 days' free trial, no obligation. Full subscription only 15 € / month or 150 € / year.

  1. Unlimited access on desktop and mobile
  2. All premium articles, analysis, commentary and investigations
  3. EUobserver archives

EUobserver is the only independent news media covering EU affairs in Brussels and all 28 member states.

♡ We value your support.

If you already have an account click here to login.

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.

Column / Crude World

Nord Stream 2: The elephant in the room

The European Commission should provide a thorough impact assessment of Nord Stream 2, a project that appears to go against all of its Energy Union objectives.

News in Brief

  1. Merkel and Macron hold symbolic joint press conference
  2. Juncker has 'no' clear idea of kind of Brexit UK wants
  3. Belgian PM calls May's proposal on EU citizens 'vague'
  4. UK lacks support of EU countries in UN vote
  5. Spain to command anti-smuggler Mediterranean force
  6. Estonia confirms opposition to Nord Stream 2 pipeline
  7. Ireland and Denmark outside EU military plan
  8. EU leaders renew vows to uphold Paris climate deal

Stakeholders' Highlights

  1. EPSUOn Public Services Day, Stop Austerity! Workers Need a Pay Rise!
  2. EGBAOnline Gambling: The EU Court Rejects Closed Licensing Regimes In Member States
  3. World VisionFaces of Today, Leaders of Tomorrow: Join the Debate on Violence Against Girls - 29 June
  4. ECR GroupThe EU Must Better Protect Industry from Unfair Competition
  5. Malta EU 2017Better Protection for Workers From Cancer-Causing Substances
  6. EPSUAfter 9 Years of Austerity Europe's Public Sector Workers Deserve a Pay Rise!
  7. Dialogue PlatformGlobalised Religions and the Dialogue Imperative. Join the Debate!
  8. UNICEFEU Trust Fund Contribution to UNICEF's Syria Crisis Response Reaches Nearly €200 Million
  9. EUSEW17Bringing Buildings Into the Circular Economy. Discuss at EU Sustainable Energy Week
  10. European Healthy Lifestyle AllianceCan an Ideal Body Weight Lead to Premature Death?
  11. Malta EU 2017End of Roaming Charges: What Does It Entail?
  12. World VisionWorld Refugee Day, a Dark Reminder of the Reality of Children on the Move

Latest News

  1. Macron’s investment screening idea watered down by leaders
  2. Leaders unimpressed by May’s offer to EU citizens
  3. New Irish PM praises unscripted nature of EU summits
  4. EU extends sanctions on Russia
  5. UK's universities set 'Brexit wish list'
  6. Decision on post-Brexit home for EU agencies postponed
  7. May's offer on citizens’ rights dismissed as ‘pathetic’
  8. 'Historic' defence plan gets launch date at EU summit