Here's a number, from the article in the url below, to focus your attention on the scale of the challenge ahead:
"The International Monetary Fund calculated that just over $7 trillion in subsidies went to fossil fuels last year. That is a record for at least the past decade. Since the IMF's report expresses all figures in 2021 dollars, inflation cannot explain away the increase. In short, the world has never spent this much to subsidize fossil fuels."
Just as concerning, perhaps, is that this number (which is spent annually) is many times larger than the amount of money being invested in the transition to renewables:
"The world is headed for a record year of investment in the energy transition. Every new clean electron generated by wind turbines and solar arrays, and each new battery-powered car and hydrogen electrolyzer, will reduce some measure of the fossil fuels consumed on the planet's roads and grids. More than $1 trillion was spent on the transition last year, and almost certainly will be spent again in 2023."
The only hope, perhaps, is that this $7 trillion comprises both explicit subsidies (lowering the purchase price) and implicit subsidies (failing to account for externalities), and not in equal amounts:
"About one-quarter of the total — $1.33 trillion — is made up of what the IMF terms explicit subsidies, or undercharging for the cost of supplying a fossil fuel or electricity. … But that still leaves a balance of $5.7 trillion in implicit subsidies, or undercharging for the environmental costs of a fuel, as well as forgone taxes on consumption. … Implicit subsidies grew less in percentage terms than explicit ones, but given their scale, they increased nearly as much in absolute terms — by more than $500 billion."
Both numbers are record highs (so the problem is getting worse, not better). But, in theory at least, these implicit subsidies could be fixed if the political willpower existed to pass a global carbon tax (the approach that is widely acknowledged by economists as the most effective way to make immediate headway against climate change – see Strategic CSR – Carbon Tax).
Take care
David
David Chandler
© Sage Publications, 2023
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The Biggest Fossil Fuel Subsidies Are Indirect, and Bigger Than Ever
By Nathaniel Bullard
August 31, 2023
Bloomberg
