Global subsidies for fossil fuels rose by $2 trillion over the past two years to reach a record $7 trillion in 2022, according to new estimates from the International Monetary Fund.
The soaring costs, driven by post-pandemic consumption growth and by rising energy costs stemming from Russia's 2022 invasion of Ukraine, are straining budgets, adding to pollution and exacerbating global warming, the IMF said in a report.
It warned that implicit subsidies - the cost of damage from air pollution and global warming - account for the bulk of the costs and are likely to keep rising.in recent years due in part to rising debt and borrowing costs. Wealthier nations, where energy consumption is higher, face less financial pressure to cut subsidy costs.
"Falling energy prices provide an opportune time to lock in pricing of carbon and local air pollution emissions without necessarily raising energy prices above recently experienced levels," it said.
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