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IMF Figures Show UK Government Still Subsidising Fossil Fuel, While Renewables Are Slashed

A new survey from the International Monetary Fund shows that the UK government is still providing billions of pounds in subsidies to fossil fuels, while on the other hand cutting support for renewables.

Analysis of the report done by RenewableUK, the country’s wind, wave, and tidal energy trade association, lays out the fact that the UK Government is still paying billions of pounds in subsidies to the UK fossil fuel industry, while at the same time making a big song and dance over the need to cut renewable subsidies to save average homeowners money on their energy bills.

IMF-1The International Monetary Fund (IMF) survey, How Large Are Global Energy Subsidies?, looked at global energy subsidies, concluding that energy subsidies are “sizeable worldwide and projected to stay high.” As can be seen in the chart right, China is well and above the largest subsidizer in terms of dollars, Ukraine in percent of GDP, and Qatar in per capita terms.

In fact, the IMF concluded that “energy subsidies are dramatically higher than previously thought,” with estimates for global energy subsidies in 2011 being revised up to $4.2 trillion, more than double the $2.0 trillion previously reported in the 2013 IMF book, Energy Subsidy Reform: Lessons and Implications.

For the UK specifically, the country’s fossil fuel sector received more than £26 billion in subsidies this year, more than £400 per citizen, 1.4% of UK GDP — in comparison, the UK is only spending 2.1% of GDP on defense.

Over on the other side of the aisle, the cost of supporting renewable energy in 2014/15 was £3.5 billion according to figures from the Department of Energy and Climate Change.

“The IMF is right to turn the spotlight on the billions of pounds in subsidies which the UK’s fossil fuel sector continues to enjoy at the expense of all of us,” said RenewableUK’s Deputy Chief Executive Maf Smith. “Although there’s been a great deal of scrutiny about the cost of renewable energy, the price that all British taxpayers are still being forced to pay to the oil, coal and gas industries, decades after they became well-established, is eye-watering.

“It’s time for the UK to wake up to the benefits of renewable energy, Moving away from subsidising coal, oil and gas and backing technologies like onshore and offshore wind will help keep bills down and protect consumers.

“But a first step is Government being honest about the true cost of all forms of energy and the value renewables bring.”

Writing for the Guardian, Damian Carrington pulls out of the IMF’s survey figures which show that G20 countries are paying over $1,000 per citizen in fossil fuel subsidies. Look at the US, which provides $700 billion a year in fossil fuel subsidies, amounting to $2,180 for every American. My own home country of Australia is giving $1,260 per head in fossil fuel subsidies, while countries such as Mexico, India, and Indonesia have per capita subsidies averaging $250.

Hopefully this IMF report will call attention to the two-faced nature of political support for renewables and fossil fuels — in particular those who are claiming with one hand the need to cut fossil fuel subsidies, while with the other hand shuffling billions of dollars under the table to their fossil fuel-aligned compatriots.

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