The United States poured $649 billion into fossil fuel subsidies in 2015, more than that year’s defense budget and close to 10 times what the government spent on education in that same period, according to a new study by the International Monetary Fund (IMF).
Countries continue to channel large chunks of their budgets to fossil fuels in spite of the rapidly decreasing price of renewable energy. According to the IMF, 5.2 trillion (6.5 percent of the world’s GDP) was spent on these subsidies -- half a trillion more than in 2015.
“Subsidies tend to stay in the system and they can become very costly as the cost of new technologies falls. Cost reductions like this were not envisageable even 10 years ago. They have transformed the situation and many renewables are now cost competitive in different locations with coal,” said Simon Buckle, the head of climate change, biodiversity and water division at the Organization for Economic Co-operation and Development.
According to a recent study published in the Royal Society of Chemistry, up to 80% of the United States' energy demand could be covered with renewables.
The failure to decrease subsidies in a timely manner could have a substantial impact on the environment.
If nations had adjusted subsidies to reflect fossil fuel’s true price in 2015, global carbon emissions would have dropped by 28 percent, and fossil fuel air pollution deaths would have reduced 46 percent, according to the IMF.