IMF estimates global fuel subsidies at $8.1 trillion: Georgieva

WASHINGTON • Research by the International Monetary Fund (IMF) estimates global fossil fuel subsidies at about US$6 trillion (S$8.1 trillion), with about 70 per cent from "under-charging" for the environmental costs associated with the fuels, its managing director Kristalina Georgieva told a UN energy summit.

The IMF had previously estimated such costs at about US$5.2 trillion in 2017.

"The good news is that global carbon emissions would fall by one-third - in line with keeping global warming to 1.5 deg C - if fossil fuel prices increase to fully reflect environmental and supply costs by 2025," Dr Georgieva said in prepared remarks to Friday's summit on the sidelines of the United Nations General Assembly.

Her comments came as governments and the private sector pledged to spend over US$400 billion at the summit that called for accelerated efforts to avert catastrophic climate change.

The spending commitments, many announced previously, include projects to expand electricity access in developing countries, boost clean cooking technologies and improve energy efficiency to decarbonise the energy system.

UN Secretary-General Antonio Guterres called on Friday for the world to redouble its renewable energy efforts to avert a climate emergency and address global energy poverty. He described the mandate as a "double imperative to end energy poverty and to limit climate change", adding: "And we have an answer that will fulfil both imperatives... Affordable, renewable and sustainable energy for all."

The UN says some 760 million people around the world lack access to electricity. Mr Guterres said the world should aim to cut that in half by 2025. He noted there has been progress, with renewable energy now comprising 29 per cent of global electricity generation. He called for a quadrupling of solar and wind capacity by that time, part of a push to triple investments on renewable energy and energy efficiency to US$5 trillion per year.

At the same forum on Friday, Sri Lanka President Gotabaya Rajapaksa said his nation will cease building new coal-fired power plants and achieve net-zero carbon emissions by 2050.

Sri Lanka has set a target of achieving 70 per cent of all its energy requirements from renewable sources by 2030. The leader said: "Sri Lanka is happy to be a co-lead of the Energy Compact for No New Coal Power."

Governments including Sri Lanka, Chile, Denmark, France, Germany, Montenegro and Britain have announced a No New Coal Power Compact to halt the construction of coal-fired power plants, according to climate advocacy group Sustainable Energy for All.

REUTERS, AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Sunday Times on September 26, 2021, with the headline 'IMF estimates global fuel subsidies at $8.1 trillion: Georgieva'. Subscribe