IMF: Stop energy subsidies to slow climate change

Mar 27, 2013, 6:15 PM EDT
A journalist wearing a mask stands outside the Great Hall of the People after the sixth plenary meeting of the National People's Congress (NPC) on a hazy day in Beijing March 16, 2013.

The International Monetary Fund is urging governments to reduce energy-related subsidies, which it estimates amounted to $1.9 trillion in 2011, the equivalent of 2.5% of world GDP. The effect of allowing market prices for petroleum products, natural gas, and coal, the IMF estimates, would cut CO2 emissions by 4.5 billion tons, a 13% decrease in global energy-related CO2 emissions. IMF dputy managing director David Lipton says that "by boosting energy consumption and thus emissions, subsidies aggravate climate change and worsen local pollution and congestion."