Economic policy-makers are capable of big mistakes, “but it would be hard to find a worse one than energy subsidies,” The Economist wrote last month in response to a blockbuster International Monetary Fund report on the subject.
“Energy subsidies do not just gobble money,” the magazine commented. “They help cook the planet, too.”
The article recaps the IMF study and traces recent changes in fossil fuel subsidies in Egypt, Indonesia, and Thailand. “Subsidies attract a tenacious and vocal lobby. But the fall in the oil price has provided a chance to cut subsidies,” the magazine notes.
“Ending them altogether, and taxing fossil fuels properly, the IMF reckons, would halve the number of deaths from outdoor air pollution, cut carbon dioxide emissions by a fifth, and save up to $2.9 trillion. It would also leave governments with lots of room to cut taxes, or increase spending on more useful things.”