IMF: Fossil fuels subsidised by $10 million a minute — The Guardian

It seems no matter how shocking and gargantuan the crimes and conspiracies of the 1% get, they always manage to ‘out do’ themselves.

The byline to this jaw-dropping story reads: “‘Shocking’ revelation finds $5.3tn subsidy estimate for 2015 is greater than the total health spending of all the world’s governments.”

Typically, I would see revelations of this type and think – business as usual. But this sudden and bizarre emphasis on decades old subsidies by the world’s biggest banks (the same people responsible for putting them in place) has me scratching my head, thinking something else is going on here.

After all, while these mega subsidies may be ‘news’ to some of us, this concerted and  melodramatic chorus of disbelief on the part of big banks and the main stream media, is at best, extremely disingenuous. At worst, it’s yet another effort by big banks and their cohorts to pull one over on us, bailing them out of a gargantuan yet undisclosed economic dilemma that remains intractable, while placing them at the receiving end of endless new streams of global revenue.

Just one look at the slick, commercial-like teaser below makes it pretty obvious that they’re selling something. The question is – is the world going to buy it?

Screen Shot 2015-05-23 at 2.34.46 AM

Fossil fuel companies are benefitting from global subsidies of $5.3tn (£3.4tn) a year, equivalent to $10m a minute every day, according to a startling new estimate by the International Monetary Fund.

The IMF calls the revelation “shocking” and says the figure is an “extremely robust” estimate of the true cost of fossil fuels. The $5.3tn subsidy estimated for 2015 is greater than the total health spending of all the world’s governments.

The vast sum is largely due to polluters not paying the costs imposed on governments by the burning of coal, oil and gas. These include the harm caused to local populations by air pollution as well as to people across the globe affected by the floods, droughts and storms being driven by climate change.



But, you say, all this sounds legitimate. After all, oil pollution is a terrible thing and I would agree wholeheartedly. But none of it is new. In fact, it’s pretty obvious and has been well known for decades. So, why the sudden feign of interest?

Then there’s the less-than-honest characterization of the IMF as “one of the world’s most respected financial institutions” when in fact it’s arguably the most reviled.

So what really is going on here? What do these bankers want from us?

[T]he IMF said the resources freed by ending fossil fuel subsidies could be an economic “game-changer” for many countries, by driving economic growth and poverty reduction through greater investment in infrastructure, health and education and also by cutting taxes that restrict growth.

In other words, they don’t intend to “free” anything. They intend to redirect these resources (that they themselves have quantified) – towards another scam of their choosing.

And apparently, that does not include investments in affordable decentralized, renewable energy sources. as they insist “the need for subsidies for renewable energy – a relatively tiny $120bn a year – would also disappear, if fossil fuel prices reflected the full cost of their impacts.”

And how do they intend to “free” up these resources?

“These [fossil fuel subsidy] estimates are shocking,” said Vitor Gaspar, the IMF’s head of fiscal affairs and former finance minister of Portugal. “Energy prices remain woefully below levels that reflect their true costs.”

Raising the prices for consumers, of course! Even though the subsidies that go directly to keeping prices low for consumers represents only 6% of the IMF’s self-declared total.

The most detailed breakdown yet of global fossil fuel subsidies has found that the US government provided companies with $5.2bn for fossil fuel exploration in 2013, Australia spent $3.5bn, Russia $2.4bn and the UK $1.2bn. Most of the support was in the form of tax breaks for exploration in deep offshore fields.

* * *

The figures, published ahead of this week’s G20 summit in Brisbane, Australia, contains the first detailed breakdown of global fossil fuel exploration subsidies. It shows an extraordinary “merry-go-round” of countries supporting each others’ companies. The US spends $1.4bn a year for exploration in Columbia, Nigeria and Russia, while Russia is subsidising exploration in Venezuela and China, which in turn supports companies exploring Canada, Brazil and Mexico.

Nevertheless, the cheerleaders insist, all of the subsidies have to go! Nevermind that the subsidies going directly to multinationals will find a way to reincarnate themselves in a different more popular form, while those that go to working people around the globe would be dead and buried forever.

Finally, no diabolical sales pitch worth its weight in gold leaves out the age old tactic of divide and conquer…

Reform of the subsidies would increase energy costs but Kim and the IMF both noted that existing fossil fuel subsidies overwhelmingly go to the rich, with the wealthiest 20% of people getting six times as much as the poorest 20% in low and middle-income countries.Gaspar said that with oil and coal prices currently low, there was a “golden opportunity” to phase out subsidies and use the increased tax revenues to reduce poverty through investment and to provide better targeted support.

So there you have it folks, all this hand waving and exhortations so that international bankers and their minions can justify redistributing wealth from the middle class to the dirt poor (who of course will never get it) and so that everyone but the 1% can be dirt poor and living in squalor.

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