Event Summary
The Peterson Institute for International Economics (PIIE) hosted a discussion on a newly released paper by the International Monetary Fund (IMF), "Still Not Getting Energy Prices Right: A Global and Country Update of Fossil Fuel Subsidies," which provides a global, regional, and country-level update of fossil fuel prices to reflect supply and environmental costs and subsidies implied by undercharging.
The event began with a presentation by Vítor Gaspar, director of the IMF's Fiscal Affairs Department. Ian Parry, one of the report's lead authors, then outlined the paper's findings. Globally, fossil fuel subsidies were worth $5.9 trillion in 2020 or about 6.8 percent of GDP, with 86 percent reflecting undercharging for environmental costs. Efficient fuel pricing in 2025 that reflects these costs would reduce global carbon dioxide emissions 36 percent below baseline levels, while raising revenues worth 3.8 percent of global GDP and preventing 0.9 million deaths caused by air pollution.
A Q&A and discussion with the audience moderated by PIIE Nonresident Senior Fellow Jean Pisani-Ferry followed.
SPEAKERS
- Vítor Gaspar, Director of the Fiscal Affairs Department, IMF
- Ian Parry, Principal Environmental Fiscal Policy Expert, Fiscal Affairs Department, IMF