The world is waking up to the $5.3 trillion cost of fossil fuels

A report from the International Monetary Fund (IMF) released on Monday, estimated that global fossil fuel use is subsidised to the tune of US$5.3 trillion a year (6.5% of global GDP).

The striking finding of the IMF, echoing previous work by economists such as Nicholas Muller, Robert Mendelsohn, and William Nordhaus for the United States, is that the third category of costs, smog and particulates, is easily the largest. Within this category, the biggest cost is due to particulate emissions from coal.

Professor John Quiggin, School of Economics at The University of Queensland notes that:

It follows that, even disregarding impact of climate change, the costs of burning fossil fuels outweigh the benefits in many cases. So, a reduction in fossil fuel use, and particularly in coal use makes economic sense.

He suggests rhis will drive China and India to abandon coal.

More details in his article from The Conversation.