New World Bank report on fossil fuel and agricultural subsidies

A new report from the World Bank entitled "Detox Development: Repurposing Environmentally Harmful Subsidies" lays out in grim relief the extent to which our most harmful industries are willingly subsidized by our governments. 

Governments around the world collectively spend $7.25 trillion each year, roughly 8% of global GDP, to support the socially and environmentally damaging activities of the oil and gas industry and often destructive forms of agriculture and fishing. As an accompanying statement from Axel von Trotsenburg, senior managing director of the World Bank, explains: "If we could repurpose the trillions of dollars being spent on wasteful subsidies and put these to better, greener uses, we could together address many of the planet's most pressing challenges". Vast sums of money, he says, are "hiding in plain sight".

About $1.25 trillion of the total sum is in the firm of explicit, direct subsidues and payments by governments to the fossil fuel industry, farming and fisheries. About half this goes to artificially lowering the price of carbon-intensive coal, oil and gas. This serves to incentivize the over-use of fossil fuels and to perpetuate its inefficient polluting technologies.

The other half of the direct subsidies goes to agriculture, mainly in the form of "coupled support", which "distorts producers' decisions and leads to harmful environmental and economic impacts". A smaller amount (but still a whopping $35 billion) goes to direct subsidies of the fishing industry, much of which leads to overcapacity and overfishing.

By far the largest part of the subsidies, though ($6 trillion of the $7.25 trillion, although some estimates put it as high as $10.8 trillion), is the implicit or indirect subsidies these industries receive, which occur because of the decision to make explicit subsidies.

The vast majority of these ($5.4 trillion) are down to the fossil fuel industry, such as impacts from local air pollution, greenhouse gas emissions, road congestion, and foregone tax revenues. The indirect costs of agricultural subsidies are smaller, relatively speaking, but still substantial at $548 billion (up to $5.3 trillion by some estimates!), and these come in the form of greenhouse gas emissions, land degradation, biodiversity loss, pollution and anti-microbial resistance.

These indirect costs are notoriously difficult to quantify, but I think if more of the general public were aware of how much of their hard-earned taxes went to directly supporting the bottom lines of oil and gas companies and Big Agriculture, they would not be so complacent in their voting. Maybe this report might be the thing to bring that egregious situation to a more public light. Or maybe it will just get buried, along with a plethora of similar reports in the past.