Global fossil fuel subsidies have risen by $2 trillion in the past two years, reaching a record $7 trillion in 2022, according to an estimate published by the International Monetary Fund on Thursday.

Rising costs driven by increased post-pandemic consumption and high energy costs caused by Russia’s invasion of Ukraine in 2022 are putting budgets under pressure, adding to pollution and exacerbating global warming, the IMF warns.

“Subsidies for oil, coal and natural gas cost the equivalent of 7.1% of global GDP. That’s more than governments spend annually on education (4.3% of global income) and about two-thirds of what they spend on health care (10.9%),” says the international financial institution. It warns that implicit subsidies – the cost of damages caused by atmospheric pollution and global warming – represent the largest part of the costs and will probably increase further, according to Agerpres.

Explicit subsidy costs, which governments pay directly to keep the price of electricity or gasoline artificially low, have more than doubled since 2020 to $1.3 trillion. Now these costs will probably decrease, because the price of energy has eased, and that is why it is the ideal time to give up subsidies, says the IMF.

The institution is concerned about implicit subsidy costs, which are likely to continue to rise, exacerbating global warming.

“We estimate that giving up the implicit and explicit costs of fossil fuel subsidies would prevent 1.6 million premature deaths annually, increase state revenues by $4.4 trillion and reduce emissions,” the IMF believes.