Cut carbon subsidies to help the climate, IMF head tells Cop28

Diverting the trillions of dollars by which the world subsidises fossil fuel production each year would generate the vast amounts of cash needed to tackle the climate crisis, the head of the International Monetary Fund has said.

- Fiona Harvey

Governments have been put off explicitly pricing carbon by the potential unpopularity of new carbon taxes, which have become favourite targets of anticlimate politicians and parties around the world, from the US and Australia to Europe and the UK.

Kristalina Georgieva, the managing director of the IMF, said it was possible to achieve the same result of making high-carbon activities reflect their true costs to society - using regulation, and by cutting the bad subsidies that encourage fossil-fuel use.

"We have been slow on a very important policy thought, which is the incentive for investors by still tolerating high levels of fossil-fuel subsidies," she told the Guardian. "And [the world has made this worse] by being fairly slow on introducing carbon pricing, and giving a trajectory for this carbon price upward."