According to the International Monetary Fund (IMF), global energy subsidies will cost $5.3 trillion in 2015, which is equivalent to 6% of the world’s GDP. Most of these subsidies are financed through public debt, higher taxes, and resources that could have been more productively used on health, education, and infrastructure.

The IMF report emphasizes the harmful effects of energy subsidies on the environment as they increase air pollution, road congestion, and greenhouse gas emissions.

Some nations in Asia, the CIS group, and North Africa consume as much as 18% of their GDP annually on energy subsidies. Developing Asia contributes more than 50% of the world’s energy subsidies with China spending $2.3 trillion a year, which is by far the highest by any country. Most of the energy subsidies go to coal, the most polluting fuel.

The IMF has called for immediate reforms. If countries raise energy prices gradually to bring them on par with the real cost of energy, they could enjoy financial gains equivalent to about 3.5% of their GDP.