New estimates show government subsidies that ease fossil energy consumption costs smashed records last year despite nations’ vows to phase these payments down to fight climate change, Ben writes.

Driving the news: Subsidies for oil, gas and power reached more than $1 trillion as governments looked to help shield consumers from last year’s price spikes, per the International Energy Agency. That’s more than double 2021 levels.

Why it matters: Russia’s invasion of Ukraine caused household energy costs to soar last year.

IEA says some subsidies are defensible “given the hardship that full exposure to market-driven prices could have caused.” But the subsidies’ scale is “still a worrying sign for energy transitions.”
Threat level: While governments are looking to speed low-carbon energy growth, “these price interventions worked in the opposite direction by favoring the incumbent fuels.”

Of note: The subsidies are concentrated in emerging market and developing nations.

But IEA notes significant spending to cut consumer bills — largely in Europe — is “not necessarily captured in our methodology.”
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