Ameer Randolph
Fossil fuels, including coal, oil, and natural gas, have played a dominant role in global energy systems for centuries. In 2023, fossil fuels accounted for 82% of the global energy mix, with coal, oil, and natural gas comprising 82% of energy consumption. Despite the increasing adoption of renewable energy sources, fossil fuels remain the primary source of global electricity, with over 60% of electricity generated in 2023 coming from these sources. The top consumers of fossil fuels include China, the United States, and India, and they are the largest drivers of global climate change, contributing to rising global temperatures and their associated problems.
| Characteristics | Values |
|---|---|
| Percentage of global energy mix in 2023 | 82% |
| Percentage of global energy mix in 1966 | 94% |
| Percentage of global energy mix in 2019 | 80%+ |
| Percentage of global energy mix in Europe in 2023 | <70% |
| Percentage of global energy mix in the US | Halved in the last decade |
| Percentage of global energy mix in China | 55% |
| Percentage of global energy mix in India | 90% |
| US revenue from fossil fuels | $138 billion annually |
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What You'll Learn
Fossil fuels generated $138 billion for US governments between 2015 and 2020
Fossil fuels are the most popular energy source worldwide. In 2023, they comprised 82% of the global energy mix, with oil and coal accounting for a third and a quarter of the world's energy consumption, respectively. The top three consumers of fossil fuels are China, the United States, and India.
The US federal government and many states, tribes, and localities benefit significantly from fossil fuels. Between 2015 and 2020, fossil fuels generated approximately $138 billion each year for these US localities, according to a working paper by RFF Fellow Daniel Raimi. Wyoming, North Dakota, Alaska, and New Mexico are the states most dependent on fossil fuel revenues, with over 14% of total state and local revenues coming from this industry. In Wyoming, this number exceeds 50%.
However, the shift towards clean energy and the declining competitiveness of fossil fuels relative to renewable energy sources threaten the revenue streams of communities reliant on them. The paper's authors predict that government revenues will decrease across all scenarios, even without new climate policies. This is already evident in the decline of petroleum product taxes, the largest revenue source, and the expected decline in coal revenue, which could reach zero by 2040 under certain conditions.
To address the fiscal risk posed by the energy transition, governments can implement changes to tax policies and invest existing revenues into savings funds or economic diversification. While the costs of fossil fuel use outweigh the fiscal losses, it is important to recognize the economic backbone these industries provide for certain communities and plan for a smooth transition.
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Fossil fuel subsidies in 2022 totalled $1.5 trillion
The International Energy Agency estimates that governments subsidised the consumption of fossil fuels by $1 trillion in 2022. This is a significant increase from previous years, mainly attributed to the spike in energy prices caused by the Russian invasion of Ukraine. The majority of these subsidies, around 80%, went directly to consumers, with the remaining amount supporting fossil fuel production.
The vast majority of fossil fuel subsidies are implicit, as environmental and health costs are often not factored into the prices of fossil fuels. These implicit subsidies are projected to grow as developing countries increase their consumption of fossil fuels. According to the International Monetary Fund, these subsidies resulted in over $5 trillion in environmental costs that were not paid by consumers in the past year. This figure would almost double if the damage to the climate was valued using recent scientific studies as a reference.
The consensus among economists is that the rich predominantly benefit from fossil fuel subsidies, while the poor, who are less likely to own cars, may be indirectly affected by price increases if subsidies are removed. However, scrapping these subsidies could prevent 1.6 million premature deaths annually, generate an additional $4.4 trillion in government revenue, and significantly reduce global carbon emissions. It would also allow for increased investment in public goods such as education, healthcare, and clean energy.
While removing fossil fuel subsidies is challenging and must be carefully implemented, it is crucial for a healthier and more sustainable planet. The funds recovered from these subsidies could be used to compensate vulnerable households, cut taxes, and accelerate the transition to clean energy sources.
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Fossil fuels made up 82% of the global energy mix in 2023
Fossil fuels accounted for 82% of the global energy mix in 2023, according to the Energy Institute. This figure includes coal, oil, and natural gas. The world consumed more of these fossil fuels in 2023 than ever before, with oil and coal making up a third and a quarter of the world's energy consumption, respectively. The record consumption was driven by a spike in energy demand, more than half of which came from the Global South, where energy demand is increasing at twice the rate of the rest of the world.
Despite the overall negative trend, some countries have significantly increased their consumption of fossil fuels. For example, India's use of fossil fuels increased by 8%, with its coal consumption surpassing that of North America and Europe combined. China, which accounts for 28% of global energy consumption, also increased its fossil fuel consumption by 6%, reaching a new high of 139 exajoules.
On the other hand, fossil fuel consumption decreased in Europe and the US. In Europe, fossil fuels dipped below 70% of the energy mix for the first time, while in the US, consumption of coal has halved in the last decade. These changes resulted in a significant decrease in CO2 emissions in both regions: 6.6% in the EU and 2.7% in the US.
While renewable energy sources have seen aggressive rollouts in every major economy, they still only accounted for 15% of the global energy mix in 2023. This is the highest share in history but still far from what is needed to curb global warming. Worldwide, electricity generation from renewable sources has grown at nearly triple the pace of fossil fuels since 2019, providing hope that the share of renewables in the global energy mix will continue to increase in the coming years.
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Fossil fuels are the world's most popular energy source
Fossil fuels, including coal, oil, and natural gas, are the world's most popular energy source. They have played a dominant role in global energy systems since the Industrial Revolution. In 2019, fossil fuels accounted for over 80% of the world's energy consumption, with oil, gas, and coal making up 84.3% of this figure. The following year, fossil fuels accounted for more than 81% of global energy production. In 2023, fossil fuels made up 82% of the global energy mix, with oil and coal accounting for a third and a quarter of the world's energy consumption, respectively.
The world's top three consumers of fossil fuels are China, the United States, and India. China burns more coal than the rest of the world combined, while India's coal consumption surpasses that of Europe and North America combined. In Europe, fossil fuels dipped below 70% for the first time ever in 2023, and consumption in the US has halved in the last decade. Despite these decreases, global fossil fuel consumption continues to rise, increasing by 1.5% between 2022 and 2023. This increase was driven by a spike in energy demand, more than half of which came from the Global South.
The high percentage of fossil fuel usage worldwide has significant implications for the environment and public health. Fossil fuels are the largest driver of global climate change, contributing to rising global temperatures and extreme weather events. They are also a major source of air pollution, which is linked to millions of premature deaths each year. In addition, the economic incentives to transition to cleaner energy sources are reduced by the subsidies provided to fossil fuel producers and consumers. These subsidies can take the form of direct payments to producers or the sale of electricity and gas at below-market rates to consumers.
To address the negative impacts of fossil fuels and mitigate climate change, a transition to low-carbon energy sources is necessary. While clean energy sources like solar and wind reached a record high in 2023, accounting for 15% of the world's energy mix, they are still not keeping up with the ever-increasing global energy demand. The Group of Seven (G7) countries have committed to exiting coal by the 2030s, and investments in clean energy technologies and infrastructure are expected to double to $2 trillion this year. However, the speed and scale of the energy transition required to replace fossil fuels with low-carbon alternatives remain a challenge.
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Fossil fuels are the largest driver of climate change
Fossil fuels are the world's most popular energy source, accounting for over 80% of global energy consumption as of 2023. The top three consumers are China, the United States, and India. Oil, coal, and natural gas are the most commonly used fossil fuels, contributing to global warming and climate change. When burned, fossil fuels release large amounts of carbon dioxide (CO2) and nitrous oxide (N2O), powerful greenhouse gases that trap heat in the Earth's atmosphere. This leads to global warming, altering the Earth's ecosystems and causing environmental, human health, and economic problems.
The burning of fossil fuels is the primary cause of current climate change. Carbon dioxide emissions from fossil fuels have led to a 1.2C increase in global average temperatures since the Industrial Revolution, with coal being responsible for over 0.3C of this increase. Oil releases a significant amount of carbon when burned, contributing approximately a third of the world's total carbon emissions. Natural gas, while promoted as a cleaner alternative to coal and oil, still accounts for a fifth of the world's carbon emissions. The Intergovernmental Panel on Climate Change (IPCC) warns that fossil fuel emissions must be halved within 11 years to limit global warming to 1.5C above pre-industrial levels.
The effects of burning fossil fuels are far-reaching and impact the Earth's systems in multiple ways. Firstly, the release of greenhouse gases intensifies the greenhouse effect, increasing the Earth's average air temperatures. Secondly, airborne particles such as soot increase the reflectivity of the atmosphere, causing a slight cooling effect. However, the net effect of burning fossil fuels is warming because the heating caused by the greenhouse effect outweighs the cooling impact of airborne particles. Additionally, the dark colour of soot settling on snow increases the absorption of sunlight, leading to faster melting of winter ice and snow.
Transportation is a major contributor to greenhouse gas emissions, particularly road vehicles that combust petroleum-based products like gasoline. Fossil fuels are also used in industrial processes, such as manufacturing cement, iron, steel, electronics, plastics, and clothes. The manufacturing industry is one of the largest contributors to greenhouse gas emissions worldwide. Food production is another significant contributor to climate change, as it involves the use of fossil fuels, deforestation, and agricultural practices that release carbon dioxide, methane, and other greenhouse gases.
To mitigate climate change, a transition from fossil fuels to low-carbon energy sources is necessary. While clean energy sources like solar and wind reached a record high of 15% of the world's energy mix in 2023, they still fall short of curbing global warming. The challenge lies in making these cleaner sources more economically competitive than fossil fuels, which are often subsidized by governments, creating short-term economic incentives to continue their use. However, there is reason for optimism, with increasing investments in clean energy technologies and infrastructure, and international pledges to transition away from fossil fuels and phase out unabated coal power.
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Frequently asked questions
Fossil fuels made up 82% of the global energy mix in 2023.
Fossil fuels are energy sources that come from decomposed plant and animal matter. Examples include coal, oil, and natural gas.
Fossil fuels account for over 80% of the world's energy consumption. In 2019, about 15 billion metric tons of fossil fuels were burned worldwide.
Fossil fuels have negative impacts on the environment, contributing to climate change and local air pollution, which has been linked to millions of premature deaths each year. Fossil fuels are also non-renewable, meaning that they will eventually deplete.
Alternatives to fossil fuels include low-carbon energy sources such as nuclear and renewables like solar, water, and wind power.
