Notwithstanding the hype around green energy and electric vehicles, governments worldwide spent some 7 percent of gross domestic product subsidizing fossil fuels in 2022. For some energy sources, such as natural gas, location has a major effect on pricing. In North America, natural gas costs approximately $7 per gigajoule, compared with $25 in East Asia. Oil products, on the other hand, are traded in a more interconnected international market and thus do not fluctuate so much on cost.
But geopolitics plays a role as well, and no one subsidizes energy like China. The Middle Kingdom spent $2.2 trillion on fossil fuel subsidies last year, several times more than the next country, the United States ($760 billion). Notably, despite the costs of its war in Ukraine, Russia spent $420 billion. China, the U.S., Russia, India and the European Union together accounted for 57 percent of all fossil fuel subsidies.
The Geopolitics of the American President