Households around the world are unknowingly paying $12 trillion per year in additional costs for fossil fuels despite the soaring price of energy bills, according to a report by non-governmental organisation 350.org.

In a report titled ‘Out of Pocket: How Fossil Fuels are Draining Households and Economies’, the organisation said it uncovered the hidden cost of fossil fuels production on society after recalculating the International Monetary Fund estimates on crude oil subsidies.

The report showed that to sustain continuous production of crude oil, the global population is bearing an extra cost of $12 trillion yearly in taxpayer handouts, health impacts and extreme weather damage.

This cost was estimated to be around $23 million per minute in “gift to Big Oil’, which is silently costing each person on Earth $1,400 annually.

“New research by 350.org shows that on top of soaring energy bills, fossil fuels cost households an additional $12 trillion a year in taxpayer handouts, health impacts and extreme weather damage – equivalent to a $23 million a minute ‘gift to Big Oil’ that costs each person on Earth $1,400 per year,” the report stated.

The report also found that fossil fuel production is responsible for climate damages and air pollution amounting to $9.3 trillion per year, which is higher than IMF estimates, with the public shouldering the bills instead of fossil fuel industries.

“Fossil fuels cause $9.3 trillion per year in climate damages and air pollution, higher than IMF estimates. These are social costs that the fossil fuel industry should be charged with but pay nothing for, and which the public shoulders through taxes and out of pocket payments.

“The $4.1 trillion annual climate undervaluation could finance more than 5,900 gigawatts of new solar capacity—enough to power every home in Africa, South Asia and Latin America combined,” the report revealed.

Additionally, over $150 billion has been siphoned from ordinary people to oil and gas companies due to soaring energy prices alone.

350.org’s analysis noted that in the first 50 days of the war (in the Middle East), over $150 billion has been siphoned from ordinary people to oil and gas companies due to soaring energy prices alone.

Subsequently, the organisation called on decision-makers in countries around the world to divert profits made from taxing fossil companies and excessive revenues to lowering the public’s energy bills.

Additionally, it also urged them to end fossil fuel subsidies and replace them with targeted household support and invest public money in cheaper, reliable renewables that bring bills down for good.

“A building El Niño means 2026 and 2027 will set new global temperature records, and that will offer yet more chaos, and yet more reminders that it is the poorest people on earth who must bear most of the cost of this ongoing tragedy,” Bill McKibben, climate activist and 350.org founder stated.  

Mr McKibben added, “We have a narrow path out of these crises, and that path has been illuminated by the bombs from this misbegotten war. It would be a waste and a sin not to seize this moment.”