New report: Households pay $12 trillion a year in hidden fossil fuel costs – a $23 million a minute ‘gift to Big Oil’

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.

In the report “Out of Pocket: How Fossil Fuels are Draining Households and Economies,” 350.org recalculated IMF estimates on fossil fuel subsidies, uncovering what fossil fuels actually cost society and what governments spend to keep production flowing. These hidden costs – totalling $12 trillion annually [1] – are “silently siphoning trillions away from household budgets and draining state coffers” while a handful of big corporations make windfall profits from the war in South West Asia.

The report highlights that:

• Fossil fuels cause $9.3 trillion per year in climate damages and air pollution, higher than IMF estimates.[2] 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 [3] 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 $12 trillion owed by the fossil fuel industry annually in avoided costs is more than 100 times total global climate finance — or the money the world has committed to help countries respond to the climate crisis.
• In the first 50 days of the war, over $150 billion has been siphoned from ordinary people to oil and gas companies due to soaring energy prices alone. [4]

As decision-makers from over 50 countries gather for the first international conference on a fossil fuel phase-out in Santa Marta, Colombia this week, 350.org said that leaders have an unprecedented opportunity to put the world on the right path. “Decades of delay have turned every oil price spike into a household emergency and every climate‑fuelled disaster into another withdrawal from the savings of the world’s poorest communities,” the group said.

350.org is calling on governments to:

• Tax fossil fuel windfall and corporate excess profits to channel the revenues directly into lowering people’s energy bills.
• 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.
• Protect families and businesses from future price shocks by ending fossil fuel expansion and building affordable 100% renewable energy.

Using case studies from Asia, Africa, and the Caribbean, the report also highlights how an alternative energy system is already being shaped. From community‑owned grids, Indigenous‑led wind projects, subnational 100% renewable commitments, and regional subsidy reforms, the great power shift from fossil fuels to people‑centered renewables has already begun.

Bill McKibben, climate activist and 350.org founder said:

“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. 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.”

Anne Jellema, 350.org Chief Executive said:

“The economic case for fossil fuels has not just weakened, it has collapsed. Climate chaos and volatile oil prices have pushed ordinary people to a breaking point: unable to afford food, transport, housing or healthcare. Leaders must acknowledge the real costs of fossil fuels and redirect public money where it belongs — into making clean energy a right, not a privilege.”

Hala Kilani, Head of Energy Diplomacy, REN21 said:

“Renewables are not controlled by a few fossil fuel exporting countries. It is abundant, distributed, and affordable. It can stabilize costs and be deployed locally, empowering communities rather than concentrating power. It is a peace, development, and justice solution. It’s high time we transition to reliable, affordable renewable energy.”

Hilda Flavia Nakabuye, Founder of Fridays for Future Uganda said:

“African families are paying for fossil fuels three times over: through taxes, through rising living costs, and through worsening climate disasters. The fossil fuel system is not a distant global issue; it is something people experience in their daily lives. Public resources are being drained to support this system, while wealth is extracted and exported. We must ensure that polluters pay for the damage they have caused to our communities over generations. We must shift investment towards a system that reduces costs for households, strengthens resilience, and prioritizes the people.

Jan Rosenow, Professor of Energy and Climate Policy at Oxford University said:

“This crisis is a stark reminder of just how risky it is to rely on fossil fuels, with around 80 percent of global energy still coming from them and driving the instability we see today. We should be focusing on long-term solutions rather than applying short-term sticking plasters to a much deeper problem. Price volatility is not a flaw in the fossil fuel system; it is a built-in feature. The real question is not what the energy transition will cost us, but what it will cost if we fail to act.”

Muhammad Mustafa Amjad, Program Manager for Renewables First Pakistan said:

“The system is structured in such a way that fossil fuels continue to benefit, even as cleaner and cheaper alternatives become available. Pakistan has imported less fossil fuel but ended up paying more, which shows how deeply flawed the system is. We learned how to build an energy system around fossil fuels, and now we must learn how to build one around renewables. This transition is no longer just about economic growth; it is about human survival.Solar energy is not only a source of clean power, but also a driver of economic stability.”

Executive summary of the report

Full report

Notes to Editor:

[1] (a) ~$11.4 trillion in underpriced fossil fuel costs — including explicit government subsidies, climate damages, air pollution, and road externalities — recalculated from IMF data using peer-reviewed US EPA damage models; plus (b) ~$700 billion in production-side support to fossil fuel producers tracked by the OECD across 52 countries.

[2] The IMF’s climate damage figure rests on a carbon price — US$85 per tonne of CO2 — that represents the cheapest possible price to keep warming below 2°C, not the actual damage fossil fuels cause. Using the peer-reviewed damage models that now underpin the US Environmental Protection Agency’s official social cost of carbon, 350.org recalculated those figures for 186 countries.

[3] Social costs of fossil fuels not accounted for by IMF estimates, as calculated by 350.org

[4] This 350.org analysis calculates the losses from price spikes using weighted oil and gas price averages for the period, combined with global consumption levels. It does not yet include wider knock-on effects such as inflation, decline in economic outputs and unemployment.