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What’s the simplest way to tackle global warming? Make sure that fossil fuels are priced properly and not subsidized.

That’s the core idea behind a large new report (pdf) from the International Monetary Fund, which argues that the world “misprices” fossil fuels to the tune of some $1.9 trillion per year.

Eliminating these subsidies, the IMF argues, and replacing them with appropriate carbon taxes could cut global greenhouse-gas emissions by 13 percent, curtail air pollution, and shore up the finances of many poorer countries now in debt trouble.

So let’s take a closer look at the IMF’s numbers. Energy subsidies, the report argues, come in two very different flavors:

-$480 billion in direct subsidies for consumption. This is what we typically think of as “fossil fuel subsidies.” In 2011, governments around the world spent some $480 billion to lower the price of petroleum, natural gas, coal, and electricity for their citizens.