How Large are Global Energy Subsidies?

Coady, David; Parry, Ian; Sears, Louis Martin; Shang, Baoping

doi:10.2139/ssrn.2613304

Cited by 38 publications

(9 citation statements)

References 8 publications

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“…with a scale parameter that varies across countries and fuels, price , and long-run price elasticity A p of demand . The constant elasticity demand function has been widely used in related studies ⑀ (Clements et al, 2013;Davis, 2014;Coady et al, 2015) and coincides closely with a substantial empirical literature that has tended overwhelmingly to estimate log-log models.…”

Section: Functional Formmentioning

confidence: 61%

“…5 Both in the figure and in the empirical analysis which follows, the supply of fuels has been assumed to be perfectly elastic. This is a common assumption in this literature (Clements et al, 2013;Davis, 2014;Coady et al, 2015) and is likely to be a very accurate approximation. The infrastructure for transportation, refining, and distribution of fuels can be scaled up at near constant marginal cost, so what matters is the long-run supply elasticity for crude oil.…”

Section: Key Assumptionsmentioning

confidence: 85%

“…Clements et al (2013), for example, finds that pre-tax subsidies worldwide were $480 billion in 2011 whereas posttax subsidies were $1.9 trillion. Coady et al (2015) finds that pre-tax subsidies were $541 billion in 2013 while post-tax subsidies were much larger, $4.9 trillion in 2013. These estimates are for all energy types including not only transportation fuels but also coal and natural gas, and thus are very large.…”

Section: Graphical Analysismentioning

confidence: 99%

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The Environmental Cost of Global Fuel Subsidies

Davis¹

2017

The Energy Journal

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Despite increasing calls for reform many countries continue to provide subsidies for gasoline and diesel. This paper quantifies the external costs from global fuel subsidies using the latest available data and estimates from the World Bank and International Monetary Fund. Under preferred assumptions about supply and demand elasticities, current subsidies cause $44 billion in external costs annually. This includes $8 billion from carbon dioxide emissions, $7 billion from local pollutants, $12 billion from traffic congestion, and $17 billion from accidents. These external costs are in addition to conventional deadweight loss, estimated to be $26 billion annually. Government incentives for alternative fuel vehicles are unlikely to cost-effectively reduce these externalities as they do little to address traffic congestion or accidents and only indirectly address carbon dioxide and local pollutants.

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Section: Functional Formmentioning

confidence: 61%

Section: Key Assumptionsmentioning

confidence: 85%

Section: Graphical Analysismentioning

confidence: 99%

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The Environmental Cost of Global Fuel Subsidies

Davis¹

2017

The Energy Journal

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“…FF subsidies by themselves were found to approach $5 trillion annually by a recent International Monetary Fund (IMF) assessment, while subsidies for related sectors add at least another $1 tn. 131,132…”

Section: Economic Reformsmentioning

confidence: 99%

World scientists’ warnings into action, local to global

Barnard¹,

Moomaw

Fioramonti

et al. 2021

Science Progress

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‘We have kicked the can down the road once again – but we are running out of road.’ – Rachel Kyte, Dean of Fletcher School at Tufts University. We, in our capacities as scientists, economists, governance and policy specialists, are shifting from warnings to guidance for action before there is no more ‘road.’ The science is clear and irrefutable; humanity is in advanced ecological overshoot. Our overexploitation of resources exceeds ecosystems’ capacity to provide them or to absorb our waste. Society has failed to meet clearly stated goals of the UN Framework Convention on Climate Change. Civilization faces an epochal crossroads, but with potentially much better, wiser outcomes if we act now. What are the concrete and transformative actions by which we can turn away from the abyss? In this paper we forcefully recommend priority actions and resource allocation to avert the worst of the climate and nature emergencies, two of the most pressing symptoms of overshoot, and lead society into a future of greater wellbeing and wisdom. Humanity has begun the social, economic, political and technological initiatives needed for this transformation. Now, massive upscaling and acceleration of these actions and collaborations are essential before irreversible tipping points are crossed in the coming decade. We still can overcome significant societal, political and economic barriers of our own making. Previously, we identified six core areas for urgent global action – energy, pollutants, nature, food systems, population stabilization and economic goals. Here we identify an indicative, systemic and time-limited framework for priority actions for policy, planning and management at multiple scales from household to global. We broadly follow the ‘Reduce-Remove-Repair’ approach to rapid action. To guide decision makers, planners, managers, and budgeters, we cite some of the many experiments, mechanisms and resources in order to facilitate rapid global adoption of effective solutions. Our biggest challenges are not technical, but social, economic, political and behavioral. To have hope of success, we must accelerate collaborative actions across scales, in different cultures and governance systems, while maintaining adequate social, economic and political stability. Effective and timely actions are still achievable on many, though not all fronts. Such change will mean the difference for billions of children and adults, hundreds of thousands of species, health of many ecosystems, and will determine our common future.

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“…A series of studies endeavored to answer the first question, but leading to very dispersed results. For example, Lin and Jiang (2011) computed the energy subsidies in China to be 357 billion CNY in 2007; Jiang and Tan's (2013) results show, while externalities are included, the subsidies reached 1,214 billion CNY in 2008; Lin and Ouyang (2014) estimated the subsidies to be between 604 and 1,039 billion CNY during 2006CNY during -2010and Coady et al (2015) suggested the pre-tax subsidies and forgone tax revenues summed up to 486 billion CNY in 2013, but the value raised up to 11,465 billion CNY if the costs of global warming, air pollution, and other externalities are also included. The dispersed outcomes (from less than 1% to almost 20% of GDP) from previous studies mainly result from disagreement on the concept of energy subsidies.…”

Section: Introductionmentioning

confidence: 99%

Inventory and Distribution of Energy Subsidies of China

Chen¹

2017

The Energy Journal

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To provide support for the energy subsidy reform as a critical step of China's recent energy reform agenda, a comprehensive energy subsidy inventory of China is compiled and the associated distributional effect is investigated in this study. According to the results, the lower boundary estimation of annual energy subsidies of China was 90-202 billion CNY, equivalent to 0.22%-0.37% of GDP or 0.95%-1.21% of government expenditure, during 2010-2014. Thanks to the specific subsidies provided to rural grid construction and transportation, 72% of the energy subsidies were distributed to residents in 2012, while fixed capital and export carried another 13% and 10%. Poorer urban household received higher energy subsidy ratio through dwelling and food expenditures, but lower ratio through transportation and communication expenditures. The overall energy subsidies are slightly regressive, thus adequate reform can narrow wealth gap on the one hand and reduce budgetary pressure on the other.

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How Large are Global Energy Subsidies?

Cited by 38 publications

References 8 publications

The Environmental Cost of Global Fuel Subsidies

The Environmental Cost of Global Fuel Subsidies

World scientists’ warnings into action, local to global

Inventory and Distribution of Energy Subsidies of China

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