Who benefit most from fuel subsidies? Evidence from Nigeria

Soile, Ismail Oladimeji; Mu, Xiaoyi

doi:10.1016/j.enpol.2015.09.018

Cited by 49 publications

(17 citation statements)

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“…Another approach – albeit less common – to evaluate the extent of inequality associated with fossil fuel subsidies is to use rank‐dependent measures. Soile and Mu (2015) assess the distribution of fuel subsidies relative to that of household expenditure in Nigeria by comparing their respective Gini coefficient measures and Lorenz concentration curves. Their results, based on data from the 2009–2010 Harmonized Living Standard Survey, suggest that the welfare associated with fuel subsidies was less equally distributed than the welfare measured by household expenditure, showing that subsidies exacerbated rather than reduced inequalities.…”

Section: Some Empirical Evidence From Developing Countriesmentioning

confidence: 99%

“…In particular, reformers must convince the population of their capacity to anticipate changes and to ensure that these changes will be fair and reasonable (Vagliasindi, 2012, 2013; Clements et al ., 2013). In Nigeria, continuous resistance to attempts to remove fossil fuel subsidies has prevailed because most times, the government reneged on its promises on how the proceeds from the subsidy removal would be applied to improve the economy or raise the standard of living of the people (Soile and Mu, 2015). Similarly, taking the example of the reform of the gas subsidy implemented by the government of El Salvador in 2011, Calvo‐Gonzalez et al .…”

Section: Subsidy Reforms and Redistribution: Lessons From Country Expmentioning

confidence: 99%

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Fossil Fuel Subsidies, Income Inequality, and Poverty: Evidence From Developing Countries

Couharde

Mouhoud

2020

Journal of Economic Surveys

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The past two decades have witnessed widespread attempts to reform fossil fuel subsidies in developing countries. If the reforms are likely to improve economic efficiency, the expected effects on income distribution and poverty are more controversial. This paper reviews the recent literature that examines the impacts of fossil fuel subsidies and their reforms on income inequality and poverty in developing countries. It identifies the different channels that have been explored in the literature and surveys the empirical evidence on the importance of these channels in practice. Drawing on diverse country experiences, it also discusses why fossil fuel subsidies are particularly challenging to reform and highlights several ways in which efforts to reform may be feasible and successful.

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Section: Some Empirical Evidence From Developing Countriesmentioning

confidence: 99%

Section: Subsidy Reforms and Redistribution: Lessons From Country Expmentioning

confidence: 99%

Fossil Fuel Subsidies, Income Inequality, and Poverty: Evidence From Developing Countries

Couharde

Mouhoud

2020

Journal of Economic Surveys

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“…Consumption subsidies arise when the price paid by consumers is below the cost of supply (Coady et al, 2017) and are commonly used by governments in low-income and emerging countries to decrease households' energy bills. Nevertheless, subsidies' benefits tend to be concentrated on the richest households, thus limiting the effect on energy poverty (Dartanto, 2013;Soile and Mu, 2015).…”

Section: Follow the Money: Fossil Fuel Subsidies Vs Renewable Energy Subsidiesmentioning

confidence: 99%

The impact of phasing out fossil fuel subsidies on the low-carbon transition

2019

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There is growing consensus on the fact that fossil fuels subsidies provided by governments in high-income countries represent a misalignment on emissions' reduction with the global climate agenda. In addition, a discussion emerged on the negative socio-economic and environmental externalities associated with fossil fuel subsidies. Nevertheless, pathways for phasing out fossil fuel subsidies in high income countries and their implications on the low-carbon transition have not yet been analysed. With the aim to narrow this knowledge gap, we extend the EIRIN Stock-Flow Consistent behavioral model to study the implications on sustainable development of the gradual phasing out of fossil fuels subsidies, whose revenues could be used by the government to subsidize energy investments in green capital (e.g. solar panels), either via fiscal policies or green bonds. We assess the effects on green growth, employment, credit and bonds market, as well as the distributive effects across heterogeneous households and sectors. The phasing out of fossil fuels subsidies contributes to improve macroeconomic performance, to decrease inequality and helps the government to find fiscal space to support stable renewable energy policies. Green subsidies contribute to foster the low-carbon transition but could imply distributive effects, depending on the way in which they are implemented.

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“…Contrastingly, the shabbiness of our environment (flooding, insufficient natural resources endowments, extinction of wildlife, uncultivable or scarce arable land to farm etc.) can in some ways explains government willingness to extend subsidies to the citizens, in an attempt to lessen poverty and generate a condition sustainable for affordable public consumption (Soile & Mu, 2015). This phenomenon exemplifies uni-directional causality from environmental quality to fuel subsidy.…”

Section: Introductionmentioning

confidence: 94%

Fuel subsidies and carbon emission: evidence from asymmetric modelling

Adekunle

Oseni

2021

Environ Sci Pollut Res

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It is expected that fuel subsidy removal should hinder carbon emissions growth through low energy consumption channels amid higher energy prices. However, outliers in this theoretical disposition make empirical proof of the fuel subsidy-carbon intensity apt and primitive. Despite established fuel subsidy abolishment gains for climate and economic welfare, the relevance, magnitude and policy implications remain dimly. This paper employs the non-linear autoregressive distributed lag (NARDL) estimation procedure to gauge the contemporaneous influence of fuel subsidy for carbon intensity in Nigeria. Findings revealed that fuel subsidy removal inversely relates to Nigeria's carbon emission in the short-run and long run. The study recommends complementary policy option that ensures additional financial savings to the government should be invested in public sector growth that can cushion the effect of relative income loss to the citizenry. The Nigerian government should ensure measures are kept in place to discourage over-consumption of alternative energy (for example, coal) that could also threaten the green economy paradox.

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Who benefit most from fuel subsidies? Evidence from Nigeria

Cited by 49 publications

References 10 publications

Fossil Fuel Subsidies, Income Inequality, and Poverty: Evidence From Developing Countries

Fossil Fuel Subsidies, Income Inequality, and Poverty: Evidence From Developing Countries

The impact of phasing out fossil fuel subsidies on the low-carbon transition

Fuel subsidies and carbon emission: evidence from asymmetric modelling

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