How Large Are Global Energy Subsidies?

June 25, 2015 · 1 comment

How Large Are Global Energy Subsidies? 2015. International Monetary Fund.

Prepared by David Coady, Ian Parry, Louis Sears, and Baoping Shang

This paper provides a comprehensive, updated picture of energy subsidies at the global and regional levels. It focuses on the broad notion of post-tax energy subsidies, which arise when consumer prices are below supply costs plus a tax to reflect environmental damage and an additional tax applied to all consumption goods to raise government revenues.

Post-tax energy subsidies are dramatically higher than previously estimated and are projected to remain high. These subsidies primarily reflect underpricing from a domestic (rather than global) perspective, so that unilateral price reform is in countries’ own interests. The potential fiscal, environmental, and welfare impacts of energy subsidy reform are substantial.

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staff June 26, 2015 at 6:53 am

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