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How Large Are Global Energy Subsidies?

David Coady, Ian Parry (), Louis Sears and Baoping Shang

No 15/105, IMF Working Papers from International Monetary Fund

Abstract: 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 under-pricing from a domestic (rather than global) perspective, so even unilateral price reform is in countries’ own interests. The potential fiscal, environmental and welfare impacts of energy subsidy reform are substantial.

Keywords: Energy sector; Subsidies; Energy prices; Consumption taxes; Fiscal reforms; Sensitivity analysis; energy subsidies, efficient taxation, deadweight loss, revenue, subsidies, tax, vehicle, traffic, subsidy, Demand and Supply, Government Policy, (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-agr, nep-ene and nep-env
Date: 2015-05-18
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