How Large Are Global Energy Subsidies?

David Coady, Ian Parry, Louis Sears and Baoping Shang

No 2015/105, 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: WP; supply cost; demand curve; energy price reform; externality cost (search for similar items in EconPapers)
Pages: 42
Date: 2015-05-18
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Citations: View citations in EconPapers (137)

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Working Paper: How Large are Global Energy Subsidies? (2016)
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