Dirty Little Secrets: Inferring Fossil-Fuel Subsidies from Patterns in Emission Intensities

Radoslaw Stefanski

No 134, OxCarre Working Papers from Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford

Abstract: I develop a unique database of international fossil-fuel subsidies by examining country specific patterns in carbon emission-to-GDP ratios, known as emission-intensities. For most but not all countries, intensities tend to be hump-shaped with income. I construct a model of structural-transformation that generates this hump-shaped intensity and then show that deviations from this pattern must be driven by distortions to sectoral-productivity and/or fossil-fuel prices. Finally, I use the calibrated model to measure these distortions for 170 countries for 1980-2010. This methodology reveals that fossil-fuel price-distortions are large, increasing and often hidden. Furthermore, they are major contributors to higher carbonemissions and lower GDP.

Date: 2014-04-04
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Persistent link: https://EconPapers.repec.org/RePEc:oxf:oxcrwp:134

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