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

Radoslaw Stefanski ()

No 201705, Discussion Paper Series, School of Economics and Finance from School of Economics and Finance, University of St Andrews

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 carbon-emissions and lower GDP.

Keywords: Carbon Subsidies; Subsidies; Fossil Fuels; Pollution; Energy; Energy Intensity; Industrialization; Structural Transformation; Climate Change; Global Warming; Emissions (search for similar items in EconPapers)
JEL-codes: O1 O44 O41 Q53 Q54 H23 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-reg
Date: 2017-03-06
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Related works:
Working Paper: Dirty Little Secrets: Inferring Fossil-Fuel Subsidies from Patterns in Emission Intensities (2017) Downloads
Working Paper: Dirty Little Secrets: Inferring Fossil-Fuel Subsidies from Patterns in Emission Intensities (2014) Downloads
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