A number of subsidy identification and analysis tools developed by the Organisation for Economic Co-operation and Development (OECD) have been road-tested by the Institute for European Environmental Policy (IEEP), in a report published November last year called Environmentally Harmful Subsidies: Identification and Assessment.

Based on a review of the OECD’s ‘quick scan’, ‘checklist’ and ‘integrated assessment’ methods, the report identifies best practice and potential short-comings by applying them in the context of six case studies: three in the energy sector, two in the transport sector and one on irrigation. The study’s key finding was that the three approaches could be integrated into one single method, given the fact that they sometimes overlapped, and otherwise complemented one another.

The IEEP have also developed a ‘recipe book’, providing guidance for policy-makers trying to calculate the size of environmentally harmful subsidies, and a subsidy ‘identity card’, a suggested way to visually represent the different properties of subsidies. The emphasis of the report is on making subsidy identification and assessment tools quick and easy-to-use, while retaining their value for more in-depth analysis.

Notably, the authors suggest that the large budget deficits following the financial crisis may provide the additional momentum needed for the wide-scale reform of environmentally harmful subsidies in the medium term.

The full report can be downloaded from: http://www.ieep.eu/publications/publications.php?pub=97581