“The United States will begin to publish annual reports on U.S. Government spending on fossil fuel subsidies and will share this information with the Group of 20 (G-20) and other relevant international bodies," according to the preview report of the second U.S. Open Government National Action Plan.

This effort to increase transparency and accountability may prove useful to move forward the debate on fossil-fuel subsidy reform in the United States. As pointed out in an earlier post, the Obama administration has proposed the cutting of fossil-fuel tax subsidies from the budget every year since the President took office in 2009. Congress, however, has consistently opposed.

Earlier research by the IISD Global Subsidies Initiative (GSI) suggests that the failure to reform fossil fuel subsidies is often determined by political economy factors. In particular organized interest groups block reform through campaign financing and disproportionate access to political decision-making. One of GSI’s conclusions for reformers has been to invest in transparency about the cost and purpose of subsidies.

Most fossil fuel subsidies in industrialized countries are to producers in the form of tax subsidies. These subsidies are often complicated and hidden, making public scrutiny difficult. At the same time, the methodologies to estimate them are subject to disagreement. This particular initiative by the White House can be helpful to address both of these issues.

At the same time, we hope that this initiative by the United States will be followed in more countries and spark new debate in and engagement of international bodies such as G-20 and APEC. Members of both organizations had already committed to phase out inefficient fossil-fuel subsidies in 2009. However, process has proven to be difficult, and is, among others, stalled by a lack of consensus over estimation methodologies and definitions.