Renewable Energy Subsidies & Fossil Fuel Phase-Out

Manila—20th June—This year, the Asian Development Bank's Asia Clean Energy Forum (ACEF) included a special session on fossil-fuel subsidies hosted by the Global Subsidies Initiative.

Nairobi―28-29th April―A two day workshop took place on ‘Reforming Fossil Fuel Subsidies for an Inclusive Green Economy,’ hosted by the United Nations Environment Programme (UNEP) and supported by the Global Subsidies Initiative (GSI), the German development agency GIZ and the International Monetary Fund (IMF).

The Government of Bangladesh has committed to ensuring access to affordable and reliable electricity for all citizens by 2021. This report addresses the key priority issues for reform in the energy sector along with an agenda for its progressive implementation. It starts with an overview of energy subsidies in Bangladesh, before surveying the country’s energy sector development plans, with an emphasis on the electricity sector. Finally, the report discusses the important role that energy pricing policy will play in achieving the government’s objectives.

Nuclear power will be the featured energy source in the International Energy Agency’s 2014 World Energy Outlook (WEO).1 To gather input, the IEA convened 100 experts in Paris on 31 March for an informal meeting—“The Future of Nuclear Power”—to help shape the three chapters of the upcoming WEO, which is standard reading for all in the energy policy field. The IEA’s Chief Economist, Fatih Birol, introduced the session noting that the WEO was always objective and does not lobby for any energy source or technology.

Fossil-fuel subsidies matter. They matter for sustainable development; they matter for government budgets; they matter for the poor who benefit very little; they matter for women and accessing daily necessities such as heating, lighting, cooking and transport; and they matter for the environment in that they work in the opposite direction of a low-carbon future, impede renewable take-off, stifle energy efficiency and dwarf climate finance.  Global pre-tax subsidies amounted to US$480 billion in 2011, whilst post-tax subsidies reached US$1.9 trillion. Reforming and redirecting subsidies will be an important piece of the jigsaw if we are to solve the climate change puzzle.

This study provides a detailed exploration of the events leading up to, during and after the notorious Spanish solar PV bubble—when a sudden and unexpected burst of investment in solar PV led to skyrocketing policy costs, and ultimately resulted in the government taking retroactive measures to reduce the subsidy promised to developers.

Download:  Call for Proposals. Case Study: India's Accelerated Depreciation Policy for Wind Energy (PDF - 246 KB) Renewable energy technologies have a key role to play in sustainably meeting the world’s energy needs.

Green industrial policy (GIP) is the pursuit by governments of national economic excellence in key green economy sectors, with a view to creating globally competitive domestic firms. This report is one in a series that considers the lessons for GIP that can be learnt from policies in the renewable energy sector. The aim of the series is to provide policy makers with research to support the development of cost effective, well targeted policies for the development of green industries. The reports highlight how policies have worked, the outcomes of the policies and the lessons that have been learnt.