Removal of consumer subsidies can lead to carbon emission reductions (6 to 8 per cent by 2050 globally), Reductions that can be improved further with a switch or a "SWAP" towards sustainable energy. This report describes the scale and impact of fossil fuel subsidies on sustainable development. It describes the SWAP concept to switch savings made from fossil fuel subsidy reform, towards sustainable energy, energy efficiency and safety nets. The report provides potential SWAP outlines for Bangladesh, Indonesia, Morocco and Zambia. "Making the Switch" was written for the Nordic Council Ministers by the Global Subsidies Initiative of IISD and Gaia Consulting.
The combined impact of fossil fuel subsidy reform (FFSR) and an increase in gasoline and diesel fuel taxation could do three things: save and raise money for governments; reduce emissions; and provide upfront and ongoing domestic resources to fund sustainable development and the sustainable energy transition.
This World Bank book, edited by by Gabriela Inchauste and David G. Victor, brings together detailed chapters on the political economy of subsidy reform in four countries—the Dominican Republic, Ghana, Indonesia and Jordan —and draws overall lessons from their experiences.
IISD's Global Subsidies Initiative (GSI) contributed Chapter 4, "Indonesia: Pricing Reforms, Social Assistance and the Importance of Perceptions," on Indonesia's experiences with overcoming political obstacles to gasoline and diesel subsidy reforms. The chapter begins by reviewing the economic, fiscal and political context surrounding these subsidies. It then places them in their historical context, outlining the history surrounding their creation as well as the six major reform attempts since the 1997—98 Asian Financial Crisis.
Since the end of 2015, the Buhari government has introduced major reforms to gasoline and kerosene subsidies, with a new “price modulation” policy that has seen upward adjustments in the price of both fuels—at the same time that major problems with supply continue, driving domestic prices above official levels in many areas.
This study conducts a detailed analysis of the compensation mechanisms that could be used to mitigate the impact of fuel subsidy removal on weak and vulnerable segments of Nigerian society. The study suggests actionable proposals that the government could pursue if it decides that it must mitigate the social impact of ongoing future price increases as well as pro-poor policies in which the government could invest as part of its general budgeting, given the fiscal space created by subsidy reforms.
Electricity distribution utilities in India are currently unable to cover the cost of their operations from the sale of electricity.
This report presents the findings of a household survey that sheds light on the awareness and views of different socioeconomic and geographical groups regarding electricity subsidies and electricity tariff reform. It concludes that there is a significant lack of awareness of the existence and size of electricity subsidies, although subsidy reform is a tough sell. At the same time, surveyed households recognize that higher power prices would have significant negative impacts on their daily activities, and some of them show willingness to pay for a more reliable power supply.
If we aim to reduce global emissions in order to limit global warming to less than 2°C above pre-industrial levels, then the energy sector is of paramount importance.
Many countries and regions are making this switch: from subsidising fossil fuels and towards investing in sustainable energy. This report describes how Ethiopia, Morocco, Peru and the Philippines have reformed their subsidies. It also describes how countries including Denmark, Finland, Norway and Sweden have introduced innovative policy instruments to encourage switching towards renewable and sustainable energy.
India is one of the world's largest users of kerosene, most of which is provided at highly subsidized prices and at significant fiscal cost to poor households through the national Public Distribution System.