SUBSIDY WATCH BLOG

The roundtable on the theme of “Energy subsidies in Ukraine and progress of reform” was jointly held by the Committee on Fuel and the Energy Complex, Nuclear Policy and Nuclear Safety of the Parliament of Ukraine and the Organisation for Economic Co-operation and Development (OECD) in Kyiv on April 25, 2016. This was the second in the series of events linked to the OECD-led project “Inventory of Energy Subsidies in the EU’s Eastern Partnership Countries", supported by the IISD Global Subsidies Initiative (IISD-GSI) and consultants in Armenia, Azerbaijan, Belarus, Georgia and Ukraine. A draft report on "Energy subsidies in Ukraine" (available in English and Ukranian) was prepared by IISD-GSI to inform the discussion.  

In 2015, the Indian government introduced nationwide changes to the system of domestic liquefied petroleum gas (LPG) subsidies, replacing integrated consumer price subsidies with bank transfers through the Direct Benefit Transfer for LPG (DBTL) scheme.

16 February 2016—Geneva—The Global Subsidies Initiative (GSI) of the International Institute for Sustainable Development (IISD) hosted a webinar on the climate change impacts of USD 500 billion of government subsidies to fossil fuels. The webinar was chaired by Peter Wooders, Group Director, Energy, IISD, who outlined the importance of fiscal instruments and mitigation efforts in light of the UNFCCC agreement and the ambitious efforts of the Friends of Fossil Fuel Subsidy Reform in promoting an international communiqué on the issue.

World leaders hailed that the climate change agreement, agreed on Saturday 12 December, was important and significant in terms of setting the framework for government action in the coming years. In this blog, the Global Subsidies Initiative (GSI) examines both the text of the agreement as well as the events and activities that took place throughout COP21 in Paris with regards to fossil fuel subsidy reform and the phased removal of around US$600 billion of government subsidies to fossil fuels. In summary, there was much momentum on the side-lines of the negotiating process. The content of the agreement itself, from the perspective of moving the issue of fossil fuel subsidy reform, is also a very positive step in the right direction for setting the framework and rules of the game on climate action.

Kerosene subsidies are expensive: estimated to be more than US$ 4 billion in West Africa and more than US$ 5 billion in India. What are governments—often with highly limited resources—achieving by spending all this money? And with an increasing number of countries committing to reform subsidies, what will it mean for energy access if these policies are removed?

Just a few days before the G-20 Leaders’ Summit in Antalya and the UNFCCC’s COP21 in Paris, hundreds of Turkish experts, scholars and activists gathered in Istanbul from 12-13 November 2015 at the IKLIM Climate Forum, under the banner “Ben de Varim!” (“Count me in, too!”).

Jakarta—31 October—As part of its work in Indonesia, the Global Subsidies Initiative (GSI) recently supported The Habibie Center and consumer’s association Yayasan Lembaga Konsumen Indonesia (YLKI) in facilitating a large public dialogue session to discuss Indonesia’s recent efforts to reform fossil fuel subsidies.

When it comes to phasing out subsidies to the production of polluting oil, gas and coal—something G-20 leaders have committed to every year since 2009—we’re seeing little progress. In fact, as fossil fuel prices have fallen, some countries have even increased subsidies in response.

Since April 1st 2015, India’s cooking gas subsidies have been distributed solely by electronic transfer through the Direct Benefit Transfer for Liquefied Petroleum Gas scheme (otherwise known as DBTL or PAHAL).

In New York this weekend (25–27 September) over 100 heads of state and government attended the UN Sustainable Development Summit to adopt the "Sustainable Development Goals" (SDGs) – the development agenda for the world for the next fifteen years. The goals cover 17 areas including their "Means of Implementation", which is how these goals will be funded.

Beijing—September 16—The first estimate of subsidies to coal producers in China, totaling CNY35.7 billion (US$5.6 billion) in 2013, has been revealed by the Global Subsidies Initiative (GSI) at the Coal and Renewable Energy event held in Beijing on 16 September 2015.

In January 2015, Suhail Al Mazroui, the Minister of Energy in the United Arab Emirates (UAE), announced that lifting energy subsidies was 'just a matter of time'. Six months on, that time appears to have come. On 22 July, the United Arab Emirates (UAE) government announced that the prices of gasoline and diesel will be deregulated from 1 August.

The downturn in oil prices over the past year has hit Nigeria’s public budget hard. When money is tight, it seems obvious that governments should first phase out programmes that are expensive and have low benefit to their intended beneficiaries.

Addis Ababa—July 14—The Global Subsidies Initiative (GSI) organized a high-level event on the role of fossil fuel subsidy reform as a means to provide financing for sustainable development.

The international community reaffirmed commitments on Thursday 16th July 2015, within the Addis Ababa Action Agenda "to rationalize inefficient fossil-fuel subsidies that encourage wasteful consumption ..."  and "phasing out those harmful subsidies". Fossil fuel subsidy removal remains on the agenda and is as important as ever when governments are squeezed for fiscal space and domestic resource mobilisation.

Government negotiators are meeting in Bonn for climate talks this week (1-11 June 2015), to prepare for negotiations in Paris towards a climate deal at the end of the year. At the time of writing 39 countries have submitted their Intended Nationally Determined Contributions or INDCs.