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SUBSIDY WATCH BLOG

Explore news, commentary and analysis related to subsidies and sustainable development.

Blog: Renewable energy subsidies and the WTO: The wrong law and the wrong venue

Japan recently announced that consultations had failed to resolve its dispute with Canada over the Province of Ontario’s feed-in-tariffs for renewable energy, and that in mid-June it will be asking the WTO to establish a dispute settlement panel. This is awful news for the multilateral trade system, for which the dispute will be corrosive, seemingly pitting trade against the environment.

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Blog: Clarifying misconceptions about taxpayer-subsidized ethanol exports in the United States

Last November, the Financial Times published an article charging that U.S.-produced ethanol is collecting U.S. tax credits before being shipped to Europe, where it also qualifies for favorable tax treatment. I covered this story in "Taxpayer Subsidized Ethanol Exports May Bite Industry in the Future". The gist of my article was that if this charge is true, it completely undermines the supposed reasons U.S. taxpayers are subsidizing ethanol in the first place: to reduce dependence on foreign oil. In fact, as I showed in a later article, any ethanol that is exported actually increases U.S. dependence on foreign oil because it takes some oil to make the ethanol and then ship it to the export market.

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Global food prices and increased biofuel production: an overview of the food vs. fuel debate

From 2006 to 2008, the world saw new price highs for a number of food commodities, with prices for grains like maize rising substantially, despite record crops, and many poor communities no longer able to afford their basic needs. When an internal World Bank report was leaked to the British newspaper The Guardian, worldwide attention turned to the role that biofuels might be playing in the crisis. It argued that increased biofuel production – in many countries, driven by generous subsidy programmes – had resulted in food commodities being diverted for use as biofuel feedstocks, such that food markets were now in direct competition with energy markets. The heated arguments over its findings have come to be known as the ‘food vs. fuel’ debate.

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A lack of critical debate about India's solar energy subsidies?

This January, Deepak Gupta, the Secretary for India’s Ministry of New and Renewable Energy (MNRE), reaffirmed plans to install 20 Gigawatts (GW) of solar power by 2022, calling it “perhaps the biggest target in the world”. This follows a number of statements made by Dr Kirit S. Parikh, the author of a government-commissioned report last year, recommending that the country “boost” solar power capacity.

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Hope on the horizon: Will the G-20 really start the final countdown on unsustainable energy subsidies?

For decades there has existed a community of researchers – spanning government ministries, international organisations, academia and civil society – working to increase the world’s understanding and awareness of harmful subsidies. Since September 2009, when the G-20 committed to phase out and rationalize inefficient fossil-fuel subsidies that lead to wasteful consumption and distorted long-term energy investments, much attention has turned to the subject. Marking just over a year after this agreement was reached, and in the run-up to the G-20’s Seoul Summit on 11−12 November, Subsidy Watch contacted Professor Cees van Beers and André de Moor, part of the fossil-fuel subsidy research community since the 1990s, and asked for a retrospective: how far have we come and how far have we yet to go?

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Some Concerns on the Fossil-Fuel Subsidies Debate in the G-20

Energy subsidies are a long-debated issue as regards their efficacy, efficiency and relationship with the problem of climate change. These questions have been recently included on the agenda of the G-20, after the Leaders’ Summit held in Pittsburgh in September 2009. Paragraphs 29 and 31 of the Leaders’ Statement set forth a course of action for member countries. In those paragraphs, fossil-fuel subsidies are questioned on the grounds that they can be inefficient and encourage wasteful consumption, and it is therefore proposed to phase them out over the medium-term, while recognizing the importance of providing those in need with essential energy services.

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Towards creating international standards for subsidy accounting

Earlier this summer the GSI published a 150-page manual, Subsidy Estimation: A survey of current practice. The document is mostly a compilation of verbatim quotations on definitions of subsidies from various inter-governmental organizations, and documentation of estimation methods for particular subsidy elements. It is intended for use primarily by individuals who are interested in preparing estimates of subsidies to particular products or sectors—people who engage in what might be called “subsidy accounting.” But we hope that it will also serve as a catalyst for kick-starting a dialogue on the need for a common, consistent set of international “subsidy accounting standards”.

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Energy subsidies in the context of sustainable development

Editor’s introduction: in late 2009 and early 2010, the Organization of the Petroleum Exporting Countries (OPEC) helped prepare a Joint Report, Analysis of the Scope of Energy Subsidies and Suggestions for the G-20 Initiative, in partnership with the International Energy Agency (IEA), the Organisation for Economic Co-operation and Development (OECD) and the World Bank. The purpose of the study was to analyse “the scope of energy subsidies” and provide suggestions for the G-20’s initiative to phase out and rationalize inefficient fossil-fuel subsidies that encourage wasteful consumption, and it was submitted to the G-20 Meeting of Finance Ministers and Central Bank Governors in Toronto, Canada, on 26-27 June 2010. In this article, the OPEC Secretariat explains its findings and perspective on the role of energy subsidies and their relationship with sustainable development.

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The Real Reasons Behind India's Reluctance to Liberalize Petroleum Prices

In just four years the Indian government has had three high-level committees recommend how petroleum product prices should be determined. All three have shared the same general conclusions: the government should reform fuel-price subsidies and use other, more effective policies to improve the welfare of the poor. But the reality behind India's reluctance to liberalize prices is not a lack of good policy advice.

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The Public Goods Paradigm and the EU's Common Agricultural Policy

From the outside, the European Union's Common Agricultural Policy (CAP) may look immutable. The only major effect of the reform passed by farm ministers in 2009, dubbed the ‘Health Check', was to dissipate more serious ambitions for change for the rest of the EU long-term budget (2007–2013).

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Subsidized U.S. Biodiesel: The Never-Ending Story

In 2004 the U.S. Congress created a USD$ 1/gallon (US$ 0.264/litre) blenders' tax credit for biodiesel that was slated to expire in 2006. But in 2005 it extended the tax credit through the end of 2008 and, before that year was up, extended it again, through 2009.

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A Grain of Salt Needed with Promises of Cheap Desalination

The irony of water scarcity on a planet 70% covered by ocean does make us gaze longingly at the seas as the ultimate answer. The public, politicians and water authorities continue to hope that cost-effective and environmentally friendly desalination - the removal of salt from seawater to make it drinkable - will come to the rescue of water-scarce regions.

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Energy subsidies: can Iran kick the habit?

The Iranian government recently announced their intention to phase out several of its subsidies. The reform bill, the outlines of which were approved by the parliament in November, aims to eliminate subsidies over a five year period, the most notable being Iran's fossil-fuel subsidies.

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Transparency as a Tool for Subsidy Reform

Transparency, one of the fundamental norms of the trading system, is increasingly seen as an essential tool in the governance of international trade.

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The Tough Politics of Energy Subsidy

Governments spend staggering sums of money subsidizing energy—in particular fossil fuels, but increasingly also other forms of energy such as renewables.  The latest global assessment, published last year by the International Energy Agency, puts the total energy subsidy at far more than US$300 billion annually.

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