Boom and Bust: The fiscal implications of fossil fuel phase-out in six large emerging economies
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The era of fossil fuel revenues is ending: six fossil fuel-dependent economies must adjust their tax policies to avoid a USD 500 billion revenue gap by 2050.
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Emerging economy governments depend on fossil fuel revenues, ranging from 5% of total revenues in China to over 33% in Russia: governments need fiscal strategies to ensure fossil revenue dependence doesn’t slow their clean energy transition.
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The world must phase out fossil fuels, which will inevitably erode related revenues. Countries need fiscal strategies to avoid revenue gaps that could reverse progress on poverty eradication and economic development.
To comply with the Paris Agreement, the world will have to phase down fossil fuels, which will erode related revenues. This report examines the possible financial consequences of the clean energy transition in Brazil, Russia, India, Indonesia, China, and South Africa (BRIICS countries). The study assesses current dependency on fossil fuel revenues and uses IEA scenarios of energy demand, supply, and prices from 2030 to 2050 to project future revenues.
As the global clean energy transition gathers pace, the report shows that BRIICS economies risk a USD 278 billion gap in revenues by 2030 that could reverse progress on poverty eradication and economic development. By 2050, overall fossil fuel revenues in BRIICS countries could be as much as USD 570 billion lower than a business-as-usual scenario, which would see governments failing to phase down fossil fuels enough to avoid the worst climate impacts.
The report aims to support BRIICS and other governments in planning for a managed transition to net-zero and to reduce the risk of revenue crises.
Participating experts
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