Options for International Agreements on Fossil Fuel Subsidies

Growing international understanding that fossil fuel subsidies tend to cause over-production and over-consumption of fossil fuels is, in turn, increasing interest in disciplining the use of such subsidies through international agreements between governments willing to engage in a deeper and more ambitious fossil fuel subsidy reform. While such agreements might take different forms and shape depending on their parties, ranging from some provisions in free trade agreements to agreements more specifically focused on this topic, any international agreement on fossil fuel subsidies would require the consideration of a number of building blocks.

In this report, we discuss six potential building blocks for any such agreement. For each building block, we identify a series of options and choices for negotiators to consider and also identify potential advantages and limitations of the options.

The report does not aim to prescribe any specific options for governments to take. Rather, it explores the alternatives available for governments that may be considering various options and their suitability for specific disciplines.