Implementing energy subsidy reforms vagliasindi maria. EconPapers: Implementing energy subsidy reforms: an overview of the key issues 2019-02-13

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Implementing energy subsidy reforms : evidence from developing countries (eBook, 2012) [cleanpowerfinance.com]

implementing energy subsidy reforms vagliasindi maria

Similar trends are recorded for power consumption. The reduction of subsidies is particularly remarkable for net energy importers. The case studies were supported by data collection related to direct budgetary subsidies, fuel and electricity tariffs, and household survey data. The most notable decline in consumption was recorded in the low-income and lower-middle-income countries. And it underlines the opportunities to influence future consumption behavior rather than modifying the existing consumption patterns, overcoming inertia and vested interests.

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Implementing Energy Subsidy Reforms: Evidence from Developing Countries

implementing energy subsidy reforms vagliasindi maria

Although priorities differ from one country to another, the main objectives of price reforms have been to curb energy consumption, ease fiscal pressure, and redistribute income to benefit the poor Vagliasindi, 2012;Arze del Granado et al. Beyond leading to over-consumption of oil products these subsidies also lead to increased labor supply, a distorted emphasis on producing traded goods, and higher real wages. The industries that experience the largest contraction are generally more energy intensive. More than half of this impact arises from the indirect impact on prices of other goods and services consumed by households. In addition, our results suggest that fuel demand responds to negative and positive price changes symmetrically. Furthermore, we find that transport fuel demand is price inelastic, making tax on fuel a perfect tool for raising budget revenues. The reduction of subsidies is particularly remarkable for net energy importers.

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Implementing Energy Subsidy Reforms : An Overview of the Key Issues

implementing energy subsidy reforms vagliasindi maria

The sample has selected on the basis of a number of criteria, including the country's level of development and consumption , developing country region, energy security and the fuel it subsidies petroleum fuel, electricity, natural gas. Many countries, including the Untied States, are grappling with this challenge and are attempting to determine the economic costs and benefits of reform. States that are estimated to incur the largest welfare shocks, coincide with hotspots of civil unrest following Nigeria's 2012 subsidy reform attempt. Overall, it highlights the importance of understanding differences in vulnerability, and designing tailored social protection schemes which ensure public support for subsidy reforms. The case studies were supported by data collection related to direct budgetary subsidies, fuel and electricity tariffs, and household survey data.

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Armenia : Implementing Energy Subsidy Reforms

implementing energy subsidy reforms vagliasindi maria

Reflecting a reluctance of many governments to pass these price increases onto energy users, energy price subsidies are absorbing an increasing share of scarce public resources. This report aims at providing the emerging lessons form a representative sample of case studies in 20 developing countries that could help policy makers to address implementation challenges, including overcoming political economy and affordability constraints. The energy subsidy policy challenge is not going to disappear anytime soon. With the recent jump in world oil prices, the issue of petroleum product pricing has become increasingly important in developing countries. The analysis provides strong evidence of the success of reforms in reducing the associated fiscal burden. Thus, carbon emissions increase in the short run and the climate externality worsens. Our results show that higher-income groups benefit more from low energy prices than low-income groups when tracing both direct and indirect supply chain effects of energy price variations.

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Implementing energy subsidy reforms : evidence from developing countries (English)

implementing energy subsidy reforms vagliasindi maria

Policy relevance There is an increasingly strong international consensus that fossil fuel subsidies are detrimental in terms of economic, social and environmental sustainability. AbstractPoorly implemented energy subsidies are economically costly to taxpayers and damage the environment. Using examples from analyses recently undertaken for five countries, it also identifies the magnitude of consumer subsidies and their fiscal implications. While there is no one-size-fits-all model for subsidy reform, implementation of compensatory social policies and an effective communication strategy, before the changes are introduced, reduces helped with the implementation of reforms. Recycling a small fraction of fiscal revenues from energy subsidy removal or energy taxation could be sufficient to compensate vulnerable households from the effects of price hikes. Implementing energy subsidy reforms : evidence from developing countries English.

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Implementing Energy Subsidy Reforms by Maria Vagliasindi by Maria Vagliasindi

implementing energy subsidy reforms vagliasindi maria

The article synthesizes the key principles for designing effective reforms and emphasizes that subsidy reforms cannot only yield fiscal relief, but should also contribute to long-term sustainable development objectives. Universal energy-price subsidies tend to be regressive because benefits are conditional upon the purchase of subsidized goods and increase with expenditure. The case studies were supported by data collection related to direct budgetary subsidies, fuel and electricity tariffs, and household survey data. For the selected sample of 20 developing countries, the average energy subsidy recorded in the budget was reduced from 1. The reduction of subsidies is particularly remarkable for net energy importers. Pass-through of international fuel prices was also notable in the case of electricity generated by fossil fuel. Similar trends are recorded for power consumption.

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Implementing Energy Subsidy Reforms: Directions in Development

implementing energy subsidy reforms vagliasindi maria

This reflects the much higher rate of growth in gross domestic product in this group of countries. The case studies have been selected on the hypothesis that energy dependence and per capita income appear to be the key drivers of subsidy reforms in developing countries. Universal energy-price subsidies tend to be regressive because benefits are conditional upon the purchase of subsidized goods and increase with expenditure. The main argument in favor of removing subsidies is that it will lead to a reduction in global carbon emissions and a decrease in fiscal deficits. For the selected sample of 20 developing countries, the average energy subsidy recorded in the budget was reduced from 1. Our results imply that gasoline demand does not respond to income and price in the long run, reflecting a shift from gasoline towards diesel induced by differential tax policies.

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EconPapers: Implementing energy subsidy reforms: an overview of the key issues

implementing energy subsidy reforms vagliasindi maria

The power sector reform plans included gradual transition to cost-based tariffs; unbundling of part of the state-owned, vertically integrated utility; and implementation of a new regulatory framework. While there is no one-size-fits-all model for subsidy reform, implementation of compensatory social policies and an effective communication strategy, before the changes were introduced, made a difference in securing the successful implementation of reforms. Low- and middle-income countries are expected to display a larger impact of energy subsidy reforms on consumption. However, as we have seen in recent attempts at global governance to mitigate global climate change, many nations are weary of risking short-term competitiveness for longer-term gain. With energy inextricably linked to economic growth, many countries subsidize energy costs in varying forms and magnitude. Furthermore, we study the effect of reducing the rather high level of taxes on households.

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Columbia

implementing energy subsidy reforms vagliasindi maria

The analysis provides strong evidence of the success of reforms in reducing the associated fiscal burden. Subsidies to consumption, by lowering end-use prices, can encourage increased energy use and reduce incentives to conserve energy efficiently. In spite of the relatively price inelastic demand for gasoline and diesel, fossil fuel consumption in the road sector per unit of gross domestic product declined in the 20 countries examined from 53 44 in 2002 to about 23 kilotonnes oil equivalent per million of gross domestic product in 2008 in the case of gasoline diesel. This report aims at providing the emerging lessons form a representative sample of case studies in 20 developing countries that could help policy makers to address implementation challenges, including overcoming political economy and affordability constraints. Given their usefulness, it is understandable why hundreds of studies have focused on measuring such elasticities for gasoline and diesel fuel consumption. The analysis strongly suggests that current taxes are not well geared towards attaining environmental, budgetary and distributional policy objectives. Removing these subsidies is expected to affect consumer prices by increasing production costs and raising energy prices.

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