Energy Subsidies: Lessons Learned in Assessing their Impact - UNEP

More documents

Recommendations

Info

Energy Subsidies: Lessons Learned in Assessing their Impact and Designing Policy Reforms about more efficient energy-resource allocation and use. The gradual shift in subsidies away from fossil fuels towards energy efficiency and renewables in many countries reflects a genuine attempt to question the rationale for established subsidy schemes and a growing recognition of the damage that many of them do to the environment, to the economy and to social welfare. In many such cases, considerable progress has been made in overcoming resistance to reforms by communicating the potential benefits to the general public and implementing them in a way that minimises the impact on particular social groups. Understanding the effects of energy subsidies is crucial to designing appropriate reforms. Considerable progress has been made in developing methodologies for identifying the relationships between subsidy polices and broader economic and social indicators, although quantifying those effects in practice remains highly complex. Various methodological approaches that can be used to assess quantitatively the economic, environmental and social effects of energy-subsidy reform in an integrated way are reviewed in more detail in the annex that follows this chapter. References International Energy Agency (IEA) (1999), Looking at Energy Subsidies: Getting the Prices Right. United Nations Environment Programme (UNEP)/International Energy Agency (IEA) (2002), Reforming Energy Subsidies. World Bank (2000), Energy Services for the World’s Poor: Energy and Development Report 2000. 154
Annex: Methodological Approaches to Analysing Energy Subsidy Reform Annex: Methodological Approaches to Analysing Energy Subsidy Reform This annex describes various methodological approaches to examining the economic, environmental and social effects of energy-subsidy reform in an integrated way. In principle, the volume of pollution associated with energy use under a subsidised regime would be reduced if support were removed since the level of energy supply would normally fall. Economic gains are also possible as a result of reduced government expenditure on subsidies and improved efficiency in the economy. Any economic or environmental effects resulting from subsidy reform will also have a social dimension, affecting some socio-economic groups more than others. Integrated assessment of different effects requires measuring the welfare effects in the same way. The assessment needs to be carefully tailored to the local context. Involvement of stakeholders in assessing the effects of energy-subsidy reform in an integrated manner and gaining support for policy action is critical. A1 Assessing Economic Effects Various methodologies for assessing the economic impact of reform of energy subsidies exist. Data availability and other institutional constraints may limit their applicability to particular countries and regions. The range of methodologies presented here is by no means comprehensive, but is intended to reflect those that are well established as well as some that remain in development. Established methodologies that are appropriate for the assessment of economic impacts of energy subsidy reform are based on models of the economy that detail the relationships between key economic variables within a market or markets. Such models are built using theoretical and empirical estimates of these relationships. To a large degree, the sophistication of the analysis depends on the number of market inter-dependencies that are considered. It should be emphasised in the context of energy-subsidy reform that a reliance on market-based economic analysis limits our depth of understanding in economies with widespread stateownership. Equally, application of this type of analysis is inappropriate in areas such as Sub- Saharan Africa, where non-market transactions make up a significant part of the economy. A1.1 Partial Equilibrium Analysis The simplest type of analysis, known as partial equilibrium analysis, considers only the market directly impacted by the proposed subsidy reform and identifies price and output changes in that market. The analytical framework is known as demand and supply analysis. It is most often illustrated in diagrammatic terms, as in Figure A1. 155
Page 3 and 4:
© Copyright 2003 UNEP This publica
Page 5 and 6:
Acknowledgements Acknowledgements T
Page 7 and 8:
United Nations Environment Programm
Page 9 and 10:
Contents Contents Foreword 1 Acknow
Page 11 and 12:
Contents 8.2.3 Renewable Energy Sou
Page 13 and 14:
Executive Summary Executive Summary
Page 15 and 16:
Executive Summary Summary of Findin
Page 17 and 18:
Executive Summary employment in dom
Page 19 and 20:
Abbreviations and Acronyms Abbrevia
Page 21 and 22:
Energy Subsidies: Lessons Learned i
Page 23 and 24:
Page 25 and 26:
Page 27 and 28:
Page 29 and 30:
Page 31 and 32:
Page 33 and 34:
Page 35 and 36:
Energy Subsidies in OECD Countries
Page 37 and 38:
Page 39 and 40:
Page 41 and 42:
Page 43 and 44:
Page 45 and 46:
Page 47 and 48:
Page 49 and 50:
Energy Subsidies in the Czech and S
Page 51 and 52:
Page 53 and 54:
Page 55 and 56:
Page 57 and 58:
Page 59 and 60:
Page 61 and 62:
Page 63 and 64:
Page 65 and 66:
Page 67 and 68:
Energy Subsidies in Russia: The Cas
Page 69 and 70:
Page 71 and 72:
Page 73 and 74:
Page 75 and 76:
Electricity Subsidies in India 6. E
Page 77 and 78:
Electricity Subsidies in India (SEB
Page 79 and 80:
Electricity Subsidies in India rura
Page 81 and 82:
Page 83 and 84:
Electricity Subsidies in India Usin
Page 85 and 86:
Electricity Subsidies in India and
Page 87 and 88:
Electricity Subsidies in India For
Page 89 and 90:
Oil Subsidies in Indonesia 7. Oil S
Page 91 and 92:
Oil Subsidies in Indonesia Table 7.
Page 93 and 94:
Oil Subsidies in Indonesia 7.4 Econ
Page 95 and 96:
Energy Subsidies in Korea 8. Energy
Page 97 and 98:
Energy Subsidies in Korea been used
Page 99 and 100: Energy Subsidy Reform in Iran 9. En
Page 101 and 102: Energy Subsidy Reform in Iran Table
Page 105 and 106: Energy Subsidy Reform in Iran Figur
Page 109 and 110: Energy Subsidy Reform in Iran The e
Page 111 and 112: LPG Subsidies in Senegal 10. LPG Su
Page 113 and 114: LPG Subsidies in Senegal and charco
Page 115 and 116: LPG Subsidies in Senegal Figure 10.
Page 117 and 118: LPG Subsidies in Senegal Effective
Page 119 and 120: LPG Subsidies in Senegal References
Page 121 and 122: Energy Subsidies: Lessons Learned i
Page 131 and 132: Analysis of Findings of Country Cas
Page 143 and 144: Designing and Implementing Energy S
Page 149: Designing and Implementing Energy S
Page 153 and 154: Annex: Methodological Approaches to
show all

Energy Subsidies: Lessons Learned in Assessing their Impact - UNEP

Create successful ePaper yourself

Delete template?

Save as template?