Fossil Fuel Subsidies: Approaches and Valuation

doi:10.1596/1813-9450-7220

Publication:
Fossil Fuel Subsidies: Approaches and Valuation

dc.contributor.author	Kojima, Masami
dc.contributor.author	Koplow, Doug
dc.date.accessioned	2015-03-31T16:59:34Z
dc.date.available	2015-03-31T16:59:34Z
dc.date.issued	2015-03
dc.description.abstract	Numbers ranging from half a trillion to two trillion dollars have been cited in recent years for global subsidies for fossil fuels. How are these figures calculated and why are they so different? The most commonly used methods for measuring subsidies are the price-gap approach -- quantifying the gap between free-market reference prices and the prices charged to consumers -- the inventory approach, which constructs an inventory of government actions benefiting production and consumption of fossil fuels. Practitioners are not faced with two choices. The two methods are complementary and should be used together -- price gaps cause distortions throughout the economy and quantification is needed for improving pricing policies; an inventory is useful for examining budgetary allocation. An inventory based on a full accounting framework for producer and consumer support estimates in fact captures price gaps as market transfers to producers or consumers. Differences in subsidy valuation arise from assumptions made to compensate for missing data and the scope of subsidy measurement. Having a common understanding of terms and standardizing calculation methods would go a long way in enabling comparison of subsidies across countries and sectors, benchmarking pricing, and assessing subsidy policies. Subsidy measurement should not be viewed as a one-off exercise to inform subsidy reform strategies. Just as subsidy reform in many countries does not have a clear end but is a continuous process of adjustment, so too is subsidy tracking. Devoting resources to data collection and analysis to track subsidies on a continuous basis can bring rich dividends by increasing transparency and enabling informed decisions.	en
dc.identifier.doi	10.1596/1813-9450-7220
dc.identifier.uri	https://hdl.handle.net/10986/21659
dc.language.iso	en_US
dc.publisher	World Bank Group, Washington, DC
dc.relation.ispartofseries	Policy Research Working Paper;No. 7220
dc.rights	CC BY 3.0 IGO
dc.rights.holder	World Bank
dc.rights.uri	http://creativecommons.org/licenses/by/3.0/igo
dc.subject	fossil fuels
dc.subject	oil
dc.subject	gas
dc.subject	coal
dc.subject	subsidies
dc.subject	price gap
dc.subject	inventory
dc.subject	producer support estimate
dc.subject	consumer support estimate
dc.subject	total support estimate
dc.subject	OECD
dc.subject	International Energy Agency
dc.subject	International Monetary Fund
dc.title	Fossil Fuel Subsidies	en
dc.title.subtitle	Approaches and Valuation	en
dc.type	Working Paper	en
dc.type	Document de travail	fr
dc.type	Documento de trabajo	es
dspace.entity.type	Publication
okr.crossref.title	Fossil Fuel Subsidies: Approaches and Valuation
okr.date.disclosure	2015-03-23
okr.date.doiregistration	2025-04-10T09:45:39.723199Z
okr.doctype	Publications & Research
okr.doctype	Publications & Research::Policy Research Working Paper
okr.globalpractice	Energy and Extractives
okr.guid	961661467990086330
okr.identifier.doi	10.1596/1813-9450-7220
okr.identifier.report	WPS7220
okr.language.supported	en
okr.topic	Energy::Energy Policies & Economics
okr.topic	Energy::Energy Production and Transportation
okr.topic	Energy::Fuels
okr.topic	Energy::Oil & Gas
okr.topic	Macroeconomics and Economic Growth::Markets and Market Access
okr.topic	Macroeconomics and Economic Growth::Taxation & Subsidies
okr.unit	Energy and Extractives Global Practice Group
relation.isSeriesOfPublication	26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery	26e071dc-b0bf-409c-b982-df2970295c87