Vagliasindi, Maria2012-12-072012-12-072012-07https://hdl.handle.net/10986/11934Poorly implemented energy subsidies are economically costly to taxpayers and damage the environment. This report describes the emerging lessons that could help policy makers to address implementation challenges, including overcoming political economy and affordability constraints. The analysis provides strong evidence of the success of reforms in reducing the associated fiscal burden. For the selected sample of 20 developing countries, the average energy subsidy recorded in the budget was reduced from 1.8 percent in 2004 to 1.3 percent of gross domestic product in 2010. The reduction of subsidies is particularly remarkable for net energy importers. 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). The most notable decline in consumption was recorded in the low-income and lower-middle-income countries. This reflects the much higher rate of growth in gross domestic product in this group of countries. And it underlines the opportunities to influence future consumption behavior rather than modifying the existing consumption patterns, overcoming inertia and vested interests. Similar trends are recorded for power consumption. 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.en-USCC BY 3.0 IGOACCESS TO ELECTRICITYADVERSE IMPACTAIRAIR POLLUTANTSAPPROACHBALANCEBARRIERS TO ENTRYBENCHMARKBONDSCARBONCARBON TAXCLEANER ENERGYCONSUMPTION OF FUELCOST OF ENERGYDEBTDEMAND ELASTICITIESDEMAND FOR ELECTRICITYDEMAND FOR GASOLINEDEVALUATIONDEVELOPMENT POLICYDIESELDIESEL FUELDIESEL FUEL CONSUMPTIONDIESEL FUELSDISTRICT HEATINGDOMESTIC ENERGYDRIVERSECONOMIC VALUEELASTICITIESELASTICITIES OF ROAD TRAFFICELASTICITY OF FUEL CONSUMPTIONELECTRIC POWERELECTRICITYELECTRICITY CONSUMPTIONELECTRICITY DEMANDELECTRICITY DISTRIBUTIONELECTRICITY PRICEELECTRICITY PRICESELECTRICITY SECTORELECTRICITY TARIFFELECTRICITY TARIFFSELECTRIFICATIONEMISSIONSEND-USEENERGY BILLENERGY BILLSENERGY CONSUMERSENERGY COSTSENERGY EFFICIENCYENERGY EXPENDITURESENERGY INTENSITYENERGY NEEDSENERGY POLICYENERGY PRICESENERGY PRICINGENERGY PRODUCTSENERGY SERVICEENERGY SOURCESENERGY SUPPLYENERGY TECHNOLOGIESENERGY USEENVIRONMENTAL POLICYEXPORTSFINANCIAL EFFICIENCYFINANCIAL PERFORMANCEFISCAL POLICIESFOSSILFOSSIL FUELFOSSIL FUEL CONSUMPTIONFOSSIL FUEL PRICESFOSSIL FUELSFUEL PRICEFUEL PRICE INCREASESFUEL SUBSIDIESFUELSGAS SECTORGAS SECTORSGASOLINE CONSUMPTIONGASOLINE PRICESGDPGDP PER CAPITAGREENHOUSEGREENHOUSE GASGROSS DOMESTIC PRODUCTHEATHEAVY OILHEAVY RELIANCEHIGH ENERGYHIGHER ENERGY CONSUMPTIONHOUSEHOLD EXPENDITURESHUMAN CAPITALIMPROVING ENERGY EFFICIENCYINCOMEINCOME EFFECTINCOME GROUPSINCOME LEVELSINEFFICIENCYINELASTIC DEMANDINTERNAL COMBUSTIONINTERNAL COMBUSTION ENGINESKEROSENEMIDDLE INCOME COUNTRIESMOTOR VEHICLESNATURAL GASOILOIL COMPANYOIL EQUIVALENTPER CAPITA INCOMEPERSONAL VEHICLESPETROLEUMPETROLEUM PRODUCTSPILOT PROJECTSPOLITICAL ECONOMYPOWERPOWER CONSUMPTIONPOWER PLANTSPOWER SECTORPOWER SECTORSPRICE ELASTICITYPRICE OF DIESELPRICE OF ELECTRICITYPRICE OF GASOLINEPRICE SUBSIDIESPRIVATE TRANSPORTPRODUCTION OF POWERPUBLIC TRANSPORTREAL INCOMEREGULATORY FRAMEWORKRESIDENTIAL CONSUMERSRESIDENTIAL ENERGYROADROAD SECTORRURAL ELECTRIFICATIONSAFETYSAFETY NETSSPACE COOLINGSPACE HEATINGSUSTAINABLE DEVELOPMENTSUSTAINABLE ENERGYTARIFF STRUCTURETRANSPORTTRANSPORT SECTORTRANSPORTATIONTRUEUTILITIESVEHICLESWELFARE LOSSESWorld Bank10.1596/1813-9450-6122