Commander, SimonNikoloski, ZlatkoVagliasindi, Maria2015-04-022015-04-022015-04https://hdl.handle.net/10986/21674It is widely accepted that the costs of underpricing energy are large, whether in advanced or developing countries. This paper explores how large these costs can be by focussing on the size of the external effects that energy subsidies in particular generate in two important sectors—transport and agriculture—in two countries in the Middle East and North Africa, the Arab Republic of Egypt (transport) and the Republic of Yemen (agriculture). The focus is mainly on the costs associated with congestion and pollution, as well as the impact of underpriced energy for depletion of scarce water resources, including through crop selection. Quantifying the size of external effects in developing countries has received relatively little analytical attention, although there is a significant body of literature for developed countries. By building on earlier research, as well as employing the United Nations ForFITS model, the paper provides indicative estimates of the external costs of energy subsidies, as manifested in congestion and pollution. The estimates using simulations indicate that these costs could be materially reduced by elimination or reduction of energy subsidies. The paper also describes the impact of energy subsidies on water consumption in a region where water resources are particularly limited. The findings provide further evidence of the adverse and significant consequences of subsidizing energy.en-USCC BY 3.0 IGOPOLLUTION COSTSPOPULATION DENSITIESFUEL PRICE INCREASEPUBLIC TRANSITTRANSPORT SECTORFUEL PRICE INCREASESCOST OF TRAVELCARBON DIOXIDEFOSSIL FUELSPASSENGERSROAD ACCIDENTSENVIRONMENTAL COSTSCAR OWNERSHIPELASTICITYGASOLINEJOURNEYVEHICLE OWNERSHIPTOLLVEHICLE CLASSCOSTS OF CONGESTIONTYPE OF TRANSPORTAIRTRANSPORT PRICINGGREENHOUSE GASVEHICLE CLASSESTRANSPORT SERVICESUNDERGROUNDMODAL CHOICETRANSPORT MODESTRAVEL COSTSFUEL ECONOMYCRASHESAIR POLLUTIONELASTICITIES OF ROAD TRAFFICELASTICITIES OF VEHICLE TRAVELURBAN TRIPSTRANSPORT SYSTEMSEFFICIENT VEHICLESVEHICLE MILESVEHICLE EMISSIONSFUEL USEFUEL PRICE ELASTICITIESEXTERNALITIESVEHICLE TYPESURBAN BUSESTRIPSHIGH ENERGYDRAINAGETRAVEL SURVEYPRICE ELASTICITYTRANSPORT DATAGAS EMISSIONSFUEL TAXESFUELSFUEL COSTSSUBSIDIESINFRASTRUCTURELAND USELONG RUN ELASTICITYBUSESPRIVATE VEHICLESVEHICLE FUEL ECONOMYTRANSPORT NETWORKEMISSIONCONGESTIONDRIVINGTRANSPORTATIONFUEL EFFICIENCYAIR POLLUTION DEATHSPOLICIESMARGINAL EXTERNAL COSTSTRUCKSPRICE ELASTICITIESPUBLIC TRANSPORT NETWORKCARSTRADING PATTERNSACCESSIBILITYTRUCK USEPRICE CHANGESEMISSION FACTORSPETROLEUM GASFUEL PRICESPASSENGERS AS WELLPUBLIC TRANSPORT INFRASTRUCTURECOSTS OF FUELURBAN MOBILITYVEHICLE EFFICIENCYFUEL TAXRAILWAYMINISTRY OF TRANSPORTCARWALKINGTRANSPORT TECHNOLOGIESVEHICLE FUELVEHICLE COSTCOST OF TRANSPORTTRANSPORT ACTIVITYDIESEL FUELRAILFUELMOTOR VEHICLE AIR POLLUTIONTRIPCONGESTION COSTTRANSPORT DEMANDTRANSPORT SYSTEMVEHICLE REGISTRATIONSVEHICLE AIR POLLUTIONDIESELROAD TRANSPORTTRAVEL TIMETRANSPORT POLICIESFUEL COSTFREIGHTROAD TRAFFICURBAN TRANSPORTLONG-DISTANCE TRAVELFUEL SUBSIDIESAUTOMOBILEFUEL-EFFICIENT VEHICLESTRAFFIC CONGESTIONPRICE OF FUELROAD DEATHSTRANSPORT SERVICEENVIRONMENTAL DEGRADATIONGREENHOUSE GAS EMISSIONSVEHICLE TRAVEL ELASTICITYTRANSPORT INFRASTRUCTUREVEHICLESFREIGHT TRANSPORTTRANSPORTATION RESEARCHEMISSIONSTRANSIT BENEFITSGASOLINE CONSUMPTIONFATAL INJURIESLORRIESPOLLUTANT EMISSIONSSUBSIDYTRAFFICTAXGAS CONSUMPTIONPUBLIC TRANSPORT MODESVEHICLE USEMOTOR VEHICLE OWNERSHIPTRAFFIC VOLUMESPEEDSTRAFFIC MANAGEMENTVEHICLEVEHICLE TRAVELROADTRANSPORT ECONOMICSCOSTSCAR OCCUPANCYLAND USE ACCESSIBILITYELASTICITY OF VEHICLE TRAVELROAD SECTORTRANSPORTPOPULATION GROWTHLONG-DISTANCECONGESTION CHARGINGMODE OF TRANSPORTMOBILITYTRAVEL DEMANDROAD INJURIESMODES OF TRANSPORTPOLLUTIONEXHAUST EMISSIONSPRICE SENSITIVITYFUEL CONSUMPTIONTRAFFIC ACCIDENTSINJURYGASOLINE PRICETAXESPRICE CHANGEENERGY CONSUMPTIONVEHICLE USAGETRAVELCOST OF CONGESTIONTRANSITCLIMATE CHANGEVEHICLE FLEETROAD SAFETYCONGESTION COSTSEXCESS FUEL CONSUMPTIONELASTICITIESMOTOR VEHICLETAX SUBSIDIESMOTOR VEHICLESPUBLIC TRANSPORTODOMETERSIGNALSMODAL CHOICESPRICE SENSITIVITIESVEHICLE FUEL EFFICIENCYHIGHWAY ADMINISTRATIONHIGHWAYGASOLINE TAXESRAILWAYSINLAND TRANSPORTFUEL PRICEVEHICLE KILOMETERSACCIDENTSFUEL OILINVESTMENTSCOSTS OF TRANSPORTPEDESTRIANSLONG-RUN ELASTICITIESNOISESAFETYPASSENGER TRANSPORTWorking PaperWorld Bank10.1596/1813-9450-7227