IMF Working Papers

How Large Are Global Energy Subsidies?

By David Coady, Ian W.H. Parry, Louis Sears, Baoping Shang

May 18, 2015

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David Coady, Ian W.H. Parry, Louis Sears, and Baoping Shang. How Large Are Global Energy Subsidies?, (USA: International Monetary Fund, 2015) accessed December 11, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper provides a comprehensive, updated picture of energy subsidies at the global and regional levels. It focuses on the broad notion of post-tax energy subsidies, which arise when consumer prices are below supply costs plus a tax to reflect environmental damage and an additional tax applied to all consumption goods to raise government revenues. Post-tax energy subsidies are dramatically higher than previously estimated, and are projected to remain high. These subsidies primarily reflect under-pricing from a domestic (rather than global) perspective, so even unilateral price reform is in countries’ own interests. The potential fiscal, environmental and welfare impacts of energy subsidy reform are substantial.

Subject: Consumption, Energy prices, Energy pricing, Energy subsidies, Non-renewable resources

Keywords: Demand curve, Energy price reform, Externality cost, Supply cost, WP

Publication Details

  • Pages:

    42

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2015/105

  • Stock No:

    WPIEA2015105

  • ISBN:

    9781513532196

  • ISSN:

    1018-5941