## How Large Are Global Energy Subsidies?

_IMF Working Papers, May 18, 2015_

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## Bibliographic details
- Authors: David Coady, Ian W.H. Parry, Louis Sears, Baoping Shang
- Published: May 18, 2015
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781513532196.001

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### 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.

### Key Findings and Concepts
- Post-tax energy subsidies are substantially larger than earlier estimates.
- The subsidy concept used: consumer price < supply cost + environmental damage tax + general consumption tax.
- Under-pricing is mainly a domestic issue, implying national-level gains from unilateral reform.

### Projections and Implications
- Post-tax energy subsidies are projected to remain high (phrase preserved from source).
- Fiscal, environmental, and welfare impacts from subsidy reform are described as substantial.

### Policy-Relevant Themes
- Unilateral price reform can be in a country’s own interest because under-pricing primarily reflects domestic perspectives.
- Addressing post-tax subsidies requires accounting for supply costs, externality (environmental) costs, and general consumption taxation.

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_Source: https://www.imf.org/en/publications/wp/issues/2016/12/31/how-large-are-global-energy-subsidies-42940_