In the “about-to-be-published” (Novemeber 9) World Energy Outlook, emphasizes the importance of reforming the fossil-fuel subsidies. Their claim is that
Removing inefficient subsidies would raise national revenues and reduce greenhouse-gas emissions, according to OECD and IEA analyses.
It seems that the IEA expects not only lower expenditure on subsidies and thereof higher revenues on the taxation side, but also boosting economic development and growth.
Both developing and developed countries need to phase out inefficient fossil fuel subsidies. As they look for policy responses to the worst economic crisis of our lifetimes, phasing out subsidies is an obvious way to help governments meet their economic, environmental and social goals.
said OECD Secretary-General Angel Gurria (in IEA press release)
What is struck me, is that the fossil-fuel subsidies, according to IEA and OECD, were 20% 30% higher in 2010 (USD 409 billion) than in 2009 (USD 300 billion). Even with all the anti-fossil fuel movements, An Inconvenient Truth, and high profile alternative energy evangelists!
Lets wait for November 9th for detailed report.
Photo by thematchfactory.com.
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2 Comments on "OECD & IEA: Reforming Fossil-Fuel Subsidies Will Improve The Economy"
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You don’t have to wait until 9 November for the report.First of all, the full OECD report is available on-line for free:www.oecd.org/iea_oecd_ffss It covers 24 of the OECD’s 34 member countries. Those “subsidies” (we prefer to use the term “support”) have been stable over the last 6 years, rising and falling mainly because of the effects of changing oil prices on Mexico’s price stabilization fund.There is also a PDF document showing the consumption subsidies estimated by the IEA for the 38 developing and emerging countries. These are countries in which at least some fossil fuels (or electricity generated from fossil fuels) are sold domestically at lower than world prices. The value of these subsidies — which arise from policies that strive to keep internal prices artificially low — naturally rise and fall with the international prices of oil, natural gas and coal. The changes have less to do with changes in policies. However, to give credit where credit is due, China has over the last two years moved closer to adopting market-based pricing. So there have been some reforms.
Thanks for the comment, unfortunatelly the link is not working. So here is the direct link to PRELIMINARY Report.I understand and know that there were reforms and it is exactly this that struck me. Although there are reforms and we are all getting into “green economy” the subsidies acctually has rose.