| Table 9.3: Summary results from case studies on
energy subsidy removal (note that subsidies are defined in various ways
and are not comparable) |
 |
| Study |
Subsidy or group of
subsidies removed |
Monetary equivalent
of distortion (US$
million, various
years, 1988 –to 1995) |
Decrease in annual
CO2 emissions relative
to reference scenarios
resulting from reforms
by 2010 million tonnes |
Other economic effects
of removing subsidies |
|
Larsen and
Shah (1995) |
Global price subsidies to consumers of fossil fuels
(difference between domestic
and world prices)b |
215,000 |
1366a |
Enhanced economic growth. |
| GREEN |
Global price subsidies to consumers of fossil fuels (difference between
domestic and world prices)b |
235,000 |
1,800 in 2000
1,5000 in 2050 |
Enhanced economic growth in
most regions, largest in CIS.
Improved terms-of-trade for
non-OECD countries. |
DRI
(1994) |
Coal PSEs in Europe and Japan |
5,800 |
10 (DRI estimate)
>50 (OECD estimate) |
Job loss in coal industry,
increased coal trade. |
| Böhringer |
Coal in Germany |
6,700 |
NQ |
Nearly 1% GDP increase. Job loss
in coal industry, increased coal
trade. Cost of using subsidies to
maintain jobs is 94–145,000 DM
per job/year. Reduces cost
of meeting CO2 target. |
| Australia |
State procurement/planning
Barriers to gas and electricity
trade
Below-market cost financing |
133
1,400
NQ |
0.3
0.8
NQ |
Reduces cost of meeting CO2 target.
Reduces cost of meeting CO2 target. |
| Italy |
Net budgetary subsidies to the
electricity supply industry (ESI)
VAT below market rate
Subsidies to capital
Excise tax exemption for
fossil fuels use by ESI
Total net and cross-subsidies |
4,000
300
1,500
700
10,000 |
12.5
0.6
3.3
5.9
19.2 |
Reduces cost of meeting CO2 target/makes CO2 tax
more effective. |
| Norway |
Barriers to trade |
NQ |
8 for Nordic region |
|
| Russia |
Direct subsidies and price
control for coal
Price control/debt forgiveness
for electricity consumers |
3,600
6,000 |
120
(about half caused by shift from coal to other fuels, half to reduced
final energy demand) |
1% drop in employment
(but note that model included no
subsidy recycling mechanism). |
| UK |
Grants and price supports for
coal and nuclear producers
VAT on electricity below
general rate |
2,500
1,200
|
0 to 40
0.2 |
|
| USA |
DFI (1993) analysis of federal
subsidies
DJA (1994) analysis of federal
subsidies |
8,500c
15,400c |
10
64 |
GNP increased 0.2% if revenue
used to reduce capital taxes. |
|