The impact of phasing out fossil fuel subsidies on the low-carbon transition
By I. Monasterolo, Marco Raberto. Energy Policy, 2019
150 citations recorded by the source corpus.
There is growing consensus on the fact that fossil fuel subsidies provided by governments in high-income countries represent a misalignment on emissions’ reduction with the global climate agenda. In addition, a discussion emerged on the negative socio-economic and environmental externalities associated with fossil fuel subsidies. Nevertheless, pathways for phasing out fossil fuel subsidies in high income countries and their implications on the low-carbon transition have not yet been assessed. With the aim to narrow this knowledge gap, we extend the EIRIN Stock-Flow Consistent behavioral model to study the implications on sustainable development of the gradual phasing out of fossil fuels subsidies, whose revenues could be used by the government to subsidize energy investments in green capital (e.g. solar panels), either via fiscal policies or green bonds. We assess the effects on green growth, employment, credit and bonds market, as well as the distributive effects across heterogeneous households and sectors. A smooth phasing out of fossil fuels subsidies contributes to improve macroeconomic performance, to decrease inequality and helps the government to find fiscal space to support stable renewable energy policies. Renewable energy subsidies contribute to foster the low-carbon transition but could imply distributive effects, depending on the way in which they are implemented.
Subfields: Economics and Econometrics, Renewable Energy, Sustainability and the Environment
View Paper: https://www.semanticscholar.org/paper/c3d51ab22c1181ae3d2aaf56da4c9de70e9352dd
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In Economics and Econometrics
In Renewable Energy, Sustainability and the Environment
Citations in the corpus
- How can green differentiated capital requirements affect climate risks? A dynamic macrofinancial analysis (2020, unknown): “In line with agent-based and SFC models (see e.g. Caiani et al., 2016; Monasterolo and Raberto, 2019), we assume that agents make decisions under fundamental uncertainty in which microeconomic variables are determined via macroeconomic interactions.”
- Climate Change and the Financial System (2020, background): “Introduce forward-looking climate risks into financial risk metrics (such as the Climate Spread and the Climate VaR) used by private and public decision makers (Battiston et al., 2017, Monasterolo et al., 2018, Battiston and Monasterolo, 2019); 4.”