How Large are Global Energy Subsidies?

By David Coady, Ian W. H. Parry, L. Sears, Baoping Shang. Social Science Research Network, 2015

456 citations recorded by the source corpus.

This paper estimates fossil fuel subsidies and the economic and environmental benefits from reforming them, focusing mostly on a broad notion of subsidies arising when consumer prices are below supply costs plus environmental costs and general consumption taxes. Subsidies are $4.9 trillion worldwide in 2013 and $5.3 trillion in 2015 (6.5 percent of global GDP in both years). Undercharging for global warming accounts for 22 percent of the subsidy in 2013, air pollution 46 percent, broader vehicle externalities 13 percent, supply costs 11 percent, and general consumer taxes 8 percent. China was the biggest subsidizer in 2013 ($1.8 trillion), followed by the United States ($0.6 trillion), and Russia, the European Union, and India (each with about $0.3 trillion). Eliminating subsidies would have reduced carbon emissions in 2013 by 21 percent and fossil fuel air pollution deaths 55 percent, while raising revenue of 4 percent, and social welfare by 2.2 percent, of global GDP.

Subfields: Economics and Econometrics, Environmental Engineering, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/cfe157aa8bed3cf99c2583a3990dc3df42056696

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Citations in the corpus

Investment Needs to Achieve the Sustainable Development Goals Understanding the Billions and Trillions (2015, unknown): “Methodology detailed in McIntyre & Meheus (2014). n/a Builds on prior work presented by Beaglehole et al. (2008).”
The ‘2°C capital stock’ for electricity generation: Committed cumulative carbon emissions from the electricity generation sector and the transition to a green economy (2016, background): “It is certainly time, as the IMF has argued, to cut subsidies for fossil fuel use [64].”
Reviewing, Reforming, and Rethinking Global Energy Subsidies: Towards a Political Economy Research Agenda (2017, unknown): “They updated their figures in 2015 to put the amount at $5.3 trillion, or 6.5% of global GDP,with the largest subsidies in absolute terms in China ($2.3 trillion), the United States ($699 billion), and Russia ($335 billion) (Coady et al., 2015).”
Analyzing the Characteristics of Green Bond Markets to Facilitate Green Finance in the Post-COVID-19 World (2021, background): “Another form of subsidy, an indirect one, takes place when fossil fuel companies are not taxed efficiently [15].”
Sustainability guardrails for energy scenarios of the global energy transition (2018, background): “These same subsidies for fossil fuels result in premature deaths through local air pollution, exacerbate congestion of vehicles and increase atmospheric greenhouse gas concentrations [57].”
Economic growth and development with low‐carbon energy (2017, background): “There are also policy distortions, not least the subsidization of fossil fuels and the underpricing of energy (OECD 2015; Coady et al. 2015).”
Social tipping dynamics for stabilizing Earth’s climate by 2050 (2020, background): “(68) argue that eliminating subsidies for fossil fuels would have reduced global carbon emissions in 2013 by 21%.”
Realizing the Full Potential of Social Safety Nets in Africa (2018, result): “Energy subsidies: Coady et al. 2015. Other data: WDI (World Development Indicators) (database), World Bank, Washington, DC, http://databank.worldbank.org / data / reports .aspx ? source=world-development-indicators. Note: See methodology in appendix B.4 and more details in appendix G, table G.1. Dat”
Reforming fossil fuel subsidies: drivers, barriers and the state of progress (2017, background): “At the local level, removing subsidies can help curb traffic congestion, pollution and associated health threats (Coady et al., 2015; Commander et al., 2015; Davis, 2014; IMF, 2013a) (Figure 5).”