1887

OECD Environment Working Papers

This series is designed to make available to a wider readership selected studies on environmental issues prepared for use within the OECD. Authorship is usually collective, but principal authors are named. The papers are generally available only in their original language English or French with a summary in the other if available.

English

Designing fossil fuel subsidy reforms in OECD and G20 countries

A robust sequential approach methodology

Reform of support for fossil fuels is often identified as a priority for a country’s fiscal consolidation efforts and for climate action to align financial flows with low-carbon pathways. Its implementation, however, remains elusive for many countries as they face seemingly irreconcilable policy agendas of economic growth and sustainability coupled with potential political backlash against austerity and rising costs. This paper provides a sequential approach that may assist in providing support for the analysis to a well-informed reform process. Deploying the suggested tools can help policy makers to identify the most distorting government support measures and alternative or complementary policies that deliver the sought-after objectives more efficiently and effectively. The work presented here draws on the OECD’s longstanding experience and tradition in measuring and tracking support measures for fossil fuels, primarily in its Inventory of Support Measures for Fossil Fuels (Inventory hereafter) and accompanying reports.

English

Keywords: reform, government support, tax incentives, tax expenditures, oil, fossil fuel subsidy reform, gas, energy, coal, fossil fuel subsidies, subsidies, fossil fuels
JEL: E64: Macroeconomics and Monetary Economics / Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook / Incomes Policy; Price Policy; Q54: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Climate; Natural Disasters and Their Management; Global Warming; Q58: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environmental Economics: Government Policy; H23: Public Economics / Taxation, Subsidies, and Revenue / Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies; Q38: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Nonrenewable Resources and Conservation / Nonrenewable Resources and Conservation: Government Policy
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