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Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels 2013

image of Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels 2013
This Inventory is concerned with direct budgetary transfers and tax expenditures that relate to fossil fuels, regardless of their impact or of the purpose for which the measures were first put in place. It has been undertaken as an exercise in transparency, and to inform the international dialogue on fossil-fuel subsidy reform. For each of the 34 OECD countries covered, the Inventory provides a succinct summary of its energy economy, and of the budgetary and tax-related measures provided at the central-government level (and, in the case of federal countries, for selected sub-national units of government) relating to fossil-fuel production or consumption. The transfers associated with these measures are reported for recent years using the Producer Support Estimate (PSE) and Consumer Support Estimate (CSE) as organising frameworks. These frameworks have already been used extensively by the OECD, most notably in respect of agriculture. The Inventory covers a wide range of measures that provide a benefit or preference for a particular activity or a particular product, either in absolute terms or relative to other activities or products, against a specified baseline. Many measures listed in this inventory are relative preferences within a particular country’s tax system rather than absolute support that can be readily compared across countries, and for that reason no national totals are provided.

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Introduction

This chapter describes the coverage, method and data sources used to compile the country information contained in the Inventory. It also examines the way in which this information should be interpreted, with particular attention devoted to the concept of tax expenditures given its relative importance for the report. A distinction is made among tax expenditures based on whether they relate to the consumption of fossil fuels, to the use of fossil fuels as inputs to production, or to the production of fossil fuels. Measurement issues are also examined, in particular the role of tax benchmarks and the importance of the broader tax system to understand the meaning of tax-expenditure estimates. Lastly, this chapter provides an overview of OECD-wide support to the production and use of fossil fuels in the form of a few summary charts and statistics.

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