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Subsidy Reform and Sustainable Development

Political Economy Aspects

image of Subsidy Reform and Sustainable Development

Unsustainable subsidies are pervasive in the industry, agriculture, transport and energy sectors of most OECD countries. They are expensive for governments and can have harmful environmental and social effects. Eliminating these supports requires comprehensive approaches which are supported by top political leadership, transparent in their potential effects on all parties, consistent over the long-term, and often accompanied by transition supports. This volume uses sectoral case studies to illustrate that achieving change in structural policies such as subsidies depends largely on good governance practices.

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A Sustainable Development Framework forAssessing the Benefits of Subsidy Reform

A central tenet of sustainable development is that activities in any one of the economic, social, or environmental spheres of human endeavour will frequently generate impacts in one or both of the other two spheres. Subsidies are economic in their initial impact, but can also generate important social or environmental consequences. Analysing subsidies from the perspective of sustainable development requires that these consequences be considered in an integrated fashion.

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