eBook

Implementing energy subsidy reforms

Vagliasindi, Maria

2012,2013,2014

Overview

Poorly implemented energy subsidies are economically costly to taxpayers and damage the environment. This report aims at providing the emerging lessons form a representative sample of case studies in 20 developing countries that could help policy makers to address implementation challenges, including overcoming political economy and affordability constraints. The sample has selected on the basis of a number of criteria, including the country’s level of development (and consumption), developing country region, energy security and the fuel it subsidies (petroleum fuel, electricity, natural gas). The case studies were supported by data collection related to direct budgetary subsidies, fuel and electricity tariffs, and household survey data.The analysis provides strong evidence of the success of reforms in reducing the associated fiscal burden. For the sample of countries, the average energy subsidy recorded in the budget was reduced from 1.8% in 2004 to 1.3%GDP in 2010. The reduction of subsidies is particularly remarkable for net energy importers. Pass-through of international fuel prices was also notable in the case of electricity generated by fossil fuel. For the sample of countries, the average end-user electricity tariff increased by 50%, from USD 6 cents in 2002 to USD 9 cents per kWh in 2010.In spite of the relatively price inelastic demand for gasoline and diesel, fossil fuel consumption in the road sector (per unit of GDP) declined in the 20 countries examined from 53 (44) in 2002 to about 23 kt oil equivalent per million of GDP in 2008 in the case of gasoline (Diesel). The most notable decline in consumption was recorded in the low and lower middle income countries. This reflects the much higher rate of growth in GDP in this group of countries and underlines the opportunities to influence future consumption behavior rather than modifying the existing consumption patterns, overcoming inertia and vested interests. Similar trends are recorded for power consumption.While there is no one-size-fits-all model for subsidy reform, implementation of compensatory social policies and an effective communication strategy, before the changes are introduced, reduces helped with the implementation of reforms.

• Publisher: THE WORLD BANK,World Bank,World Bank Publications,The World Bank,Washington, DC: World Bank
• Subject: AIR CONDITIONING / ANECDOTAL EVIDENCE / APPROACH / Armut / AVAILABILITY / BALANCE / BARRIERS TO ENERGY EFFICIENCY / BUILDING CODES / BUS032000 - BUSINESS & ECONOMICS / CARBON DIOXIDE / CARBON FINANCE / CARBON FINANCE OPERATIONS / CARBON FINANCING / CERTIFICATION CENTER / CERTIFIED EMISSION REDUCTION / CLEAN ENERGY / CLIMATE / CLIMATE CHANGE / CLIMATE CHANGE MITIGATION / COAL / COGENERATION / COMMERCIAL ENERGY / COMMERCIAL EQUIPMENT / COMMITMENT TO ENERGY EFFICIENCY / COOLING / Developing countries / DISTRICT HEATING / DISTRICT HEATING SYSTEMS / ECONOMIC ACTIVITY / ECONOMIC GROWTH / Economic incentives / EFFICIENCY GAINS / EFFICIENCY IMPROVEMENT / EFFICIENCY IMPROVEMENTS / EFFICIENCY POTENTIAL / EFFICIENT EQUIPMENT / ELECTRIC POWER / ELECTRICITY / ELECTRICITY CONSUMPTION / EMISSION / EMISSION REDUCTIONS / END USE / END USER / END USERS / END USES / END-USE CONSUMPTION / Energiekonsum / Energiepolitik / Energy / Energy assistance / ENERGY AUDIT / ENERGY AUDITING / ENERGY AUDITS / ENERGY BILL / ENERGY BILLS / ENERGY CONSERVATION / ENERGY CONSERVATION PRODUCTS / ENERGY CONSUMERS / ENERGY CONSUMPTION / Energy consumption -- Developing countries / ENERGY COST SAVINGS / ENERGY COSTS / ENERGY CRISIS / ENERGY DEMAND / ENERGY EFFICIENCY / ENERGY EFFICIENCY FINANCE / ENERGY EFFICIENCY IMPROVEMENT / ENERGY EFFICIENCY IMPROVEMENTS / ENERGY EFFICIENCY INVESTMENTS / ENERGY EFFICIENCY MARKET / ENERGY EFFICIENCY MEASURES / ENERGY EFFICIENCY PROGRAMS / ENERGY EFFICIENT EQUIPMENT / ENERGY MANAGEMENT / ENERGY NEEDS / ENERGY OUTLOOK / ENERGY OUTSOURCING / ENERGY PERFORMANCE / ENERGY PERFORMANCE CONTRACTING / Energy policy / Energy policy -- Developing countries / ENERGY PRICES / ENERGY PRICING / ENERGY PRODUCTION / ENERGY REDUCTION / ENERGY RESEARCH / ENERGY SAVINGS / ENERGY SAVINGS PERFORMANCE / ENERGY SAVINGS PROJECTS / ENERGY SECURITY / ENERGY SERVICE / ENERGY SERVICE COMPANIES / ENERGY SERVICE COMPANY / ENERGY SERVICE PROVIDERS / ENERGY SERVICES / ENERGY SUPPLIERS / ENERGY SUPPLY / ENERGY SYSTEMS / ENERGY USE / Entwicklungsländer / ENVIRONMENTAL IMPACTS / ENVIRONMENTAL PROTECTION / ESP / FINANCIAL PERFORMANCE / FINANCIAL RETURNS / FINANCIAL SERVICES / FOSSIL / Fossil Fuel Subsidies-Electricity Tariff Reforms-Fiscal Reforms-Safety Nets-Affordability-energy Efficiency-Energy Regulation-Targeted Subsidies-Lifeline Tariffs-Welfare Impact of Subsidy Removal / FOSSIL FUELS / FREE ENERGY / FUEL / GLOBAL ENVIRONMENT / GREENHOUSE / GREENHOUSE GAS / GREENHOUSE GAS EMISSIONS / GROSS DOMESTIC PRODUCT / GROWTH IN ENERGY DEMAND / HEAT / HEAT RECOVERY / IMPROVING ENERGY EFFICIENCY / INCOME / Infrastructure / Infrastructure Economics and Finance / INFRASTRUCTURE INVESTMENT / INTERNATIONAL ENERGY AGENCY / INVESTMENTS IN ENERGY / INVESTMENTS IN ENERGY EFFICIENCY / JOBS / LIGHTING / LOAD MANAGEMENT / LOWER COSTS / MARKET FOR ENERGY / MARKET FOR ENERGY EFFICIENCY / METHANE / MUNICIPAL WATER SUPPLY / NATURAL RESOURCES / OIL / OIL COMPANY / OIL EQUIVALENT / OIL PRICES / PENALTIES / PERFORMANCE STANDARDS / PIPELINE / Policy implementation / POLLUTION / Poor / Poor -- Energy assistance -- Developing countries / PORTFOLIO / POWER / POWER GENERATION / PRESENT VALUE / PRIMARY ENERGY / PRINCIPAL-AGENT / PROMOTING ENERGY EFFICIENCY / Public Sector Development / QUALITY ENERGY / Reform / RENEWABLE ENERGIES / RENEWABLE ENERGY / RENEWABLE ENERGY DEVELOPMENT / RISK MANAGEMENT / Subsidies / Subvention / SUSTAINABLE DEVELOPMENT / TONS OF CARBON / TOTAL ELECTRICITY CONSUMPTION / TOTAL ENERGY CONSUMPTION / TRANSACTION COSTS / TRANSACTIONS COSTS / TYPES OF ENERGY / UTILITIES / UTILITY BILLS / UTILITY DEMAND-SIDE MANAGEMENT / VEHICLES / VENTILATION / WASTE / WASTE RECYCLING / WASTEWATER TREATMENT / WORLD ENERGY / WORLD ENERGY OUTLOOK
• ISBN: 0821395610, 0821395629, 9780821395622, 9780821395615