This paper focuses on how to undertake energy subsidy reform in light of country experiences. The paper reviews the challenges arising from energy subsidies, emphasizing their fiscal costs, adverse macroeconomic and environmental impacts, and the regressive distribution of subsidy benefits. A novel feature of the paper is that it presents the most comprehensive estimates of energy subsidies available covering petroleum products, electricity, natural gas, and coal. A central objective of the paper is to learn from past subsidy reform experiences, both successful and otherwise, to identify key design features that can facilitate reform.
The paper draws on lessons from international reform experiences from 22 country case studies (covering 28 reform episodes) undertaken by IMF staff, which are provided in a supplement to this paper.
Developing countries are faced with the dual challenge of reducing poverty while improving management of natural capital and mitigating the emission of greenhouse gases (GHG) and local pollutants. The challenge is particularly acute for large, rapidly growing economies, such as India, China and Brazil. In 2007 the Energy Sector Management Program (ESMAP) and the World Bank began to provide support to countries to develop long-term frameworks for reducing GHG emissions in a way that is compatible with economic growth objectives. This report presents lessons learned from seven country studies. These include: countries must take the leading role; adopt a flexible approach and build a multi-disciplinary team; stakeholder engagement and consensus building is essential; allow sufficient time and resources; and invest in data and tools. The report is intended as a practical guide for government officials, practitioners and development agencies involved in low carbon development planning.
This summary was prepared by Eldis.
In June 2012, the Green Infrastructure Finance Framework Report was published to address the constraints in financing green infrastructure and to develop a new approach to accelerate investments in low-emission technologies. The approach includes a financing and advisory interface, which clarifies the principles and concepts of the shared financing roles recommended by the methodology. The Framework attempts to bring clean investments towards a more familiar financing environment and to distance them from the charged political debate that has adversely affected the progress in international climate change discussions for over a decade. The detrimental effect of climate change is growing, yet clean investments are still grossly insufficient making it necessary to rethink the approach to greening the global energy mix. The need for some level of concessional financing or outright subsidy support is widely understood but the approach must be equitable, non-political and deliver a sufficient level of support.
In order to achieve long-term sustainable growth, countries in Sub-Saharan Africa need to adapt their economies and growth models taking 'Green Growth' or 'Green Economy' concepts into account. Only in a scenario, where economic growth and the conservation and sustainable management of natural resources are equally taken into consideration, poverty can be reduced in a sustainable way. On behalf of the German Federal Ministry of Economic Cooperation and Development (BMZ), GIZ supports partner countries in the transition towards a Green Economy, helping them to use upcoming opportunities, manage political risks throughout the transformation process, and tap into new markets and products based on a green economy.
Each of the last several years has seen a fresh record high in global carbon dioxide emissions, and scientists say if this trend continues the planet will suffer a catastrophic increase in temperature. With electricity generation responsible for about half of recent growth in emissions, a new IEA book looks at ways the power sector can keep up with an improvement in global living standards while minimising the risk of drastic climate change.
In Electricity in a Climate-Constrained World, IEA experts consider potential solutions ranging from the design of a Chinese emissions trading programme to stand-by consumption of networked appliances to carbon capture and storage.
The book lays out the reasons electricity generation must get cleaner, and do so quickly. Higher temperatures will affect all aspects of human life, including the very electricity sector that emits so much of the cause of climate change.