Contributed by Kerryn Lang at www.iisd.org

This is the 2nd paper to be published in the series 'Untold Billions: Fossil-fuel subsidies, their impacts and the path to reform'.

Subsidies are powerful instruments and when granted to fossil fuels, which are at the heart of all modern economies, subsidies have impacts throughout the economy, society and environment. Understanding the complex trade-offs between the different impacts of subsidy reform is a challenge for any government considering phasing out fossil-fuel subsidies.

In this report, Jennifer Ellis provides a detailed literature review, focusing on the six modeling studies in the last 20 years that have attempted to analyze global impacts of subsidies for all fuels. The studies mostly considered effects on greenhouse gas emissions and gross domestic product, but very little of the work has considered other environmental impacts or social impacts. The paper highlights a number of areas where further research should be undertaken but concludes that there is already enough evidence to demonstrate the significant environmental and economic benefits of phasing out fossil-fuel subsidies, and recommends that policy-makers do not delay in beginning the reform process.

As part of the 'Untold Billions' series, support for the paper "Gaining traction: the importance of transparency in accelerating the reform of fossil-fuel subsidies"* *was generously provided by the United Nations Environment Program (UNEP).

Further information

Contact: Ms. Kerryn Lang
klang at iisd.org or +41.22.917.8920

Web: www.globalsubsidies.org/en/research/political-economy