Energy Subsidies – Moving ahead on reform
2 October 2013
Peter Wooders, Senior Economist, IISD & Programme Leader, Global Subsidies Initiative
What we do
Support reform of energy subsidies…..
….which act against sustainable development
By being a trusted partner and expert advisor…..
…..ideally to governments
Propose sustainable alternatives (renewables, green economy, energy intensive industry & CC)
Subsidies that undermine sustainable development
ECONOMIC: inefficient use of scarce public resources; perverse market
distortions; increased volatility
ENVIRONMENTAL: can incentivize waste, resource depletion, pollution; and absolve producers of liability for accidents
SOCIAL: inefficient welfare policies; can damage poor producer competitiveness;
environmental impacts deepen poverty; can lead to rent-seeking and corruption
Fossil FuelsUS$400-700 bn/year - oil
consumers keyBut >US$100 bn to
producers, including in OECD Biofuels
>US$20 bn/yearMostly developed
countries, but growing worldwide
NuclearScale unknown
Industry depends on subsidy
AgricultureUS$384 bn in 2009Over-production in
developed countries very trade-distorting
IrrigationScale unknown
GSI estimates US$1 bn in Spain, >US$0.5 bn in
4 Indian States
FisheriesUS$15-35 bn/year –
25% of industry revenueUS$50 bn/year lost from
depleted stocks
Building support
• Organize internally• Gather information and understand
perceptions• Raise awareness and change
attitudes
Assess adequacy of internal organisation and promote improvementsConduct research to identify and map stakeholder groups and opinionsRaise awareness
The IISD Global Subsidies Initiative
Fossil-Fuel Subsidies: International
GSI’s objectives and role: 1. Support government forums to address FFS
reform• GSI officially engaged by Friends group to provide
support• Input to G20 and APEC processes• Identify opportunities in UNFCCC and other forums
2. Facilitate civil society dialogue and cooperation• Co-chair of Civil-20 Energy & Environment GroupOpportunities: role for IISD as “thought leader” to give
vision, strategy and better coordinate CSO strategies and actions
Note: others increasingly moving into the field including IOs and international civil society groups – need to partner effectively
Options for a G20 peer review on FFSR:Review teams
Host country should select review team (or joint selection)
• G20 members only
• G20 members + 3rd parties:
• Other countries: APEC or “Friends” members
• Experts: OECD, IEA, GSI or independent
Countries with similar circumstances (e.g. energy exporters) could review each other
FFS: Producers – Ministries typically split on reform
GSI unique role: • The detail of GSI investigations is unsurpassed: bottom-
up inventories for Canada, Indonesia, Russia and Norway
• Nobody except GSI has even tried to quantify producer subsidies in developing countries.
This year: improving methodology and applying it now at project level (case studies)
Forthcoming: • Developing the Arctic dimension of producer subsidies
work, especially given Canada’s presidency of the Arctic Council in 2013–2015
• Further work in Canada
Moving ahead - Supporting national reform
1. Good research in not enough to achieve influence; need to invest in communications and good partnerships to address the politics of reform
2. It takes time to build trust and credibility with government and CSOs
3. Think of reform as a process that rarely (and usually shouldn’t) happen over-night; therefore, need a longer term perspective
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