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This is the second detailed report on fossil fuel subsidies prepared by the assigned agencies to support the G20 subsidy phase-out commitment.  It was prepared to support the November 2010 meeting of the G20 in South Korea.  The report estimates the scope of fossil-fuel subsidies in 2009 and provides a roadmap for phasing-out fossil-fuel subsidies.  The IEA estimates that direct subsidies that encourage wasteful consumption by artificially lowering end-user prices for fossil fuels amounted to $312 billion in 2009.  In addition, a number of mechanisms can be identified, also in advanced econ

Earth Track presentation on fossil fuel subsidy reform at a joint meeting hosted by the Global Subsidies Initiative of the IISD and the United Nations Environment Programme in Geneva in October 2010, titled Increasing the Momentum of Fossil-Fuel Subsidy Reform: Developments and Opportunities.  The presentation goes through lessons learned on subsidy transparency and challenges for reform based on case studies in China, Germany, Indonesia, and the United States.

By providing a longitudinal perspective on energy tax policy and expenditures, this report examines how current revenue losses resulting from energy tax provisions compare to historical losses and provides a foundation for understanding how current energy tax policy evolved.  Further, this report compares the relative value of tax incentives given to fossil fuels, renewables, and energy efficiency.

LAST time it met, in 2009, the G20 took a stand against a little discussed problem that unites environmentalists and economists: fossil-fuel subsidies. Over the course of the subsequent year, the nations contributed to a list of the “inefficient” subsidies they supported and the things they planned to do about it. So far, this list is unimpressive.

In its September 2009 Communiqué from Pittsburgh, the G20 nations (“Group of Twenty” nations that include the largest economies in the world) committed to “rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption.”

Interesting article by Amory Lovins in The Weekly Standard examining the history and market-related problems associated with nuclear subsidies past and present.  Lovins suggests that the structure of many of the proposed nuclear programs do a poor job aligning incentives and accountability for proper risk management and oversight, and create a significant risk of recreating conditions similar to those that led to the meltdown in mortgage markets two years ago.  Lovins uses subsidy data from Earth Track, and suggests shifting from always adding new subsidies to various energy forms

This joint report to the G20 Finance Ministers and Leaders was issued by the IEA, OPEC, OECD and World Bank in response to a request by G20 Leaders when they met in Pittsburgh in September 2009. At that time, leaders agreed to “rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption” and asked the study authors to jointly provide "an analysis of the scope of energy subsidies and suggestions for the implementation of this G20 country initiative”.

The ability to undertake any meaningful subsidy reforms, either nationally or multilaterally, is hampered by a basic lack of knowledge about the extent of support to the sector and where information on this support might be held. This multi-country research effort identifying and classifying different sources of data on fossil-fuel subsidies has begun to characterize the extent and nature of subsidy programs, identifying the analytical challenges that need to be overcome in order to de-subsidize.

DOE has taken steps to implement the Loan Guarantee Program (LGP) for applicants but has treated applicants inconsistently and lacks mechanisms to identify and address their concerns. Among other things, DOE increased the LGP’s staff, expedited procurement of external reviews, and developed procedures for deciding which projects should receive loan guarantees. However, GAO found:

This document is addressed primarily to those individuals who are interested in preparing estimates of subsidies to particular products or sectors—people who engage in what might be called “subsidy accounting.”  Unlike financial accounting for the business sector, or public-sector accounting for governments, there exists no agreed set of standards for producing such accounts.