Energy Subsidies: Lessons Learned in Assessing their Impact and Designing Policy Reforms

Anja Von Moltke, Colin McKee, and Trevor Morgan.  United Nations Environment Programme, 2004. (Earth Track peer review, not authorship).

The need to reform energy subsidies was one of the pressing issues highlighted at the World Summit on Sustainable Development held in Johannesburg in September 2002. Many types of subsidies, especially those that encourage the production and use of fossil fuel, and other non-renewable forms of energy, are harmful to the environment. They can also have high financial and economic costs, and often only bring few benefits to the people for whom they are intended. Removing, reducing or restructuring such energy subsidies is helpful for the environment and the economy at the same time. Potential social costs in terms of employment in the conventional energy industry or reduced access to energy could be addressed by re-directing the money formerly spent on subsidies to income support, health, environment, education or regional development programmes.