Gaining Traction: The importance of transparency in accelerating the reform of fossil-fuel subsidies

An accurate picture of the level and nature of subsidization is a necessary first step towards reform. Reliable  information facilitates an assessment of the subsidy's costs, distribution and impacts, and the development of effective strategies for reform. At the international level, it provides a foundation for dialogue on reform and for monitoring of progress towards de-subsidization.

But the current state of knowledge about fossil-fuel subsidies is less than desirable. There are major differences in the amount and quality of information among countries and types of subsidies. At the international level, the lack of information is partly the result of the absence of a system or protocol to comprehensively assess and monitor fossil-fuel subsidies.

Drawing on existing literature on transparency in public policy, this paper describes how improved information could most usefully support reform and how this can be achieved given available time and resources. An analysis of previous efforts to improve transparency about subsidies – in energy and other sectors – is used to suggest options for a feasible international system for evaluating and reporting fossil-fuel subsidies. The  paper concludes that improving transparency requires a two-track approach: better reporting within countries and a new international regime to gather and manage data.