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Residential Electricity Subsidies in Mexico : Exploring Options for Reform and for Enhancing the Impact on the Poor

Author

Listed:
  • Kristin Komives
  • Todd M. Johnson
  • Jonathan D. Halpern
  • Jose Luis Aburto
  • John R. Scott

Abstract

This report addresses a pressing issue in Mexico's electricity sector the large and growing subsidies to residential consumers and their regressive incidence across different segments of the population. It responds to requests from the Ministry of Energy to provide a preliminary assessment of alternatives to the current subsidy system, building on prior collaboration between the Government of Mexico and the World Bank on the distributional impact of public spending, the performance of conditional cash transfer programs and other poverty-targeted programs, and related work on pricing and subsidies for infrastructure services. This study was designed as the first phase of a multiphase program of collaborative analytical work. This first phase provides estimates of the distributional and fiscal performance of alternative subsidy targeting mechanisms to help inform discussion and deliberations on feasible goals and practical approaches over the medium term. A second phase will address transition paths, specific compensatory mechanisms, and decision processes for pursuing the options that the Mexican authorities deem most promising.

Suggested Citation

  • Kristin Komives & Todd M. Johnson & Jonathan D. Halpern & Jose Luis Aburto & John R. Scott, 2009. "Residential Electricity Subsidies in Mexico : Exploring Options for Reform and for Enhancing the Impact on the Poor," World Bank Publications - Books, The World Bank Group, number 5959, December.
    • Handle: RePEc:wbk:wbpubs:5959
    as

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    File URL: https://openknowledge.worldbank.org/bitstream/handle/10986/5959/471070PUB0MX0E101OFFICIAL0USE0ONLY1.pdf?sequence=1
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    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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    Cited by:

    1. Friedrich Kunz, Juan Rosellón, and Claudia Kemfert, 2017. "Introduction of Nodal Pricing into the new Mexican Electricity Market through FTR Allocations," The Energy Journal, International Association for Energy Economics, vol. 0(KAPSARC S).
    2. John Scott, 2013. "Redistributive Impact and Efficiency of Mexico's Fiscal System," Commitment to Equity (CEQ) Working Paper Series 08, Tulane University, Department of Economics, revised Jul 2013.
    3. Raymundo M. Campos-Vázquez & Nora Lustig & John Scott, 2018. "Inequality in Mexico: Labour markets and fiscal redistribution 1989-2014," WIDER Working Paper Series wp-2018-188, World Institute for Development Economic Research (UNU-WIDER).
    4. John Scott & Enrique de la Rosa & Rodrigo Aranda, 2017. "Inequality and fiscal redistribution in Mexico: 1992–2015," WIDER Working Paper Series 194, World Institute for Development Economic Research (UNU-WIDER).
    5. José M. Labeaga & Xavier Labandeira & Xiral López-Otero, 2018. "Energy Tax Reform and Poverty Alleviation in Mexico," Working Papers 1801, Universidade de Vigo, Departamento de Economía Aplicada.
    6. John Scott & Enrique de la Rosa & Rodrigo Aranda, 2017. "Inequality and fiscal redistribution in Mexico: 1992-2015," WIDER Working Paper Series wp-2017-194, World Institute for Development Economic Research (UNU-WIDER).
    7. Luis F. López-Calva & Nora Lustig & John Scott & Andrés Castañeda, 2013. "Gasto social, redistribución del ingreso y reducción de la pobreza en México: evolución y comparación con Argentina, Brasil y Uruguay," Commitment to Equity (CEQ) Working Paper Series 17, Tulane University, Department of Economics, revised Mar 2014.
    8. John Scott & Enrique de la Rosa & Rodrigo Aranda, 2017. "Inequality and Fiscal Redistribution in Mexico," Commitment to Equity (CEQ) Working Paper Series 65, Tulane University, Department of Economics.
    9. John Scott, 2013. "Redistributive Impact and Efficiency of Mexico's Fiscal System," Commitment to Equity (CEQ) Working Paper Series 1308, Tulane University, Department of Economics, revised Jul 2013.
    10. Maboshe, Mashekwa & Kabechani, Akabondo & Chelwa, Grieve, 2019. "The welfare effects of unprecedented electricity price hikes in Zambia," Energy Policy, Elsevier, vol. 126(C), pages 108-117.
    11. Fuentes-Cortés, Luis Fabián & Flores-Tlacuahuac, Antonio & Ponce-Ortega, José María, 2019. "Integrated utility pricing and design of water-energy rural off-grid systems," Energy, Elsevier, vol. 177(C), pages 511-529.
    12. Ilyas, Rubina & Hussain, Khadim & Ullah, Mehreen Zaid & Xue, Jianhong, 2022. "Distributional impact of phasing out residential electricity subsidies on household welfare," Energy Policy, Elsevier, vol. 163(C).
    13. Wang, Feng & Zhang, Bing, 2016. "Distributional incidence of green electricity price subsidies in China," Energy Policy, Elsevier, vol. 88(C), pages 27-38.
    14. Raymundo Campos-Vázquez & Nora Lustig & John Scott, 2018. "Inequality in Mexico: Labour markets and fiscal redistribution 1989–2014," WIDER Working Paper Series 188, World Institute for Development Economic Research (UNU-WIDER).
    15. John Scott, 2014. "Redistributive Impact and Efficiency of Mexico’s Fiscal System," Public Finance Review, , vol. 42(3), pages 368-390, May.
    16. Rubina Ilyas & Hidayat Ullah Khan & Abdur Rauf, 2022. "Welfare Impacts of Policy Reforms: A Case of Electricity Subsidies in Pakistan," International Journal of Energy Economics and Policy, Econjournals, vol. 12(3), pages 41-49, May.
    17. Renner, Sebastian & Lay, Jann & Greve, Hannes, 2018. "Household welfare and CO2 emission impacts of energy and carbon taxes in Mexico," Energy Economics, Elsevier, vol. 72(C), pages 222-235.

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