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Combining energy subsidies is not free: distributional effects and energy poverty

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  • Poggiese Milena
  • Ibáñez Martín María María

Abstract

In Argentina, energy subsidies play a central role in the National Treasury’s expenditures. After the pandemic, changes were made to two of the most significant subsidy policies: the Zona Fria Law and the universal residential subsidy. The Zona Fria Law was extended in 2021, and residential tariffs began to be segmented in 2022. Both subsidies and their respective modifications have distributive effects on the population and have a substantial impact on energy deprivation. The primary objective of this study is to examine whether the changes in subsidy policies have contributed to alleviating energy poverty in Argentina and reducing territorial inequalities. By applying a distributive incidence analysis of energy expenditure using various indicators, it is found that the combination of subsidy policies—each with different motivations—creates distorting effects.

Suggested Citation

  • Poggiese Milena & Ibáñez Martín María María, 2024. "Combining energy subsidies is not free: distributional effects and energy poverty," Asociación Argentina de Economía Política: Working Papers 4752, Asociación Argentina de Economía Política.
    • Handle: RePEc:aep:anales:4752
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    More about this item

    JEL classification:

    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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