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Analysis of Fossil Fuel Subsidies in Kazakhstan

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  • Nugumanova, Lyazzat

Abstract

During the last decades the topic of fossil fuel subsidies has been gaining importance in the policy discussion. International Energy Agency (IEA) (2011) estimates that the total global fossil fuel subsidies in 2010 amounted to $409 billion. Kazakhstan is energy-rich country with significantly high subsidies on fossil fuels. Fossil fuel subsidies are a distortion which causes inefficient use of energy and natural resources, high CO2 emissions, distort the energy markets, put pressure on the state budget, and hinder investments into energy sector and renewable energy and thus long-term sustainable development in Kazakhstan. Removing fossil fuel subsidies could be in the long-term beneficial for Kazakhstan. The main research question is to analyze macroeconomic effects of removing current distortions in the energy market using the computable general equilibrium model (CGE), GTAP. The specific objectives are to understand the issue and the extent of fossil fuel subsidies in Kazakhstan, analyze implications of these subsidies, and provide general policy suggestions on this topic. This paper first presents main data on fossil fuel subsidies, energy and environment in Kazakhstan, literature review, methodological approach suitable for this research and expected results.

Suggested Citation

  • Nugumanova, Lyazzat, 2013. "Analysis of Fossil Fuel Subsidies in Kazakhstan," International Conference and Young Researchers Forum - Natural Resource Use in Central Asia: Institutional Challenges and the Contribution of Capacity Building 159103, University of Giessen (JLU Giessen), Center for International Development and Environmental Research.
  • Handle: RePEc:ags:ugidic:159103
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    File URL: http://purl.umn.edu/159103
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    References listed on IDEAS

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    1. Jean-Marc Burniaux & Jean Ch√Ęteau, 2011. "Mitigation Potential of Removing Fossil Fuel Subsidies: A General Equilibrium Assessment," OECD Economics Department Working Papers 853, OECD Publishing.
    2. Lin, Boqiang & Jiang, Zhujun, 2011. "Estimates of energy subsidies in China and impact of energy subsidy reform," Energy Economics, Elsevier, vol. 33(2), pages 273-283, March.
    3. Lin, Boqiang & Li, Aijun, 2012. "Impacts of removing fossil fuel subsidies on China: How large and how to mitigate?," Energy, Elsevier, vol. 44(1), pages 741-749.
    4. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685.
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    Keywords

    fossil fuel subsidies; Kazakhstan; computable general equilibrium model (CGE); GTAP; Environmental Economics and Policy; International Development; International Relations/Trade; Research Methods/ Statistical Methods; R; Q; O;

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