World fossil fuel subsidies and global carbon emissions in a model with interfuel substitution
The author presents a simple empirical framework for estimating the level of world fossil fuel subsidies and analyzing their implications for carbon dioxide emissions. The author extends Larsen and Shah (1992) by applying a simple model with interfuel substitution, using a more detailed sectoral data set that includes energy prices and consumption for an expanded sample of countries. The author concludes that substantial fossil fuel subsidies prevail in a handful of large carbon-emitting countries. The fiscal implications for some countries are significant - as much as 10 percent of GDP in some countries. World subsidies are estimated to be more than $210 billion, or 20 to 25 percent of the value of world fossil fuel consumption at world prices. Removing such subsidies, the author estimates, would reduce national carbon emissions by more than 20 percent relative to baseline emissions in some countries. It would reduce global carbon emissions by 7 percent.
|Date of creation:||28 Feb 1994|
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- Nordhaus, William D, 1991. "To Slow or Not to Slow: The Economics of the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 920-937, July.
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- Larsen, Bjorn & Shah, Anwar & DEC, 1992. "World fossil fuel subsidies and global carbon emissions," Policy Research Working Paper Series 1002, The World Bank.
- Thomas Sterner, 1989. "Oil Products in Latin America: The Politics of Energy Pricing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 25-46.
- Bates, Robin W. & Moore, Edwin A., 1992. "Commercial energy efficiency and the environment," Policy Research Working Paper Series 972, The World Bank.
- Summers, Lawrence H., 1991. "The Case for Corrective Taxation," National Tax Journal, National Tax Association, vol. 44(3), pages 289-292, September. Full references (including those not matched with items on IDEAS)
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