IEA - Analysis of Fossil Fuel Subsidies
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© OECD/IEA 2011 IEA analysis of fossil-fuel subsidies International Energy Agency Paris , 4 October 2011
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IEA World Energy Outlook 2011 - Analysis Of Fossil Fuel Subsidies
Transcript of IEA - Analysis of Fossil Fuel Subsidies
© OECD/IEA 2011
IEA analysis of fossil-fuel subsidies
International Energy Agency
Paris , 4 October 2011
© OECD/IEA 2011
Fossil-fuel subsidies can have unintended effects
Fossil-fuel subsidies result in an economically inefficient allocation of resources and market distortions, while often failing to meet their intended objectives
© OECD/IEA 2011
World subsidies to fossil-fuel consumption
Fossil fuel subsidies have been driven higher by the rebound in international energy prices
Fossil-fuel consumption subsidies remain big
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2007 2008 2009 2010
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Electricity
Coal
Natural gas
Oil
they totalled $409 billion in 2010 – about $110 billion up on 2009
© OECD/IEA 2011
Major energy producers are among the biggest subsidisers
For importers, subsidies can impose a heavy burden on state budgets, while for producers they quicken the depletion of resources, reducing export earnings over the long-term
World fossil-fuel consumption subsidies by net oil & gas importer/exporter, 2007-2010
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Exporter
Importer
© OECD/IEA 2011
Fossil-energy subsidies go mostly to the rich
Subsidies are an extremely inefficient means of assisting the poor: only 8% of the $409 billion spent on fossil-fuel subsidies in 2010 went to the poorest 20% of the population
Share of fossil-fuel subsidies received by the lowest 20% income group, 2010
© OECD/IEA 2011
Cutting fossil-fuel subsidies would bring economic, energy & environmental benefits
Without further reform, spending on fossil-fuel consumption subsidies is set to reach $660 billion in 2020, or 0.7% of global GDP
Phasing-out fossil-fuel consumptions subsidies by 2020 would:
slash growth in energy demand by 4.1%
reduce growth in oil demand by 3.7 mb/d
cut growth in CO2 emissions by 1.7 Gt
Many countries have started or planned reforms since early-2010
key driver has been fiscal pressure on government budgets
G20 & APEC commitments have also underpinned many reform efforts
much more remains to be done to realise full extent of benefits
