Inefficient Fossil Fuel Subsidies

Transcription

1 Inefficient Fossil Fuel Subsidies Anthony Cox Deputy Director, Environment Directorate G20 Energy Sustainability Working Group 3 rd Meeting, Izmir, 1-2 Sep 2015

2 The OECD continues monitoring how national budgets and tax codes support fossil fuels On 21 September, the OECD will be releasing a new report and a database of nearly 800 measures that support the production or use of fossil fuels. This new inventory covers 40 countries that together account for about 80% of global energy use. Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD) tad.contact@oecd.org 2 2

3 The OECD found that support overall remains high, at USD 160 billion, despite signs of decline Indonesia s 2015 reform? OECD countries (USD millions) Partner economies (USD millions) Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD) tad.contact@oecd.org 3 3

4 Key messages from the new OECD Inventory Support for the consumption of petroleum products still accounts for the bulk of total support. About two-thirds of all measures were introduced prior to 2000 and are tax expenditures. There has been notable progress since the previous edition of the Inventory in 2013, though more needs to be done. The relationship between international oil prices and subsidy reform is a complex one. Trade and Agriculture Directorate Organisation for Economic Co-operation and Development (OECD) tad.contact@oecd.org 4 4

5 Inefficient Fossil Fuel Subsidies Paul Simons, Deputy Executive Director G20 Energy Sustainability Working Group Izmir, 1-3 September 2015 OECD/IEA 2015

6 Subsidies to fossil fuels remain stubbornly persistent, but reforms are making a difference Billion dollars (2014) Contributing factors to the change in the value of subsidies between 2009 and International prices Consumption Currency effects Subsidy reforms In the absence of the reforms that have been taken since the G20 in 2009, fossil fuel consumption subsidies would have been 24% higher in 2014 at $600 billion OECD/IEA 2015

7 Selected reforms to fossil fuel subsidy programs in recent years Country India OECD/IEA 2015 Main fuels subsidised Kerosene, LPG, natural gas, electricity Indonesia Diesel, electricity Iran Gasoline, diesel, kerosene, LPG, gas, electricity Malaysia LPG, gas, electricity Morocco LPG Oman Gasoline, gas Thailand LPG, gas, electricity UAE Gasoline, diesel, natural gas, electricity Recent developments Stopped diesel subsidies in October Also introduced a new pricing formula for domestically-produced gas. In January 2015, a cash transfer scheme was introduced for residential LPG consumers. At the end of 2014, abolished subsidies to gasoline (RON88) and capped the diesel subsidy. In May 2015, increased the price of subsidised gasoline from rials ($0.28) per litre to rials ($0.35) per litre. In 2014, electricity and natural gas tariffs were increased. In December 2014, gasoline and diesel subsidies were abolished and prices are now set to track international levels. Abolished gasoline and fuel oil subsidies at the start of 2014 and diesel subsidies at the start of In January 2015, gas prices for industrial consumers were raised by 100%. A 3% annual rise is to be introduced for industries. In October 2014, the price of CNG for vehicles was increased. In December 2014, subsidies for LPG were ended. From August 2015, started to adjust prices monthly to match global prices.

8 Subsidy reform can contribute to achieving a nearterm peak in energy-related GHG emissions Gt CO 2 -eq Global GHG emissions savings from fossil-fuel subsidy reforms in the Bridge Scenario relative to the INDC Scenario Middle East (54%) Eastern Europe / Eurasia (13%) Africa (13%) Latin America (11%) Asia (9%) The energy sector can achieve a peak in GHG emissions within the next few years, without harming economic growth; a gradual phase out of subsidies is one part of the strategy OECD/IEA 2015