GLOBAL SUBSIDIES INITIATIVE

The leaders of the Group of Twenty (G-20) countries agreed in September 2009 to phase-out inefficient fossil-fuel subsidies over the medium term. This section of the GSI website is dedicated to tracking the progress that has taken place since this commitment – including developments at subsequent G-20 Summits, the similar commitment made by APEC Leaders in November 2009, and the formation of a group of ‘Friends’ countries in support of both reform movements. 

Tracking progress: G-20 and APEC commitments to reform

The GSI is committed to on-going outreach to policy-makers and the global media, communicating our knowledge of fossil-fuel subsidies and best practice for successful reform.
 
On 25 September 2009, the Leaders of the Group of Twenty (G-20) met in Pittsburgh, PA, and agreed to phase out fossil-fuel subsidies. The Global Subsidies Initiative is committed to ensuring that this process be as fair and transparent as possible, taking into account producer as well as consumer subsidies and implementing measures to secure the welfare of the poor.

GSI outreach: shaping the agenda for reform

Globally, subsidies to fossil fuels may be on the order of US$ 600 billion per year, of which the GSI estimates about US$ 100 billion is provided to producers. Nobody knows the real number, however, because there is no international framework for regularly monitoring fossil-fuel subsidies.

Clearly a more accurate picture is needed. Subsidies to consumers that lower end-user prices are relatively easy to estimate using the ‘price-gap' approach but producer subsidies come in many forms.

Kinds of subsidies, who uses them and how big they are

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The effects of fossil-fuel subsidy reform: a review of modelling and empirical studies 

Subsidies are powerful instruments. When granted to fossil fuels, which are at the heart of all modern economies, subsidies have impacts throughout the economy, society and environment. When such impacts work against other government objectives, subsidies are often termed perverse.

Economic, social and environmental effects

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The Politics of Fossil-Fuel Subsidies 

Reforming fossil-fuel subsidies is widely believed to be a “win-win” policy that would benefit energy security, economic growth and the environment, as evidenced by the G-20 commitment to phase out such subsidies. But subsidies are notoriously difficult to reform.

Political economy

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Strategies for Reforming Fossil-Fuel Subsidies: practical lessons from Ghana, France and Senegal

Many countries have tried to reform their fossil-fuel subsidies with varying degrees of success. Political opposition is fed by popular resentment to price increases, job losses and environmental impacts (if consumers switch to dirtier fuels). After reform there is the risk of backsliding or replacing one subsidy with another form of distorting support.

Reform

An accurate picture of the level and nature of subsidization is a necessary first step towards reform. Reliable information facilitates an assessment of a subsidy's costs, distribution and impacts, and the development of effective strategies for reform. At the international level, it provides a foundation for dialogue on reform and for monitoring of progress towards de-subsidization.

Transparency

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Increasing the Momentum of Fossil-Fuel Subsidy Reform: A roadmap for international cooperation

International collaboration and agreement can provide essential support to national efforts to reform fossil-fuel subsidies. In addition to supplying political legitimacy and peer pressure, it can also offer research and technical assistance, sharing of information and best practice, establishment of rules, financial support and promoting increased accountability.

But where, institutionally, should this international collaboration and agreement be housed?

International co-operation for reform