Fossil fuel subsidies as a lose-lose: Fiscal and environmental burdens in Turkey

AbstractAttempts at common agreements to phase out fossil fuel subsidies (FFS) have been increasing, as the topic generated momentum through the Rio Dialogues prior to the 2012 United Nations Conference on Sustainable Development (Rio+20) and following the Paris Agreement in 2016. This study quantifies the magnitude and the relative importance of FFS in the Turkish economy and produces a relevant national FFS synthesis for policy design. FFS form a complex system of a self-contradictory nature that stands in stark contrast with the Turkish government’s statements regarding sustainable development. Based on available data from the 2000s, we find that Turkey provides state support for coal and the exploration of oil and natural gas that represents roughly 0.2 percent of its nominal GDP per year. Continuing to subsidize fossil fuels narrows down the fiscal options that could otherwise be used to support cleaner technologies and mitigation actions. Given the fact that fossil fuels have significantly negative implications for the environment and health, eliminating those subsidies has the potential to help combat environmental pollution, climate change, and related problems.

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OECD Green Growth Policy Review of Indonesia 2019| Indonesia’s Effort to Phase Out and Rationalise Its Fossil-Fuel Subsidies

Bulletin of Indonesian Economic Studies ◽

10.1080/00074918.2020.1742959 ◽

2020 ◽

Vol 56 (1) ◽

pp. 133-135

Author(s):

Nina Indriati Lestari

Keyword(s):

Fossil Fuel ◽

Green Growth ◽

Policy Review ◽

Growth Policy ◽

Fuel Subsidies ◽

Fossil Fuel Subsidies ◽

Phase Out

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Trade Impacts of Fossil Fuel Subsidies

World Trade Review ◽

10.1017/s1474745620000270 ◽

2020 ◽

Vol 19 (S1) ◽

pp. s1-s17

Author(s):

Tom Moerenhout

Keyword(s):

Fossil Fuels ◽

Fossil Fuel ◽

Lower Cost ◽

Trade Volume ◽

Iron And Steel ◽

Fuel Subsidies ◽

Fossil Fuel Subsidies ◽

Pass Through ◽

Energy Products ◽

Direct Trade

AbstractThis article introduces the various trade impacts of fossil fuel subsidies. There are large direct and pass-through trade impacts. Direct trade impacts are found when producer subsidies affect the markets for crude energy products such as crude oil, natural gas, and coal. Direct trade impacts are also found when consumer subsidies decrease the input costs of various industries, whether they refine crude products into energy carriers (e.g. gasoline, electricity) or they use energy products to produce non-energy products (e.g. iron and steel, plastics). Pass-through trade impacts are found when upstream fossil fuel subsidies lead to a lower-cost product that is then used in downstream production processes. We find that markets for fossil fuels, refined energy products and energy-intensive products are enormous. In 2018, crude fossil fuel exports were worth at least US$1.3 trillion, petroleum product exports at least US$800 billion, and exports of energy-intensive goods at least US$1.3 trillion. Their trade volume and export value, as well as their competition density highlight that fossil fuel subsidies have a direct impact on who wins and who loses in terms of market share.

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Towards sustainable development in developing countries: Aggregate and disaggregate analysis of energy intensity and the role of fossil fuel subsidies

Sustainable Production and Consumption ◽

10.1016/j.spc.2020.07.011 ◽

2020 ◽

Vol 24 ◽

pp. 254-265 ◽

Cited By ~ 1

Author(s):

Sakiru Adebola Solarin

Keyword(s):

Sustainable Development ◽

Developing Countries ◽

Energy Intensity ◽

Fossil Fuel ◽

Fuel Subsidies ◽

Fossil Fuel Subsidies ◽

Disaggregate Analysis

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Economic Perspective on Discontinuing Fossil Fuel Subsidies and Moving toward a Low-Carbon Society

Sustainability ◽

10.3390/su13031217 ◽

2021 ◽

Vol 13 (3) ◽

pp. 1217

Author(s):

Kyungwon Park ◽

Yoon Lee ◽

Joon Han

Keyword(s):

Renewable Energy ◽

Co2 Emissions ◽

Computable General Equilibrium ◽

Fossil Fuels ◽

Energy Use ◽

Fossil Fuel ◽

Computable General Equilibrium Model ◽

Low Carbon ◽

Fuel Subsidies ◽

Fossil Fuel Subsidies

In Korea, multiple efforts, including subsidies to energy industries, have been made to increase renewable energy use and strengthen the competitiveness of renewable energy industries. Ironically, a considerable number of subsidies have also been provided for fossil fuels, drawing criticism both within Korea and overseas that these subsidies increase not only fossil fuel consumption and greenhouse gas emissions, but also energy market distortion. Thus, the Korean government announced a plan to discontinue some fossil fuel subsidies in 2020. Based on Korea’s policy orientation to expand renewable energy and strengthen its competitiveness, various scenarios to phase out fossil fuel subsidies and increase renewable energy subsidies can be examined. This study used the computable general equilibrium model to subdivide the energy sector and analyze the influence of changes in subsidies on the Korean economy and CO2 emissions based on three scenarios. The results show that phasing out fossil fuel subsidies causes a significant reduction in domestic CO2 emissions by −6.9 to −8.5%, depending on our scenarios. Implementing energy policy in Korea may have minimum impacts on its economy when fossil fuel subsidies transfer to renewable energy industries. The real gross domestic product could be only decreased by −0.04 to −0.14%.

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