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

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%.

Rethinking Energy at the Crossroads

2018 ◽  
Author(s):  
Kathleen Araújo
Keyword(s):  
Renewable Energy ◽  
Internal Combustion Engines ◽  
Fossil Fuels ◽  
Energy Use ◽  
Clean Energy ◽  
Energy Estimates ◽  
Low Carbon ◽  
Fuel Prices ◽  
New Energy ◽  
Carbon Dioxide Co2

The discovery of oil in Pennsylvania in 1859 was a relatively inconspicuous precursor to what would become an epic shift into the modern age of energy. At the time, the search for “rock oil” was driven by a perception that lighting fuel was running out. Advances in petrochemical refining and internal combustion engines had yet to occur, and oil was more expensive than coal. In less than 100 years, oil gained worldwide prominence as an energy source and traded commodity. Along similar lines, electricity in the early 1900s powered less than 10% of the homes in the United States. Yet, in under a half a century, billions of homes around the world were equipped to utilize the refined form of energy. Estimates indicate that roughly 85% of the world’s population had access to electricity in 2014 (World Bank, n.d.b). For both petroleum and electricity, significant changes in energy use and associated technologies were closely linked to evolutions in infrastructure, institutions, investment, and practices. Today, countless decision-makers are focusing on transforming energy systems from fossil fuels to low carbon energy which is widely deemed to be a cleaner, more sustainable form of energy. As of 2016, 176 countries have renewable energy targets in place, compared to 43 in 2005 (Renewable Energy Policy Network for the 21st Century [REN21], 2017). Many jurisdictions are also setting increasingly ambitious targets for 100% renewable energy or electricity (Bloomberg New Energy Finance [BNEF], 2016). In 2015, the G7 and G20 committed to accelerate the provision of access to renewables and efficiency (REN21, 2016). In conjunction with all of the above priorities, clean energy investment surged in 2015 to a new record of $329 billion, despite low, fossil fuel prices. A significant “decoupling” of economic and carbon dioxide (CO2) growth was also evident, due in part to China’s increased use of renewable energy and efforts by member countries of the Organization for Economic Cooperation and Development (OECD) to foster greater use of renewables and efficiency (REN21, 2016).

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

2018 ◽  
Vol 58 ◽  
pp. 93-124
Author(s):  
Sevil Acar ◽  
Sarah Challe ◽  
Stamatios Christopoulos ◽  
Giovanna Christo
Keyword(s):  
Sustainable Development ◽  
Fossil Fuels ◽  
Fossil Fuel ◽  
Policy Design ◽  
Environment And Health ◽  
Turkish Economy ◽  
Fuel Subsidies ◽  
Oil And Natural Gas ◽  
Fossil Fuel Subsidies ◽  
Phase Out

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.

scholarly journals Energy efficiency of fossil and renewable fuels

2016 ◽  
pp. 1-7
Author(s):  
Winfried Schäfer
Keyword(s):  
Renewable Energy ◽  
Co2 Emissions ◽  
Energy Supply ◽  
Energy Input ◽  
Fossil Fuels ◽  
Energy Intensity ◽  
Fossil Fuel ◽  
Energy Output ◽  
Engine Fuel ◽  
Wide Range

Assessment results of renewable energy supply in agriculture and forestry are often questionable because 1. the methodology does not describe the nature dependent conditions of agricultural production, 2. there is no standard system boundary, 3. thermodynamic laws are violated and/or ignored, 4. direct and embodied energy is mixed, 5. the mainstream life cycle analysis (LCA) takes downstream and upstream inputs arbitrarily into consideration, depending on the research objectives and the research-funding agency. Thus, the calculation results neglect a wide range of specific energy input figures of upstream and down-stream factors outside farm level resulting in non-comparable figures. The EROI describes the ratio between energy output and input. The advantage of this measure is that energy input and output of fuel supply as well as the resulting CO2 emissions are comparable. There are no standards to calculate the indirect energy input of commodities and services hidden in monetary inputs (insurances, rent for land, subsidies and fees etc.). They are usually excluded because procedures to handle them as energy input are rare. The easiest way to quantify the indirect energy is the use of the energy intensity (EI). Multiplying the price of any good or service with the energy intensity results in a rough estimation of energy embodied in the good or service. Applying the EROI and the EI to compare the efficiency of fossil and renewable energy supply released the following results: Substitution of fossil fuels by renewable ones causes always additional costs. Most known renewable energy supply techniques need more energy than fossil fuel exploitation. Polluting the environment is - for the time being – the most competitive alternative. Renewable engine fuel, produced from biomass, is not competitive with fossil fuels in terms of EROI. The energy of one ha biomass may substitute gasoline to drive a car 40 000 km with biogas. Electric power harnessed from one ha solar panels enables to drive an electric vehicle 5 000 000 km applying the same calculation method. The most efficient way to mitigate CO2 emissions is to include the entropy of agricultural products in energy policy decision making. Albeit wood has a high EROI, processing fuels from wood of low entropy makes no sense: Producing a table from a tree and burning the residues and the table at the end of its lifetime renders the same energy gain as using the tree for fuel only. The EROI of fossil fuels remains probably on high level during the next 50 to 100 years. Oil and gas will be replaced by coal, in Finland also by nuclear power, peat and wood. Although biomass is more renewable than fossil fuels, its EROI is lower and substitution will not reduce CO2 emissions. Climate change may force humankind to reduce fossil fuel consumption. The only sustainable way to achieve this is reduction of fossil fuel exploitation.

Trade Impacts of Fossil Fuel Subsidies

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.

Sign in / Sign up

Export Citation Format

Share Document