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Protecting the petroleum industry: renewed government aid to fossil fuel producers

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  • Lin Kun-Chin

    (Department of Politics & International Studies, University of Cambridge, Alison Richard Building, 7 West Road, Cambridge, CB3 9DT, UK)

Abstract

The dual pressures of the global economic crisis in 2008 and high crude prices through the subsequent recovery period have prompted oil-producing countries to adopt a wide range of protectionist measures including subsidies in all forms and trade and investment restrictions. Focusing on fiscal and industrial policy adjustments in the UK and the People’s Republic of China since 2008, this paper argues that both governments have sought an increase in tax contributions from the corporate sector in exchange for intensified, targeted support for specific capital investments that will address the challenges of overall decline in domestic oil production and new field exploration and oil recovery opportunities. These novel “rent-sharing” schemes – inadequately captured in recent academic debates over precise measurements of fuel subsidies – raise concerns for fair competition in the upstream market and politicians’ long-term commitment to the transitioning of energy mix toward green and renewable sources.

Suggested Citation

  • Lin Kun-Chin, 2014. "Protecting the petroleum industry: renewed government aid to fossil fuel producers," Business and Politics, De Gruyter, vol. 16(4), pages 1-30, December.
    • Handle: RePEc:bpj:buspol:v:16:y:2014:i:4:p:30:n:5
    DOI: 10.1515/bap-2014-0019
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    References listed on IDEAS

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    1. Kojima, Masami, 2013. "Petroleum product pricing and complementary policies: experience of 65 developing countries since 2009," Policy Research Working Paper Series 6396, The World Bank.
    2. Ronald McKinnon, 2013. "Hot Money Flows, Commodity Price Cycles and Financial Repression in the USA and China: The Consequences of Near-zero US Interest Rates," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 21(4), pages 1-13, July.
    3. McKinnon, Ronald & Liu, Zhao, 2013. "Hot Money Flows, Commodity Price Cycles, and Financial Repression in the US and the People’s Republic of China: The Consequences of Near Zero US Interest Rates," Working Papers on Regional Economic Integration 107, Asian Development Bank.
    4. Lin, Kun-Chin, 2006. "Disembedding Socialist Firms as a Statist Project: Restructuring the Chinese Oil Industry, 1997–2002," Enterprise & Society, Cambridge University Press, vol. 7(1), pages 59-97, March.
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    Cited by:

    1. Aggarwal Vinod K. & Evenett Simon J., 2014. "Do WTO rules preclude industrial policy? Evidence from the global economic crisis," Business and Politics, De Gruyter, vol. 16(4), pages 1-29, December.

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