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The devil lies in the definition: competing approaches to fossil fuel subsidies at the IMF and the OECD

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  • Jakob Skovgaard

    (Department of Political Science Lund University)

Abstract

Fossil fuel subsidy reform has in recent years been addressed by international economic organizations including the International Monetary Fund (IMF) and the Organisation for Economic Co-operation and Development (OECD). The two organizations have differed significantly in how they define fossil fuel subsidies. The IMF’s definition constitutes a radical break with previous definitions by including environmental externalities, while the OECD’s is more conventional. The article explores the factors that explain why these international economic organizations have approached fossil fuel subsidies so differently. The exact definition of fossil fuel subsidies is contested. Furthermore, fossil fuels subsidies can be framed in ways that emphasize, respectively, their macroeconomic, fiscal, environmental, and distributive consequences. The article finds that institutional interaction lifted OECD involvement in fossil fuel subsidies to a new level, whereas the impetus to address fossil fuel subsidies within the IMF came largely from the IMF staff. In both cases, the organization’s bureaucracy constituted the most important factor shaping how the organizations addressed such subsidies and hence the main reason why they differ in how they approach fossil fuel subsidies.

Suggested Citation

  • Jakob Skovgaard, 2017. "The devil lies in the definition: competing approaches to fossil fuel subsidies at the IMF and the OECD," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(3), pages 341-353, June.
    • Handle: RePEc:spr:ieaple:v:17:y:2017:i:3:d:10.1007_s10784-017-9355-z
    DOI: 10.1007/s10784-017-9355-z
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    References listed on IDEAS

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    Cited by:

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    2. Antimiani, Alessandro & Costantini, Valeria & Paglialunga, Elena, 2023. "Fossil fuels subsidy removal and the EU carbon neutrality policy," Energy Economics, Elsevier, vol. 119(C).
    3. Harro van Asselt & Kati Kulovesi, 2017. "Seizing the opportunity: tackling fossil fuel subsidies under the UNFCCC," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 17(3), pages 357-370, June.
    4. Joshua Philipp Elsässer & Thomas Hickmann & Sikina Jinnah & Sebastian Oberthür & Thijs Graaf, 2022. "Institutional interplay in global environmental governance: lessons learned and future research," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 22(2), pages 373-391, June.
    5. Nicky R. M. Pouw & Hans-Peter Weikard & Richard B. Howarth, 2022. "Economic analysis of international environmental agreements: lessons learnt 2000–2020," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 22(2), pages 279-294, June.

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