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Pricing Electricity and Supporting Renewables in Heavily Energy Subsidized Economies

Author

Listed:
  • David Newbery

    (EPRG, Cambridge)

Abstract

Heavily Energy Subsidized Economies' energy subsidies cost the budget on average 4% of GDP in 2014. Resource rents permit administratively undemanding transfers to citizens to maintain political support, whose removal will be resisted, despite resulting inefficient consumption and lock-in risk. Collapsing energy prices delivering severe fiscal shocks combined with growing concerns over climate change damage make carefully designed reforms both urgent and politically more acceptable. Political logic suggests designing reforms that compensate vocal interest groups. The paper presents evidence on the magnitude and impacts of oil, gas and electricity subsidies, and discusses how the electricity sector can be weaned off subsidies, enabling CCGTs and unsubsidized renewables to reduce carbon emissions.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • David Newbery, 2016. "Pricing Electricity and Supporting Renewables in Heavily Energy Subsidized Economies," Working Papers EPRG 1618, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg1618
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    File URL: https://www.jbs.cam.ac.uk/wp-content/uploads/2023/12/eprg-wp1618.pdf
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    Citations

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    Cited by:

    1. Burke, Paul J. & Kurniawati, Sandra, 2018. "Electricity subsidy reform in Indonesia: Demand-side effects on electricity use," Energy Policy, Elsevier, vol. 116(C), pages 410-421.
    2. Adelina Jashari & Jana Lippelt & Marie-Theres von Schickfus, 2018. "Kurz zum Klima: Unerwartet schnell fallende Preise für Wind- und Solarenergie – Hintergründe, Auswirkungen und Perspektiven," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 71(04), pages 60-67, February.
    3. Adelina Jashari & Jana Lippelt & Marie-Theres von Schickfus, 2018. "Unexpected Rapid Fall of Wind and Solar Energy Prices: Backgrounds, Effects and Perspectives," CESifo Forum, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 19(02), pages 65-69, July.

    More about this item

    Keywords

    Energy subsidies; interest group politics; reforming electricity tariffs; renewables.;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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