IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/1256.html
   My bibliography  Save this paper

World fossil fuel subsidies and global carbon emissions in a model with interfuel substitution

Author

Listed:
  • Larsen, Bjorn

Abstract

The author presents a simple empirical framework for estimating the level of world fossil fuel subsidies and analyzing their implications for carbon dioxide emissions. The author extends Larsen and Shah (1992) by applying a simple model with interfuel substitution, using a more detailed sectoral data set that includes energy prices and consumption for an expanded sample of countries. The author concludes that substantial fossil fuel subsidies prevail in a handful of large carbon-emitting countries. The fiscal implications for some countries are significant - as much as 10 percent of GDP in some countries. World subsidies are estimated to be more than $210 billion, or 20 to 25 percent of the value of world fossil fuel consumption at world prices. Removing such subsidies, the author estimates, would reduce national carbon emissions by more than 20 percent relative to baseline emissions in some countries. It would reduce global carbon emissions by 7 percent.

Suggested Citation

  • Larsen, Bjorn, 1994. "World fossil fuel subsidies and global carbon emissions in a model with interfuel substitution," Policy Research Working Paper Series 1256, The World Bank.
    • Handle: RePEc:wbk:wbrwps:1256
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1999/04/28/000009265_3961005235029/Rendered/PDF/multi_page.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nordhaus, William D, 1991. "To Slow or Not to Slow: The Economics of the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 920-937, July.
    2. Anwar Shah & Bjorn Larsen, 2014. "Carbon taxes, the greenhouse effect, and developing countries," Annals of Economics and Finance, Society for AEF, vol. 15(1), pages 353-402, May.
    3. Summers, Lawrence H., 1991. "The Case for Corrective Taxation," National Tax Journal, National Tax Association, vol. 44(3), pages 289-92, September.
    4. Peter Hoeller & Markku Wallin, 1991. "Energy Prices, Taxes and Carbon Dioxide Emissions," OECD Economics Department Working Papers 106, OECD Publishing.
    5. Bates, Robin W. & Moore, Edwin A., 1992. "Commercial energy efficiency and the environment," Policy Research Working Paper Series 972, The World Bank.
    6. Summers, Lawrence H., 1991. "The Case for Corrective Taxation," National Tax Journal, National Tax Association;National Tax Journal, vol. 44(3), pages 289-292, September.
    7. Burgess, Joanne C., 1990. "The contribution of efficient energy pricing to reducing carbon dioxide emissions," Energy Policy, Elsevier, vol. 18(5), pages 449-455, June.
    8. Larsen, Bjorn & Shah, Anwar & DEC, 1992. "World fossil fuel subsidies and global carbon emissions," Policy Research Working Paper Series 1002, The World Bank.
    9. Thomas Sterner, 1989. "Oil Products in Latin America: The Politics of Energy Pricing," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 25-46.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Moor, Andre P.G. de, 1997. "Key issues in subsidy policies and strategies for reform," Sede de la CEPAL en Santiago (Estudios e Investigaciones) 34314, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    2. André de Moor, 2001. "Towards a grand deal on subsidies and climate change," Natural Resources Forum, Blackwell Publishing, vol. 25(2), pages 167-176, May.
    3. Li, Yingzhu & Shi, Xunpeng & Su, Bin, 2017. "Economic, social and environmental impacts of fuel subsidies: A revisit of Malaysia," Energy Policy, Elsevier, vol. 110(C), pages 51-61.
    4. Farzin, Y. H., 1996. "Optimal pricing of environmental and natural resource use with stock externalities," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 31-57, October.
    5. Shreekant Gupta, 2010. "Incentive Based Approaches for Mitigating Greenhouse Gas Emmissions : Issues And Prospects for India," Working Papers id:2638, eSocialSciences.
    6. Shreekant Gupta, 2000. "Incentive-Based Approaches for Mitigating Greenhouse Gas Emissions: Issues and Prospects for India," Working papers 85, Centre for Development Economics, Delhi School of Economics.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Larsen, Bjorn & Shah, Anwar & DEC, 1992. "World fossil fuel subsidies and global carbon emissions," Policy Research Working Paper Series 1002, The World Bank.
    2. Anwar Shah & Bjorn Larsen, 2014. "Carbon taxes, the greenhouse effect, and developing countries," Annals of Economics and Finance, Society for AEF, vol. 15(1), pages 353-402, May.
    3. Steenblik, Ronald P & Coroyannakis, Panos, 1995. "Reform of coal policies in Western and Central Europe : Implications for the environment," Energy Policy, Elsevier, vol. 23(6), pages 537-553, June.
    4. Larsen, Bjorn & Shah, Anwar, 1994. "Global Tradeable Carbon Permits, Participation Incentives, and Transfers," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 841-856, Supplemen.
    5. Ren, Jie & Chen, Xi & Hu, Jian, 2020. "The effect of production- versus consumption-based emission tax under demand uncertainty," International Journal of Production Economics, Elsevier, vol. 219(C), pages 82-98.
    6. Wang, Qiang & Li, Rongrong, 2015. "Cheaper oil: A turning point in Paris climate talk?," Renewable and Sustainable Energy Reviews, Elsevier, vol. 52(C), pages 1186-1192.
    7. Peter Bohm & Bjorn Larsen, 1994. "Fairness in a tradeable-permit treaty for carbon emissions reductions in Europe and the former Soviet Union," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 4(3), pages 219-239, June.
    8. Jaeger, William K., 1995. "The welfare cost of a global carbon tax when tax revenues are recycled," Resource and Energy Economics, Elsevier, vol. 17(1), pages 47-67, May.
    9. Shreekant Gupta, 2010. "Incentive Based Approaches for Mitigating Greenhouse Gas Emmissions : Issues And Prospects for India," Working Papers id:2638, eSocialSciences.
    10. Yahya F. Anouti & Carol A. Dahl, 2014. "Rationalizing Transport Fuels Pricing Policies and Effects on Global Fuel Consumption, Emissions, Government Revenues and Welfare," Working Papers 2014-01, Colorado School of Mines, Division of Economics and Business.
    11. Shreekant Gupta, 2000. "Incentive-Based Approaches for Mitigating Greenhouse Gas Emissions: Issues and Prospects for India," Working papers 85, Centre for Development Economics, Delhi School of Economics.
    12. Birdsall, Nancy, 1992. "Another look at population and global warming," Policy Research Working Paper Series 1020, The World Bank.
    13. Devarajan Shantayanan & Go Delfin S & Robinson Sherman & Thierfelder Karen, 2011. "Tax Policy to Reduce Carbon Emissions in a Distorted Economy: Illustrations from a South Africa CGE Model," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-24, February.
    14. Zhang, Zhong Xiang, 1995. "Energy conservation in China : An international perspective," Energy Policy, Elsevier, vol. 23(2), pages 159-166, February.
    15. Ruth, Matthias & Davidsdottir, Brynhildur & Laitner, Skip, 2000. "Impacts of market-based climate change policies on the US pulp and paper industry," Energy Policy, Elsevier, vol. 28(4), pages 259-270, April.
    16. Subhes C Bhattacharyya, 1995. "Estimation of subsidies on coal in India," Natural Resources Forum, Blackwell Publishing, vol. 19(2), pages 135-142, May.
    17. Lawrence H. Goulder, 1998. "Environmental Policy Making in a Second-Best Setting," Journal of Applied Economics, Universidad del CEMA, vol. 1, pages 279-328, November.
    18. Khanna, Neha & Chapman, Duane, 1997. "Climate Policy and Petroleum Depletion in an Optimal Growth Framework," Staff Papers 121172, Cornell University, Department of Applied Economics and Management.
    19. Richard S.J. Tol, 2003. "The Marginal Costs Of Carbon Dioxide Emissions: An Assessment Of The Uncertainties," Working Papers FNU-19, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2003.
    20. Oliver Fromm, 2000. "Ecological Structure and Functions of Biodiversity as Elements of Its Total Economic Value," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(3), pages 303-328, July.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:1256. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.