Reforming environmentally harmful subsidies (EHS) is a fundamental element of green growth strategies and confers a range of benefits to countries that undertale such reforms. These include, among others, reducing the use of resource intensive inputs (e.g. energy) and subsequent decrease in pollution levels, fixing market distrortions by making resource prices reflect resource value, and polluters pay for their pollution; releasing and/or relallocating public funding to other areas, such as education, energy saving or reducing debt.
Determining the environmental impact of different subsidies is often complicated because specific policy measures do not take place in isolation, but within a broad and evolving socio-economic and technological context. Due to very patchy data and information but also because of the lack of a harmonised methodology for recording and reporting subsidies, identifying and calculating the size of EHS schemes is not easy and will require the concerted efforts of many different parties in a given government.
DID YOU KNOW? ....that there is some evidence that fossil fuel consumer subsidies in the EaP countries might be large. The International Energy Agency estimated that, in 2011, fossil fuel subsidies for consumers (oil, coal, gas, electricity) totalled about USD 2 billion in Azerbaijan (about 3% of GDP), about USD 6 billion (3.3% of GDP) in Kazakhstan and about USD 9 billion in Ukraine (about 6% of its GDP).