OECD-IEA Analysis of Fossil Fuels Support
The combustion of fossil fuels in power plants, vehicles, machinery, and dwellings continues to be a leading contributor to global man-made greenhouse-gas emissions. Although many governments have already taken steps to reduce the carbon intensity of their economies, some policies remain in place that encourage more production and use of fossil fuels than would otherwise be the case. Fossil-fuel subsidies are one such policy.
Not only do fossil-fuel subsidies undermine global efforts to mitigate climate change, but they also aggravate local pollution problems, causing further damage to human health and the environment. They represent a considerable strain on public budgets as well, draining scarce fiscal resources that could be put to better use, such as strategic investment in the education, skills, and physical infrastructure that people value most in the 21st century. Last, fossil-fuel subsidies distort the costs and prices that inform the decisions of many producers, investors, and consumers, thereby perpetuating older technologies and energy-intensive modes of production.
Many governments, including members of the G20 and of the Asia-Pacific Economic Cooperation (APEC) forum, have already recognised the problems that fossil-fuel subsidies cause at home and abroad. This led them both in 2009 to commit to “rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption.” A number of countries have since translated those commitments into concrete policy actions and removed some of the subsidies they had in place. However, lack of information about the scope, magnitude, and effects of fossil-fuel subsidies remains an important obstacle to current and future reform efforts.
To assist governments in their reform efforts, this site brings together the estimates of subsidies and other forms of support for fossil fuels that the OECD and the IEA regularly produce for a great number of countries around the world.
OECD Companion to the Inventory of Support Measures for Fossil Fuels 2018
This publication is concerned with all policies that directly support the production or consumption of fossil fuels in all 36 OECD countries and in 8 partner economies. It provides a useful complement to the online OECD database that identifies and estimates direct budgetary transfers and tax expenditures benefitting fossil fuels, and from which it derives summary results and indicators on support to fossil fuels, as well as policy recommendations.
The report finds that government support to fossil fuel consumption and production in OECD countries and key emerging economies remains too high, at USD 151 billion in 2016, and that reductions in fossil fuel subsidies have flattened out over the past two years in OECD countries while a strong downward trend continues to be observed in partner economies.
The 2018 Companion also harmonises the data for these 43 countries with those of the International Energy Agency (IEA) to create new, aggregate estimates of support to fossil fuels of between USD 370 billion and USD 620 billion over the period 2010-2015. The 76 countries and economies covered together contribute 94% of global CO2 emissions.
It also introduces a new approach for measuring the subsidy element of government credit assistance to fossil-fuel related projects. According to preliminary estimates in the OECD Companion, the cost to the government of credit assistance programmes can reach 20% of the principal, an equivalent of USD 14 billion, annually. The full report is available on the OECD iLibrary.
Previous inventory publications
» 2015 edition
» 2013 edition
G20 voluntary peer reviews of the reform of inefficient fossil fuel subsidies
In September 2009, Leaders of the Group of Twenty (G20) economies committed to “phase out and rationalize over the medium term inefficient fossil fuel subsidies while providing targeted support for the poorest.” To follow up on this commitment, members of the G20 have since engaged in a voluntary process of periodically reporting on their fossil-fuel subsidies. In an effort to further facilitate the sharing of experience and mutual learning among G20 members, G20 Finance Ministers announced in February 2013 that they would seek to develop a framework for voluntary peer reviews for rationalising and phasing out inefficient fossil-fuel subsidies that encourage wasteful consumption.
This led in December 2013 to a joint announcement by the People’s Republic of China and the United States of America that the two countries would undertake a reciprocal peer review of their fossil-fuel subsidies under the G20 process. The OECD was invited to serve as Chair of these reviews. The final versions of the reviews (and of the countries’ own self reviews, which were issued at the start of the process) were issued in September 2016.
Peer Review of Italy
Self Review of Italy
Peer Review of Indonesia
Self Review of Indonesia
In November 2017, the reciprocal peer reviews of Germany and Mexico, conducted as part of the G20 process outlined above, were published. These reviews were chaired by the OECD.
Peer Review of China (G20低效化石燃料补贴同行审议-中国审议报告-中文-提交峰会)
Self Review of China (G20低效化石燃料补贴同行审议-中国自述报告-中文-提交峰会)
Peer Review of the United States
Self Review of the United States
Measuring Fossil Fuel Subsidies in the Context of the Sustainable Development Goals (UNEP, IISD & OECD)
The study Measuring Fossil Fuel Subsidies in the Context of the Sustainable Development Goals was prepared by the United Nations Environment Programme (UNEP) in close collaboration with the International Institute for Sustainable Development (IISD) Global Subsidies Initiative (GSI) and experts from the Organisation for Economic Co-operation and Development (OECD).
The importance of measuring fossil fuel subsidies (FFS) has been recognized in the SDG process with a dedicated indicator on measuring FFS (12.c.1 – – “Amount of fossil fuel subsidies per unit of GDP”). As custodian agency for the SDG indicator 12.c.1, UN Environment has developed a methodology to measure fossil fuel subsidies to provide guidance to UN member countries on reporting on this indicator.
While periodic international monitoring on fossil fuel subsidies is carried out by international organisations such as the OECD, IMF and IEA, reporting under the SDG12.c.1 indicator will be the first attempt to systemically monitor fossil fuel subsidies to both consumption and production based on national data from 193 UN member countries and to collect this using an internationally agreed methodology. This monitoring and reporting on fossil fuel subsidies will help to increase transparency on fossil fuel subsidies, providing comparable data to allow the tracking of national and global trends.
IEA World Energy Outlook
The global energy landscape is evolving at a rapid pace, reshaping long-held expectations for our energy future. The 2016 edition of the World Energy Outlook (WEO) incorporates all the latest data and developments to produce a comprehensive and authoritative analysis of medium- and longer-term energy trends. It complements a full set of energy projections – which extend from today through, for the first time, the year 2040 – with strategic insights into their meaning for energy security, the economy and the environment. Oil, natural gas, coal, renewables and energy efficiency are covered, along with updates on trends in energy-related CO2 emissions, fossil-fuel and renewable energy subsidies, and universal access to modern energy services.
» Access the World Energy Outlook on the OECD iLibrary