Designing fossil fuel subsidy reforms in OECD and G20 countries
A robust sequential approach methodology
Reform of support for fossil fuels is often identified as a priority for a country’s
fiscal consolidation efforts and for climate action to align financial flows with
low-carbon pathways. Its implementation, however, remains elusive for many countries
as they face seemingly irreconcilable policy agendas of economic growth and sustainability
coupled with potential political backlash against austerity and rising costs. This
paper provides a sequential approach that may assist in providing support for the
analysis to a well-informed reform process. Deploying the suggested tools can help
policy makers to identify the most distorting government support measures and alternative
or complementary policies that deliver the sought-after objectives more efficiently
and effectively. The work presented here draws on the OECD’s longstanding experience
and tradition in measuring and tracking support measures for fossil fuels, primarily
in its Inventory of Support Measures for Fossil Fuels (Inventory hereafter) and accompanying
reports.
Published on October 23, 2020
In series:OECD Environment Working Papersview more titles