Institutions and economic structure matter for fossil fuel subsidy levels and reforms

Beskrivning

In session Climate Change Economics
Fossil fuel subsidies constitute an important barrier to meeting the targets of the Paris Agreement, and a case that illustrates why climate transitions are so difficult to achieve. Understanding the political economy of fossil fuel subsidies – as well as of their reform – is important to understanding their persistence. Therefore, we analyze factors that correspond with fossil fuel subsidy levels and reforms in the OECD countries over the last 15 years through an inductive empirical approach. We observe that more and more subsidies are being reformed and that the subsidy levels have declined, as have production-based emissions. We find that it is both i) the structure of the economy in terms of energy sources and income levels and ii) the quality of institutions in terms of government effectiveness and corruption levels that matter for the reform and level of subsidies. We present interactions between economic and institutional variables and discuss the causal mechanisms that may shape the political
economy of fossil fuel subsidy reforms.

Period	2022 maj 17
Evenemangstitel	Swedish Climate Symposium 2022
Typ av evenemang	Konferens
Plats	Norrköping, SverigeVisa på karta