Consumer Fossil Fuel Subsidies

The International Institute for Sustainable Development (IISD) is conducting a study on fossil fuel subsidies as part of its Global Subsidies Initiative (GSI). The GSI is dedicated to research and awareness building on government subsidies and their impacts on sustainable development. In cooperation with a growing international network of research and media partners, the GSI seeks to lay bare just what good or harm public subsidies are doing and to encourage public debate and awareness of the options that are available for reform.  IISD’s Trade Knowledge Network (TKN) is assisting with this call for proposals by reaching out to its partner organizations. TKN is a global collaboration of research institutions working on issues of trade, investment and sustainable development.

There are signs aplenty in rural Asia of the profligate use of energy - electrical and fossil fuel - but little evidence that such use is being assessed against its true costs. This is because supplying cheap power (and in some cases free power) is a valuable political lever. In rural Asia, the value of such 'support' can be judged by the scale of popular opposition to its withdrawal.

A report from a coalition of Canadian environmental organizations has called on the Province of Ontario to eliminate subsidies and the health and environmental costs externalized to the rest of society as a result of burning coal, which benefit the generation of electricity.

Many countries in the developing world are concerned about the impact of high oil prices on their economic growth. This is the case not only in Asia, but also in Latin America, where subsidies are often used to lower the consumer price of petroleum products, at heavy cost to public budgets.