Quotation Monasterolo, Irene, Raberto, Marco. 2018. The impact of phasing out fossil fuel subsidies on the low-carbon transition. Energy Policy. (124), 355-370.


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Abstract

There is growing consensus on the fact that fossil fuel subsidies provided by governments in high-income countries represent a misalignment on emissions’ reduction with the global climate agenda. In addition, a discussion emerged on the negative socio-economic and environmental externalities associated with fossil fuel subsidies. Nevertheless, pathways for phasing out fossil fuel subsidies in high income countries and their implications on the low-carbon transition have not yet been assessed. With the aim to narrow this knowledge gap, we extend the EIRIN Stock-Flow Consistent behavioral model to study the implications on sustainable development of the gradual phasing out of fossil fuels subsidies, whose revenues could be used by the government to subsidize energy investments in green capital (e.g. solar panels), either via fiscal policies or green bonds. We assess the effects on green growth, employment, credit and bonds market, as well as the distributive effects across heterogeneous households and sectors. A smooth phasing out of fossil fuels subsidies contributes to improve macroeconomic performance, to decrease inequality and helps the government to find fiscal space to support stable renewable energy policies. Renewable energy subsidies contribute to foster the low-carbon transition but could imply distributive effects, depending on the way in which they are implemented.

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Energy Policy
Citation Index SSCI
WU-Journal-Rating new FIN-A, INF-A, STRAT-B, VW-C, WH-B
Language English
Title The impact of phasing out fossil fuel subsidies on the low-carbon transition
Number 124
Year 2018
Page from 355
Page to 370
Reviewed? Y
URL https://www.sciencedirect.com/science/article/pii/S0301421518305809
DOI https://doi.org/10.1016/j.enpol.2018.08.051
Open Access N

Associations

People
Monasterolo, Irene (Details)
External
Raberto, Marco (University of Genova, Italy)
Organization
Institute for Ecological Economics IN (Details)
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