Subsidies to transport fuels and electricity generation
Subsidies to Liquid Transport Fuels: A Comparative Review of Estimates / Chris Charles and Peter Wooders. GSI ; IISD, September 2011, 30 p.
This report surveys the publicly available estimates of subsidies to biofuels and conventional liquid transport fuels, including both consumption subsidies and the production subsidies provided to the oil industry. It reviews the information currently available for each fuel type, describes the principal methods for quantifying subsidies, identifies the major information gaps in the literature on subsidies, and makes a preliminary comparison of results. (© GSI/IISD)
Subsidies and External Costs in Electric Power Generation: A Comparative Review of Estimates / Lucy Kitson, Peter Wooders and Tom Moerenhout. GSI ; IISD, September 2011, 31 p.
Over the past twenty years the political and economic landscape for energy has begun to shift in response to environmental, health and natural resource concerns. However, the fuel mix for global electricity generation in 2008 was not dissimilar to that in 1990, with a slight decrease in the share of hydroelectricity and nuclear power being offset by an increase in the share of thermal and, to a lesser extent, renewable generation from non-hydroelectric sources.1 On an absolute basis, there has been significant growth in generation from non-hydro renewable energy sources, from 124 terawatt-hours in 1990 to 535 terawatt-hours in 2008, but these still accounted for less than 2 per cent of global electricity generation. The extent to which governments support each of these electricity generation technologies is generally not apparent, though claims abound that each source benefits from subsidies to the detriment of others. While the literature on energy subsidies is considerable and growing, only a fraction of this literature focuses on subsidies to electricity generation, and only a small subset attempts to quantify the level of these subsidies. This report reviews the information currently available for each fuel type, describes the principal methods for quantifying subsidies, identifies the major gaps in the literature, and makes a preliminary comparison of results. (© GSI/IISD)
About the two reports (© Lucy Kitson, IISD) :
The research reviewed available information on subsidies to conventional transport fuels and biofuels, quantifying these subsidies on a per unit of energy basis. The same analysis was applied to subsidies for the generation of electricity, with a comparison of nuclear, fossil fuel and renewable energy sources. The analysis provides an estimate of the amount of subsidies offered to these energy types per kilo-watt hour (kWh).
The studies suggest that support to conventional transport fuels is generally less than to biofuels, relative to the amount of energy they produce. The research identified subsidies of around 0.49 U.S cents/kWh for conventional transport fuels, and up to 3.3 U.S cents/kWh for biofuels. For electricity generation, the research identified subsidies of up to 0.7 U.S. cents/kWh in the case of fossil-fuel generation, up to 11.6 U.S. cents/kWh for nuclear generation and up to 15.4 U.S. cents/kWh for generation from renewable sources. However, for both transport and electricity generation, the data provided should be considered as giving an indicative estimate only and the following considerations should be noted when interpreting the results.
– First, the studies are based on publicly available sources. Therefore, it is not possible to capture all subsidies. This reflects the lack of data and information on certain types of subsidies. For example, there is currently good information on subsidies for the consumption of oil products, but much less is known about subsidies to oil producers and even less information is available about nuclear electricity producers.
– Second, there are important differences between regions. For example, some countries provide significant subsidies to biofuels, but spend much less subsidizing prices of consumer oil products, while in other countries the reverse might be true.
– Third, there are important variations within energy types. Some types of biofuels and renewable generation sources, for example, receive lower subsidies per unit of energy than others.
– Finally, there is significant range in the external costs associated with the production and consumption of various energy types (the additional costs to the environment and to society that are not captured in the market price of the product).
Efforts to compare subsidies to various energy types are also difficult because of the different definitions and methods used to quantify subsidies. The reports compare the main methods used for quantifying energy subsidies, and highlight the pros and cons of each.