Can Government Transfers Make Energy Subsidy Reform Socially Acceptable?: A Case Study on Ecuador

Abstract

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Estimation of the Energy Consumption of the Rice and Corn Drying Process in the Equatorial Zone

“…In summary, in Ecuador, the cost of electricity service for the year 2019 reached an average price of 9 ¢/kWh [20]. It is appropriate to emphasize that, in the Ecuadorian case, in addition to explicit consumption subsidies, there are subsidies to the implicit electricity derived from the hidden costs of electricity, related, for example, to the fact that public generation companies exclude capital costs from calculating the cost of energy, transmission, and distribution [21].…”

Getting to Net-Zero Emissions: Lessons from Latin America and the Caribbean

“…Cash transfer is one of the most efficient ways for delivering social assistance, and most countries in LAC are already experienced with cash transfer programs (Bastagli et al, 2016;Ibarrarán et al, 2017). IDB research shows that cash transfers are much more cost-effective than energy subsidies: in the region, it costs typically about ten dollars to transfer one dollar to a poor household using energy subsidies, while it only costs two dollars to do the same using a cash transfer program (Feng et al, 2018;Schaffitzel et al, 2019). Using 30% of revenues from a carbon tax to expand the number of beneficiaries or the amounts disbursed with existing cash transfer programs would typically be enough to compensate poor and vulnerable households -leaving more than 70% of carbon tax receipts to fund other priorities .…”

“…Most of the impact on households of carbon taxes and the removal of energy subsidies comes from the impact on the cost of food, public transport, natural gas and LPG, and electricity in the countries where it comes from fossil fuels (Feng et al, 2018;Dorband et al, 2019;. To shield vulnerable households, governments can focus on providing those items at affordable prices for poor households, for instance using reforms of public transport tariffs, free school meals, food and LPG vouchers for poor households, or electricity lifelines (Rentschler and Bazilian, 2017;Schaffitzel et al, 2019).…”

Política fiscal para la resiliencia y la descarbonización: aportes al diálogo de políticas

“…Aunque resultaría deseable aumentar la imposición neta sobre los combustibles para incrementar el costo de emitir carbono, las reformas para corregir estas distorsiones han sido difíciles de implementar a causa de los potenciales costos políticos, y los impactos sociales y económicos que dichas reformas acarrearían (Feng et al, 2018;Schaffitzel et al, 2019).…”

“…En 2017 el nivel de subsidios era un 40% menor a lo observado en 2013 (OCDE y AIE, 2019). Sin embargo, las experiencias de Chile, Ecuador y México indican que para el éxito de las reformas en el sistema de subsidios es necesario tomar en cuenta las consecuencias políticas, económicas, sociales y climáticas (Feng et al, 2018, Schaffitzel et al, 2019.…”