Energy Subsidies in Latin America and the Caribbean: Stocktaking and Policy Challenges

Bella, Gabriel Di; Norton, Lawrence; Ntamatungiro, Joseph; Ogawa, Sumiko; Samaké, Issouf; Santoro, Marika

doi:10.5089/9781484365366.001

Cited by 54 publications

(41 citation statements)

References 5 publications

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“…6B). Total fuel subsidies accounted for 7% of the national gross domestic product from 2011 to 2013, making Ecuador the second most subsidized energy sector in Latin America (Di Bella, Norton, Ntamatungiro, Samaké, & Santoro, 2015). However, at its peak, LPG accounted for only 15% of Ecuador’s total fuel subsidies; the remainder go to liquid fuels for transportation (Heredia, 2016).…”

Section: Resultsmentioning

confidence: 99%

Government policy, clean fuel access, and persistent fuel stacking in Ecuador

Gould

Schlesinger²,

Toasa

et al. 2018

Energy for Sustainable Development

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After more than three decades of access to low-cost liquefied petroleum gas (LPG) financed by large direct government subsidies, more than 90% of Ecuadorian households cook primarily with LPG. Due to the large fiscal burden of the LPG subsidy, increases in electricity from hydropower, and other sociopolitical factors, the Government of Ecuador launched a major induction stove program (PEC) to reduce the demand for LPG. We assess the effects of the LPG subsidies and PEC using government records, interviews, academic literature, newspaper reports, household surveys, and focus groups. Household surveys, conducted in rural, northern Ecuadorian households (n=383), characterized cooking patterns and fuel access. Focus groups (n=6) were carried out with a subset of surveyed households to better characterize survey findings. The LPG subsidy was developed as part of broad social support reforms in the early 1970s, without specific aims to reduce the health impacts of household air pollution from woodfuel or provide economic benefits as part of the transition to a clean cooking fuel. Nonetheless, the subsidy has resulted in nearly all Ecuadorian households cooking primarily with LPG. PEC has generated the sale of 740,000 induction stoves since its inception in 2014, short of the goal of 3.5 million. Among the rural households surveyed, LPG use, acceptance, and satisfaction was high, however, more than three-quarters of those surveyed reported weekly woodfuel use. Induction stove ownership (17%) and use as a primary cooking fuel (1%) was low among the rural households surveyed; furthermore, households owning induction stoves reported very low satisfaction with the stoves. Here we show that nationally-representative surveys reporting only “primary cooking fuef” use may underestimate solid fuel use as a supplemental household cooking energy, particularly in rural areas where fuel availability issues play a stronger role in decisions about what fuels to use.

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Section: Resultsmentioning

confidence: 99%

Government policy, clean fuel access, and persistent fuel stacking in Ecuador

Gould

Schlesinger²,

Toasa

et al. 2018

Energy for Sustainable Development

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“…9% between 1965 and 2015), the costs generated due to negative externalities of energy use reached in the period 2011-2013 about the 2% of GDP. Additionally, the costs generated by providing fuel and electricity subsidies reached about 1.8% of GDP in the same period (Di Bella et al, 2015).…”

Section: Introductionmentioning

confidence: 99%

Dynamics between energy consumption and economic growth in Ecuador: A granger causality analysis

Pinzón¹

2018

Economic Analysis and Policy

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Energy consumption (EC) in Ecuador has increased significantly during the last decades, affecting negatively the financial position of the country since (1) large EC subsidies are provided in its internal market and (2) Ecuador is mostly a crude-oil exporter and oil-derivatives importer country. This research seeks to state the long-run price and income elasticities of energy demand in Ecuador, by analyzing information spanning the period 1970-2015. A co-integration analysis and an estimation by using a Dynamic Ordinary Least Squares (DOLS) approach considering structural breaks is carried out. Results obtained are robust and suggest that in the long-run energy demand in Ecuador (1) is highly income elastic, (2) has no relationship with its price and (3) has an almost unitary but inverse relationship with the industrial production level. Conclusions and economic policy suggestions are also provided.

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“…For countries with pre-tax subsidy estimates (including IEA, Di Bella et al 2015, IMF and World Bank studies) supply cost is assumed to equal the electricity retail price plus the unit pre-tax subsidy. For all other countries, the supply cost is unknown and subsidies are not estimated.…”

Section: Supply Costmentioning

confidence: 99%

How Large Are Global Energy Subsidies?

Coady¹,

Parry²,

Sears³

et al. 2015

IMF Working Papers

283

194

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract This paper estimates fossil fuel subsidies and the economic and environmental benefits from reforming them, focusing mostly on a broad notion of subsidies arising when consumer prices are below supply costs plus environmental costs and general consumption taxes. Subsidies are $4.9 trillion worldwide in 2013 and $5.3 trillion in 2015 (6.5 percent of global GDP in both years). Undercharging for global warming accounts for 22 percent of the subsidy in 2013, air pollution 46 percent, broader vehicle externalities 13 percent, supply costs 11 percent, and general consumer taxes 8 percent. China was the biggest subsidizer in 2013 ($1.8 trillion), followed by the United States ($0.6 trillion), and Russia, the European Union, and India (each with about $0.3 trillion). Eliminating subsidies would have reduced carbon emissions in 2013 by 21 percent and fossil fuel air pollution deaths 55 percent, while raising revenue of 4 percent, and social welfare by 2.2 percent, of global GDP. Terms of use: Documents inJEL-Codes: Q310, Q380, Q480.

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Energy Subsidies in Latin America and the Caribbean: Stocktaking and Policy Challenges

Cited by 54 publications

References 5 publications

Government policy, clean fuel access, and persistent fuel stacking in Ecuador

Government policy, clean fuel access, and persistent fuel stacking in Ecuador

Dynamics between energy consumption and economic growth in Ecuador: A granger causality analysis

How Large Are Global Energy Subsidies?

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