Dirty little secrets: inferring fossil-fuel subsidies from patterns in emission intensities

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    Abstract

    I develop a unique database of international fossil-fuel subsidies by examining country specific patterns in carbon emission-to-GDP ratios, known as emission-intensities. For most - but not all - countries, intensities tend to be hump-shaped with income. I construct a model of structural-transformation that generates this hump-shaped intensity and then show that deviations from this pattern must be driven by distortions to sectoral-productivity and/or fossil-fuel prices. Finally, I use the calibrated-model to measure these distortions for 170 countries for 1980-2010. This methodology reveals that fossil-fuel price-distortions are large, increasing and often hidden. Furthermore, they are major contributors to higher carbon-emissions and lower GDP.
    Original languageEnglish
    Place of PublicationSt Andrews
    PublisherUniversity of St Andrews
    Number of pages95
    Publication statusPublished - 6 Mar 2017

    Publication series

    NameSchool of Economics and Finance Discussion Paper
    PublisherUniversity of St Andrews
    No.1705
    ISSN (Print)0962-4031
    ISSN (Electronic)2055-303X

    Keywords

    • Carbon subsidies
    • Subsidies
    • Fossil fuels
    • Pollution
    • Energy
    • Energy intensity
    • Industrialization
    • Structural transformation
    • Climate change
    • Global warming
    • Emissions

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