DOCSLIB.ORG

Update on Recent Progress in Reform of Inefficient Fossil-Fuel Subsidies That Encourage Wasteful Consumption

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Update on Recent Progress in Reform of Inefficient Fossil-Fuel Subsidies That Encourage Wasteful Consumption UPDATE ON RECENT PROGRESS IN REFORM OF INEFFICIENT FOSSIL-FUEL SUBSIDIES THAT ENCOURAGE WASTEFUL CONSUMPTION Contribution by the International Energy Agency (IEA) and the Organisation for Economic Co-operation and Development (OECD) to the G20 Energy Transitions Working Group in consultation with: International Energy Forum (IEF), Organization of Petroleum Exporting Countries (OPEC) and the World Bank 2nd Energy Transitions Working Group Meeting Toyama, 18-19 April 2019 Update on Recent Progress in Reform of Inefficient Fossil-Fuel Subsidies that Encourage Wasteful Consumption This document, as well as any data and any map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. This update does not necessarily express the views of the G20 countries or of the IEA, IEF, OECD, OPEC and the World Bank or their member countries. The G20 countries, IEA, IEF, OECD, OPEC and the World Bank assume no liability or responsibility whatsoever for the use of data or analyses contained in this document, and nothing herein shall be construed as interpreting or modifying any legal obligations under any intergovernmental agreement, treaty, law or other text, or as expressing any legal opinion or as having probative legal value in any proceeding. Please cite this publication as: OECD/IEA (2019), "Update on recent progress in reform of inefficient fossil-fuel subsidies that encourage wasteful consumption", https://oecd.org/fossil-fuels/publication/OECD-IEA-G20-Fossil-Fuel-Subsidies-Reform-Update-2019.pdf │ 3 Summary This report discusses recent trends and developments in the reform of inefficient fossil- fuel subsidies that encourage wasteful consumption, within the G20 and beyond. G20 member countries continue their commitment to phase out inefficient fossil-fuel subsidies, as reiterated in the Energy Ministers Communiqué of June 2018, in Argentina.1 The latest estimates of support for fossil fuels show that progress in reducing subsidies and government support for fossil-fuel production and use has slowed down in 2017. According to the combined IEA-OECD estimates, which cover 76 economies, the 2013- 16 downward trend in support for fossil fuels, was reversed with an increase of 5% in 2017 compared to 2016, reaching USD 340 billion. Nevertheless, countries around the world have continued to implement energy-pricing reforms. For example, Argentina, India, Indonesia, and several MENA countries took important steps towards reducing their energy subsidies. On the production side, the subsidised hard-coal industry in Western Europe has been phased out and efforts to end state aid to coal-fired power generation in the European Union are continuing. A recent EU decision sets 2025 as the target date for ending state aid to high-emission power plants, effectively eliminating subsidies to coal. At the same time, the oil and gas sector continues to benefit from government incentives in several countries, mostly through tax provisions that provide preferential treatment for cost recovery. Such policies could go against domestic efforts to reduce global greenhouse gas (GHG) emissions. While reforms of inefficient fossil-fuel subsidies have translated in reduced fiscal deficits and a better alignment of prices with costs, recent policy developments show that such gains might be under threat, depending particularly on the evolution of oil prices. Volatility in international oil prices, as happened in during 2018, renders reform more difficult to implement, as increases in domestic energy prices may have adverse distributional consequences. Increasing transparency on the use of scarce public resources is one way to maintain the momentum for fossil-fuel subsidy reform. Six G20 member states have completed voluntary peer reviews of inefficient fossil-fuel subsidies and collectively evaluated more than 100 government interventions relating to both the consumption and production of fossil fuels. Two more member states, Argentina and Canada, are now in the preparatory phase of a peer review. These peer reviews bring to the fore issues around fossil fuel 1 . The G20 work focuses on the phasing out of inefficient fossil-fuel subsidies that encourage wasteful consumption over the medium term. These important qualifications (in italics) are central to the update. Still, for reasons of succinctness and readability in the text, the update may refer to fossil-fuel subsidies without the additional qualifications. RECENT PROGRESS IN REFORM OF INEFFICIENT FOSSIL-FUEL SUBSIDIES THAT ENCOURAGE WASTEFUL CONSUMPTION 4 │ support and the formidable task of undertaking energy subsidy reforms while providing targeted support for the poorest. Further efforts to improve transparency are underway. For example, countries are joining the newly established OECD Paris Collaborative on Green Budgeting, which aims to support governments in using national expenditure and revenue processes to support climate and environmental goals towards developing sustainable and resilient societies. RECENT PROGRESS IN REFORM OF INEFFICIENT FOSSIL-FUEL SUBSIDIES THAT ENCOURAGE WASTEFUL CONSUMPTION │ 5 Table of contents Summary ................................................................................................................................................ 3 Introduction ........................................................................................................................................... 6 G20 voluntary peer reviews of inefficient fossil-fuel subsidies .......................................................... 7 Recent global progress in fossil-fuel subsidy reform .......................................................................... 9 Developments in the reform of fossil-fuel subsidies in other IOs .................................................... 17 References ............................................................................................................................................ 31 Annex A. Additional OECD data on support for fossil fuels ........................................................... 33 Tables Table 1. Summary of G20 peer reviews .................................................................................................. 8 Table 2. OECD Economic Surveys that discuss support to fossil fuels ................................................. 23 Table 3. OECD Environmental Performance Reviews that discuss support to fossil fuels................... 27 Figures Figure 1. Reductions of government support for fossil fuels continue but at a slower pace in the OECD and selected partner economies ......................................................................................... 10 Figure 2. Value of fossil-fuel consumption subsidies from the IEA price-gap estimates indicate an increase of 12% between 2016 and 2017 ...................................................................................... 14 Figure 3. Policy developments to reduce consumption subsidies ......................................................... 15 Figure 4. IEA-OECD combined estimate of support for fossil fuels show that progress has slowed down .............................................................................................................................................. 16 Figure 5. Decomposition of change in government support for fossil fuels for OECD and selected partner economies between 2016 and 2017 ................................................................................... 33 Figure 6. Shares of fossil-fuel support by indicator and by fuel type in 2017 ...................................... 34 RECENT PROGRESS IN REFORM OF INEFFICIENT FOSSIL-FUEL SUBSIDIES THAT ENCOURAGE WASTEFUL CONSUMPTION 6 │ Update on recent progress in reform of inefficient fossil-fuel subsidies that encourage wasteful consumption Introduction The Energy Transitions Working Group (ETWG) of the G20 requested that an update “that captures recent progress in countries, the peer review process and other developments to phase out inefficient fossil-fuel subsidies that encourage wasteful consumption” be prepared by the International Energy Agency (IEA) and the Organisation for Economic Co-operation and Development (OECD), in consultation with the International Energy Forum (IEF), the Organisation of the Petroleum Exporting Countries (OPEC), and the World Bank. The report was to be made available for the ETWG meeting, in Toyama, Japan, on 18-19 April 2019. This document responds to that request. Under the recent G20 presidency of Argentina, member states reiterated their commitments, in the medium term, to rationalise and phase out inefficient fossil-fuel subsidies that encourage wasteful consumption, while providing targeted support for the poorest, thus upholding their pledge of the 2009 Pittsburgh Communiqué. The effort to reform fossil-fuel subsidies qualified as inefficient remains voluntary and country-led, recognising the need to provide affordable and reliable energy access to the poor. A continued, concerted commitment by G20 membership to reform their inefficient fossil-fuel subsidies is instrumental in enabling a global transition towards a lower- emissions energy system.2 Inefficient fossil-fuel subsidies can hinder progress in a country’s transition as they distort prices, induce economic inefficiencies and poor environmental outcomes, and put pressure on scare public resources. They can encourage
Load more

Recommended publications
  • Trends in Electricity Prices During the Transition Away from Coal by William B
    May 2021 | Vol. 10 / No. 10 PRICES AND SPENDING Trends in electricity prices during the transition away from coal By William B. McClain The electric power sector of the United States has undergone several major shifts since the deregulation of wholesale electricity markets began in the 1990s. One interesting shift is the transition away from coal-powered plants toward a greater mix of natural gas and renewable sources. This transition has been spurred by three major factors: rising costs of prepared coal for use in power generation, a significant expansion of economical domestic natural gas production coupled with a corresponding decline in prices, and rapid advances in technology for renewable power generation.1 The transition from coal, which included the early retirement of coal plants, has affected major price-determining factors within the electric power sector such as operation and maintenance costs, 1 U.S. BUREAU OF LABOR STATISTICS capital investment, and fuel costs. Through these effects, the decline of coal as the primary fuel source in American electricity production has affected both wholesale and retail electricity prices. Identifying specific price effects from the transition away from coal is challenging; however the producer price indexes (PPIs) for electric power can be used to compare general trends in price development across generator types and regions, and can be used to learn valuable insights into the early effects of fuel switching in the electric power sector from coal to natural gas and renewable sources. The PPI program measures the average change in prices for industries based on the North American Industry Classification System (NAICS).
    [Show full text]
  • Energy Subsidy Reform in Mena Oil Exporters
    OIL PRICES, POLITICAL INSTABILITY, AND ENERGY SUBSIDY REFORM IN MENA OIL EXPORTERS Jim Krane, Ph.D. Wallace S. Wilson Fellow for Energy Studies Francisco J. Monaldi, Ph.D. Fellow in Latin American Energy Policy May 2017 © 2017 by the James A. Baker III Institute for Public Policy of Rice University This material may be quoted or reproduced without prior permission, provided appropriate credit is given to the authors and the James A. Baker III Institute for Public Policy. Wherever feasible, papers are reviewed by outside experts before they are released. However, the research and views expressed in this paper are those of the individual researchers and do not necessarily represent the views of the James A. Baker III Institute for Public Policy. Jim Krane, Ph.D. Francisco J. Monaldi, Ph.D. “Oil Prices, Political Instability, and Energy Subsidy Reform in MENA Oil Exporters” Energy Subsidy Reform in MENA Oil Exporters Abstract Since the nationalization of petroleum sectors in the 1970s, low, state-subsidized prices of energy products and services have been a policy fixture of Middle Eastern oil producers. Starting in late 2014, however, many oil-producing governments began to reduce subsidies. Prices of fuels and services have risen in the six Gulf monarchies, as well as in Iran, Algeria, and Egypt. These subsidy reforms followed successful test cases in Iran in 2010 and Dubai in 2011, when price increases were accepted by the public with minimal backlash. Such reforms are understood to be politically illegitimate in autocratic settings where in-kind energy is supplied to citizens in lieu of public support for the government.
    [Show full text]
  • Phase-Out 2020: Monitoring Europe's Fossil Fuel Subsidies
    Brief Czech Republic France Germany Greece Hungary Phase-out 2020: monitoring Italy Netherlands Poland Europe’s fossil fuel subsidies Spain Sweden Leah Worrall and Matthias Runkel United Kingdom September 2017 European Union Italy Key Leading on phasing out fossil fuel subsidies: findings • Italy is demonstrating commitment to report on its fossil fuel subsidies, as part of the EU agreements. Following the approval of a Green Economy package by Parliament, the Italian Ministry of Environment released a summary of subsidies with harmful and beneficial impacts on the environment. This includes Italy’s tax expenditures and budgetary support for fossil fuels, but does not include support provided through public finance or state-owned enterprises . • Domestic oil and gas production are in decline, which may account for low domestic support for fossil fuel production infrastructure in Italy through its development bank Cassa Depositi e Prestiti (CDP). • Remaining national subsidies to coal mining and coal-fired power are comparatively low in Italy, indicating the possibility for a complete phase-out of support for these subsidies by 2018, in line with its EU-level commitment to phase out hard-coal mining by 2018. Lagging on phasing out fossil fuel subsidies: • The Fiscal Reform Delegation Law introduced in 2014 required the removal of environmentally harmful subsidies, but it has never been implemented. All sectors reviewed in this analysis still receive fossil-fuel subsidies (see Table 1). • The transport sector receives the most support through government spending. This includes a reduced excise tax rate for diesel compared with petrol fuel, at an annual average cost of €5 billion.
    [Show full text]
  • Biomass Basics: the Facts About Bioenergy 1 We Rely on Energy Every Day
    Biomass Basics: The Facts About Bioenergy 1 We Rely on Energy Every Day Energy is essential in our daily lives. We use it to fuel our cars, grow our food, heat our homes, and run our businesses. Most of our energy comes from burning fossil fuels like petroleum, coal, and natural gas. These fuels provide the energy that we need today, but there are several reasons why we are developing sustainable alternatives. 2 We are running out of fossil fuels Fossil fuels take millions of years to form within the Earth. Once we use up our reserves of fossil fuels, we will be out in the cold - literally - unless we find other fuel sources. Bioenergy, or energy derived from biomass, is a sustainable alternative to fossil fuels because it can be produced from renewable sources, such as plants and waste, that can be continuously replenished. Fossil fuels, such as petroleum, need to be imported from other countries Some fossil fuels are found in the United States but not enough to meet all of our energy needs. In 2014, 27% of the petroleum consumed in the United States was imported from other countries, leaving the nation’s supply of oil vulnerable to global trends. When it is hard to buy enough oil, the price can increase significantly and reduce our supply of gasoline – affecting our national security. Because energy is extremely important to our economy, it is better to produce energy in the United States so that it will always be available when we need it. Use of fossil fuels can be harmful to humans and the environment When fossil fuels are burned, they release carbon dioxide and other gases into the atmosphere.
    [Show full text]
  • Biomass Cofiring in Coal-Fired Boilers
    DOE/EE-0288 Leading by example, saving energy and Biomass Cofiring in Coal-Fired Boilers taxpayer dollars Using this time-tested fuel-switching technique in existing federal boilers in federal facilities helps to reduce operating costs, increase the use of renewable energy, and enhance our energy security Executive Summary To help the nation use more domestic fuels and renewable energy technologies—and increase our energy security—the Federal Energy Management Program (FEMP) in the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, assists government agencies in developing biomass energy projects. As part of that assistance, FEMP has prepared this Federal Technology Alert on biomass cofiring technologies. This publication was prepared to help federal energy and facility managers make informed decisions about using biomass cofiring in existing coal-fired boilers at their facilities. The term “biomass” refers to materials derived from plant matter such as trees, grasses, and agricultural crops. These materials, grown using energy from sunlight, can be renewable energy sources for fueling many of today’s energy needs. The most common types of biomass that are available at potentially attractive prices for energy use at federal facilities are waste wood and wastepaper. The boiler plant at the Department of Energy’s One of the most attractive and easily implemented biomass energy technologies is cofiring Savannah River Site co- fires coal and biomass. with coal in existing coal-fired boilers. In biomass cofiring, biomass can substitute for up to 20% of the coal used in the boiler. The biomass and coal are combusted simultaneously. When it is used as a supplemental fuel in an existing coal boiler, biomass can provide the following benefits: lower fuel costs, avoidance of landfills and their associated costs, and reductions in sulfur oxide, nitrogen oxide, and greenhouse-gas emissions.
    [Show full text]
  • Ecotaxes: a Comparative Study of India and China
    Ecotaxes: A Comparative Study of India and China Rajat Verma ISBN 978-81-7791-209-8 © 2016, Copyright Reserved The Institute for Social and Economic Change, Bangalore Institute for Social and Economic Change (ISEC) is engaged in interdisciplinary research in analytical and applied areas of the social sciences, encompassing diverse aspects of development. ISEC works with central, state and local governments as well as international agencies by undertaking systematic studies of resource potential, identifying factors influencing growth and examining measures for reducing poverty. The thrust areas of research include state and local economic policies, issues relating to sociological and demographic transition, environmental issues and fiscal, administrative and political decentralization and governance. It pursues fruitful contacts with other institutions and scholars devoted to social science research through collaborative research programmes, seminars, etc. The Working Paper Series provides an opportunity for ISEC faculty, visiting fellows and PhD scholars to discuss their ideas and research work before publication and to get feedback from their peer group. Papers selected for publication in the series present empirical analyses and generally deal with wider issues of public policy at a sectoral, regional or national level. These working papers undergo review but typically do not present final research results, and constitute works in progress. ECOTAXES: A COMPARATIVE STUDY OF INDIA AND CHINA1 Rajat Verma2 Abstract This paper attempts to compare various forms of ecotaxes adopted by India and China in order to reduce their carbon emissions by 2020 and to address other environmental issues. The study contributes to the literature by giving a comprehensive definition of ecotaxes and using it to analyse the status of these taxes in India and China.
    [Show full text]
  • Supply-Side Climate Policy for Crude Oil Producers: Exploring Policy Pathways for Decarbonizing Fossil Fuels
    Supply-Side Climate Policy for Crude Oil Producers: Exploring Policy Pathways for Decarbonizing Fossil Fuels Paul Zakkour and Wolfgang Heidug August 2020 Doi: 10.30573/KS--2020-DP19 About KAPSARC The King Abdullah Petroleum Studies and Research Center (KAPSARC) is a non-profit global institution dedicated to independent research into energy economics, policy, technology and the environment across all types of energy. KAPSARC’s mandate is to advance the understanding of energy challenges and opportunities facing the world today and tomorrow, through unbiased, independent, and high-caliber research for the benefit of society. KAPSARC is located in Riyadh, Saudi Arabia. This publication is also available in Arabic. Legal Notice © Copyright 2020 King Abdullah Petroleum Studies and Research Center (“KAPSARC”). This Document (and any information, data or materials contained therein) (the “Document”) shall not be used without the proper attribution to KAPSARC. The Document shall not be reproduced, in whole or in part, without the written permission of KAPSARC. KAPSARC makes no warranty, representation or undertaking whether expressed or implied, nor does it assume any legal liability, whether direct or indirect, or responsibility for the accuracy, completeness, or usefulness of any information that is contained in the Document. Nothing in the Document constitutes or shall be implied to constitute advice, recommendation or option. The views and opinions expressed in this publication are those of the authors and do not necessarily reflect the official views or position of KAPSARC. Supply-Side Climate Policy for Crude Oil Producers: Exploring Policy Pathways for Decarbonizing Fossil Fuels 2 Key Points his paper provides an overview of supply-side climate policies, considers options for fossil fuel producers to establish proactive and progressive approaches toward climate mitigation, and assesses factors and challenges that could influence their success.
    [Show full text]
  • Phase-Out 2020: Monitoring Europe's Fossil Fuel Subsidies
    Phase-out 2020 Monitoring Europe’s fossil fuel subsidies Ipek Gençsü, Maeve McLynn, Matthias Runkel, Markus Trilling, Laurie van der Burg, Leah Worrall, Shelagh Whitley, and Florian Zerzawy September 2017 Report partners ODI is the UK’s leading independent think tank on international development and humanitarian issues. Climate Action Network (CAN) Europe is Europe’s largest coalition working on climate and energy issues. Readers are encouraged to reproduce material for their own publications, as long as they are not being sold commercially. As copyright holders, ODI and Overseas Development Institute CAN Europe request due acknowledgement and a copy of the publication. For 203 Blackfriars Road CAN Europe online use, we ask readers to link to the original resource on the ODI website. London SE1 8NJ Rue d’Edimbourg 26 The views presented in this paper are those of the author(s) and do not Tel +44 (0)20 7922 0300 1050 Brussels, Belgium necessarily represent the views of ODI or our partners. Fax +44 (0)20 7922 0399 Tel: +32 (0) 28944670 www.odi.org www.caneurope.org © Overseas Development Institute and CAN Europe 2017. This work is licensed [email protected] [email protected] under a Creative Commons Attribution-NonCommercial Licence (CC BY-NC 4.0). Cover photo: Oil refinery in Nordrhein-Westfalen, Germany – Ralf Vetterle (CC0 creative commons license). 2 Report Acknowledgements The authors are grateful for support and advice on the report from: Dave Jones of Sandbag UK, Colin Roche of Friends of the Earth Europe, Andrew Scott and Sejal Patel of the Overseas Development Institute, Helena Wright of E3G, and Andrew Murphy of Transport & Environment, and Alex Doukas of Oil Change International.
    [Show full text]
  • A New Era for Wind Power in the United States
    Chapter 3 Wind Vision: A New Era for Wind Power in the United States 1 Photo from iStock 7943575 1 This page is intentionally left blank 3 Impacts of the Wind Vision Summary Chapter 3 of the Wind Vision identifies and quantifies an array of impacts associated with continued deployment of wind energy. This 3 | Summary Chapter chapter provides a detailed accounting of the methods applied and results from this work. Costs, benefits, and other impacts are assessed for a future scenario that is consistent with economic modeling outcomes detailed in Chapter 1 of the Wind Vision, as well as exist- ing industry construction and manufacturing capacity, and past research. Impacts reported here are intended to facilitate informed discus- sions of the broad-based value of wind energy as part of the nation’s electricity future. The primary tool used to evaluate impacts is the National Renewable Energy Laboratory’s (NREL’s) Regional Energy Deployment System (ReEDS) model. ReEDS is a capacity expan- sion model that simulates the construction and operation of generation and transmission capacity to meet electricity demand. In addition to the ReEDS model, other methods are applied to analyze and quantify additional impacts. Modeling analysis is focused on the Wind Vision Study Scenario (referred to as the Study Scenario) and the Baseline Scenario. The Study Scenario is defined as wind penetration, as a share of annual end-use electricity demand, of 10% by 2020, 20% by 2030, and 35% by 2050. In contrast, the Baseline Scenario holds the installed capacity of wind constant at levels observed through year-end 2013.
    [Show full text]
  • "Subsidies and Costs of EU Energy", Ecofys, 2014
    Subsidies and costs of EU energy Final report Subsidies and costs of EU energy Final report By: Sacha Alberici, Sil Boeve, Pieter van Breevoort, Yvonne Deng, Sonja Förster, Ann Gardiner, Valentijn van Gastel, Katharina Grave, Heleen Groenenberg, David de Jager, Erik Klaassen, Willemijn Pouwels, Matthew Smith, Erika de Visser, Thomas Winkel, Karlien Wouters Date: 11 November 2014 Project number: DESNL14583 Reviewer: Prof. Dr. Kornelis Blok This study was ordered and paid for by the European Commission, Directorate-General for Energy. All copyright is vested in the European Commission. The information and views set out in this study are those of the author(s) and do not necessarily reflect the official opinion of the Commission. The Commission does not guarantee the accuracy of the data included in this study. Neither the Commission nor any person acting on the Commission’s behalf may be held responsible for the use which may be made of the information contained therein. © Ecofys 2014 by order of: European Commission A cooperation of: This project was carried out and authored by Ecofys. KPMG, the Centre for Social and Economic Research (CASE) and CE Delft provided data collection support with regard to public interventions in 28 Member States. KPMG collected data for twenty Member States and CASE and CE Delft collected data for the remaining eight. We wish to thank CE Delft and CASE also for helpful discussions during the development of the methodology. Summary Introduction The way energy markets function and the effect of government interventions in the European Union has been the subject of much debate in recent years.
    [Show full text]
  • Green Growth Policy, De-Growth, and Sustainability: the Alternative Solution for Achieving the Balance Between Both the Natural and the Economic System
    sustainability Editorial Green Growth Policy, De-Growth, and Sustainability: The Alternative Solution for Achieving the Balance between Both the Natural and the Economic System Diego A. Vazquez-Brust 1,2 and José A. Plaza-Úbeda 3,* 1 Portsmouth Faculty of Business and Law, Richmond Building, Portland Street, Portsmouth P01 3DE, UK; [email protected] 2 Production Engineering Department, Federal University of Santa Catarina (UFSC), Florianópolis 88040-900, SC, Brazil 3 Economics and Business Department, University of Almeria, 04120 Almeria, Spain * Correspondence: [email protected] 1. Introduction “We are ethically obliged and incited to think beyond what are treated as the realistic limits of the possible” (Judith Butler, 2020) The existence of an imbalance between our planet’s reserves of resources and the conditions necessary to maintain high levels of economic growth is evident [1]. The limitation of natural resources pushes companies to consider the possibility of facing critical situations in the future that will make it extremely difficult to reconcile economic Citation: Vazquez-Brust, D.A.; and sustainable objectives [2]. Plaza-Úbeda, J.A. Green Growth In this context of dependence on an environment with finite resources, there are Policy, De-Growth, and Sustainability: growing interests in alternative economic models, such as the Circular Economy, oriented to The Alternative Solution for the maximum efficient use of resources [3–5]. However, the Circular Economy approach is Achieving the Balance between Both still very far from the reality of industries, and the depletion of natural resources continues the Natural and the Economic System. undeterred [6]. It is increasingly necessary to explore alternative approaches to address the Sustainability 2021, 13, 4610.
    [Show full text]
  • Energy in WTO Law and Policy
    Energy in WTO law and policy THOMAS COTTIER, GARBA MALUMFASHI, SOFYA MATTEOTTI-BERKUTOVA, OLGA NARTOVA, ∗ JOËLLE DE SÉPIBUS AND SADEQ Z.BIGDELI KEY MESSAGES • The regulation of energy in international law is highly fragmented and largely incoherent. We submit that pertinent issues should be addressed by a future Framework Agreement on Energy within WTO law. • Successful regulation of energy requires a coherent combination of rules both on goods and services. Energy services require new classifications suitable to deal coherently with energy as an integrated sector. • Rules on subsidies relating to energy call for new approaches within the Framework Agreement on Energy. A distinction should be made between renewable and non- renewable energy. Moreover, disciplines need to be developed in the context of emission trading. • The Framework Agreement should address the problem of restricting energy production and export restrictions. • Disciplines on government procurement are able to take into account policies on green procurement, but a number of changes to the GPA Agreement will be required to make green procurement more effective and attractive. • In view of the close interactions between the energy sector and climate change, formulating effective rules to address energy under the WTO system will catalyse coherence and complementarity between the climate and trade regimes A. Introduction 60 years ago, when the rules of the GATT were negotiated, world energy demand was a fraction of what it is today and so were energy prices.1 While energy has always been a crucial factor in geopolitics, at that time liberalising trade in energy was not a political priority. The industry was largely dominated by state run monopolies and thus governed by strict territorial allocation.
    [Show full text]