In developing countries, government energy subsidies are more beneficial than harmful (NSDA China)

View the autosave


Energy Subsidy Reform Facility: Generates Knowledge to Support Governments to Design and Implement Sustainable Energy Subsidy Reforms while Safeguarding the Welfare of the Poor (2020). This article provides a general overview of energy subsidies. It doesn’t really have any evidence.

Ending Fossil Fuel Subsidies, Better Funding for Renewable (2021). This article argues we should shift fossil fuel subsidies to renewable energy subsidies.

Fossil fuel subsidies need to go – but what about the poorer people who rely on cheap energy? (2018)

General (Fossil Fuel)


Energy subsidies in developing countries: Treating the disease while symptoms abate (2015). This makes a general argument for reducing subsidies in favor of relying on markets.

Fossil Fuel subsidy reform in the developing world (2018). Most of this article is complicated to read and requires a degree in economics, but there is some great evidence about how cutting fossil fuel subsidies will reduce climate change and air pollution. There is also a great card that says there is a net reduction in CO2 emissions, even when green energy subsidies are factored in.

Welfare effects of energy subsidy reform in developing countries (2019). We analyze the potential welfare effect of energy subsidy reforms. The income distributions of eleven developing countries from different geographical regions are simulated using the assumption that income is lognormally distributed. We use the concept of the compensating variation to measure how much compensation is required to compensate consumers for a price increase in formerly subsidized goods. The behavior of consumers is modeled by a standard Cobb–Douglas and a quasilinear utility function. In the Cobb–Douglas case, a fixed fraction of income is spent on the subsidized good, which does not change after a price increase. With quasilinear preferences, the optimal amount of the subsidized good does not vary with income, but does change as prices change. We show theoretically and empirically that the required compensating variation can be set below the saved expenditures on subsidies, so a budget neutral reform can have a positive effect on social welfare.

Pro (Fossil Fuel)

To ride COVID-19’s green wave, governments must slash fossil fuel subsidies (2020). This article argues that subsidies actually hurt manufacturing.

Con (Renewable)

Phase out energy subsidies to improve energy mix (2020). This article argues that cutting subsidies is not enough and that subsidies must be shifted to clean energy programs. It also argues that subsidy cuts will hurt the poor.

Developing countries and the renewable energy revolution (2017). This article argues that developing countries are primarily investing in renewable energy.

Fossil fuel subsidies and renewable energies in MENA: An oxymoron? (2021)

Ending energy poverty faster (2020, video)

Con (General)

Reducing energy subsidies without hurting the poor (2015). This article argues cutting subsidies will hurt the poor and increase food prices.

Energy subsidy reform and delivery technical assistance facility (2017). There isn’t much evidence in here but it makes a simple case that energy subsidies hurt the environment and the poor.

Energy subsidies are bigger than aid in more than half of poor countries … but we spend very little trying to reduce them (2017). This article argues cutting subsidies will hurt the poor.