Energy Subsidies – Moving ahead on reform 2 October 2013 Peter Wooders, Senior Economist, IISD & Programme Leader, Global Subsidies Initiative

What we do  Support reform of energy subsidies….. ….which act against sustainable development  By being a trusted partner and expert advisor….. …..ideally to governments  Propose sustainable alternatives (renewables, green economy, energy intensive industry & CC)

Recent work examples

Subsidies that undermine sustainable development ECONOMIC : inefficient use of scarce public resources; perverse market distortions; increased volatility ENVIRONMENTAL : can incentivize waste, resource depletion, pollution; and absolve producers of liability for accidents SOCIAL : inefficient welfare policies; can damage poor producer competitiveness; environmental impacts deepen poverty; can lead to rent-seeking and corruption Fossil Fuels US$ bn/year - oil consumers key But >US$100 bn to producers, including in OECD Biofuels >US$20 bn/year Mostly developed countries, but growing worldwide Nuclear Scale unknown Industry depends on subsidy Agriculture US$384 bn in 2009 Over-production in developed countries very trade-distorting Irrigation Scale unknown GSI estimates US$1 bn in Spain, >US$0.5 bn in 4 Indian States Fisheries US$15-35 bn/year – 25% of industry revenue US$50 bn/year lost from depleted stocks

International attention continues to increase

GSI Country Work-plans

Examples of partnerships in Indonesia

Public Dialogue: University of Gadjah Mada

Building support Organize internally Gather information and understand perceptions Raise awareness and change attitudes Assess adequacy of internal organisation and promote improvements Conduct research to identify and map stakeholder groups and opinions Raise awareness The IISD Global Subsidies Initiative

Fossil-Fuel Subsidies: International GSI’s objectives and role: 1.Support government forums to address FFS reform GSI officially engaged by Friends group to provide support Input to G20 and APEC processes Identify opportunities in UNFCCC and other forums 2.Facilitate civil society dialogue and cooperation Co-chair of Civil-20 Energy & Environment Group Opportunities: role for IISD as “thought leader” to give vision, strategy and better coordinate CSO strategies and actions Note: others increasingly moving into the field including IOs and international civil society groups – need to partner effectively

Options for a G20 peer review on FFSR: Review teams Host country should select review team (or joint selection) G20 members only G20 members + 3 rd parties: Other countries: APEC or “Friends” members Experts: OECD, IEA, GSI or independent Countries with similar circumstances (e.g. energy exporters) could review each other

FFS: Producers – Ministries typically split on reform GSI unique role: The detail of GSI investigations is unsurpassed: bottom-up inventories for Canada, Indonesia, Russia and Norway Nobody except GSI has even tried to quantify producer subsidies in developing countries. This year: improving methodology and applying it now at project level (case studies) Forthcoming: Developing the Arctic dimension of producer subsidies work, especially given Canada’s presidency of the Arctic Council in 2013–2015 Further work in Canada

Moving ahead - Supporting national reform 1.Good research in not enough to achieve influence; need to invest in communications and good partnerships to address the politics of reform 2.It takes time to build trust and credibility with government and CSOs 3.Think of reform as a process that rarely (and usually shouldn’t) happen over-night; therefore, need a longer term perspective

Thank you!