The Road Not Taken? : Responding to the Energy Price Shock in East Asia
Several countries in East Asia have increased fossil fuel subsidies to keep consumer prices lower than currently high international prices.
These subsidies are discouraging the shift in consumption away from fossil fuels, while high prices are encouraging investment in new fossil fuel infrastructure. Providing income transfers instead of price subsidies would encourage consumption of cleaner alternatives, while softening the welfare loss. And subsidizing investment in renewables would avert the risk of being locked in to fossil fuels. The total cost need not be higher than that of fossil fuel subsidies.
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English PDFAuthors:
Pollitt, Hector Islamaj, Ergys Kitchlu, Rahul Le, Duong Trung Mattoo, Aaditya
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