United Nations Environment Programme
Division of Technology, Industry, and Economics
Economics and Trade Branch

Energy Subsidies

The need to reform energy subsidies is now at the top of the international agenda. Any measure that keeps energy prices for consumers or producers below or above market levels can be considered a subsidy. Many types of subsidies, especially those that encourage the production and use of fossil fuels and other non-renewable forms of energy, are harmful to the environment. They can have high economic costs and often bring only very few benefits to those for whom they are intended. At the same time, subsidies to renewables and energy-efficient end-use technologies are enabling countries to make advances in the international market for cleaner and safer technologies.

The work of UNEP ETB focuses on raising awareness among policy makers and other stakeholders of the actual and potential impacts of energy subsidies. With the aim of assessing and reforming environmentally harmful energy subsidies, UNEP ETB has organized workshops, elaborated analytic papers and supported case studies.

Jointly with the International Energy Agency (IEA), a series of thematic workshops on reforming energy subsidies were conducted. These workshops helped further the dialogue on energy subsidies and their implications for sustainable development. They provided a platform for representatives of governments, NGOs, industry and other stakeholders to discuss issues surrounding energy subsidies and their reform, and share experience based on country-specific experience and analysis. They further helped review and build on methodologies to identify and assess impacts of energy subsidies and to enhance policy-makers capacities to find win-win solutions in defining and implementing energy subsidy reform.