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Energy Subsidy Reform Assessment Framework

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Book Synopsis Energy Subsidy Reform Assessment Framework by : Ezgi Canpolat

Download or read book Energy Subsidy Reform Assessment Framework written by Ezgi Canpolat. This book was released on . Available in PDF, EPUB and Kindle. Book excerpt: This is the fourth in the series of ten good practice notes under the Energy Sector Reform Assessment Framework (ESRAF), an initiative of the Energy Sector Management Assistance Program (ESMAP) of the World Bank. ESRAF proposes a guide to analyzing energy subsidies, the impacts of subsidies and their reforms, and the political context for reform in developing countries. This good practice note provides those working on consumer price subsidy reforms, in particular social scientists, with hands-on, practical guidance for using certain qualitative research tools to help fully understand the distributional impacts of higher prices on households. It focuses primarily on the direct effects of energy price subsidies (that is, higher energy prices), which are especially pronounced in middle-income countries. The good practice note aims to illustrate how qualitative research tools-focus group discussions and in-depth interviews-can be utilized in the context of energy subsidy reforms. By using such tools, this note aims to guide researchers and policy advisers to better understand the energy use behavior of households, the impacts of higher energy prices on their lives, the ways households may adjust their energy use behavior in response, and the consequences of such coping strategies.

The Energy Subsidy Reform Assessment Framework

2017
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Release : 2017
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Book Synopsis The Energy Subsidy Reform Assessment Framework by : Thomas Flochel

Download or read book The Energy Subsidy Reform Assessment Framework written by Thomas Flochel. This book was released on 2017. Available in PDF, EPUB and Kindle. Book excerpt: Reforming subsidies can be a complex and politically difficult process. Countries embarking on this journey underline the need for understanding the political context of reform, crafting the right energy pricing, designing solutions that mitigate the adverse impacts of reform on affected populations, and engaging with citizens. The Energy Subsidy Reform Assessment Framework (ESRAF) is a comprehensive analytical toolkit and assessment framework for helping countries to achieve politically and socially sustainable reforms. It highlights issues, tools and practices to help identify, analyze and facilitate a comprehensive reform of energy subsidies. It also outlines analytical approaches to diagnose the impacts of energy subsidies, including their effect on energy consumption, emissions, and health. Finally, it explains how to better understand the political context of reform, consult with stakeholders and engage with the public, and it proposes a checklist for rapid diagnostics to aid and guide the reform process.

Energy Subsidy Reform Assessment Framework

2018
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Release : 2018
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Book Synopsis Energy Subsidy Reform Assessment Framework by : Gabriela Inchauste

Download or read book Energy Subsidy Reform Assessment Framework written by Gabriela Inchauste. This book was released on 2018. Available in PDF, EPUB and Kindle. Book excerpt: This note comes in three sections. First, the information required for political economy analysis of energy subsidy reforms is presented. Second, a summary is given of the information that can usually be obtained through desk research to provide the context for subsequent interviews and another field research. Third, information that probably requires interviews and field data collection is provided. The ultimate audience of the proposed types of analysis lies with policy reformers themselves and with external development and policy institutions that are seeking to help governments adopt more sustainable reforms. However, the direct audience for this note are those commissioning political economy analysis of energy subsidies, and technocrats, researchers, and advisers to policy makers carrying out the analysis. Often, a team made up of sector experts and political economy experts will provide a greater depth of analysis. Significant attention is devoted here to the origins and operation of existing subsidies since that history conditions what is possible for the adoption and sustainability of future reforms. The main interest and audience for this note is forward-looking, people and institutions who need to understand what is politically possible and how to realign political forces around successful reform. The authors are mindful that this role is perhaps different from other more technocratic roles of agencies and institutions focused on technical analysis and thus they also devote some attention to the processes needed to obtain and manage sensitive information and political insights since mismanagement in that realm can, itself, affect the political prospects for reform and harm the standing of reform agents in the process. In contrast to desk research or analysis of existing datasets, field research on political economy will always be an intervention in the local system, which needs to be managed well to increase and not decrease the space for reform and coalition building.

Energy Subsidy Reform Assessment Framework

2018
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Release : 2018
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Book Synopsis Energy Subsidy Reform Assessment Framework by : Sudarshan Gooptu

Download or read book Energy Subsidy Reform Assessment Framework written by Sudarshan Gooptu. This book was released on 2018. Available in PDF, EPUB and Kindle. Book excerpt: The objective of this good practice note is to outline the ingredients of an assessment of the fiscal impacts of energy subsidies in an economy from the aggregate fiscal perspective of the government. It demonstrates the interrelations between the fiscal balance, its financing, and impact on key debt and fiscal sustainability indicators. As discussed in the Energy Sector Reform Assessment Framework (ESRAF) Good Practice Note on the definition of energy subsidies (Good Practice Note 1), energy subsidies may be provided through various channels on the production and consumption sides, and may generate contingent liabilities-explicit or implicit-for a government that must be monitored and managed as part of overall macroeconomic management. ESRAF defines an energy subsidy as a deliberate policy action by the government that specifically targets electricity, fuels, or district heating and that reduces the net cost of energy purchased, reduces the cost of energy production or delivery, increases the revenues retained by energy suppliers, or has any combination of these three effects. ESRAF also covers non-energy use of oil, gas, and coal, such as natural gas used as a feed stock for fertilizer manufacture and naphtha and liquefied petroleum gas (LPG) used as feed stocks in petrochemicals. Subsidies are not always paid for by the government. Consumers may subsidize producers, producers may subsidize consumers, and financiers and other actors not linked to energy consumption or production, including those outside the country, may be covering the costs of subsidies. This note focuses on the costs of subsidies to the government. One important form of subsidies consists of direct budgetary transfers from the government to either consumers or producers, which are recorded in the government public sector budget. For instance, with the justification of social benefits, governments often establish consumer prices for energy that are below reference prices (prices that would have prevailed in a competitive market, or the cost of efficient production if a competitive market does not exist), and then compensate the energy suppliers for the difference (also referred to as the price gap) between the reference prices and the government controlled prices.' Another subsidy delivery mechanism is provision of the subsidy benefits directly to end users, typically households. In addition, a government may provide subsidies in the form of tax exemptions to energy service providers, tax credits for investment, or allowing the energy-related public utilities and national oil companies to run arrears on their debt service and other payment obligations to the government.

Energy Subsidy Reform Assessment Framework

2018
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Release : 2018
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Book Synopsis Energy Subsidy Reform Assessment Framework by : Anne Olivier

Download or read book Energy Subsidy Reform Assessment Framework written by Anne Olivier. This book was released on 2018. Available in PDF, EPUB and Kindle. Book excerpt: This note aims to provide guidance on how to assess the distributional implications of energy subsidy reform (ESR) using quantitative methods. It is intended for use by those familiar with the basics of welfare measurement, ideally part of a multi-disciplinary team. Ideally this assessment would therefore be complemented by insights from qualitative analysis and by an analysis of the effectiveness of feasible compensatory measures. The note focuses on how to assess the distributional implications of household level impacts of ESR (as opposed to firm level, discussed in Good Practice Note 6). Its scope is confined to cases where ESRs lead to higher prices paid by energy consumers. As Good Practice Note 1 outlines, ESRs do not necessarily lead to higher prices, and could even decrease prices actually paid, such as when producer subsidies in the form of price support paid for by consumers are eliminated, or when consumer price subsidies lead to illegal diversion and out-smuggling, acute fuel shortages, and prices that are even higher than official prices on the black markets. The latter is particularly important, because a lack of data often forces the distributional analysis of ESRs to take observed expenditures on subsidized energy and scale them in proportion to the calculated price gaps-the gap between the unsubsidized price and the official price-to estimate the incidence of subsidies, whereas in practice consumers may be paying much higher prices than the official prices. Further, this note is not confined only to ESRs in that the distributional effects of higher prices of fuels used as feed stocks-such as natural gas used in fertilizer manufacturer-are also captured. In addition, while this note tries to present a general approach, practical pointers are provided that are relevant for the analysis of different types of energy, the prices of which are rising, and which are used either directly or in the production of goods and services widely in the economy. Overall, therefore, the note discusses the analysis of liquid fuels, gas, electricity and district heating (a source of heating used primarily in Eastern Europe). The word prices applies to all forms of energy, while tariffs applies to schedules of regulated prices that are applicable to regulated electricity, gas, or district heating. For households-the focus of this paper-two main channels of impacts can be identified, relating respectively to consumption patterns and income streams. goth consumption and income can be affected directly by higher prices for energy, or indirectly through other price changes triggered by the changes in energy prices (most notably through higher transport costs caused by rises in gasoline and diesel prices). These indirect effects, though harder to quantify than direct effects, can be significant for petroleum products.

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