Balancing Act : Cutting Energy Subsidies While Protecting Affordability

Laderchi, Caterina Ruggeri ; Olivier, Anne ; Trimble, Chris

Washington, DC:World Bank

关键词: AFFORDABLE ENERGY;    ALTERNATIVE ENERGY;    AVAILABILITY;    BALANCE;    CALCULATION;   

DOI  :  10.1596/978-0-8213-9789-3
RP-ID  :  74705

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The cost of energy in Eastern Europe andCentral Asia, as elsewhere, is an important policy issue, asshown by the concerns for energy affordability during thepast harsh winter. Governments try to moderate the burden ofenergy expenditures that is experienced by householdsthrough subsidies to the energy providers, so thathouseholds pay tariffs below the cost recovery level for theenergy they use. These subsidies result in significantpressures on government budgets when international pricesrise. They also provide perverse incentives for theoverconsumption of energy as households do not pay the truecost of energy, and therefore, have fewer incentives to saveor to invest in energy efficiency. Balancing competingclaims-fiscal and environmental concerns which would pushfor raising energy tariffs on the one hand, andaffordability and political economy concerns which push forkeeping tariffs artificially low on the other-is a task thatpolicy makers in the region are increasingly unable to putoff. Addressing this issue is all the more pressing as theongoing crisis continues to add stress to governmentbudgets, and that international energy prices remain high.While challenging, the reforms needed for this balancing actcan build on much that has been learned in the last decadeabout improving the effectiveness of social assistancesystems and increasing energy efficiency. This is the firstreport to assess, at the micro level for the whole region,the distributional impact of raising energy tariffs to costrecovery levels and to simulate policy options to cushionthese impacts. In conclusion, this report highlights thatcountries face a difficult balancing act between fiscal andenvironmental concerns that call for raising energy tariffsto lower fiscal burdens and curb household consumption andconcerns for the affordability of energy and the politicaleconomy of unpopular reforms.