ABSTRACT
This chapter summarises and analyses the findings of the country case studies contained in Chapters 3–11. It draws out generic conclusions about the economic, environmental and social effects of subsidies. The country case studies illustrate the pervasiveness of energy subsidies and the need for policy-makers to consider their full implications for economic development, the environment and social welfare—the three pillars of sustainable development. Most subsidies still go to fossil fuels. The scope for environmental improvement and for enhancing economic efficiency by removing those subsidies is often considerable. In many cases, the economic costs of subsidies, manifested, for example, by inefficient energy use and supply, the burden on public finances and the trade balance, and rationing are high. The main environmental costs are increased air and water pollution and higher emissions of climate-destabilising greenhouse gases. But removing subsidies can involve significant short-run economic and social costs, notably in the form of job losses and income effects. These need to be addressed from the outset in the design of any subsidy reform package.
