ABSTRACT
This concluding chapter provides guidance on the underlying principles that ought to be applied in reforming existing subsidies or designing new schemes, and practical approaches to implementing reforms. These principles draw on the lessons learned from the country case studies as well as the discussions of the UNEP/IEA workshops on energy subsidy reform. In principle, subsidy schemes should always be carefully targeted at clearly defined social groups or technologies and should not discourage the efficient use and supply of energy. They should be based on a sound analysis of all the related economic, social and environmental costs and benefits and should be practical and affordable, transparent and limited in time. Reforming existing energy subsidies requires strong political will to take tough decisions that benefit society as a whole. Phasing out subsidies in a gradual fashion and compensating financially the social groups that would suffer unduly can make implementing reforms easier. In any event, governments should always communicate to the general public the reasons for reform, demonstrate the net benefits to society as a whole and actively involve stakeholders in the process of formulating policy.
