Limited emission reductions from fuel subsidy removal except in energy-exporting regions

J. Jewell, D. McCollum, J. Emmerling, C. Bertram, D.E.H.J. Gernaat, V. Krey, L. Paroussos, L. Berger, K. Fragkiadakis, I. Keppo, N. Saadi, M. Tavoni, D.P. van Vuuren, V. Vinichenko, & K. Riahi. (2018). Limited emission reductions from fuel subsidy removal except in energy-exporting regions. Nature. Gated. DOI: https://doi.org/10.1038/nature25467. PrePrint.

Many governments use subsidies for fossil fuels to reduce the cost of energy for domestic consumption. This has led to the frequent argument that removing subsidies could play an important part in mitigating climate change. Now, Jessica Jewel and colleagues show that subsidy removal would indeed substantially lower emissions in fossil-fuel-exporting countries, but would reduce global carbon dioxide emissions by only a few per cent by 2030. This small reduction would largely be due to offsetting effects from international trade and fuel substitution. The authors also find that subsidy removal would not dramatically increase the use of renewable energy, adding to the suggestion that extensive revisions of subsidy policies would not produce a major benefit for climate mitigation.