A new report from the International Monetary Fund (IMF) urged policymakers the world over to reform subsidies for products from coal to gasoline, arguing that this could translate into major gains both for economic growth and the environment. The comprehensive study, Energy Subsidy Reform – Lessons and Implications, released today, estimates that energy subsidies amount to a staggering $1.9 trillion worldwide—the equivalent of 2½ percent of global GDP, or 8 percent of government revenues.
In a speech at the Peterson Institute for International Economics in Washington D.C., marking the release of the paper, IMF First Deputy Managing Director David Lipton noted that “subsidy reform can lead to a more efficient allocation of resources, which will help spur higher economic growth over the longer term.” Removing energy subsidies can also strengthen incentives for “research and development in energy-saving and alternative technologies,” he said. He also noted that, while intended to benefit consumers, subsidies are often inefficient and “could be replaced with better means of protecting the most vulnerable parts of the population.”
See full Article: http://www.imf.org/external/np/sec/pr/2013/pr1393.htm
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