Jun 23, 2021 - Energy & Climate
Fossil fuel subsidies fall but a rebound awaits
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An International Energy Agency analysis shows that subsidies for consumers' use of gasoline, diesel and other fuels dropped sharply last year — but are headed for a rebound.
Why it matters: The IEA and many policymakers say phasing out subsidies is a tool for combating climate change.
- But it's tricky. While subsidies often flow to people who don't need them, they also help poor consumers obtain needed energy.
The big picture: The pandemic-driven collapse in fuel demand and prices dropped the aggregate value greatly last year.
- But IEA said rebounding prices and use, alongside "hesitant progress on pricing reforms," will likely push them back up this year.
- "This is a worrying trend at a time when countries need to be redoubling efforts to accelerate energy transitions," it notes.
How it works: The tally above looks at consumption subsidies for oil, power, gas and coal. The top five countries are Iran, China, India, Saudi Arabia and Russia.
Go deeper: Read the IEA commentary
