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Business and Economics > Public Finance

You are looking at 1 - 10 of 46 items for :

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Cover IMF Working Papers
IMF Fossil Fuel Subsidies Data: 2023 Update
Mr. Simon Black
,
Antung A. Liu
,
Ian W.H. Parry
, and
Nate Vernon
This paper provides a comprehensive global, regional, and country-level update of: (i) efficient fossil fuel prices to reflect supply and environmental costs; and (ii) subsidies implied by charging below efficient fuel prices. Globally, fossil fuel subsidies were $7 trillion in 2022 or 7.1 percent of GDP. Explicit subsidies (undercharging for supply costs) have more than doubled since 2020 but are still only 18 percent of the total subsidy, while nearly 60 percent is due to undercharging for global warming and local air pollution. Differences between efficient prices and retail fuel prices are large and pervasive, for example, 80 percent of global coal consumption was priced at below half of its efficient level in 2022. Full fossil fuel price reform would reduce global carbon dioxide emissions to an estimated 43 percent below baseline levels in 2030 (in line with keeping global warming to 1.5-2oC), while raising revenues worth 3.6 percent of global GDP and preventing 1.6 million local air pollution deaths per year. Accompanying spreadsheets provide detailed results for 170 countries.
Keywords:
Fossil fuel subsidies; efficient fuel prices; supply costs; climate change; local air pollution mortality; revenue gains; energy price surge; non-pricing reform; spreadsheet tools; IMF fossil fuel subsidies datum; price reform; air emission fee; supply cost; Fuel prices; Non-renewable resources; Energy subsidies; Greenhouse gas emissions; Global; North America; East Asia; Caribbean; South Asia
Cover IMF Working Papers
The IMF-World Bank Climate Policy Assessment Tool (CPAT): A Model to Help Countries Mitigate Climate Change
Simon Black
,
Ian W.H. Parry
,
Victor Mylonas
,
Nate Vernon
, and
Karlygash Zhunussova
To stabilize the climate, global greenhouse gas emissions must be cut by 25 to 50 percent by 2030 compared to 2019. Such an unprecedented rate of decarbonization necessitates climate mitigation policies across countries, notably carbon pricing, fossil fuel subsidy reform, renewable subsidies, feebates, emission rate regulations, and public investments. To design and implement effective, efficient, and equitable policies, governments need tools to assess economic, environmental, fiscal, and social impacts. To support this effort, the IMF and World Bank are making their joint Climate Policy Assessment Tool (CPAT) available to governments. CPAT is a transparent, flexible, and user-friendly model covering over 200 countries. It allows for the rapid quantification of impacts of climate mitigation policies, including on energy demand, prices, emissions, revenues, welfare, GDP, households and industries, local air pollution and health, and many other metrics. This paper describes the CPAT model, its data sources, key assumptions, and caveats.
Keywords:
CPAT; climate mitigation; carbon pricing; instrument choice; fiscal incidence; health co-benefits; transport co-benefits; welfare effects; IMF-World Bank Climate Policy Assessment Tool; climate mitigation policy; CPAT model; CPAT structure; CPAT application; Climate policy; Energy pricing; Energy prices; Fuel prices; Global
Cover IMF Staff Country Reports
United Republic of Tanzania: Selected Issues
International Monetary Fund. African Dept.
This Selected Issues Paper takes stock of progress in the project’s expected timeline, investment and production prospects, and the project’s potential macroeconomic implications. Drawing from review of empirical literature, the paper also highlights key lessons for managing revenues from natural gas. This paper is the first step toward a more comprehensive assessment of the macroeconomic impact of the project, which will require information on the technical details of the projects as well as the fiscal regime. Tanzania’s Liquefied Natural Gas project aims to commercialize natural gas discoveries made in the deep offshore basin. Negotiations between the government and private sector developers have gained momentum recently and a Host Government Agreement is expected to be signed early this year. Meanwhile, preparatory technical work in terms of site selection and acquisition has advanced. Notwithstanding these achievements, several important steps remain, including amendment of relevant laws, preparing project blueprints, environmental assessments, and a final investment decision. If it goes through, the project has the potential to transform the Tanzanian economy.
Keywords:
T-Bill rate shock; monetary policy transmission mechanism; impulse response; interest rates shock; standard deviation shock; Climate change; Natural disasters; Monetary base; Natural gas sector; Business enterprises; Global; Sub-Saharan Africa
Cover Selected Issues Papers
Kosovo’s Electricity Sector Challenges and Opportunities: Republic of Kosovo
Gabriel Di Bella
and
Selim Thaci
Since the start of the war in Ukraine, electricity prices in Europe have increased and become more volatile. This coupled with unreliable domestic electricity supply has led to significant stress for Kosovo’s energy sector and budget. This paper presents several scenarios characterized by alternative assumptions for European electricity prices and domestic electricity production in 2023 in order to gauge their potential impact on the budget and the economy. It also discusses the medium-term benefits, including in terms of increased energy security and reduced emissions and pollution, of diversifying domestic electricity generation away from lignite.
Keywords:
Kosovo; Electricity; Energy; Energy Resources; Energy Utilities; Infrastructure; Pollution; Energy Security; electricity price; sector challenge; E. medium term; medium-term benefit; generation matrix; Natural gas sector; Tariffs; Energy pricing; Imports; Europe
Cover IMF Staff Country Reports
Republic of Kosovo: Selected Issues
International Monetary Fund. European Dept.
This Selected Issues paper focuses on challenges and opportunities in Kosovo’s electricity sector. Energy market pressures in Europe are likely to continue throughout 2023. Higher energy prices represent a heavy blow for Kosovo’s current account. The tariff-setting framework is broadly sound, but the increase in European electricity prices has led to challenges. Higher European electricity prices have stressed the sector’s flows, creating liquidity choke points. Higher European electricity prices and lower domestic electricity supply may result is significant stress for Kosovo’s energy sector and budget. In the short term, more efficient use of electricity should reduce demand and contribute to balance the system in 2023. In the medium term, boosting energy efficiency and diversification away from lignite is priority. To that end, creating a fund for the renewal and expansion of domestic electricity generation capacity in green technologies could be explored. Starting to explore carbon pricing would strengthen price signals and result in more efficient demand and less carbon intensity.
Keywords:
tax revenue growth; policy implication; Electricity supply chain; central banks in Kosovo; electricity sector; Electricity; Income; Natural gas sector; Tax administration core functions; Europe; Global
Cover IMF Working Papers
Targeted, Implementable, and Practical Energy Relief Measures for Households in Europe
Mr. Nicolas Arregui
,
Oya Celasun
,
Ms. Dora M Iakova
,
Ms. Aiko Mineshima
,
Mr. Victor Mylonas
,
Mr. Frederik G Toscani
,
Yu Ching Wong
,
Mr. Li Zeng
, and
Jing Zhou
The recommended way of helping households during the ongoing European energy crisis is to allow price signals to operate freely while providing targeted compensation to the vulnerable. In practice, however, institutional, political, and technical constraints have led many European governments to adopt broad, price-suppressing measures, which impede the adjustment in demand, have high fiscal costs, and widen cross-country gaps in prices. This paper focuses on easy-to-implement, second-best policies. Bonuses or rebates on energy bills (that are not linked to the current volume of consumption) or block tariffs are simple options which would improve on the current policy design in many countries. To avoid stoking inflation, fiscal policy should not add to aggregate demand, so relief for energy bills should be targeted and coupled with offsetting fiscal measures. One option is to reclaim the relief from the better-off through income taxation, which would also make support more progressive.
Keywords:
energy prices; price pass-through; household incidence; distributional analysis; social safety nets; energy cost support measure; I. consumer energy price inflation; price signal; price-suppressing measure; EU government; Energy pricing; Consumption; Natural gas sector; Income; Europe
Cover IMF Working Papers
Still Not Getting Energy Prices Right: A Global and Country Update of Fossil Fuel Subsidies
Ian W.H. Parry
,
Mr. Simon Black
, and
Nate Vernon
This paper provides a comprehensive global, regional, and country-level update of: (i) efficient fossil fuel prices to reflect their full private and social costs; and (ii) subsidies implied by mispricing fuels. The methodology improves over previous IMF analyses through more sophisticated estimation of costs and impacts of reform. Globally, fossil fuel subsidies were $5.9 trillion in 2020 or about 6.8 percent of GDP, and are expected to rise to 7.4 percent of GDP in 2025. Just 8 percent of the 2020 subsidy reflects undercharging for supply costs (explicit subsidies) and 92 percent for undercharging for environmental costs and foregone consumption taxes (implicit subsidies). Efficient fuel pricing in 2025 would reduce global carbon dioxide emissions 36 percent below baseline levels, which is in line with keeping global warming to 1.5 degrees, while raising revenues worth 3.8 percent of global GDP and preventing 0.9 million local air pollution deaths. Accompanying spreadsheets provide detailed results for 191 countries.
Keywords:
fossil fuel subsidies; efficient fuel prices; supply costs; climate change; local air pollution mortality; revenue gains; spreadsheet tools.; fossil fuel subsidy; supply cost; price reform; fossil fuel; fuel user price; Non-renewable resources; Fuel prices; Energy subsidies; Greenhouse gas emissions; Global
Cover IMF Working Papers
Public Investment in Bolivia: Prospects and Implications
Mr. Yehenew Endegnanew
and
Dawit Tessema
Bolivia’s “Patriotic Agenda 2025” sets targets for social and economic development propelled by state-led industrialization under a five-year development plan (2016–2020). Large-scale public investment has aimed to fill infrastructure gaps and raise productivity to ensure sustained medium-term growth. Pursuit of these goals in a period of lower hydrocarbon revenues has, however, contributed to widening fiscal and external current account deficits. The paper uses a structural model to outline different scenarios for the level of public investment in the face of declining hydrocarbon revenues. It finds that if public investment is sustained at current levels as a share of GDP while hydrocarbon revenues continue to decline, the sustainability of the public debt could be called into question.
Keywords:
WP; GDP; investment; deficit; investment path; investment-growth nexus; Public Investment; Fiscal Consolidation; hydrocarbon revenue projection; consolidation path; Public investment spending; Natural gas sector; Private investment; Private consumption; Global
Cover IMF Staff Country Reports
Republic of Mozambique: Selected Issues
International Monetary Fund. African Dept.
Selected Issues
Keywords:
ISCR; CR; revenue; liquified natural gas
Cover IMF Staff Country Reports
Republic of Mozambique: Selected Issues
International Monetary Fund. African Dept.
Selected Issues
Keywords:
ISCR; CR; revenue; liquified natural gas; regime shift; LNG export; NRIR estimate; equilibrium real interest rate; LNG trade; Natural gas sector; Public investment spending; Real interest rates; Central bank policy rate; Inflation; Global; LNG production; Liquified Natural Gas 101; NATRUAL gas resource; price scenario; investment efficiency