We use cookies on this website to give you a better user experience. By continuing to browse the site, you are agreeing to our use of cookies. Learn more

Institutional Policy and Economic Impacts of Energy Subsidies Removal in East Asia

Institutional Policy and Economic Impacts of Energy Subsidies Removal in East Asia
4 May 2017
Han Phoumin, Shigeru Kimura
Energy, East Asia

Print Article:

This study explores the impact of energy subsidies and provides policy recommendations to gradually phase out energy subsidies in the East Asia Summit (EAS) region. Fossil fuel subsidies amounted to about $51 billion in Southeast Asia for 2012 alone (ERIA and IEA, 2013). They encourage wasteful energy use; burden government budgets; defer investment in energy infrastructure and efficient technology; and further undermine renewable energy uptake. While some ASEAN countries have taken action to remove energy subsidies, such action, which is often politically sensitive, must be accompanied by careful strategy and steps.

Energy subsidies are important if they are well targeted for people who need energy to survive and to improve their well-being. For example, fossil-fuel subsidies improve the living conditions of the poor by making fuel for cooking and heating more affordable. However, most are often blanket subsidies, which benefit the rich rather than the poor.

Blanket energy subsidies incentivise consumption and can result in increased energy demand. However, inefficient subsidies can lead to fiscal pressure, harmful emissions, and potentially undermine sustainable green growth in EAS countries.

Reduced energy subsidies will encourage more energy-efficient consumption, leading to a positive impact on international energy prices and energy security, and will make renewable energy and technologies more competitive. It further benefits the environment and society by reducing local pollution and cutting greenhouse gas emissions.

Full Report






List of Figures and Tables

List of Project Members

Executive Summary

Chapter 1. A Review of Energy Subsidy Removals and Other Energy Policy Reforms: The Case of Malaysia

Chapter 2. Economic, Social, and Environmental Impacts of Energy Subsidies: A Case Study of Malaysia

Chapter 3. Impact Analysis of Removing Petroleum Product Subsidies in Thailand

Chapter 4. An Intersectoral Assessment of the Impact of Removing Energy Subsidies in China

Chapter 5. Socio-economic Impacts of an LPG Subsidy Removal on the Household Sector in India


Search ERIA.org

Latest Multimedia

Indonesia's ASEAN Chairmanship 2023 High-Level Policy Dialogue: ASEAN Digital Community 2045

ERIA Knowledge Lab Discusses Scaling Up Innovation and Digital Technology Ecosystem

Is ASEAN Ready for Electric Vehicles? | ASEAN Insights Podcast

Latest Articles

Online Public Service, Asia, Digital Economy
4 March 2024
Editor(s)/Author(s): Fukunari Kimura, Lurong Chen
(still under ISBN process and under review Chief Economist) The implications of digital[...]
trade, semiconductor trade, trade network, regional trade, COVID-19, ASEAN
23 February 2024
Editor(s)/Author(s): K.P. Prabheesh, C.T. Vidya
This paper examines the global semiconductor industry trade network[...]