Beyond Fossil Fuels: Fiscal transition in BRICS

The report analyzes the dependence of BRICS governments on fossil fuel revenues and the risks posed by the clean energy transition, including asset stranding and revenue loss. It provides 2017 data on revenues and subsidies, highlighting Russia's high fiscal exposure and the potential for 'fossil fuel to clean energy subsidy swaps' to fund a just transition.

• In 2017, Russia had the highest dependence on fossil fuel revenues among BRICS, with combined production and consumption revenues accounting for 23.6 per cent of general government revenue and 8 per cent of GDP.
• Other BRICS countries showed lower but significant fiscal reliance on fossil fuels in 2017: India's revenues were 17.8 per cent of general government revenue (3.7 per cent of GDP), while Brazil and South Africa both stood at 6.8 per cent (approximately 2 per cent of GDP), and China at 4.2 per cent (1.2 per cent of GDP).
• Fossil fuel subsidies in BRICS are primarily used to generate export revenue and GDP growth (especially in Russia and Brazil) or to maintain low domestic prices for households.
• The clean energy transition risks the stranding of fossil fuel assets, with the highest risk concentrated in government-owned entities and state-owned enterprises (SOEs), particularly in Russia.
• India has already experienced significant asset stranding, with approximately 40 GW of coal-fired power plant capacity identified as 'non-performing' by the end of 2018, representing 21 per cent of its total installed capacity.
• There is a significant gap between current fossil fuel taxation and the cost of their negative externalities; the IMF estimates that fossil fuel consumption is considerably undertaxed across all BRICS countries, with the gap in Russia exceeding the entire general government budget.
• The report recommends a 'fossil fuel to clean energy subsidy swap,' where governments redirect support from fossil fuels toward clean energy and use carbon pricing as a temporary bridge to fund transition costs.
• To mitigate the social impacts of the transition, the report emphasizes 'just transitions' through targeted support like cash transfers and reskilling, citing China's CNY 100 billion Industrial Special Fund for coal area employment restructuring.

APA

Gerasimchuk, I., Kühne, K., Roth, J., Geddes, A., Oharenko, Y., Bridle, R., & Garg, V. (2019). Beyond Fossil Fuels: Fiscal transition in BRICS. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/beyond-fossil-fuels-brics.pdf

Chicago

Gerasimchuk, Ivetta, Kjell Kühne, Joachim Roth, Anna Geddes, Yuliia Oharenko, Richard Bridle, and Vibhuti Garg. Beyond Fossil Fuels: Fiscal transition in BRICS. International Institute for Sustainable Development, 2019. https://www.iisd.org/system/files/publications/beyond-fossil-fuels-brics.pdf.

Wikipedia

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BibTeX

@techreport{gerasimchuk2019beyond, author = {Gerasimchuk, Ivetta and Kühne, Kjell and Roth, Joachim and Geddes, Anna and Oharenko, Yuliia and Bridle, Richard and Garg, Vibhuti}, title = {{Beyond Fossil Fuels: Fiscal transition in BRICS}}, institution = {International Institute for Sustainable Development}, year = {2019}, month = nov, url = {https://www.iisd.org/system/files/publications/beyond-fossil-fuels-brics.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }