A Guidebook to Reviews of Fossil Fuel Subsidies

This guidebook provides a framework and practical options for countries to conduct self-reviews and peer reviews of fossil fuel subsidies (FFSs). It aims to increase transparency and accountability to support the phase-out of inefficient subsidies that encourage wasteful consumption, aligning with commitments made by the G7, G20, EU, and APEC.

• Fossil fuel subsidies (FFSs) have a global annual value of at least USD 425 billion and are characterized as being "fiscally burdensome, economically inefficient, socially regressive and environmentally harmful."
• The G7, G20, European Union (EU), and Asia-Pacific Economic Cooperation (APEC) have committed to the medium-term phase-out and rationalization of inefficient FFSs that encourage wasteful consumption, while ensuring targeted support for the poorest populations.
• G7 countries specifically committed in 2016, and reconfirmed in 2017, to phase out inefficient fossil fuel subsidies that encourage wasteful consumption by 2025.
• FFS reviews are voluntary, economy-owned processes that serve as a tool for transparency and peer learning rather than as a compliance mechanism. They are described as "a discussion among equals".
• The guidebook identifies several 'building blocks' for FFS reviews: identifying and defining FFS, determining the review scope, measuring the subsidies, evaluating them, and determining next steps.
• The World Trade Organization's (WTO) Agreement on Subsidies and Countervailing Measures (ASCM) is the most widely accepted and used definition of a subsidy.
• Measuring FFS typically involves three combinable options: using available estimates, requesting information from government agencies, or commissioning independent analysis. The most straightforward measurements are government estimates of direct budgetary transfers and tax expenditures.
• Evaluation of 'inefficiency' involves cost-benefit analysis, assessing if stated policy objectives are met, determining if more efficient alternative policies exist, and checking if the subsidy has become obsolete.
• The removal of global FFSs to both production and consumption is estimated to reduce carbon emissions by approximately 10 per cent by 2050.
• Practical experience from countries like Finland and Sweden shows that extending the scope of FFS reviews to include broader environmentally harmful subsidies (EHSs) can be beneficial, particularly in meeting EU commitments to phase out EHSs by 2020.
• Peer reviews within the G20 are typically conducted in economy pairs (e.g., China–USA), whereas APEC peer reviews do not require pairing and are supported by a dedicated VPR/IFFSR Secretariat.
• Successful FFS reviews require significant resources; for example, Finland estimated the need for one full-time analyst working for a year, and some APEC reviews for developing economies required donor assistance from USAID.

APA

Gerasimchuk, I., Wooders, P., Merrill, L., Sanchez, L., & Kitson, L. (2017). A Guidebook to Reviews of Fossil Fuel Subsidies. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/guidebook-reviews-fossil-fuels-subsidies.pdf

Chicago

Gerasimchuk, Ivetta, Peter Wooders, Laura Merrill, Lourdes Sanchez, and Lucy Kitson. A Guidebook to Reviews of Fossil Fuel Subsidies. International Institute for Sustainable Development, 2017. https://www.iisd.org/system/files/publications/guidebook-reviews-fossil-fuels-subsidies.pdf.

Wikipedia

{{cite report |last1=Gerasimchuk |first1=Ivetta |last2=Wooders |first2=Peter |last3=Merrill |first3=Laura |last4=Sanchez |first4=Lourdes |last5=Kitson |first5=Lucy |title=A Guidebook to Reviews of Fossil Fuel Subsidies |publisher=International Institute for Sustainable Development |date=September 2017 |url=https://www.iisd.org/system/files/publications/guidebook-reviews-fossil-fuels-subsidies.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{gerasimchuk2017guidebook, author = {Gerasimchuk, Ivetta and Wooders, Peter and Merrill, Laura and Sanchez, Lourdes and Kitson, Lucy}, title = {{A Guidebook to Reviews of Fossil Fuel Subsidies}}, institution = {International Institute for Sustainable Development}, year = {2017}, month = sep, url = {https://www.iisd.org/system/files/publications/guidebook-reviews-fossil-fuels-subsidies.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }