UNTOLD BILLIONS: FOSSIL-FUEL SUBSIDIES, THEIR IMPACTS AND THE PATH TO REFORM

The report argues that fossil-fuel subsidies lock economies into carbon reliance, exacerbate greenhouse gas emissions, and divert funds from social services. It concludes that while reform is politically difficult due to interest group influence and administrative path dependence, it would lead to aggregate GDP increases and significant CO2 reductions. The document emphasizes that transparency—both through improved national accounting and a new international reporting regime—is essential for successful de-subsidization. It provides a framework for reform based on research, clear objectives, coherent policy design, and the prevention of backsliding through independent pricing bodies.

• Fossil-fuel subsidies create several negative global impacts: they maintain long-term economic reliance on fossil fuels, increase greenhouse gas emissions by supporting inefficient energy use, cause environmental pollution and land degradation, and reduce funding for education and healthcare.
• Analysis of six major multi-country studies indicates that reforming fossil-fuel subsidies would result in aggregate GDP increases for both OECD and non-OECD countries, with predictions ranging from 0.1 per cent by 2010 to 0.7 per cent per year until 2050.
• The same six major studies concluded that reform would reduce CO2 emissions, with estimated reductions between 1.1 per cent by 2010 and 18 per cent by 2050; however, these are likely under-predictions because they relied on the conservative "price-gap approach".
• The failure to reform subsidies is driven by political factors: subsidies are used by governments to ensure survival by influencing voters or campaigns, and they are easy to supply because they require very little administrative capability.
• Successful subsidy reform requires six key strategies: conducting early research to quantify costs and benefits, establishing clear objectives, constructing a coherent policy with stakeholder support, careful implementation, continuous monitoring and adjustment, and preventing backsliding through independent pricing bodies.
• Transparency is a critical catalyst for reform, requiring a two-track approach: improved national-level reporting based on consistent standards and the creation of a new international data gathering and management regime.
• Pilot studies on producer subsidies reveal significant data gaps: China lacks disaggregated information and has numerous special tax exemptions; Germany's tax expenditure reporting is outdated; Indonesia lacks transparency in royalties and production-sharing contracts; and the United States often reports tax expenditures as multi-industry aggregates.

APA

International Institute for Sustainable Development (2010). UNTOLD BILLIONS: FOSSIL-FUEL SUBSIDIES, THEIR IMPACTS AND THE PATH TO REFORM. https://www.iisd.org/gsi/sites/default/files/synthesis_ffs.pdf

Chicago

International Institute for Sustainable Development. UNTOLD BILLIONS: FOSSIL-FUEL SUBSIDIES, THEIR IMPACTS AND THE PATH TO REFORM. 2010. https://www.iisd.org/gsi/sites/default/files/synthesis_ffs.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=UNTOLD BILLIONS: FOSSIL-FUEL SUBSIDIES, THEIR IMPACTS AND THE PATH TO REFORM |date=April 2010 |url=https://www.iisd.org/gsi/sites/default/files/synthesis_ffs.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopment2010untold, author = {{International Institute for Sustainable Development}}, title = {{UNTOLD BILLIONS: FOSSIL-FUEL SUBSIDIES, THEIR IMPACTS AND THE PATH TO REFORM}}, institution = {International Institute for Sustainable Development}, year = {2010}, month = apr, url = {https://www.iisd.org/gsi/sites/default/files/synthesis_ffs.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }