Practical first steps towards comprehensive subsidy reform

A statement by the Forum on Trade, Environment, & the SDGs calling for international organizations to collaborate on defining and reforming 'bad subsidies' to support a low-carbon circular economy and modernize WTO rules.

• The authors argue that international organizations—specifically the WTO, OECD, IMF, and World Bank Group—must urgently collaborate to distinguish between 'good subsidies' (those achieving aims at reasonable cost without negative impacts) and 'bad subsidies' (those least likely to perform as intended). This analytical foundation is presented as a prerequisite for updating the WTO's Agreement on Subsidies and Countervailing Measures (SCM Agreement), particularly Parts II and III regarding prohibited and actionable subsidies.
• The document highlights three sectors where current government support is particularly problematic: fossil fuels, agriculture, and aluminium. In 2022, 45 G20 or OECD members provided approximately $1.3 trillion in fossil fuel subsidies. Agriculture receives over $851 billion annually, with $456 billion tied to farm input use and output quantities. In the aluminium sector, state support has encouraged high GHG emitting production systems, which is critical given that demand for aluminium for the energy transition is projected to grow 80% by 2050.
• Effective policy design for government support should be transparent, non-discriminatory, time-limited, proportionate, and targeted to explicit beneficiaries. The authors advocate for removing subsidies that distort trade, investment, and production or harm the environment, while emphasizing that such reforms must be socially responsible, progressive, and include adjustment assistance for affected individuals and firms.

APA

Ash, K., Cox, A., & Draper, P. (2024). Practical first steps towards comprehensive subsidy reform. Forum on Trade, Environment, & the SDGs. https://tessforum.org/latest/practical-first-steps-towards-comprehensive-subsidy-reform

Chicago

Ash, Ken, Anthony Cox, and Peter Draper. Practical first steps towards comprehensive subsidy reform. Forum on Trade, Environment, & the SDGs, 2024. https://tessforum.org/latest/practical-first-steps-towards-comprehensive-subsidy-reform.

Wikipedia

{{cite press release |last1=Ash |first1=Ken |last2=Cox |first2=Anthony |last3=Draper |first3=Peter |title=Practical first steps towards comprehensive subsidy reform |publisher=Forum on Trade, Environment, & the SDGs |date=29 May 2024 |url=https://tessforum.org/latest/practical-first-steps-towards-comprehensive-subsidy-reform |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@misc{ash2024practical, author = {Ash, Ken and Cox, Anthony and Draper, Peter}, title = {{Practical first steps towards comprehensive subsidy reform}}, publisher = {Forum on Trade, Environment, \& the SDGs}, year = {2024}, month = may, url = {https://tessforum.org/latest/practical-first-steps-towards-comprehensive-subsidy-reform}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }