Alternative uses of pre-tax fossil-fuel subsidies per year

Alternative uses of pre-tax fossil-fuel subsidies per year

October 27, 2021

This note performs a series of arithmetic comparisons of the estimated global amount of pre-tax fossil-fuel subsidies (FFSs) distributed per year to offer an understanding of what they cost across the developing world. A first exercise focuses on what is often termed ‘poverty eradication’, which consists of lifting the current incomes of the poor population up to at least the value of the corresponding poverty line. A second exercise looks at how much of basic economic security to protect the livelihoods of the less advantaged groups during the COVID-19 crisis FFSs could pay, for how many people and for how long. Finally, a third exercise compares the amount of FFSs with that required to inoculate the global population against COVID-19.

This report is part of UNDP's Don't Choose Extinction campaign. It is one of three reports that, together, form a policy toolkit to support countries design and implement fair fossil fuel reforms and carbon pricing policies. It is therefore complemented by the following two reports: Fossil Fuel Subsidy Reforms: Lessons and Opportunities and A Guide to Carbon Pricing and Fossil Fuel Subsidy Reform: A Summary for Policymakers.