Energy Subsidy Reform

The Challenge


Global subsidies for fossil fuels totaled $325 billion in 2015. That is more than double the value of subsidies for renewables. About 13% of global CO2 emissions are linked to the use of subsidized fossil fuels. Subsidies are expensive, lead to overuse of fossil fuels, can deter private sector investment, and undermine climate change mitigation efforts. What is more, they often fail to help the poor. But reforming subsidies can be a complex, often politically unpopular process for many countries.