Energy Subsidy Reform Assessment Framework (ESRAF)

Energy Subsidy Reform Assessment Framework (ESRAF) is a comprehensive analytical toolkit and assessment framework for helping countries to identify and quantify energy subsidies, understand their impact, and evaluate the enabling environment for reform.

The need for a framework:

Reforming subsidies can be a complex and politically unpopular process. Countries that have embarked on this journey underline the need for understanding the political context of reform, crafting the right energy pricing, designing solutions that mitigate the adverse impacts of reform on affected populations, and engaging with citizens.

 
CONTEXT
 
 
 
 
ENERGY SUBSIDIES Identifying and quantifying energy subsidies
POLITICAL ECONOMY Assessing the political context for reforming subsidies
COMMUNICATION Assessing public opinion and designing communications strategies
FISCAL IMPACTS Assessing the fiscal cost of subsidies and the fiscal impact of reform
HOUSEHOLD IMPACTS Analyzing the incidence of subsidies and impact on households. Assessing the readiness of social safety nets to mitigate this impact
FIRMS & INDUSTRIAL IMPACTS Modeling macroeconomic effects and impact of reform on GHG emissions. Assessing the impact of subsidies on the environment
ECONOMIC & ENVIRONMENTAL IMPACTS Identifying the impacts of reform on firms and industrial competitiveness
 
ENERGY SUBSIDIES Identifying and quantifying energy subsidies
 
FISCAL IMPACTS Assessing the fiscal cost of subsidies and the fiscal impact of reform
 
HOUSEHOLD IMPACTS Analyzing the incidence of subsidies and impact on households. Assessing the readiness of social safety nets to mitigate this impact
 
POLITICAL ECONOMY Assessing the political context for reforming subsidies
 
COMMUNICATION Assessing public opinion and designing communications strategies
 
ECONOMIC & ENVIRONMENTAL IMPACTS Identifying the impacts of reform on firms and industrial competitiveness
 
FIRMS & INDUSTRIAL IMPACTS Modeling macroeconomic effects and impact of reform on GHG emissions. Assessing the impact of subsidies on the environment

What is ESRAF:

  • ESRAF is a practical guide to understanding energy subsidy reforms aimed to help developing country governments.
  • It aims to promote collaboration of experts and coordination within governments to achieve politically and socially sustainable reforms of energy subsidies. It highlights issues, tools and practices to help identify, analyze and facilitate a comprehensive reform of energy subsidies. It outlines analytical approaches to diagnose the impacts of energy subsidies, including their effect on energy consumption, emissions, and health. It explains how to better understand the political context of reform and how to consult with relevant stakeholders, and communicate the right messages to address concerns. It proposes a checklist to help draft a rapid diagnostic report to aid and guide the reform process.
  • As there can be no one-size-fits-all approach, ESRAF does not outline policy recommendations. Specific policies must be designed taking into consideration the specific context of each country, region, and sector.

Hands-on guidance through 10 Notes:

Over the next year, ESRAF is releasing ten guidance notes that will offer detailed explanations on how governments can identify and quantify their energy subsidies, analyze their impacts on households, industry, the economy and the environment. The notes outline the main issues, present essential diagnostic tools, and provide guidance on how to conduct relevant analysis at country level. They also contain specific country experiences from across the world.

Read the overview