Dirty little secrets : inferring fossil-fuel subsidies from patterns in emission intensities
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I develop a unique database of international fossil-fuel subsidies by examining country specific patterns in carbon emission-to-GDP ratios, known as emission-intensities. For most - but not all - countries, intensities tend to be hump-shaped with income. I construct a model of structural-transformation that generates this hump-shaped intensity and then show that deviations from this pattern must be driven by distortions to sectoral-productivity and/or fossil-fuel prices. Finally, I use the calibrated-model to measure these distortions for 170 countries for 1980-2010. This methodology reveals that fossil-fuel price-distortions are large, increasing and often hidden. Furthermore, they are major contributors to higher carbon-emissions and lower GDP.
Stefanski , R 2017 ' Dirty little secrets : inferring fossil-fuel subsidies from patterns in emission intensities ' School of Economics and Finance Discussion Paper , no. 1705 , University of St Andrews , St Andrews .
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