Experiences from the MENA region show that successful energy subsidy reforms must focus strongly on mitigating social impacts.
The phasing out of inefficient fossil fuel subsidies is a key part of the global climate change agenda as well as the Sustainable Development Goals (SDGs). Their negative environmental impacts and associated costs are well known. They lead to overconsumption, divert business to rent-seeking energy-intensive activities and drain government expenditure at the expense of public goods such as infrastructure, healthcare and education. Low energy prices also mainly benefit the wealthiest populations.
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