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Reforming environmentally harmful subsidies

How to counteract distributional impacts

image of Reforming environmentally harmful subsidies

Reforming environmentally harmful subsidies: How to counteract distributional impacts The report discusses the theoretical principles for an efficient environmental and distribution policy and offers a comprehensive survey of experiences from policy reforms in different countries. The reform survey forms a background to recommendations for implementation of sustainable policy reforms, taking care of environmental, economic and distributional concerns. It particularly brings in the Nordic experiences, both to enlighten the problems with environmentally harmful subsidies in these countries, and to discuss what can be learned from the experiences in a broader international context. The analysis has been carried out during the period October 2010 – May 2011. The study was carried out by Vista Analyse AS and commissioned by the Nordic Council of Ministers for the Environment.

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The accounting of environmentally harmful subsidies

The definition of environmentally harmful subsidies for accounting purposes proves challenging in practise. Several reports have approached the definition problem earlier, starting out with the definition of subsidies in general. First, it is challenging to define what instruments are really subsidies. Second, it is a challenge to define which subsidies are inefficient. Third, practicability concerns require a choice of which inefficient subsidies are relevant for studies of negative environmental effects.

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