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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 problem

As we will get back to in chapter 4 and 5, the extent of total environmentally harmful subsidies are difficult to estimate, both due to definition and statistical problems. Different estimates may include different subsidy bases. The estimates in this chapter are not necessarily in line with the theoretical definition in chapter 4.2, and they do not aim to cover the total sources of environmentally harmful subsidies. Rather, they indicate the size of such subsidies around the world covered by existing studies and as defined by the refereed sources. The methods for the calculations are under evaluation (cf. chapter 5). In particular, taking exemptions from or lack of externality pricing of e.g. coal into account could significantly increase the estimates.

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