Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/147192
Authors: 
Ogarenko, Iuliia
Hubacek, Klaus
Year of Publication: 
2013
Citation: 
[Journal:] Journal of Economic Structures [ISSN:] 2193-2409 [Volume:] 2 [Year:] 2013 [Pages:] 1-27
Abstract: 
Energy subsidies are causing adverse effects on the economy and environment stimulating inefficient resource allocation and excessive energy consumption. Therefore, multiple positive effects are likely to be obtained if subsidies are reduced or removed completely. This study estimates indirect end-user energy subsidies in gas and electricity sectors of Ukraine and assesses short-term environmental and socioeconomic effects of a hypothetical elimination of these subsidies. Consumer subsidies are quantified utilizing the price-gap approach that compares end-user prices and reference prices that would predominate in competitive markets where no subsidies are provided. Input-output analysis is undertaken to investigate impacts in the short-term. First, a price model is utilized to estimate price changes resulting from subsidy elimination and then a demand-driven IO model is adopted for estimation of associated changes of environmental and social variables. As a result of elimination of energy subsidies, total energy consumption and GHG emissions would decline by about 2.5 % and 3.6 %, respectively. In addition, distributional effects of a subsidy reform are analyzed utilizing data on consumption patterns of different income groups.
Subjects: 
Energy subsidies
Input-output modeling
Price-gap approach
Ukraine
CO2
JEL: 
D57
P22
P28
Q41
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/2.0/
Document Type: 
Article

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