Multilateral and plurilateral trade agreements and environmental policies
Figure 5. Combined IEA-OECD estimate of support for fossil fuels USD Billion
USD/bbl (nominal)
700
140
600
120
500
100
400
80
300
60
200
40
100
20
0
2007
2008
2009 OECD area
2010 2011 Countries outside the OECD area
2012 2013 2014 IEA average crude oil price
2015
0
Note: This indicator covers 76 countries that are accountable for 94% of global carbon emissions in 2015. Source: Garsous (2019[13]) using data from OECD (2018[27]).
covering over 800 individual policies that support the production or consumption of fossil fuels. It is now available as an online database and includes a further two countries (Argentina and Colombia). To reconcile the OECD’s bottom-up estimates of government support to individual programmes, with the IEA’s topdown estimates of consumer price support, the latest Companion to the Inventory of Support Measures for Fossil Fuels suggested a solution to combine the two sets of estimates, and presents a single figure on support given to fossil fuels (Figure 5) (OECD, 2018[27]). This inventory is now established as a unique source of information that is contributing to advancing analysis in a range of studies carried out at national and international levels. Indeed, for the first time the data captures policylevel detail for many types of support. Each iteration of the inventory brings in additional years of coverage and provides a clearer picture of policy change over time. Having such a comprehensive inventory has made it possible to carry out detailed analysis that would have been impossible otherwise and which has produced interesting findings, summarised below. The new set of estimates for government support for fossil fuels was chosen as one of the trade and environment indicators recently developed for the JWPTE (Garsous, 2019[13]). This indicator was used in this first instance to help understand how support for fossil fuels, alongside an indicator measuring the enabling policy and regulatory environment for renewable energy, affected
the energy mix and trade balances for environmental goods. Analysing trends in this indicator showed that estimates of global support to fossil fuels peaked in 2012 but have since declined, a trend driven by countries outside the OECD area where the slump in international oil prices decreased support linked to price controls, a policy instrument prevalent in these countries. The analysis also suggests that countries spending a larger share of their GDP to support fossil fuels seem to harm the competitiveness of their domestic industry producing renewable energy plant equipment, particularly in countries outside the OECD area (see Chapter 4). The inventory has also made it possible to advance on analysis related to carbon pricing. The report on Improving economic efficiency and climate mitigation outcomes through international co-ordination on carbon pricing (Nachtigall, 2019[28]) presents the potential benefits and challenges of enhanced international coordination on carbon pricing and outlines the different types and levels of co-ordination that are available for national and sub-national governments. It considers carbon pricing schemes alongside effective carbon rates and efforts to phase out inefficient fossil fuel subsidies.
Fisheries The topic of reform of government support for fisheries has been pushed up the international environmental agenda in recent years, largely due to the UN 2030 Agenda, agreed by Heads of State and Governments in 2015. As part of SDG 14, which sets the broader goal of
28 . OECD WORK ON TRADE AND THE ENVIRONMENT: A RETROSPECTIVE, 2008-2020
