Climatic Change

, Volume 131, Issue 4, pp 465–472 | Cite as

Using importers’ windfall savings from oil subsidy reform to enhance international cooperation on climate policies

  • Michael JakobEmail author
  • Jérôme Hilaire


Fossil fuel subsidy reform would not only decrease consumption, but also lower the world market price of traded fossil energy carriers, in particular oil. As a consequence, oil importers would lower their import bills by more than US$ 30 bn per year. Recycling at least a part of these savings to support low-carbon energy technologies in countries that reduce their subsidies could provide a mechanism to jointly incentivize transformation of the energy system and alter the political economy of subsidy reform.


Recipient Country World Market Price Deadweight Loss Export Revenue Fossil Fuel Subsidy 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.



We thank Patrick Doupé, Christian Flachsland, Jan Steckel and three anonymous referees for useful comments and suggestions. Funding from the German Federal Ministry of Education and Research (BMBF) in the call “Okonomie des Klimawandels” (funding code 01LA11020B/Green Paradox) is gratefully acknowledged.

Supplementary material

10584_2015_1406_MOESM1_ESM.docx (26 kb)
ESM 1 (DOCX 26 kb)


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Copyright information

© Springer Science+Business Media Dordrecht 2015

Authors and Affiliations

  1. 1.Mercator Research Institute on Global Commons and Climate ChangeBerlinGermany
  2. 2.Potsdam Institute for Climate Impact ResearchPotsdamGermany

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