Experts of the Analytical Center take the first step towards standardization of energy subsidies

31 march 2015

The round table on "Policy of subsidy assistance of the Fuel and Energy Complex in Russia and countries worldwide during the fall of prices on energy sources" took place at the Analytical Center. Experts discussed results of the study "Energy subsidies in the modern world" and new problems of subsidizing fuel and energy industries, that have arisen in Russia and abroad in recent months.

In 2013-2014, experts of the Analytical Center, the Institute of Energy Research of RAS, NRU HSE, the Russian Presidential Academy of National Economy and Public Administration conducted a study of the policy of subsidizing the Fuel and Energy Complex of the largest economies in the world. On the basis of its results the Analytical Center has published a review "Energy subsidies in the modern world."

Experts believe that the change in the energy market updates the debate on subsidizing the Fuel and Energy complex both in the world, and in Russia. "We are discussing one of the most urgent issues, facing the international energy community today. This is the issue of subsidizing the production and consumption of energy," said Alexander Kurdin, the Head of the Department for Strategic Studies in Energy of the Analytical Center. According to the expert, this problem has a number of aspects and is actively discussed at the major international forums, in the framework of the G8 and the G20.

Mr. Kurdin noted that the subsidizing is of a great interest, public authorities regularly send inquiries on this subject. "When publishing the book, experts of the Analytical Center were trying to cover a significant part of the most important aspects: subsidies to consumers and producers, fossil, renewable energy. The result was a lot of work, which we hope will be useful both for businesses, community organizations, and public authorities", said the expert.

"The Multilateral study of energy subsidies demonstrates extremely high costs of such an instrument of the state policy", said Anna Galkina, the researcher of the Institute of Energy Research of RAS, presenting a report on methodological approaches to the assessment of effects of energy subsidies. According to authors of most studies, energy subsidies lead to deformations of the GDP structure, the inter-fuel competition, the balance of payments, the energy consumption and even to losses for the economy, considers the expert. "Subsidies can be considered an appropriate response if they stimulate the consumption of energy, which replaces the one of a low quality and dangerous to health", said Ms. Galkina. Another argument against subsidizing fossil fuels, according to the expert, is in undesirable environmental effects.

Summarizing the meeting, Leonid Grigoriev, the Chief Adviser to the Head of the Analytical Center, noted that the monograph analyzes the most recent data. «The newer information is not available. We have reflected the basic picture of the world at a price of $100 p/b", said the expert. According to Mr. Grigoriev, it was the first step towards standardization.