Abstract
In this research, we applied the DEA method (data envelopment analysis) for a cross-country analysis of the comparative efficiency of government support for coal production in eight countries: the leading producers of coal and lignite, three OECD countries with developed economies (the USA, Germany, and Australia), four BRICS countries with developing economies and emerging markets (China, India, Russia, and South Africa), and Indonesia – the largest producer of coal and lignite in Southeast Asia from 2013 to 2018. An extended version of the DEA method allowed us to evaluate not only technicalities, but also price efficiency of budget support for natural gas production in the considered countries. The data for the empirical model characterizing the volume of financial support to oil producers through budgetary transfers and tax expenditures was taken from the OECD statistical base. The obtained results indicate low efficiency of state support for coal and lignite production in Russia, the industry that is responsible for the largest generation and emission of greenhouse gases. In accordance with international obligations, Russia should solve this problem. To achieve this goal, the government should legislatively limit the funding of coal projects and exclude coal projects from the sphere of credit and export agencies, development banks, and state banks.Keywords: energy subsidies, government support, fiscal measures, coal and lignite production, operational environment, DEA methodJEL Classifications: H39, H54, C60DOI: https://doi.org/10.32479/ijeep.9550
Highlights
A transition to a low-carbon economy is a globally recognized objective, government subsidies on fossil fuels have not been ended
At the same time, according to a well-known proposition of economic theory, subsidies are associated with negative economic externalities that manifest themselves as the inefficient use of resources since subsidies distort the parameters of economic decision-making, thereby stimulating inefficient distribution of all types of resources, as well as incurring losses to the national economy
The process of converting resources into results is not considered within the DEA method, i.e., the system is represented as a “black box,” efficiency is determined as a ratio of costs and results, but it is not based on the internal characteristics of decisionmaking units (DMUs)
Summary
A transition to a low-carbon economy is a globally recognized objective, government subsidies on fossil fuels (oil, natural gas, and coal) have not been ended.
Sign-in/Register to view highlights & summary Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callMore From: International Journal of Energy Economics and Policy
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
