Fossil fuel subsidy reforms and their impacts on firmsJun Rentschler, Martin Kornejew and Morgan Bazilian Energy Policy, 2017, vol. 108, issue C, 617-623 Abstract: While the potential adverse effects of fossil fuel subsidy reform are well documented for households, the literature has largely ignored the effect of subsidy reform on firms’ competitiveness. This paper discusses how firms are affected by, and respond to, energy price increases caused by subsidy reforms. It highlights that cost increases (both direct and indirect) do not necessarily reflect competitiveness losses, since firms have various ways to mitigate and pass on price shocks. This paper presents and discusses direct and indirect transmission channels for price shocks, and firms’ response measures: absorbing cost shocks into profits, inter-fuel substitution, increasing energy and material efficiency, and passing on price increases. It argues that further micro-econometric studies using enterprise surveys are essential for quantifying the role of these mechanisms, and for designing policy measures that ensure that competitiveness losses due to subsidy reforms are minimised. Keywords: Fossil fuel subsidies; Reform; Firms; Competitiveness; Response measures (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:108:y:2017:i:c:p:617-623 DOI: 10.1016/j.enpol.2017.06.036 Access Statistics for this article Energy Policy is currently edited by N. France More articles in Energy Policy from Elsevier |
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