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Shikha Jha
Asian Development Bank
1
Subsidies  lower energy supply
To produce 1 KWH of electricity
Solar plant costs $0.122 = 4 x Coal plant $0.032
Low pri...
Electricity
produced
from fossil
fuels
Reserve life at current
rates of extraction,
years
Oil Natural gas Coal
Indonesia 8...
49
36
741
147
109
2.7%
4.1%
1.9%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
0
50
100
150
200
India Indonesia Thailand
US$ billion US$ p...
• Energy
access
• Market
distortion
• Fiscal
impact
• GHG
emissions
Energy
type
Size of
subsidy
Benefits
Distribution
Subs...
 Injection of the fiscal savings from reform into the
economic system is fundamental to allay the fears
 The poor most v...
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Fossil fuel subsidy reforms Indonesia and Thailand

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Fossil fuel subsidy reforms Indonesia and Thailand -
Presentation by Shikha Jha, Asian Development Bank

Published in: Environment
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Fossil fuel subsidy reforms Indonesia and Thailand

  1. 1. Shikha Jha Asian Development Bank 1
  2. 2. Subsidies  lower energy supply To produce 1 KWH of electricity Solar plant costs $0.122 = 4 x Coal plant $0.032 Low price  fuel smuggling Annual cost: Indonesia $862m Malaysia $175m Philippines $600-700m 2
  3. 3. Electricity produced from fossil fuels Reserve life at current rates of extraction, years Oil Natural gas Coal Indonesia 86% 12 42 67 Thailand 93% 3 7 69 3
  4. 4. 49 36 741 147 109 2.7% 4.1% 1.9% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 0 50 100 150 200 India Indonesia Thailand US$ billion US$ per capita % of GDP
  5. 5. • Energy access • Market distortion • Fiscal impact • GHG emissions Energy type Size of subsidy Benefits Distribution Substitute availability 5
  6. 6.  Injection of the fiscal savings from reform into the economic system is fundamental to allay the fears  The poor most vulnerable to price shocks: Need for social safety nets  High prices reduce FF consumption but increase biomass use: Availability of clean fuels is essential  Energy /energy-intensive industries most impacted: Stimulate energy efficient investment 6

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