ENERGYSUBSIDYREFORMINACTIONTOTALCARBONPRICINGFORENERGYCONSUMPTIONTheImportanceofEnergyTaxesandSubsidiesTECHNICALREPORTPublicDisclosureAuthorizedPublicDisclosureAuthorizedPublicDisclosureAuthorizedPublicDisclosureAuthorizedENERGYSUBSIDYREFORMINACTIONTOTALCARBONPRICINGFORENERGYCONSUMPTIONTheImportanceofEnergyTaxesandSubsidiesPaoloAgnolucci,DefneGencer,andDirkHeineTECHNICALREPORTABOUTESMAPTheEnergySectorManagementAssistanceProgram(ESMAP)isapartnershipbetweentheWorldBankandover20partnerstohelplow-andmiddle-incomecountriesreducepovertyandboostgrowththroughsustainableenergysolutions.ESMAP’sanalyticalandadvisoryservicesarefullyintegratedwithintheWorldBank’scountryfinancingandpolicydialogueintheenergysector.ThroughtheWB,ESMAPworkstoacceleratetheenergytransitionrequiredtoachieveSustainableDevelopmentGoal7(SDG7),whichensuresaccesstoaffordable,reliable,sustainable,andmodernenergyforall.IthelpsshapeWBstrategiesandprogramstoachievetheWBClimateChangeActionPlantargets.Learnmoreat:https://www.esmap.org.©2024April|InternationalBankforReconstructionandDevelopment/TheWorldBank1818HStreetNW,Washington,DC20433Telephone:202-473-1000;Internet:www.worldbank.orgSomerightsreserved.ABOUTTHISSERIESThisreportispartofthe“EnergySubsidyReforminAction”seriesproducedbytheESMAPEnergySubsidyReformFacility,withtheobjectiveofdrawinginsightsfromrecentexperiencesandemergingapproachesrelatedtoreformofenergysubsidiesindevelopingcountries.Theseriesincludesissue-specificreportsfromvariousrelevantdomainssuchasenergysectorreform,macroeconomicandfiscalpolicy,carbonpricing,povertyanddistributionalanalysis,socialprotection,politicaleconomy,andcommunications.RightsandPermissionsThematerialinthisworkissubjecttocopyright.BecausetheWorldBankencouragesdisseminationofitsknowledge,thisworkmaybereproduced,inwholeorinpart,fornoncommercialpurposesiffullattributiontothisworkisgiven.Anyqueriesonrightsandlicenses,includingsubsidiaryrights,shouldbeaddressedtoWorldBankPublications,WorldBankGroup,1818HStreetNW,Washington,DC20433,USA;fax:+1-202-522-2625;e-mail:pubrights@worldbank.org.Furthermore,theESMAPProgramManagerwouldappreciatereceivingacopyofthepublicationthatusesthispublicationforitssourcesentincareoftheaddressabove,ortoesmap@worldbank.org.ThisworkisavailableundertheCreativeCommonsAttribution3.0IGOlicense(CCBY3.0IGO)http://creativecommons.org/licenses/by/3.0/igo.UndertheCreativeCommonsAttributionlicense,youarefreetocopy,distribute,transmit,andadaptthiswork,includingforcommercialpurposes,underthefollowingconditions:Attribution—PaoloAgnolucci,DefneGencer,andDirkHeine.2024.Totalcarbonpricingforenergycon-sumption:Theimportanceofenergytaxesandsubsidies.EnergySubsidyReforminActionSeries.ESMAPTechnicalReport.Washington,DC:WorldBank.License:CreativeCommonsAttributionCCBY3.0IGO.Third-PartyContent—TheWorldBankdoesnotnecessarilyowneachcomponentofthecontentcontainedwithintheworkanddoesnotwarrantthattheuseofanythird-partyownedindividualcomponentorpartcontainedintheworkwillnotinfringeontherightsofthosethirdparties.Ifyouwishtoreuseacomponentofthework,itisyourresponsibilitytodeterminewhetherpermissionisneededforthatreuseandtoobtainpermissionfromthecopyrightowner.Examplesofcomponentscaninclude,butarenotlimitedto,tables,figures,orimages.ProductionCreditsDesigner|LauraC.JohnsoniiiCONTENTSContentsAbbreviationsvAcknowledgmentsviExecutiveSumm...