Fossil fuel subsidies as a lose-lose: Fiscal and environmental burdens in Turkey

Abstract

AbstractAttempts at common agreements to phase out fossil fuel subsidies (FFS) have been increasing, as the topic generated momentum through the Rio Dialogues prior to the 2012 United Nations Conference on Sustainable Development (Rio+20) and following the Paris Agreement in 2016. This study quantifies the magnitude and the relative importance of FFS in the Turkish economy and produces a relevant national FFS synthesis for policy design. FFS form a complex system of a self-contradictory nature that stands in stark contrast with the Turkish government’s statements regarding sustainable development. Based on available data from the 2000s, we find that Turkey provides state support for coal and the exploration of oil and natural gas that represents roughly 0.2 percent of its nominal GDP per year. Continuing to subsidize fossil fuels narrows down the fiscal options that could otherwise be used to support cleaner technologies and mitigation actions. Given the fact that fossil fuels have significantly negative implications for the environment and health, eliminating those subsidies has the potential to help combat environmental pollution, climate change, and related problems.