Lessons learnt and good practice from APEC-economy fossil-fuel subsidy peer reviews

According to latest data from the OECD and the IEA, government support for the production and use of fossil fuels across 81 major economies totalled USD 351 billion in 2020, amounting to USD 183 billion across 50 OECD, G20, and Eastern Partnership economies. While the difficulty of reform is evident from the range and complexity of challenges confronting governments in the phasing-out of fossil-fuel subsidies, APEC economy-led fossil-fuel subsidy peer reviews play a key role in pointing out commonly faced challenges, and present options to tackle them more effectively. This report is the first comprehensive attempt to document “scalable” lessons and examples of good practice emerging from fossil-fuel subsidy peer reviews: taking stock of progress in their phase-out as reflected in the peer review reports, considering the role of the peer review process in promoting reform, and proposing potential ways to enhance the process. Eleven peer reviews are documented, seven of which were chaired by the OECD and four in which the IEA was a member of the review panel. Six of these peer reviews were conducted under the auspices of the G20, and four under APEC auspices, with the addition of the OECD-IEA review of the Netherlands, modelled on the G20 review process. The economies reviewed inventoried between three to thirty-nine measures, of an average self-declared value of USD 13 billion, for those reviews which quantified fossil fuel support measures. The “scalable” lessons drawn from the peer reviews can be used to further spur progress towards rationalising and phasing out fossil-fuel subsidies, thanks to the insights on the approaches and good practices for designing the reform process. These insights include the need to accommodate for differing contexts, objectives and definitions; to prioritise inter-ministerial co-ordination; to promote active government and stakeholder participation; and to engage a cross-sectional peer review panel.