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1. Reforming Iran’s Energy Policy: Strategies for Sustainability, Subsidies, and Global Integration

Author:
Behdad Gilzad Kohan and Hamid Dahouei
Publication Date:
04-2025
Content Type:
Journal Article
Journal:
Journal of Public and International Affairs (JPIA)
Institution:
School of Public and International Affairs (SPIA), Princeton University
Abstract:
Iran’s energy sector, rich in natural gifts and brimming with potential, struggles to realize its promise due to systemic inefficiencies, heavy dependence on fossil fuels, outdated infrastructure, and the weight of international sanctions. These challenges plague Iran with recurring energy crises, including seasonal energy shortages, environmental degradation, and socio-economic discontent. This article investigates the root causes of Iran’s energy challenges and offers a comprehensive analysis of the critical deficiencies of Iranian energy policies. Based on these insights, the article proposes a strategic roadmap with immediate, medium-term, and long-term policy recommendations to stabilize the sector, most critical of which include subsidy reforms, ambitious renewable energy integration, and energy efficiency improvements. The proposed reforms emphasize the importance of transparent governance, targeted investments, and stakeholder engagement to achieve meaningful change. By aligning its energy policies with global sustainability trends and addressing domestic inefficiencies, Iran can transform its energy sector into a model of innovation and equity.
Topic:
Sanctions, Reform, Fossil Fuels, Sustainability, Subsidies, and Energy Sector
Political Geography:
Iran and Middle East

2. Energy poverty on the flip side of energy subsidies

Author:
Julian Puig and Leonardo Gasparini
Publication Date:
04-2025
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
This paper examines the relationship between energy subsidies and energy poverty (EP). Understanding this relationship is important because subsidies are often justified from an equity perspective to protect the most vulnerable households. Argentina, which has subsidized residential energy consumption since the early 2000s, is used as the case study. Since then, the energy subsidy policy has experienced two well-defined phases: massive and universal subsidies until 2015, followed by an attempt at reduction and targeting. This context, combined with notable regional disparities -including variations in income levels, climatic conditions, energy prices, and residential energy consumption patterns (e.g., electricity vs. piped gas)- makes this case study particularly compelling. EP is analyzed both unidimensionally and multidimensionally. Under both measures, EP follows a U-shaped pattern that reflects the phases of energy subsidies: a significant decrease between 2005 and 2013, followed by a considerable increase by 2018. The paper also highlights the key role of regional disparities which is crucial for interpreting the results beyond the Argentine case. Based on the findings, the paper contributes with globally relevant insights on the link between energy subsidy policies and EP.
Topic:
Poverty, Gas, Electricity, Subsidies, and Energy
Political Geography:
Argentina and South America

3. Revisiting Distributional Effects of Energy Subsidies in Argentina

Author:
Octavio Bertín, Thomas García, Francisco Pizzi, Alberto Porto, Julian Puig, and Jorge Puig
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
We review the distributional incidence of residential energy subsidies using the attractive case of Argentina, a developing country that has massively subsidized electricity in recent decades. Using multiple data sources, we explore two central dimensions, usually omitted in previous research. On the one hand, we focus on geography given that previous studies mostly focus on the Buenos Aires Metropolitan Area (i.e., AMBA), the most populated region in the country. However, Argentina’s territorial heterogeneity demands further analysis, given that the stage of electricity distribution introduces heterogeneities between jurisdictions. On the other hand, we focus on the subsidies’ financing given that previous studies do not focus on the net incidence. Our results indicate that: regional disparities in the costs of electricity distribution and the prices set by the distribution companies are key drivers of the distributional incidence. Also omitting subsidies’ financing may lead to overestimating the belief about their redistributive effect.
Topic:
Development, Electricity, Subsidies, and Distributive Incidence
Political Geography:
Argentina and South America

4. Foul Play? On the Scale and Scope of Industrial Subsidies in China

Author:
Frank Bickenbach, Dirk Dohse, Rolf Langhammer, and Wan-Hsin Liu
Publication Date:
04-2024
Content Type:
Policy Brief
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
China makes extensive use of subsidies in order to take a leading role on the global markets in the green technology sectors of electric vehicles, wind turbines and railway rolling stock. According to DiPippo et al. (2022) and recent OECD studies, the industrial subsidies in China are at least three to four times or even up to nine times higher than in the major EU and OECD countries. According to a very conservative estimate, industrial subsidies in China amounted to around EUR 221 billion or 1.73% of Chinese GDP in 2019. According to recent data of 2022, direct government subsidies for some of the dominant Chinese manufacturers of green technology products had also increased significantly - the electric car manufacturer BYD alone received EUR 2.1 billion. The authors point out that Chinese companies are benefiting from further support measures, including subsidized inputs, preferential access to critical raw materials, forced technology transfers, the strategic use of public procurement and the preferential treatment of domestic firms in administrative procedures. The authors recommend the EU to use its anti-subsidy proceeding against BEV imports from China to enter into negotiations with the Chinese government and persuade it to abolish public support measures that are particularly harmful to the EU.
Topic:
Globalization, International Trade and Finance, Foreign Direct Investment, European Union, Business, Renewable Energy, Industry, Subsidies, and Electric Vehicles
Political Geography:
China and Europe

5. Public Perceptions on Energy Subsidy in the MENA

Author:
Munsu Kang
Publication Date:
05-2024
Content Type:
Policy Brief
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
In the Middle East and North Africa (hereafter MENA) region, fossil fuel subsidies have been utilized as a social protection mechanism, serving as a tool under the social contract. Previous studies have primarily focused on the social welfare implications of abolishing fossil fuel subsidies. In this study, we aim to answer the question of whether the public in the MENA region prefers social protection services as an alternative to fossil fuel subsidies using online survey results in four countries including Egypt, Jordan, Saudi Arabia, and Tunisia. The survey results reveal that respondents in the MENA countries prefer energy price reduction (or stabilization) policies over pro-poor cash transfer programs. However, respondents answer that they prefer support for vulnerable groups above government-led energy price reduction policies when there are energy price shocks. Why do people agree to reduce subsidies? Some of the concerns regarding the energy subsidy is that subsidy policies are more pro-rich in nature and benefits are unequally distributed. However, respondents who answered they prefer to maintain or increase fossil fuel subsidies mention that the subsidy policy could benefit all. Based on the results, two key policy implications emerge. First, social protection programs must be carefully designed as an alternative to energy subsidy reform. The second key policy implication is the importance of effective public campaigning and awareness-raising around the need for energy subsidy reform.
Topic:
Reform, Fossil Fuels, Subsidies, Energy, and Social Protection
Political Geography:
Middle East and North Africa