TTIP and Fossil Fuel Subsidies


Phasing out fossil fuels on both sides of the Atlantic would:

  • create stronger price signals in favour of energy efficiency and low-carbon innovation;
  • internalise at least some of the costs of FFS and thus reduce market distortions;
  • bring about a shift towards low-carbon energy and thus boost employment in the renewable energy sector;
  • bring about GHG emissions reductions in the US and the EU;
  • could contribute to reducing budget deficits with the least possible negative impact on growth and employment.

Within the TTIP process, a possible model for reform could be:

  1. Get FFS reform on the negotiation agenda, e.g. through the TTIP Advisory Group
  2. Agree national reporting processes - develop a detailed template for all countries to identify and quantify FFS within a transparent framework;
  3. Cost-benefit analysis of FFS reform, estimate distributional impacts;
  4. Develop a coherent reform policy on the basis of 2 and 3;
  5. Build support with a good communications strategy and disseminate information about pricing reforms before they are introduced;
  6. Set up an independent body to assess progress and deal with legal questions.
Product details
Date of Publication
March 2014
Number of Pages
Table of contents

Abbreviations and Acknowledgements
Executive Summary 

1 Introduction
1.1 A brief introduction to FFS reform
1.2 The political will to reform? The case of the EU and the USA
1.3 Structure of the Report

2 F ossil Fuel Subsidies – a brief introduction
2.1 The political economy of FF S reform
2.2 Different types of fossil fuel subsidies (FFS)
2.3 A model of fossil fuel subsidy phase out

3 International policy processes with potential to drive forward fossil fuel subsidy reform
3.1 The G20 process
3.1.1 What is the G20 process towards FFS reform?
3.1.2 What is the current state of play?
3.1.3 Where are there windows of opportunities for reform, and how could they be enhanced?
3.2 The Sustainable Development Goals and the post-2015 development agenda
3.2.1 What are the Sustainable Development Goals?
3.2.2 What is the current state of play?
3.2.3 The TTIP and windows of opportunities for FFS
3.3 The Transatlantic Trade and Investment Partnership
3.3.1 What is the Transatlantic Trade and Investment Partnership?
3.3.2 What is the current state of play?
3.3.3 The TTIP and windows of opportunities for FFS
3.4 International processes and their potential: TTIP, SDGs, G20

4 Comparing fossil fuel subsidies (FFS) in the EU and the United States – Definitions, Methodology and developing an inventory of fossil fuel subsidies
4.1 Definition and Methodology
4.2 Identifying and defining fossil fuel subsidies
4.3 Estimating and measuring fossil fuel subsidies
4.3.1 The programme-specific approach
4.3.2 The (simple) price gap approach
4.3.3 The (complex) price gap approach
4.4 F ossil Fuel Subsidies in the EU and the US – comparing apples, pears and puppies
4.4.1 International Energy Agency: results based on the simple price gap approach
4.4.2 Organisation for Economic Co-operation and Development: results based on the programme-specific approach
4.4.3 International Monetary Fund: results based on the complex price gap approach
4.4.4 Summary and recommendations

5 Conclusions