based on N. Harring, E. Jönsson, S. Matti, G. Mundaca & S. C. Jagers Nature Climate Change (2023).

The policy problem

Annually, the world spends about US$697 billion on directly subsidizing fossil fuels. If indirect costs were also included (such as the contribution of fossil fuels to global warming, local air pollution and other externalities, and foregone consumption tax), subsidies would be 6.8% of the global gross domestic product. The costs of maintaining fossil fuel subsidies are expected to increase and be regressive for developing countries especially when they are less resource-endowed and have more difficulties in raising fiscal revenues than developed countries. Removing fossil fuel subsidies is crucial not only for making more valuable use of government funds, but also for reducing carbon dioxide emissions and making carbon pricing policies more effective. Currently, scientific evidence on the scale and scope of public attitudes toward fossil fuel subsidy removal policies is scarce. We investigate the public opinion on the removal of fossil fuel subsidies in five developing countries.

The findings

We find that opposition to removal of existing subsidies is not greater than opposition to possible carbon pricing implementation. Our results indicate that the public in fact considers a subsidy removal policy as being equally desirable (or undesirable) as the introduction of a carbon tax. If so, we should expect suggestions for subsidy removal to be met with similar public opposition or support as has been seen for other carbon pricing measures. There are few studies with which we can compare our findings. Therefore, there are reasons to be cautious in making general conclusions about the extent to which there will be support for the removal of fossil fuel subsidies, at least in the countries we studied. Furthermore, the public in different countries may turn out to have different preferences for how additional revenues from either removing subsidies or collected taxes should be used (Fig. 1).

Fig. 1: Support for different proposals of revenue use as a result of the removal of fossil fuel subsidies, by country.
figure 1

Estimated average treatment effects. Points indicate the estimated effect; lines indicate 95% confidence intervals. Figure reproduced with permission from N. Harring et al. Nat. Clim. Change (2023), Springer Nature Ltd.

The study

By using a 1 × 7, pre-registered survey experiment (N = 6,636), we contribute to the existing literature in the following ways: (1) fivedeveloping countries (Ecuador, Egypt, India, Indonesia and Mexico) are studied — they were selected because they all have large subsidies for fossil fuel linked to both its consumption and production; (2) we analyse public attitudes toward the introduction of a carbon tax, and the removal of subsidies on both industrial and private consumption of fossil fuels; (3) we examine whether and how attitudes toward subsidy removal and carbon taxation may differ from each other; (4) we study whether policies that use savings from fossil fuel subsidy removals to invest in the social and economic welfare system lead to more positive attitudes toward subsidy removal.