Recent actions by many governments to promote more efficient, cleaner sources of energy signify positive steps to help improve energy security and mitigate climate change. Transformation of the energy sector, however, requires that commitments to energy efficiency and clean energy be sustained on a global level for many years to come.

The production of fossil fuels

Energy subsidies are often used to alleviate energy poverty and promote economic development by enabling access to affordable modern energy services.

In September 2009, at the Pittsburgh Summit, G-20 leaders recognized that "inefficient fossil-fuel subsidies encourage wasteful consumption, distort markets, impede investment in clean energy sources and undermine efforts to deal with climate change", and committed to phase out and rationalize inefficient fossil-fuel subsidies that lead to wasteful consumption.

This paper provides a comprehensive overview of the search for a home, or homes, for hosting international deliberations and action on energy subsidy reform. The two most obvious contenders for such an ?institutional home? are the World Trade Organization (WTO) and the United Nations Framework Convention on Climate Change (UNFCCC).

The report includes: Discussion of the scope of energy subsidies; Estimates of energy subsidies, and identification of the gaps in the existing data and issues around the measurement of energy subsidies; Modelling-based analysis of the implications of phasing-out energy subsidies on the economy, including socio-economic and trade impacts, the environment, and the energy sector; and Suggestions