By Ben Geman - 02/26/10 03:10 PM EST
Cutting subsidies in half could reduce emissions by as much as 17 percent by 2050.
“The potential gains are obviously higher if one takes a broader view of subsidies to include subsidies on other fossil fuels such as coal and natural gas,” the IMF report notes. But the report cautions that subsidy reform efforts – it suggests several – must mitigate the effects of higher prices on the poor.
The IMF report lays out several ways that governments can curb subsidies, like better targeting them to specific groups like the elderly and children; increased transparency; and easing back on government price-setting mechanisms.