United Mexican States Reducing Fuel Subsidies : Public Policy Options

This paper analyzes the economic, distributional, and environmental impact that energy subsidy reductions and alternative compensating mechanisms might have in Mexico. To achieve that goal, author use a computable general equilibrium model of the M...

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Bibliographic Details
Main Author:	World Bank
Format:	Economic & Sector Work
Language:	English en_US
Published:	Washington, DC 2015
Subjects:	AGGREGATE LEVEL AGRICULTURE AIR AIR POLLUTION AIR QUALITY ANNUAL EMISSION BALANCE BARRELS PER DAY BASE YEAR BENCHMARK BUSINESS AS USUAL SCENARIO CALCULATION CAPITAL THEORY CARBON CARBON DIOXIDE CARBON ECONOMY CARBON MONOXIDE CHEMICAL CONTENT CHEMICALS CLIMATE CLIMATE CHANGE CLIMATE CHANGE MITIGATION CLIMATE CHANGE POLICY CO CO2 COLORS CONSTANT ELASTICITIES CONSUMER GROUPS CONSUMERS CONVERGENCE DEMAND FOR ELECTRICITY DEMAND FOR GASOLINE DEVELOPMENT STRATEGIES DIESEL DISPOSABLE INCOME DISTRIBUTIONAL IMPLICATIONS DOMESTIC PRODUCTION DRIVING DYNAMIC COMPUTABLE GENERAL EQUILIBRIUM DYNAMIC MODEL ECONOMIC ACTIVITY ECONOMIC GROWTH ECONOMIC THEORY ECONOMIC WELFARE ELASTICITIES ELASTICITIES OF DEMAND ELASTICITY ELASTICITY OF SUBSTITUTION ELECTRICITY ELECTRICITY CONSUMPTION ELECTRICITY DEMAND ELECTRICITY PRODUCTION ELECTRICITY SECTOR ELECTRICITY TARIFFS EMISSION EMISSION ABATEMENT EMISSIONS EMISSIONS FROM ENERGY EMISSIONS FROM ENERGY USE EMISSIONS FROM LAND USE EMISSIONS FROM LAND USE CHANGE EMISSIONS OF POLLUTANTS ENERGY CONSUMERS ENERGY CONSUMPTION ENERGY DEMAND ENERGY EFFICIENCY ENERGY GENERATION ENERGY GOODS ENERGY PRICES ENERGY PRICING ENERGY SAVINGS ENERGY SOURCE ENERGY SOURCES ENERGY SUBSIDIES ENERGY USE ENVIRONMENTAL IMPACTS EQUILIBRIUM EQUILIBRIUM THEORY EXCHANGE RATE EXCISE TAX EXPORTS EXTERNALITIES FINANCIAL SUPPORT FORESTRY FORMAL ANALYSIS FOSSIL FOSSIL FUEL FOSSIL FUEL USE FOSSIL FUELS FOSSIL-FUEL USE FUEL FUEL PRICES FUEL SUBSIDIES FUEL USE FUELS GASOLINE GASOLINE CONSUMPTION GASOLINE PRICES GDP GENERAL EQUILIBRIUM ANALYSIS GENERAL EQUILIBRIUM MODEL GLOBAL EMISSIONS GOVERNMENT DEFICIT GOVERNMENT PURCHASES GOVERNMENT SUBSIDIES GREENHOUSE GREENHOUSE GAS GREENHOUSE GAS EMISSIONS GREENHOUSE GASES GROSS DOMESTIC PRODUCT GROWTH RATE HOUSEHOLD CONSUMPTION HUMAN CAPITAL IMPORTS INCOME INCOME DISTRIBUTION INCOME GROUPS INCOME TAXES INELASTIC DEMAND INSURANCE INTERNATIONAL TRADE LABOR SUPPLY LAND USE LAND USE CHANGE LIFE INSURANCE LIQUEFIED PETROLEUM GAS LOW-CARBON MARGINAL COST MARGINAL COST OF PRODUCTION NATURAL GAS NATURAL RESOURCES NEGATIVE IMPACTS NONRENEWABLE RESOURCE OIL OIL OUTPUT OIL PRICES OIL PRODUCERS OXIDES PARTICULATES PET PETROCHEMICALS PETROLEUM PETROLEUM GAS PLASTICS POLICY ANALYSIS POLICY IMPLICATIONS POLLUTION REDUCTION POPULATION GROWTH POSITIVE EFFECTS PRICE INCREASES PRICE OF OIL PRICE TAKERS PRICE VOLATILITY PRODUCTION COSTS PRODUCTION FUNCTIONS PRODUCTION GOODS PROFIT MAXIMIZATION PROPERTY TAXES PUBLIC TRANSPORT PUBLIC TRANSPORTATION PURCHASING POWER REDUCTION IN EMISSIONS RELATIVE PRICE RELATIVE PRICES REVENUE NEUTRAL SAVINGS SCENARIOS SENSITIVITY ANALYSES SO2 SPEEDS STREET LIGHTING SULFUR SULFUR DIOXIDE TAX TAX RATES TAX REVENUE TOTAL COST TOTAL DEMAND TOTAL EMISSIONS TRANSPORT TRANSPORT SECTOR TRANSPORTATION TRANSPORTATION COSTS TRANSPORTATION SERVICES UNEMPLOYMENT UTILITY FUNCTION VEHICLES VOLTAGE WAGES WEALTH
Online Access:	http://documents.worldbank.org/curated/en/2013/05/17878770/united-mexican-states-reducing-fuel-subsidies-public-policy-options http://hdl.handle.net/10986/21755

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Summary:	This paper analyzes the economic, distributional, and environmental impact that energy subsidy reductions and alternative compensating mechanisms might have in Mexico. To achieve that goal, author use a computable general equilibrium model of the Mexican economy. They make several important changes to the original model to build the energy subsidies (to gasoline, diesel, electricity and liquefied petroleum gas) into the benchmark and then do an array of simulations to see the effects of removing such subsidies. The report results for 2012, which is the initial year; 2018, which will be the end of the next administration; and 2024 and 2030, which represent the medium and long term, respectively. When doing the simulations, author look at possible compensation mechanisms and analyze the impact on the income groups that may be affected by the reduction of energy subsidies.

United Mexican States Reducing Fuel Subsidies : Public Policy Options

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