Balancing act; cutting energy subsidies while protecting affordability. (Eastern Europe and Central Asia reports) by Laderchi, Caterina Ruggeri and Anne Olivier, Chris Trimble - 2013

The World Bank, 2013. Paperback. New Book. Paperback. Aimed at policy makers, government officials in finance and line ministries, nongovernmental organizations, and development practitioners, this report analyzes the distributional impact of raising energy tariffs in Eastern Europe and Central Asia to cost recovery levels and alternative policy options to lessen these impacts. Laderchi, Olivier, and Trimble (a team working in the regional poverty group of the World Bank) describe how current tariff levels for households, which are low due to large subsidies to the energy sector, are not sustainable for governments and that countries will have to reform tariffs to cover the full economic cost of energy generation and distribution. They aim to balance the need to respond to fiscal pressures and environmental concerns as well as the concerns about social impact and the political economy of reform and the strain on household budgets. They draw on a household survey focusing on electricity and gas and analyze the factors of prices, regulations, and investments, which determine the cost of energy, and the subsidies, sectoral policies, and social protection policies that influence affordability. They show that reforms characterized by the gradual reduction of subsidies to the energy sector and stepped up investment in demand management and protection for the poorest groups can help countries manage energy expenditures and affordability for households. The report is part of a series of three regional reports of the Regional Study Program of the Europe and Central Asia Region of the World Bank. There is no index. (2013 Ringgold, Inc., Portland, OR)