United Mexican States Reducing Fuel Subsidies

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.

Bibliographic Details

Main Author:	World Bank
Language:	English en_US
Published:	Washington, DC 2013-05
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 https://hdl.handle.net/10986/21755
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