Energy Subsidies in the Middle East: Balancing Social Safety Nets and Climate Change
- Author Munsu Kang
In the Middle East and North Africa (MENA), energy subsidies have been at the center of government budget reform since the 2000s. However, political pressure existing between social safety nets and environmental costs, namely in terms of energy subsidy reduction. First, fossil fuel subsidies in the MENA region are one of the compensation measures implemented by authoritarian leaders in Arab countries instead of restricting the political participation of civilians. Second, the demand for social safety nets in the MENA region is increasing rather than decreasing energy subsidies, and there may be resistance to any reduction in subsidies by the government without any alternative measures. In order for MENA countries to move away from hydrocarbon economies to incentivizing the adoption of renewable energy technologies, it is necessary to shift subsidies from fossil fuels to renewable energy sources. In addition, alternative social safety nets need to be provided for civilians.
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