Renewable energy policy as an enabler of fossil fuel subsidy reform? Applying a socio-technical perspective to the cases of South Africa and Tunisia

Elsevier, Global Environmental Change, Volume 45, July 2017
Schmidt T.S., Matsuo T., Michaelowa A.

Fossil fuel subsidies are a key barrier for economic development and climate change mitigation. While the plunge in international fuel prices has increased the political will to introduce fossil fuel subsidy reforms, recently introduced reforms may risk backsliding when fuel prices rebound − particularly if they fail to address the underlying mechanisms that create demand for low fossil fuel prices. Extant literature has mostly focused on the consequences of fossil fuel subsidies, including their economic or environmental impact, and the social contract that make their reform difficult. In this paper, we complement the extant literature with a socio-technical perspective of fossil fuel subsidies to explore the systemic mechanisms that often keep subsidies in place and how these mechanisms can be weakened. Specifically, in case studies of the electricity sectors in South Africa and Tunisia, we trace the socio-technical foundations of their fossil fuel subsidy regimes and the potential of renewable energy policy in disrupting this regime We discuss the relevance of our results for national policymakers wishing to implement and international actors wishing to support fossil fuel subsidy reform. In particular, we highlight that the socio-technical perspective of fossil fuel subsidies offers new intervention points for subsidy reform and that policy designs and assistance should strengthen technologies and actors that are most likely to destabilize the fossil fuel subsidy regime.