Defining fossil-fuel subsidies for the G-20

The second, and more accurate, approach focuses on the transfer mechanisms—the types of policy instruments used to pass the subsidy benefit to the recipient. [...] For the purposes of the G-20, the GSI recommends adoption of the ASCM definition, supplemented by an illustrative list of subsidy types to capture some of the transfers not covered by the ASCM. [...] The G-20 could agree that all subsidies on the list should be considered within the scope of subsidy reform, or each member could simply use the list to select the types of subsidies they would include in the reform process and to check that no subsidy types have been overlooked. [...] The scope of the initiative should cover “inefficient” fossil-fuel subsidies that encourage “wasteful consumption.” It also says that G-20 members will “rationalize” as well as phase out their subsidies over the “medium term.” It is worth noting that there is nothing within the leaders’ statement that would prevent G-20 members from widening the scope of the reform if they wished.