Project Title

APEC Fossil Fuel Subsidy Reform: Workshop on Effective Pricing Mechanisms and Mitigation Strategies  

Project Year

2016   

Project Number

EWG 12 2016A 

Project Session

Session 2   

Project Type

Standard 

Project Status

Project in Implementation   
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Project No.

EWG 12 2016A 

Project Title

APEC Fossil Fuel Subsidy Reform: Workshop on Effective Pricing Mechanisms and Mitigation Strategies  

Project Status

Project in Implementation 

Publication (if any)

 

Fund Account

APEC Support Fund 

Sub-fund

ASF: Energy Efficiency 

Project Year

2016 

Project Session

Session 2 

APEC Funding

89,565 

Co-funding Amount

43,049 

Total Project Value

132,614 

Sponsoring Forum

Energy Working Group (EWG) 

Topics

Energy 

Committee

SOM Steering Committee on Economic and Technical Cooperation (SCE) 

Other Fora Involved

Finance Ministers Process (FMP) 

Other Non-APEC Stakeholders Involved

 

Proposing Economy(ies)

United States 

Co-Sponsoring Economies

Brunei Darussalam; Mexico; New Zealand; Philippines; Chinese Taipei 

Expected Start Date

01/10/2016 

Expected Completion Date

31/12/2017 

Project Proponent Name 1

Elena Thomas-Kerr 

Job Title 1

Senior Advisor, Office of Asia and the Americas 

Organization 1

US Department of Energy 

Postal Address 1

1000 Independence Ave SW, Washington, DC 20585, USA 

Telephone 1

1-202 5866566 

Fax 1

Not Applicable 

Email 1

elena.thomas-kerr@hq.doe.gov 

Project Proponent Name 2

Ann Katsiak 

Job Title 2

Deputy Chief of Party 

Organization 2

US-ATAARI 

Postal Address 2

2101 Wilson Blvd, Arlington, VA, USA 

Telephone 2

1-703 5167700 

Fax 2

Not Applicable 

Email 2

elena.thomas-kerr@hq.doe.gov; akatsiak@nathaninc.com  

Declaration

Elena Thomas-Kerr and Ann Katsiak 

Project Summary

Inefficient fossil fuel subsidy reform (FFSR) is a critical element of sustainable development to help reduce wasteful energy consumption and harmful CO2 emissions. As many FFS have become regressive and fail to properly target assistance, their reform can free up government resources that can be redirected toward cleaner energy options or social programs. Building upon the APEC FFSR Capacity Building Workshop (EWG 19 2015A), this project will expand upon two key areas: mechanisms toward market-based pricing and mitigation strategies. The workshop will explore these themes in detail to review different fiscal instruments and strategies for managing their impacts. Experts also will discuss how to track implementation and convey progress to the public. Through case studies from both APEC and non-APEC economies, participants will analyze the impacts of various instruments and identify best strategies for subsidy reform. Such strategies can be replicated by APEC economies who wish to pursue similar reforms.

Relevance

APEC and other global leaders have long recognized that inefficient fossil fuel subsidies encourage wasteful consumption, often fail to target the most vulnerable populations, are a fiscal drain on government resources, and can impede investments in cleaner and more sustainable energy development. As such, many APEC economies have begun implementing some domestic reforms. The current low oil prices present a window of opportunity to accelerate these reforms with less impact on domestic prices and potentially less public opposition. However, given the complexity and political sensitivity of reforming such subsidies, more capacity building is needed to identify how to structure reforms that are effective and sustainable, particularly when world oil prices rise again. 

During the December 2015 APEC FFSR Capacity Building Workshop (EWG 19 2015A), economies identified several common challenges, including securing public support for reform, addressing fuel price volatility, identifying the most vulnerable populations and properly targeting assistance, and making reform measures resilient to price increases to ensure their sustainability. Various pricing mechanisms can be used for implementing reforms, as different models may be more appropriate in different circumstances. The timing and pace for transitioning to fully market-based pricing, and transparency throughout the process, are also critical to the success of such reforms. It is also important to effectively track implementation and monitor mitigation measures to ensure progress and prevent fraud and waste. Economies have noted that additional capacity building focused specifically on pricing mechanisms and mitigation strategies would be helpful to facilitate further progress on FFS reform. 

This project will support that capacity building by expanding upon the 2015 discussions. Through additional case studies and the perspective of international participants with global expertise on fiscal, technical and programmatic aspects of fossil fuel subsidies, participants will explore various fiscal instruments and how to tailor mitigation strategies to those populations in greatest need. By sharing lessons learned, identifying common pitfalls and highlighting successful strategies, the workshop will help APEC economies better understand the fiscal and programmatic options available to successfully design and implement reform policies and provide more effective social services to poor and vulnerable populations. 

This project falls under Rank 1 of Building Sustainable and Resilient Communities, as well as Rank 2, directly supporting the APEC Leader’s Growth Strategy for sustainable growth. Capacity building to help eliminate inefficient fossil fuel subsidies that cause wasteful energy consumption will help promote energy efficiency, energy security and energy resiliency including the development of low carbon technology and alternative energy sources, and promotes sustainable growth across the APEC region more generally.

Objectives

The first objective of this workshop is to build capacity among APEC economies for implementing fossil fuel subsidy reform by sharing best practices and concrete case studies on the issues as articulated above. The second objective is to develop practical solutions to common challenges in implementing reform by exploring pricing mechanisms and mitigation strategies that could help APEC economies revise current reform strategies, or develop an action plan for those economies that are just beginning to consider subsidy reform.

Alignment

This project directly supports APEC Leaders’ commitment “to rationalize and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption while recognizing the importance of providing those in need with essential energy services,” and “to share best practices and facilitate capacity building to further progress toward this goal.” (Leaders’ 2015 Declaration). Energy and Finance Ministers continue to reaffirm the APEC Leaders’ commitment toward this goal. This effort also helps address the broader Leaders’ goals for reducing energy intensity by 45 percent by 2035, enhancing energy efficiency, increasing use of renewables, and sustainable energy development as inefficient fossil fuel subsidies are phased out over time and redirected toward cleaner more sustainable energy development. 

This project supports the EWG’s 2016 Annual Work Plan to continue to conduct capacity building activities and share best practices for FFS reform, which complements ongoing FFS peer reviews. The project also supports the EWG Strategic Plan for 2014-2018 to “Strengthen Energy Security” by encouraging “the removal of inefficient fossil fuel subsidies that promote wasteful consumption” and sharing “results and best practices from peer reviews” toward that end. As the EWG works to carry out the APEC Leaders’ mandate to phase out inefficient FFS, these capacity building activities help APEC economies better understand the impact of their fossil fuel subsidy programs and policies, and find effective ways to implement reform.

TILF/ASF Justification

Given the complexities of fossil fuel subsidy reform, and noting that broad range of consumption subsidies and support measures utilized by developing economies in particular, this workshop will provide developing economies the opportunity to learn about effective pricing mechanisms and mitigation strategies that can best facilitate domestic reforms.  The workshop will help equip developing economy energy and finance officials with the knowledge and capacity to communicate, build domestic support for, and better target reforms. Moreover, developing economies that have already undertaken some reforms will be invited to share their experiences with other developing economies facing similar challenges and learn from international experts effective ways to revise current strategies, as needed.

Beneficiaries and Outputs

Outputs: The main output of this project will be a 1-2 day workshop, possibly implemented on the margins of a 2017 Energy Working Group or other relevant meeting. The project proponents will develop a summary of the workshop outcomes, or the outcomes report, including recommendations and best practices identified during the workshop, for broad distribution among energy, finance and other relevant ministry representatives following the workshop. The outcomes report will also note any additional capacity building needs identified for future work. 

Outcomes: This capacity building workshop will serve as a platform to share lessons learned from reform measures already undertaken and disseminate best practices from international organization representatives having worked with APEC economies and other global partners on fossil fuel subsidy reform to provide effective policy practices and recommendations that can facilitate reform. It will better equip APEC energy, finance and other relevant government officials with the knowledge and expertise to 1) understand various pricing mechanisms and mitigation strategies to better target reforms, 2) identify the most useful options to initiate or revise domestic fossil fuel subsidy reform measures, 3) identify effective ways to track implementation and communicate progress to the public, and 4) continue to share lessons learned with APEC partners in future discussions on fossil fuel subsidy reform. These recommendations should help form the basis of FFSR action plans APEC economies considering reform. 

We would hope that the workshop would influence at least 2 economies in terms of their FFSR reduction strategies. 

Beneficiaries: Workshop participants will include APEC policymakers responsible for designing and implementing FFS reforms and related social programs, as well as international experts with relevant expertise from broader global experiences to share best practices. These will likely be mid-level officials and experts in energy policy; those who have worked previously with fossil fuel subsidy reform in their home economies or foreign economies; experts from multinational corporations, NGOs, and industry associations in the energy industry with experience in fossil fuel subsidy work and/or redirecting funds from fossil fuel subsidies to clean energy or other social services programs. In economies where the officials responsible for fossil fuel subsidy are not from either energy or finance authorities.  The project will work to identify the appropriate government representatives from other ministries as well. 

Energy and finance ministries and other decision-makers will directly benefit from the information on various pricing mechanisms and mitigation strategies highlighted during the workshop to help design more effective FFS reforms and provide more targeted assistance. As these strategies will also help provide more targeted assistance to poorer populations, those populations will be among longer-term beneficiaries as these reforms are implemented. In particular, since women often bear significant responsibilities in low-income households and communities, women should benefit from improved policies and programs as inefficient FFS are phased out. The public at large will also benefit from the elimination of wasteful subsidies and redirecting those savings to programs of greater public benefit.

Dissemination

The presentations made at the workshop, along with the outcomes report will be broadly distributed among APEC Energy and Finance Ministries and other participants, including international experts attending the workshop. The materials will be posted electronically on the EWG and APEC websites and shared among EWG expert groups and other relevant APEC fora. The results of the workshop may be shared more broadly with other fora that work on fossil fuel subsidy reform, including posting the results or a summary of the workshop on their respective websites as well. This workshop will also serve as the basis for future APEC discussions and capacity building activities on inefficient fossil fuel subsidy reform with broad engagement by finance ministry representatives.

Gender

Women will be directly and actively involved in the project design and implementation. The workshop organizers will be careful to include women speakers and participants in the workshop.  The organizers will also encourage women to be involved during the preparatory stage and actual activity. Invitations sent to EWG will take due consideration of gender concerns by encouraging the suggestion and nomination of female speakers and participants.

In addition, the project proponents will ensure that the evaluation forms to be distributed at the end of the workshop will include information on gender for disaggregating of data for project assessment and will help in evaluation of specific responses of women and men.

Finally, we will look to engage an expert on gender based budgeting, to include in the agenda. We will discuss this element with international organizations such as USAID, the World Bank and the OECD.

Finally, given the over-representation of women in economic vulnerable populations, working to impact FFSR will have significant consequences on women, a lens of which will be incorporated into the agenda where possible.

Work Plan

This workshop, to be held on the margins of an energy or finance-related meeting, will bring together energy and finance experts from APEC and other economies that have experience initiating domestic reforms as well as experts from international organizations that can provide global expertise in fiscal, technical and analytical aspects of FFS.

a) November 2016: Identify key stakeholders; identify workshop venue options.

b) December/January: Develop list of proposed speakers and meeting participants; develop draft agenda;

c) February 2017: Finalize logistics; book venue; invite speakers and other attendees.

d) March 2017: Finalize agenda and all speakers.

e) April-May 2017 (TBC): Conduct workshop sharing effective reform strategies.

f) May-June 2017: Disseminate findings to APEC economies via an outcomes report.

Risks

The major risk is ensuring that we get a good cross-section of finance experts along with energy experts to actively engage in the workshop. In order to mitigate this risk, the project overseers will actively reach out to targeted speakers and participants well in advance of the workshop, and will also work with EWG delegates and representatives Finance Ministers Process to identify the most appropriate representatives in each of the economies. The invitation will also be issued well in advance to ensure sufficient time for participants and speakers to plan for attendance at the event. 

Given that this is a very technical topic, another risk is ensuring that we get the appropriate technical experts. In order to mitigate this risk, we will ensure that a detailed participant description is included with the invitation to the workshop so economies so which types of experts to target.

Monitoring and Evaluation

The project overseers will design and distribute an evaluation questionnaire at the end of workshop building time into the agenda before the conclusion of the workshop so that speakers and participants can complete the questionnaire.  Participants will be able to provide qualitative feedback on the workshop program through the questionnaire, including suggestions for areas of follow up. In terms of participation (a quantitative indicator), the results and feedback will be closely reviewed through an evaluation form that will be given to participants at the workshop, collected and reviewed.  The project overseers will review the evaluations and finalize the feedback prior to finalizing the workshop report and deliverables. The results will be disaggregated by sex as part of the evaluations. The indicator for the follow up survey will be knowledge gained/knowledge applied.

We will track specific indicators that relate to percentage of female attendees (aiming for at least 50%) as well as percentage of attendees indicating knowledge gained as a result of the workshop (target improvement of +25%. 

The EWG (already underway) will also continue to track subsidy reforms being implemented in APEC economies as well as which economies have volunteered for FFSR peer reviews and what recommendations they are implementing. These indicators should see an impact from this capacity building workshop. The strategies identified in this workshop and resulting from this dialogue should inform domestic reform policies and programs in individual economies. A key metric for success will be the implementation of effective strategies to rationalize and phase out inefficient subsidies in the region over the long-term. The EWG tracks APEC-wide progress toward this goal and reports to the APEC Energy Ministers and Leaders on progress. We will seek engagement with the Finance Ministers Process to participate in that process.

Linkages

This workshop builds upon a number of APEC EWG projects and activities focused on fossil fuel subsidy reform since APEC Leaders’ made the initial commitment to phase out inefficient subsidies in 2009, including:

·  EWG 11 2010, “Phasing Out Fossil Fuel Subsidies to Reduce Waste and Limit CO2 Emissions while Protecting the Poor,” an initial assessment of fossil fuel subsidies in the APEC region and an analytical framework for supporting reform measures.

·  2011 FFSR technical workshop at EWG42 and the release of an IEA report on fossil fuel subsidies across the APEC region as a basis for comparison with current subsidies.

·  Self-reporting on fossil fuel subsidies through “voluntary reporting mechanism” (VRM) submissions beginning in 2012.

·  2013 Development of Guidelines for conducting voluntary FFSR peer reviews.

·  December 2015 Fossil Fuel Subsidy Reform Capacity Building Workshop (EWG 19 2015A) 

By the time of this workshop, the EWG will also have completed at least five FFS peer reviews and at least one additional peer review planned for 2017. This workshop will invite APEC, G20 and other economies that have undertaken domestic reform measures and/or peer reviews to share lessons from their own experiences. This information exchange should help inform their ongoing reform efforts. Other APEC economies that have yet to implement reform measures will benefit from this information exchange as they consider their own domestic fossil fuel subsidies, assess their impacts and develop options for reform.

Sustainability

Through broad engagement among both energy and finance officials engaged in fossil fuel subsidy issues, this workshop will help identify a range of pricing mechanisms and mitigation strategies that can be instrumental in implementing sustainable subsidy reforms. The case studies, lessons learned, best practices, and international experiences with inefficient fossil fuel subsidy reform shared during the workshop will enhance the dialogue among stakeholders and help build capacity among beneficiaries to carry reforms forward in their economies. The workshop will also help identify effective means for tracking and communicating progress to increase transparency and gain broad public support. Policy recommendations will be highlighted in the workshop summary report and provided as a resource to workshop participants and others considering subsidy reform.

Possible next steps may include the following:

·  Transfer of knowledge from workshop participants to other officials responsible for subsidy reform measures and implementation of public services to those populations in greatest need.

·  Development of action plans to adopt best practices and recommendations identified in the workshop.

·  Use of results or outcomes from this workshop as input for updated studies on the status of subsidies in the APEC region.

·  Follow up capacity building workshops or meetings with other international stakeholders to continue the capacity building and information-sharing process for accelerating subsidy reform. 

We anticipate that the government officials involved in the training will be directly responsible for applying the knowledge gained at the workshop in their own energy and finance ministries. For those economies who already have FFSR reviews completed or underway, those economies can look at how to use the results of the workshops in their current reform efforts, and can incorporate the recommendations into a revision of their reports or implementation plans already underway, whichever is applicable.

Project Overseers

Elena Thomas-Kerr is the U.S. Representative to the APEC Energy Working Group.  She is engaged on clean and sustainable energy policies and programs and has served as an advisor within the U.S. government on these issues. She has 16 years of experience in bilateral and multilateral programs focused on a range of energy and domestic security issues at the U.S. Department of Energy. Ms. Thomas-Kerr holds a MA in Foreign Service from Georgetown University. 

Ms. Katsiak is Chief of Party of the US-APEC US – APEC Technical Assistance to Advance Regional Integration and has managed and implemented more than twenty APEC workshops over the last six years. She has more than 9 years of experience in trade facilitation and economic development issues, and presently provides program management and leads US-ATAARI’s efforts on energy as well as trade and investment as well as women’s economic empowerment. Ms. Katsiak holds an MA in International Affairs from George Washington University.

Cost Efficiency

Not Applicable.

Drawdown Timetable

Not Applicable. 

Direct Labour

Not Applicable.

Waivers

Not Applicable.

Are there any supporting document attached?

No 
Attachments
Version: 3.0 
Created at 29/12/2016 13:45  by Lucy Phua 
Last modified at 03/01/2017 11:22  by Lucy Phua 
Version HistoryVersion History

Project No.

Project Title

Project Status

Publication (if any)

Fund Account

Sub-fund

Project Year

Project Session

APEC Funding

Co-funding Amount

Total Project Value

Sponsoring Forum

Topics

Committee

Other Fora Involved

Other Non-APEC Stakeholders Involved

Proposing Economy(ies)

Co-Sponsoring Economies

Expected Start Date

Expected Completion Date

Project Proponent Name 1

Job Title 1

Organization 1

Postal Address 1

Telephone 1

Fax 1

Email 1

Project Proponent Name 2

Job Title 2

Organization 2

Postal Address 2

Telephone 2

Fax 2

Email 2

Declaration

Project Summary

Relevance

Objectives

Alignment

TILF/ASF Justification

Beneficiaries and Outputs

Dissemination

Gender

Work Plan

Risks

Monitoring and Evaluation

Linkages

Sustainability

Project Overseers

Cost Efficiency

Drawdown Timetable

Direct Labour

Waivers

Are there any supporting document attached?

hdFldAdmin

Project Number

Previous Fora

Secretariat Comments

Reprogramming Notes

Consolidated QAF

Endorsement By Fora

PD Sign Off

Batch

Forum Priority

Committee Ranking Category

Committee Priority

PDM Priority

Priority Within Funding Category

Monitoring Report Received

Completion Report Received

PMU Field 1

PMU Field 2

PMU Field 3

On Behalf Of

Proposal Status

Originating Sub-Forum

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