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Fossil fuel subsidy reforms have become more fragile

Nature Climate Change volume 15, pages 569–574 (2025)Cite this article

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Abstract

Since the mid-2010s, many governments have pledged to reduce their subsidies for fossil fuels. Yet, it is unclear whether these reforms have been implemented, with prior studies showing conflicting results. Here we collect original monthly data on the 21 countries with the largest gasoline subsidies in the 2003–2015 period and evaluate their reform efforts from 2016 to 2023. Since 2016, there has been an increase in the frequency and ambition of subsidy reforms but a drop in their durability: just 30% of the reforms survived for 12 months, and only 9% survived for 36 months. Subsidies rose for 12 countries in our sample and were virtually unchanged in the other 9. This pattern calls into question the effectiveness of recent strategies for reducing fossil fuel subsidies.

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Fig. 1: Incidence and duration of fuel subsidy reforms, 2000–2023.
Fig. 2: Reform failure due to backsliding or erosion.
Fig. 3: Gasoline taxes and subsidies, 2000–2023.

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Data availability

The fossil fuel subsidy data supporting the findings of this study are available via the Harvard DataVerse at https://dataverse.harvard.edu/dataset.xhtml?persistentId=doi:10.7910/DVN/80JO6T.

Code availability

The code to replicate all findings of this study is available via Code Ocean at https://doi.org/10.24433/CO.8539725.v1.

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Acknowledgements

We thank J. Cameron for her valuable research assistance. We received helpful feedback following presentations at the University of California Santa Barbara, the University of California Berkeley, the University of Notre Dame, the US Agency for International Development, the 2023 annual meeting of the American Political Science Association and the 2023 meeting of the International Political Science Association in Buenos Aires.

Author information

Authors and Affiliations

  1. Department of Political Science, Bren School of Environmental Science and Management (by courtesy), University of California, Santa Barbara, CA, USA

    Paasha Mahdavi

  2. Department of Political Science, University of California, Los Angeles, CA, USA

    Michael L. Ross & Evelyn Simoni

Authors
  1. Paasha Mahdavi
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  2. Michael L. Ross
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  3. Evelyn Simoni
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Contributions

P.M. and M.L.R. conceptualized the study and oversaw data collection. E.S. performed the data analysis and interpretation of the results. M.L.R. led the manuscript writing. All authors contributed equally to reviewing and editing the manuscript and approved the final version.

Corresponding authors

Correspondence to Paasha Mahdavi or Michael L. Ross.

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Competing interests

The authors declare no competing interests.

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Peer review information

Nature Climate Change thanks Federica Genovese, Jakob Skovgaard and Thijs Van de Graaf for their contribution to the peer review of this work.

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Extended data

Extended Data Fig. 1 Combined figures of the case of Nigeria.

Panels a, b, and c show the price paid by consumers over time. a, The price in current Nigerian Naira. b, The price denominated in current US dollars, which reveals the effects of changes in the value of the currency. c, The price in constant 2015 US dollars, which accounts for the additional effects of inflation. d, The value of the per-liter implicit tax or subsidy measured with the price-gap method. e, The onset of price reforms. f, The periods of fixity reform for which Nigeria implemented floating prices.

Extended Data Fig. 2

Periods of Fixity Reform.

Extended Data Fig. 3

Increases of Monthly Prices Above 10 percent.

Extended Data Fig. 4

Increases of Quarterly Prices Above 25 percent.

Extended Data Fig. 5

Survival Estimates for Price Reform 25 percent, 2000-2015 vs 2016-2023.

Extended Data Fig. 6

Sensitivity Analysis: Kaplan-Meier survival rate of all subsidy reforms before (dashed orange) and after (solid blue) December 2014.

Extended Data Fig. 7

Leave Out Analysis. Pre and Post 2016.

Extended Data Fig. 8

Leave Out Analysis. Fixity versus Price Reforms.

Extended Data Fig. 9

Daily oil price volatility, 2000-2023. Data from the U.S. Energy Information Administration: ‘Europe Brent Spot Price FOB’.

Extended Data Table 1 Comparison of Oil Volatility in 2000-2015 versus 2016-2023
Full size table

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Mahdavi, P., Ross, M.L. & Simoni, E. Fossil fuel subsidy reforms have become more fragile. Nat. Clim. Chang. 15, 569–574 (2025). https://doi.org/10.1038/s41558-025-02283-4

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