Assessing the impact of Fossil Fuel Subsidy on Environment: A study in Indian Context

Abstract

Fossil Fuel Subsidy pose a great threat to economic, social and environmental life. Fossil Fuel subsidy are largely undesirable and detrimental to environment and result in increased carbon emissions or environmental damage. India’s fossil fuel consumption has increased since 2000 and energy sector in specific is largely dependent on primary energy sources. Therefore, India subsidised its fossil fuels, with petroleum subsidies being the largest of all. But India being a member of G-20 has pledged to remove Fossil Fuel Subsidy in 2009 and reduce the unwanted consumption. Hence, India has taken key steps in pricing reforms to cut Fossil Fuel Subsidy and ensure sustainable consumption and production. The objective of the study is to show that fossil fuel subsidy is responsible for increase in CO2 emissions and the study proves it by running an OLS regression analysis. The paper also highlights the existence, trends, measures and impact on Fossil Fuel Subsidy with focus on India.