Monitoring the fossil fuel subsidies indicator SDG 12.c.1 in Zambia

Expert Group Meeting

Meeting Title: Monitoring the fossil fuel subsidies indicator SDG 12.c.1 in Zambia

Location: Zambia

Date: 5th-10th November 2017

Partners: IISD-GSI

SDG Indicators: 12.c.1

Type: Fossil fuels

UN Environment is the custodian of SDG 12.c.1 which is: Amount of fossil-fuel subsidies per unit of GDP (production and consumption), and as a proportion of total national expenditure on fossil fuels. To develop a monitoring methodology for this SDG indicator 12.c.1, an investigative mission to Zambia took place from the 5th-10th November 2017.

This was done in line with two other case studies done in India and Egypt. The case study seeks to develop a core knowledge on country practices initially by analyzing how the country monitors fossil fuel subsidies, the data availability as well as its capability to be harmonized with SDG monitoring.

The study conducted revealed that petroleum products in Zambia are imported. All generation is either owned by ZESCO or one of several Independent Power Producers (IPPs). Electricity generation has been historically dominated by hydropower with a smaller contribution from diesel, coal and solar. The mining industry, in particular copper, is the major contributor to the economy and around half of all energy consumption.

The monitoring of fossil fuel subsidies is a topical issue. Extensive fossil fuel subsidy reforms have been undertaken in recent years to reduce public expenditure on fuels and similar reforms are now underway in the electricity sector.

Recent moves to establish cost reflective tariffs have reduced the cost of subsidies to the public budget significantly. There is currently sufficient capacity to report budgetary subsidies, but the SDG monitoring might require more to apply a broader definition. For example, if changes to taxation or the cost of other measures that incentivize consumption or production of energy are included.