The Role of Taxes and Subsidies in the Clean Cooking Transition: A Review of Relevant Theoretical and Empirical Insights

Cost barriers are among the most significant challenges impeding progress toward use of clean cooking energy in low- and middle-income countries (LMICs). This brief discusses the role of subsidy and tax policies—levied on both the supply and demand side—in affecting progress toward universal access to clean cooking in LMICs. Also, combatting a common myth among those opposing subsidies for clean cooking, the brief demonstrates that a “fear of spoiling the market” with such incentives finds little empirical support in the literature. Finally, the brief offers recommendations to policy makers.