A Systematic Review of Energy Subsidy Policies and Their Implications for Sustainable Growth

Abstract

Energy subsidies have long been used by governments to support energy affordability, economic growth, and social equity, particularly in developing countries. However, this systematic review examines growing concerns about the sustainability of such subsidies, especially those directed toward fossil fuels. Drawing on several peer-reviewed during a five-year observation period, this paper synthesizes the economic, environmental, and social impacts of energy subsidies. The findings reveal that while subsidies can offer short-term socio economic benefits, they often result in inefficient resource allocation, significant fiscal burdens, increased carbon emissions, and regressive distributional outcomes. The review emphasizes that effective reform requires targeted compensation mechanisms, strong institutional capacity, and inclusive policymaking to ensure both public acceptance and social protection. This study concludes that aligning energy subsidy policies with sustainable development necessitates a balanced, context-specific, and evidence-based approach to maximize long-term economic efficiency, environmental responsibility, and social equity