Fossil Fuel Subsidies: A Briefing for Education Unions

published 22 November 2023 updated 22 November 2023
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This policy brief explores the fossil fuels-education relationship by combining the most comprehensive recent data on fossil fuels from the IMF fossil fuel database with educational performance and potential confounding factors from the World Bank World Development Indicators databases, resulting in a dataset of 1651 observations after omitting country-years with missing data, spanning 176 countries from 2010 to 2020. Our two-level regression model (consisting of country-years nested in countries) analyses whether, and if so, how, fossil fuel spending influences a range of key educational indicators including enrollment in primary school education and attainment of primary, secondary, tertiary and higher education rates across countries’ school aged populations, while accounting for a range of national conditions that could influence education.

Our results show that, even when other potential drivers of education are held constant; (i) fossil fuel spending does indeed have a significant bearing on two key indicators of educational performance – completion rates of primary and secondary education; and (ii) the educational effects of fossil fuel spending vary widely between different countries. In general, the worst educational effects of fossil fuels tend to be concentrated in the poorest countries: In low-income countries, a one-percent increase in the share of GDP spent on fossil fuels is associated with a 0.24 and 1.12 percentage point decline in the share of the population aged 25 years and above to have attained primary and secondary education respectively. However, this detrimental effect diminishes with economic development; falling to around 0.10 percent for primary education in medium-income countries and becomes positive in high-income countries.

We also analyse four key countries that, despite spanning a diverse mix of fossil fuel spending, educational performance, and economic development, have made important progress in fossil fuel reform – namely: Norway, Indonesia, South Africa and India.