Forms and scope of public subsidies in the Polish energy sector and their ecological outcomes

Low prices of primary energy carriers and different forms of final energy mostly contributed to a very high energy intensity of the Polish centrally planned economy and, as a consequence of this, to a high energy cost of national economy measured in terms of percentage share of total expenditures on fuels and energy in the national income produced. Another factor which contributed to high energy intensity of Polish economy was the soft-money- budget constraint (Kornai) vis-a-vis state-owned enterprises. Due to a real "price revolution" for such essential forms of primary and final energy like coal electricity, oil and oil products (petrols first of all), gas and district heat, as well as a step-by-step introduction of hard-money-budget constraint (which was related to the commercialization and privatization of SOEs), one could reasonably expect the total production and consumption of energy to stabilize or even to fall in absolute terms, along with some ecologically beneficial structural changes relying in switching to oil and gas.