Economic and environmental impacts of electricity subsidy reform in Kuwait: A general equilibrium analysis
| Autor: | Ayele Gelan |
|---|---|
| Rok vydání: | 2018 |
| Předmět: |
Computable general equilibrium
Cash transfers Public economics General equilibrium theory business.industry 020209 energy Tariff Subsidy 02 engineering and technology 010501 environmental sciences Management Monitoring Policy and Law 01 natural sciences Agricultural economics Shock (economics) General Energy 0202 electrical engineering electronic engineering information engineering Economics Electricity business 0105 earth and related environmental sciences Social accounting matrix |
| Zdroj: | Energy Policy. 112:381-398 |
| ISSN: | 0301-4215 |
| DOI: | 10.1016/j.enpol.2017.10.032 |
| Popis: | This paper examined economic and environmental impacts of reducing electricity subsidy in Kuwait. A Social Accounting Matrix (SAM) was constructed together with energy consumption with CO2 emission were compiled, and then calibrated with a computable general equilibrium (CGE) model. A simulation experiment was conducted by applying a 30% reduction of subsidy to the electricity sector. This policy shock was applied to the model in two scenarios. In scenario 1, the subsidy reduction was applied and results were compared with the baseline scenario given in the SAM. This yielded adverse economic effects on most endogenous variables but positive environmental benefits in terms of CO2 emission reduction. Electricity tariff increased by three-fold from 2 to 6 fils (0.7 cents to 2 cents) per kWh. GDP fell by 0.5% and aggregate household welfare declined by 0.8%. In scenario 2, subsidy reduction was accompanied with cash transfers to compensate user losses. The subsidy deducted from the electricity sector was allocated to users according to their share in base year total expenditure on electricity. The results indicated that such transfers would reduce the adverse economic effects, CO2 emissions fell by 0.5%. The GDP and household welfare effects were reversed, rising by 0.4% and 0.1% respectively. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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