Poverty and Environmental Impacts of Electricity Price Reforms in MontenegroThe Government of Montenegro is preparing an electricity tariff reform due to recent developments in the national and regional electricity markets. Electricity tariffs for residential consumers in Montenegro are likely to gradually increase by anywhere from 40 to over 100 percent. This significant price rise will impose a heavy burden on poor households and it may adversely affect the environment. In an ex-ante investigation of the welfare impact of this price increase on households in Montenegro, the authors show that the anticipated price increase will result in a significant increase in households' energy expenditures. A simulation of alternative policy measures analyzes the impact of different tariff levels and structures on the poor and vulnerable households in particular. Higher electricity prices could also significantly increase the proportion of households using fuelwood for space heating. |
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2004 ISSP Montenegro Albania alternative electricity tariff Armenia benefit incidence analysis budget calculated from 2004 choice of heating consumer surplus consumption of electricity cost-recovery level cost-recovery price deciles of total electricity and fuelwood electricity consumption electricity expenditure shares electricity for heating electricity price increase electricity tariff increases electricity tariff reforms energy expenditures Error of inclusion estimated Euros fiscally neutral fuelwood for heating fuelwood for space Government of Montenegro higher electricity prices higher electricity tariffs household choice household fuel choice Household head households in Montenegro households using fuelwood impact of higher implementation income groups income quintile ISSP Montenegro Household logit model million Euros Montenegro Household Survey multinomial logit non-poor percent of household poor households poorest households poorest quintile predict price elasticity price of electricity proportion of households recovery level reforms on household residential tariff Romania social assistance space heating switch to fuelwood total subsidy vulnerable households welfare impact World Bank