Green growth strategy: The economywide impact of promoting renewable power generation in the Philippines
Pradesha, Angga, Robinson, Sherman, Mondal, Md. Hossain Alam, Valmonte-Santos, Rowena, Rosegrant, Mark W.
Intl Food Policy Res Inst, Jan 31, 2019 - Political Science - 41 pages
This study assesses the economywide impact of promoting renewable power generation by targeting a 50 percent share of renewables in energy production by 2040. Using a novel approach by linking a bottom-up energy model with a top-down economywide model, we found that increasing the share of renewables in the power sector could slightly slow down the industrialization process and reduce economic growth. Implementing this policy, however, would allow the country to reduce carbon emissions by 65 million tons in 2040 and improve energy security. The health co-benefit is estimated to reach up to 324 billion Philippine pesos (PHP), which levels the welfare loss. Receiving foreign financial inflow as a compensation for reducing carbon emissions could drive the economy into Dutch disease, shifting more economic activities into the nontradable sector. Increasing total investment demand in the future as a policy response could potentially mitigate this effect and improve economic welfare by 155 billion PHP.
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50 percent renewable aggregated sector air pollution authors from computable billion PHP coal power plants commodity computable general equilibrium Constructed by authors country’s decrease Dutch disease effect electricity demand electricity price electricity sector energy security energy supply mix energy transition equilibrium model simulation exports Figure financial inflow foreign transfer inflow fossil fuel–based power fuel–based power plants green growth strategy gross domestic product GTAP higher-income group impact of promoting income increase industrial sector industrialization process inflow from abroad investment activity labor demand lower-income group macroeconomic mainly manufacturing sector model simulation results optimal energy mix optimal energy supply percent in 2040 Phil-DCGE model Philippine pesos policy response power sector promoting renewable electricity promoting renewable power real exchange rate reallocation reducing carbon emissions renewable power plants renewable technology sector in 2040 share of renewables SIM1 and SIM2 SIM1 SIM2 SIM3 SIM1 SIM2 Source SIM2 SIM3 SIM4 solar investment cost subsectors welfare loss