Journal
JOURNAL OF CLEANER PRODUCTION
Volume 421, Issue -, Pages -Publisher
ELSEVIER SCI LTD
DOI: 10.1016/j.jclepro.2023.138360
Keywords
Computable general equilibrium; Growth; Inequality; Renewable energy; Sustainable development; Funding source
Ask authors/readers for more resources
This study examines the economic impacts of renewable energy expansion policies in Korea, specifically focusing on financing mechanisms. The findings suggest a trade-off between efficiency and equality in financing renewable energy expansion, with lump-sum taxation being the most efficient option but exacerbating income inequality.
Previous research has examined the double-dividend effects of renewable energy expansion policies, but the impact of financing mechanisms used to support this expansion has been overlooked. To address this gap, our study analyzes the economy-wide impacts of renewable energy expansion policies in Korea, with a specific focus on financing mechanisms. We employ a recursive dynamic computable general equilibrium model that considers imperfections in labor markets, heterogeneous households, and various electricity generation technologies. Our analysis examines the effects of various financing options for renewable energy on economic growth, the labor market, and social welfare, both with and without emission regulations. Our results reveal a trade-off between efficiency and equality when it comes to financing renewable energy expansion. Specifically, we find that financing the expansion through a lump-sum tax is the most efficient option, resulting in the smallest reduction in GDP compared to the business-as-usual scenario. However, this option also has the greatest negative impact on income inequality, as it leads to an increase in skill premiums and capital prices, exacerbating income disparities between households. Our findings suggest that renewable energy expansion tends to be regressive, with lowincome households bearing a relatively larger burden of the costs associated with the expansion. Policymakers need to consider a range of options for alleviating income inequality and labor market disparity, such as targeted subsidies or transfers, to ensure a fair and efficient transition to a sustainable energy system.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available