Socioeconomic impacts of green energy growth policy in Morocco - a general equilibrium analysis

The energy sector is critical to the Moroccan green growth strategy. In 2011 Morocco imported 96% of its commercial energy spending Dh91 billion, as compared with 19 billion in 2002. This dependence weighs heavily on economic and financial stability of the Kingdom and on its development opportunities. The energy constraint is likely to increase in the future. Indeed, the success of the recently launched sectoral strategies in key sectors (agriculture, fishing, tourism, industry) is based partly on the ability to improve access to energy which remains relatively low. The current energy profile also has important environmental consequences as oil and coal together constitute 84% of total commercial energy. Energy access is critical for the Moroccan poor, and their use of wood for fuel contributes to deforestation. If Morocco could move towards a more renewable energy profile, it could reduce the foreign exchange burden of energy imports and reduce greenhouse gas (GHG) emissions at the same time. The Government of Morocco (GOM) energy plan has three major goals: • To guarantee adequate energy supply while at the same time reducing dependence on foreign energy supplies • To limit the environmental impacts of the Moroccan growth model • To guarantee energy access to the population, especially the poor The GOM asked the World Bank to work with an inter-ministerial group consisting of Ministry of Energy, Mines, Water and Environment, and the High Planning Commission. The group chose to adapt a computable general equilibrium (CGE) model named MANAGE (Mitigation, Adaptation, and New Technologies Applied General Equilibrium Model). MANAGE is a hybrid model in that it is a prototypical CGE model but with a greater richness in technologies employed in the energy sector. Thus, the energy component has “bottom-up” features that are well integrated with the top-down CGE structure. This paper presents in a first section the main characteristics of the energy sector in Morocco, its strengths and weaknesses and trends. The second section sets out the objectives of the government and the foundations and strategic priorities of energy policy. The third section presents the methodological approach used for the evaluation of energy choices in Morocco and finally the last section presents the simulation results and conclusions.