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Reforms in the Natural Gas Sector and Economic Development

Author

Listed:
  • Bruno R. Delaribera

    (Universitat de Barcelona, BEAT, CREB, FGV EPGE)

  • Rafael SerranoQuintero

    (Universitat de Barcelona, BEAT, CREB)

  • Guilherme G. Zimmermann

    (Bradesco BBI, FGV EPGE)

Abstract

This paper investigates the short and long run effects of increased competition in the provision of natural gas. We build a dynamic general equilibrium model with monopolistic distribution of natural gas and calibrate it to 12 major Brazilian local distribution companies. We find that reductions in the price of natural gas can lead to sustained and significant increases of natural gas in the energy mix. A 5% reduction in the price of natural gas leads to a median increase in the consumption of natural gas of 5.5% and moderate GDP gains between 0.03% and 0.16%. Our model highlights mechanisms for energy transitions showing that moderate declines in natural gas prices can lead to sustained long-run increases in the share of natural gas consumption.

Suggested Citation

  • Bruno R. Delaribera & Rafael SerranoQuintero & Guilherme G. Zimmermann, 2023. "Reforms in the Natural Gas Sector and Economic Development," UB School of Economics Working Papers 2023/446, University of Barcelona School of Economics.
    • Handle: RePEc:ewp:wpaper:446web
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    File URL: http://hdl.handle.net/2445/198669
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    More about this item

    Keywords

    Energy Economics; Natural Gas Industry; Regional development.;
    All these keywords.

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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