Energy market liberalisation in the FSU - simulations with the GTAP model
AbstractThis work considers effects of energy market liberalisation in the countries of the former Soviet Union (FSU). Our analysis is based on a computable general equilibrium (CGE) model called the Global Trade Analysis Project (GTAP). This specialised model makes it possible to evaluate effects in a general equilibrium set-up. Energy market reforms are widely discussed in the literature, but the use of CGE models has been limited. In the main part of the paper, we perform two experiments. The first is a benchmark liberalisation experiment in which all government taxes and subsidies are removed. The second is an attempt to simulate an increase in the export capacity of energy commodities into the European markets. In general, we find that liberalisation of FSU energy markets would increase welfare in the EU countries, while in the FSU welfare would decrease. This result is mainly due to the terms of trade effect, as export prices of FSU countries decrease.
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Bibliographic InfoPaper provided by Bank of Finland, Institute for Economies in Transition in its series BOFIT Discussion Papers with number 12/2003.
Length: 41 pages
Date of creation: 26 Oct 2003
Date of revision:
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energy; computable general equilibrium models; former Soviet Union; welfare analysis;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-09-09 (All new papers)
- NEP-CMP-2007-09-09 (Computational Economics)
- NEP-ENE-2007-09-09 (Energy Economics)
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- Nugumanova, Lyazzat, 2013. "Analysis of Fossil Fuel Subsidies in Kazakhstan," International Conference and Young Researchers Forum - Natural Resource Use in Central Asia: Institutional Challenges and the Contribution of Capacity Building 159103, University of Giessen (JLU Giessen), Center for International Development and Environmental Research.
- Kerkelä, Leena, 2004. "Distortion costs and effects of price liberalisation in Russian energy markets: A CGE analysis," BOFIT Discussion Papers 2/2004, Bank of Finland, Institute for Economies in Transition.
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