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Energy policy and regional inequalities in the Brazilian economy

Author

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  • Santos, Gervasio F.
  • Haddad, Eduardo A.
  • Hewings, Geoffrey J.D.

Abstract

The objective of this paper is to evaluate the long-run regional impacts of the tariff policy of the Brazilian electric power sector. This sector has undergone a reform process that started in the 1990s. Since the beginning of the reform, two spatial trends of distribution of electric power tariffs have emerged among the Brazilian states, one of convergence and another of spatial divergence. These trends have been guided by the new electric power tariff policy and by the spatial features of the Brazilian economy, which is marked by a high degree of spatial concentration and hierarchical distribution of large markets. In addition, because of the presence of strong economies of scale, the recent electric power prices differentials might be caused by differentials in market size that provide better conditions for the achievement of economies of scale for electric power utility companies located in larger markets. Given the role of electric power as an important intermediate input in the production process and the interdependence between sectors, an Energy Interregional Computable General Equilibrium model was used to simulate the long-run regional impacts of electric power tariff policy in Brazil. The simulations showed that the heterogeneity of energy-intensity and the differentials of energy substitution drive the spatial impacts of changes in electric power prices. On the other hand, the recent trend of spatial dispersion of electric power prices might contribute to a decrease in the long-run economic growth and to an increase in the regional inequalities in Brazil.

Suggested Citation

  • Santos, Gervasio F. & Haddad, Eduardo A. & Hewings, Geoffrey J.D., 2013. "Energy policy and regional inequalities in the Brazilian economy," Energy Economics, Elsevier, vol. 36(C), pages 241-255.
  • Handle: RePEc:eee:eneeco:v:36:y:2013:i:c:p:241-255
    DOI: 10.1016/j.eneco.2012.08.009
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    2. Daglish, Toby & de Braganca, Gabriel & Owen, Sally & Romano, Teresa, 2015. "Electricity Market Operation: Transitioning from a Free Market to a Single Buyer structure: An econometric analysis of the Brazilian case using a Two-State Markov Switching Model," Working Paper Series 19257, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    3. Daglish, Toby & de Braganca, Gabriel & Owen, Sally & Romano, Teresa, 2015. "Electricity Market Operation: Transitioning from a Free Market to a Single Buyer structure: An econometric analysis of the Brazilian case using a Two-State Markov Switching Model," Working Paper Series 4181, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    4. Florent MCISAAC & Florent Mc ISAAC, 2017. "An Input-Output Analysis: What Would a Low-Carbon Economy for Brazil Mean?," Working Paper f2f77b78-bd3b-4408-b3e9-d, Agence française de développement.
    5. Haddad, Eduardo & Mena-Chalco, Jesús & Sidone, Otávio, 2015. "Scholarly Collaboration in Regional Science in Developing Countries: The Case of the Brazilian REAL Network," TD NEREUS 4-2015, Núcleo de Economia Regional e Urbana da Universidade de São Paulo (NEREUS).
    6. Daglish, Toby & de Bragança, Gabriel Godofredo Fiuza & Owen, Sally & Romano, Teresa, 2021. "Pricing effects of the electricity market reform in Brazil," Energy Economics, Elsevier, vol. 97(C).
    7. repec:vuw:vuwscr:19257 is not listed on IDEAS
    8. Ben Abdallah, Khaled & Belloumi, Mounir & De Wolf, Daniel, 2015. "International comparisons of energy and environmental efficiency in the road transport sector," Energy, Elsevier, vol. 93(P2), pages 2087-2101.
    9. Proque, Andressa Lemes & dos Santos, Gervásio Ferreira & Betarelli Junior, Admir Antonio & Larson, William D., 2020. "Effects of land use and transportation policies on the spatial distribution of urban energy consumption in Brazil," Energy Economics, Elsevier, vol. 90(C).
    10. Diniz, Tiago & Ferreira-Filho, Joaquim Bento & Horridge, Mark, 2018. "Economic and regional impacts of investments in electricity generation in Brazil," Conference papers 332933, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Balta-Ozkan, Nazmiye & Watson, Tom & Mocca, Elisabetta, 2015. "Spatially uneven development and low carbon transitions: Insights from urban and regional planning," Energy Policy, Elsevier, vol. 85(C), pages 500-510.

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    More about this item

    Keywords

    Energy policy; Regulation; Spatial concentration; CGE modeling;
    All these keywords.

    JEL classification:

    • P25 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Urban, Rural, and Regional Economics
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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