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The impact of an ETS on the Australian energy sector: An integrated CGE and electricity modelling approach

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  • Meng, Sam
  • Siriwardana, Mahinda
  • McNeill, Judith
  • Nelson, Tim

Abstract

This paper utilises a new computable general equilibrium (CGE) model which integrates an electricity supply model to gauge the effects of a national emissions trading scheme (ETS) on the Australian energy sector and the broader economy. The modelling results show that an ETS can reduce emissions effectively and with a relatively small impact on the overall economy. But the impact of the ETS on individual sectors varies. Wind electricity generation is projected to benefit greatly. Brown coal electricity and gas electricity are expected to be adversely affected substantially. Somewhat surprisingly, the impact on black coal electricity is negative but relatively small.

Suggested Citation

  • Meng, Sam & Siriwardana, Mahinda & McNeill, Judith & Nelson, Tim, 2018. "The impact of an ETS on the Australian energy sector: An integrated CGE and electricity modelling approach," Energy Economics, Elsevier, vol. 69(C), pages 213-224.
  • Handle: RePEc:eee:eneeco:v:69:y:2018:i:c:p:213-224
    DOI: 10.1016/j.eneco.2017.11.017
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    More about this item

    Keywords

    Carbon pricing; CGE modelling; Energy resources; Carbon emission;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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