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The resource curse: Analysis of the applicability to the large-scale export of electricity from renewable resources

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  • Eisgruber, Lasse

Abstract

The “resource curse” has been analyzed extensively in the context of non-renewable resources such as oil and gas. More recently commentators have expressed concerns that also renewable electricity exports can have adverse economic impacts on exporting countries. My paper analyzes to what extent the resource curse applies in the case of large-scale renewable electricity exports. I develop a “comprehensive model” that integrates previous works and provides a consolidated view of how non-renewable resource abundance impacts economic growth. Deploying this model I analyze through case studies on Laos, Mongolia, and the MENA region to what extent exporters of renewable electricity run into the danger of the resource curse. I find that renewable electricity exports avoid some disadvantages of non-renewable resource exports including (i) shocks after resource depletion; (ii) macroeconomic fluctuations; and (iii) competition for a fixed amount of resources. Nevertheless, renewable electricity exports bear some of the same risks as conventional resource exports including (i) crowding-out of the manufacturing sector; (ii) incentives for corruption; and (iii) reduced government accountability. I conclude with recommendations for managing such risks.

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  • Eisgruber, Lasse, 2013. "The resource curse: Analysis of the applicability to the large-scale export of electricity from renewable resources," Energy Policy, Elsevier, vol. 57(C), pages 429-440.
  • Handle: RePEc:eee:enepol:v:57:y:2013:i:c:p:429-440
    DOI: 10.1016/j.enpol.2013.02.013
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    1. repec:clh:resear:v:9:y:2016:i:20 is not listed on IDEAS
    2. Shao, Shuai & Yang, Lili, 2014. "Natural resource dependence, human capital accumulation, and economic growth: A combined explanation for the resource curse and the resource blessing," Energy Policy, Elsevier, vol. 74(C), pages 632-642.
    3. Van de Graaf, Thijs & Sovacool, Benjamin K., 2014. "Thinking big: Politics, progress, and security in the management of Asian and European energy megaprojects," Energy Policy, Elsevier, vol. 74(C), pages 16-27.
    4. Xu, Xiaoliang & Xu, Xuefen & Chen, Qian & Che, Ying, 2016. "The research on generalized regional “resource curse” in China's new normal stage," Resources Policy, Elsevier, vol. 49(C), pages 12-19.
    5. Johan Lilliestam & Anthony Patt, 2015. "Barriers, Risks and Policies for Renewables in the Gulf States," Energies, MDPI, Open Access Journal, vol. 8(8), pages 1-23, August.

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