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What Is the Macroeconomic Impact of Higher Decarbonization Speeds? The Case of Greece

Author

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  • Diamantis Koutsandreas

    (Decision Support Systems Lab (EPU-NTUA), School of Electrical and Computer Engineering, National Technical University of Athens, 157 73 Athens, Greece)

  • Evangelos Spiliotis

    (Forecasting and Strategy Unit, School of Electrical and Computer Engineering, National Technical University of Athens, 157 73 Athens, Greece)

  • Haris Doukas

    (Decision Support Systems Lab (EPU-NTUA), School of Electrical and Computer Engineering, National Technical University of Athens, 157 73 Athens, Greece)

  • John Psarras

    (Decision Support Systems Lab (EPU-NTUA), School of Electrical and Computer Engineering, National Technical University of Athens, 157 73 Athens, Greece)

Abstract

In alignment with the European Union’s legislation, Greece submitted its final 10-year National Energy and Climate Plan (NECP) in December 2019, setting more ambitious energy and climate targets than those originally proposed in the draft version of the document. Apart from higher penetration of renewable energy sources (RES), the final NECP projects also zero carbon use in power generation till 2030. Although decarbonization has long been regarded beneficial for economies that base their energy production on coal, as it is the case with Greece, the macroeconomic and societal ramifications of faster transitions to carbon-free economies remain highly unexplored. Under this context, in this paper, we soft-link energy models, namely Times-Greece and Primes, with a macroeconomic model, namely Global Trade Analysis Project (GTAP), to measure the effects of the final and draft NECPs on the Greek economy and evaluate the impact of higher decarbonization speeds. We find that the faster transition scenario displays both economic and societal merits, increasing Gross Domestic Product (GDP) and household income by about 1% and 7%, respectively.

Suggested Citation

  • Diamantis Koutsandreas & Evangelos Spiliotis & Haris Doukas & John Psarras, 2021. "What Is the Macroeconomic Impact of Higher Decarbonization Speeds? The Case of Greece," Energies, MDPI, vol. 14(8), pages 1-19, April.
    • Handle: RePEc:gam:jeners:v:14:y:2021:i:8:p:2235-:d:537513
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