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Assessing the Impact of Trade Barriers on Energy Use in Turbulent Times: Current Conditions and Future Outlook for Greece

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  • Gerassimos Bertsatos

    (Laboratory of Applied Economics, Department of Economics, University of Western Macedonia, 521 00 Kastoria, Greece)

  • Nicholas Tsounis

    (Laboratory of Applied Economics, Department of Economics, University of Western Macedonia, 521 00 Kastoria, Greece
    School of Social Sciences, Hellenic Open University, 263 35 Patra, Greece)

Abstract

This paper develops a multi-sector computable general equilibrium (CGE) model with specific features for Greece and the non-EU Rest of the World (RoW). The novelty of this work stems from the lack of energy-focused CGE models for Greece in the current literature. The study’s objective is to determine how the Greek economy would react if a 30% import tariff and a quota of 67% on energy imports and 35% on remaining imports were implemented. Furthermore, if quotas and tariffs are in force, the Greek economy will initiate countermeasures by increasing investment in renewable energies through substitution and a 35% subsidy. To quantify this, the 2015 Input-Output (I-O) table for Greece and the non-EU RoW was used. To offer a better understanding, the 36 production sectors have been divided into Agriculture, Energy, Manufacturing, and Services. The quota scenario resulted in a reduction in all sectors in domestic production in terms of output and domestic uses, with some sectors experiencing around a 30% reduction. Renewable energy investments, on the other hand, have proven to be effective for domestic production, increasing output and domestic uses by (6.561%) and (7.886%), respectively. In terms of import tariffs, prices have increased, resulting in a significant decrease in household consumption that exceeds 30% in several sectors. Finally, policy recommendations for addressing these trade barriers and Greece’s renewable energy opportunities are proposed.

Suggested Citation

  • Gerassimos Bertsatos & Nicholas Tsounis, 2023. "Assessing the Impact of Trade Barriers on Energy Use in Turbulent Times: Current Conditions and Future Outlook for Greece," Energies, MDPI, vol. 16(15), pages 1-25, August.
    • Handle: RePEc:gam:jeners:v:16:y:2023:i:15:p:5806-:d:1210686
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