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Harnessing the Sun and Wind for Economic Development? An Economy-Wide Assessment for Egypt

Author

Listed:
  • Perrihan Al-Riffai

    (International Food Policy Research Institute (IFPRI), Washington, DC 20006-1002, USA
    These authors contributed equally to this work.)

  • Julian Blohmke

    (International Centre for Integrated Assessment and Sustainable Development, Maastricht University, 6211 LK Maastricht, The Netherlands
    These authors contributed equally to this work.)

  • Clemens Breisinger

    (International Food Policy Research Institute (IFPRI), Washington, DC 20006-1002, USA
    These authors contributed equally to this work.)

  • Manfred Wiebelt

    (Kiel Institute for the World Economy, Kiellinie 66, 24105 Kiel, Germany
    These authors contributed equally to this work.)

Abstract

While the recent political transition in Egypt has delayed much-needed policy reforms, our paper suggests that under certain conditions, fostering the national renewable energy strategy may be a promising way of giving an ailing economy an urgently needed impetus. Based on the literature and results of a renewable-energy focused computable general equilibrium model, we recommend that Egypt supports the generation of wind power. While some energy may be exported to generate foreign exchange, a substantial part of the newly produced energy should be sold domestically to ease existing supply constraints and to avoid Dutch disease effects. In addition, and in order to maximize the benefits of renewable energy sources, the renewable energy strategy should be accompanied by a (further) reduction of energy subsidies. Finally, lessons from other countries suggest that sound institutions; appropriate, clear and lasting regulations; careful technology transfer; and cross-ministerial coordination are important for success.

Suggested Citation

  • Perrihan Al-Riffai & Julian Blohmke & Clemens Breisinger & Manfred Wiebelt, 2015. "Harnessing the Sun and Wind for Economic Development? An Economy-Wide Assessment for Egypt," Sustainability, MDPI, Open Access Journal, vol. 7(6), pages 1-27, June.
  • Handle: RePEc:gam:jsusta:v:7:y:2015:i:6:p:7714-7740:d:51309
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    References listed on IDEAS

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    1. Calzadilla, Alvaro & Wiebelt, Manfred & Blohmke, Julian & Klepper, Gernot, 2014. "Desert power 2050: Regional and sectoral impacts of renewable electricity production in Europe, the Middle East and North Africa," Kiel Working Papers 1891, Kiel Institute for the World Economy (IfW).
    2. Haller, Markus & Ludig, Sylvie & Bauer, Nico, 2012. "Decarbonization scenarios for the EU and MENA power system: Considering spatial distribution and short term dynamics of renewable generation," Energy Policy, Elsevier, vol. 47(C), pages 282-290.
    3. Jakob, Michael & Haller, Markus & Marschinski, Robert, 2012. "Will history repeat itself? Economic convergence and convergence in energy use patterns," Energy Economics, Elsevier, vol. 34(1), pages 95-104.
    4. Popp, David & Hascic, Ivan & Medhi, Neelakshi, 2011. "Technology and the diffusion of renewable energy," Energy Economics, Elsevier, vol. 33(4), pages 648-662, July.
    5. Massetti, Emanuele & Ricci, Elena Claire, 2013. "An assessment of the optimal timing and size of investments in concentrated solar power," Energy Economics, Elsevier, vol. 38(C), pages 186-203.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Imane Helmy & Christian Richter & Khalid Siddig & Hebatallah Ghoneim, 2018. "A Comparison of the Economics Impacts of Conditional and Unconditional Cash Transfers in Egypt," Working Papers 50, The German University in Cairo, Faculty of Management Technology.
    2. Mondal, Md. Alam Hossain & Ringler, Claudia & Al-Riffai, Perrihan & Eldidi, Hagar & Breisinger, Clemens & Wiebelt, Manfred, 2019. "Long-term optimization of Egypt’s power sector: Policy implications," Energy, Elsevier, vol. 166(C), pages 1063-1073.

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    More about this item

    Keywords

    renewable energy; economic development; income distribution; computable general equilibrium (CGE) analysis; Egypt;
    All these keywords.

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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