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Economic and GHG impacts of natural gas for Hawaii

Author

Listed:
  • Makena Coffman

    (University of Hawaii Economic Research Organization, University of Hawaii at Manoa)

  • Paul Bernstein

    (University of Hawaii Economic Research Organization)

  • Sherilyn Wee

    (University of Hawaii at Manoa)

  • Clarice Schafer

    (University of Hawaii at Manoa)

Abstract

Hawaii generates the majority of its electricity through oil-fired generation. New production technologies have led to rapidly declining natural gas prices that has renewed Hawaii’s interest in liquefied natural gas (LNG) imports. This study integrates a detailed model of Hawaii’s electric sector with a computable general equilibrium model of Hawaii’s economy to estimate the economic and greenhouse gas (GHG) impacts of importing LNG for use in the electric sector. Incorporating a range of possible price pathways (low, medium and high) out to the year 2040 for LNG imports, we find Hawaii could lower electric sector costs in a range from 6 to 16 % and petroleum refining output declines by over 20 % (in 2040). Gross state product increases in a range of $300 million to $5 billion in net present value. Using natural gas reduces out-of-stack GHG emissions but can also increase GHG emissions in other jurisdictions. Moreover, introducing natural gas could reduce the incentive to pursue renewable energy and energy efficiency. As such, adopting and enforcing policies encouraging renewable energy and efficiency becomes even more important to meet Hawaii’s clean energy and GHG mitigation goals.

Suggested Citation

  • Makena Coffman & Paul Bernstein & Sherilyn Wee & Clarice Schafer, 2017. "Economic and GHG impacts of natural gas for Hawaii," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 19(3), pages 519-536, July.
    • Handle: RePEc:spr:envpol:v:19:y:2017:i:3:d:10.1007_s10018-016-0157-2
    DOI: 10.1007/s10018-016-0157-2
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    References listed on IDEAS

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    1. Coffman, Makena & Griffin, James P. & Bernstein, Paul, 2012. "An assessment of greenhouse gas emissions-weighted clean energy standards," Energy Policy, Elsevier, vol. 45(C), pages 122-132.
    2. Tom Wigley, 2011. "Coal to gas: the influence of methane leakage," Climatic Change, Springer, vol. 108(3), pages 601-608, October.
    3. Stephenson, Eleanor & Doukas, Alexander & Shaw, Karena, 2012. "“Greenwashing gas: Might a ‘transition fuel’ label legitimize carbon-intensive natural gas development?”," Energy Policy, Elsevier, vol. 46(C), pages 452-459.
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    Cited by:

    1. Sthanu R Nair, 2021. "Agrarian suicides in India: Myth and reality," Development Policy Review, Overseas Development Institute, vol. 39(1), pages 3-21, January.

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    More about this item

    Keywords

    Natural gas; Electric sector; Computable general equilibrium; Hawaii;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy

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