Development of Renewable Energy in ASEAN Countries: Socio-economic and Environmental Impacts

In the last two decades, there has been a significant increase in electricity consumption per capita amongst ASEAN countries. This consumption of electricity will most likely keep increasing in the future; indicating the importance of the solid provision of electricity supply in the region. ASEAN countries, however, have concerns that keep utilising fossil-fueled electricity would deteriorate the environmental condition. Therefore, ASEAN countries seriously considering to increase their investment in renewable electricity power generations. Nonetheless, there have been only a few studies focus on the impacts of this shifting towards renewable energy toward societies’ socio-economic and environmental condition. Utilise an inter-regional Social Accounting Matrix (IRSAM) across countries in the Southeast Asia region, this paper aims to compare the impacts of increasing electricity generated from fossil fuel and that from renewable resources, namely wind, hydro and solar. This paper finds that switching to renewable energy, not only can induce higher GDP compared to keep using fossil fuel, but also producing much less carbon emission. However, the poverty incidence reduction under renewable electricity development simulations is less than fossil fuel development simulation. This paper argues that the initial level of income per capita, income distribution pattern, and flow of income in an economy matter in determining the poverty reduction.