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Investment in renewable energy, fossil fuel prices and policy implications for Latin America and the Caribbean

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  • Andrade, Rodrigo
  • Griffith-Jones, Edward
  • Griffith-Jones, Stephany
  • Spratt, Stephen

Abstract

This paper examines if recent sharp declines in the price of oil and other fossil fuels will discourage private investment in renewable energy, which is key for climate change mitigation. The increase in private renewables investment in the Latin America and the Caribbean (LAC) region have been driven by sharp declines in costs alongside supportive policies. The sharp fall in the price of oil and other fossil fuels since 2014 risks disrupting continued private investment in renewables if they becomes insufficiently profitable. The decline in oil and other fossil fuel prices presents an opportunity for governments to reduce subsidies to them. For countries without such large subsidies, governments could increase taxes on them. This would alleviate their negative effects on climate change.

Suggested Citation

  • Andrade, Rodrigo & Griffith-Jones, Edward & Griffith-Jones, Stephany & Spratt, Stephen, 2017. "Investment in renewable energy, fossil fuel prices and policy implications for Latin America and the Caribbean," Financiamiento para el Desarrollo 41679, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    • Handle: RePEc:ecr:col035:41679
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    Cited by:

    1. Lin, Boqiang & Xu, Bin, 2018. "How to promote the growth of new energy industry at different stages?," Energy Policy, Elsevier, vol. 118(C), pages 390-403.
    2. Wang, Yangjie & Shinwari, Riazullah & Naeem, Muhammad Abubakr, 2024. "The effects of green technology and globalization on energy demand in emerging economies," Renewable Energy, Elsevier, vol. 237(PC).
    3. Shah, Imran Hussain & Hiles, Charlie & Morley, Bruce, 2018. "How do oil prices, macroeconomic factors and policies affect the market for renewable energy?," Applied Energy, Elsevier, vol. 215(C), pages 87-97.
    4. Ishaya Tambari & Pierre Failler, 2020. "Determining If Oil Prices Significantly Affect Renewable Energy Investment in African Countries with Energy Security Concerns," Energies, MDPI, vol. 13(24), pages 1-21, December.
    5. Washburn, C. & Pablo-Romero, M., 2019. "Measures to promote renewable energies for electricity generation in Latin American countries," Energy Policy, Elsevier, vol. 128(C), pages 212-222.

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