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Economy-wide benefits and costs of local-level energy transition in Austrian Climate and Energy Model Regions

Author

Listed:
  • Thomas Schinko

    (International Institute for Applied Systems Analysis (IIASA), Austria)

  • Birgit Bednar-Friedl

    (University of Graz, Austria)

  • Barbara Truger

    (University of Graz, Austria)

  • Rafael Bramreiter

    (University of Graz, Austria)

  • Nadejda Komendantova

    (University of Graz, Austria)

  • Michael Hartner

    (Energy Economics Group, TU Wien, Austria)

Abstract

To achieve a low-carbon transition in the electricity sector, countries combine national-scale policies with regional renewable electricity (RES-E) initiatives. Taking Austria as an example, we investigate the economy-wide effects of implementing national-level feed-in tariffs alongside local-level ‘climate and energy model (CEM) regions’, taking account of policy externalities across the two governance levels. We distinguish three types of CEM regions by means of a cluster analysis and apply a sub-national Computable General Equilibrium (CGE) model to investigate two RES-E scenarios. We find that whether the net economic effects are positive or negative depends on three factors: (i) RES-E potentials, differentiated by technology and cluster region; (ii) economic competitiveness of RES-E technologies relative to each other and to the current generation mix; and (iii) support schemes in place which translate into policy costs. We conclude that the focus should mainly be on economically competitive technologies, such as PV and wind, to avoid unintended macroeconomic side-effects. To achieve that, national support policies for RES-E have to be aligned with regional energy initiatives.

Suggested Citation

  • Thomas Schinko & Birgit Bednar-Friedl & Barbara Truger & Rafael Bramreiter & Nadejda Komendantova & Michael Hartner, 2020. "Economy-wide benefits and costs of local-level energy transition in Austrian Climate and Energy Model Regions," Graz Economics Papers 2020-05, University of Graz, Department of Economics.
  • Handle: RePEc:grz:wpaper:2020-05
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    References listed on IDEAS

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    Cited by:

    1. Daniel Reiter, 2020. "Socioeconomic Integration through Language: Evidence from the European Union," Graz Economics Papers 2020-15, University of Graz, Department of Economics.
    2. Hans Manner & Gabriel Rodriguez & Florian Stöckler, 2021. "A changepoint analysis of exchange rate and commodity price risks for Latin American stock markets," Graz Economics Papers 2021-14, University of Graz, Department of Economics.
    3. Irshaid, Jenan & Mochizuki, Junko & Schinko, Thomas, 2021. "Challenges to local innovation and implementation of low-carbon energy-transition measures: A tale of two Austrian regions," Energy Policy, Elsevier, vol. 156(C).

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    More about this item

    Keywords

    energy transition; computable general equilibrium (CGE); national support policies; regional energy initiatives; policy externality;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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