IDEAS home Printed from https://ideas.repec.org/p/hai/wpaper/201613.html
   My bibliography  Save this paper

The Public Economics of Electricity Policy with Philippine Applications

Author

Listed:
  • Majah-Leah Ravago

    (Assistant Professor at the University of the Philippines and Program Director of the Energy Policy and Development Program (EPDP) of the Philippines)

  • James Roumasset

    (Emeritus Professor of Economics (pending) at the University of Hawaii, Manoa)

Abstract

Electricity policy in many countries is charged with multiple objectives including affordability, sustainability, inclusivity, and renewability. Unless these objectives can be reconciled, the pursuit of one will detract from the pursuit of another. We provide a framework for culling some objectives and reconciling other by extending the traditional view of efficiency. Philippine power policies are characterized and evaluated with respect to conflicting objectives and the problem of incomplete deregulation. We also make preliminary suggestions regarding investment planning for generation and transmission, including the suitability of short-cut metrics such as levelized and avoided costs and the prospects for increased competitiveness.

Suggested Citation

  • Majah-Leah Ravago & James Roumasset, 2016. "The Public Economics of Electricity Policy with Philippine Applications," Working Papers 201613, University of Hawaii at Manoa, Department of Economics.
  • Handle: RePEc:hai:wpaper:201613
    as

    Download full text from publisher

    File URL: http://www.economics.hawaii.edu/research/workingpapers/WP_16-13.pdf
    File Function: First version, 2016 09
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Daron Acemoglu & Philippe Aghion & Leonardo Bursztyn & David Hemous, 2012. "The Environment and Directed Technical Change," American Economic Review, American Economic Association, vol. 102(1), pages 131-166, February.
    2. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    3. Stiglitz, Joseph E., 1987. "Pareto efficient and optimal taxation and the new new welfare economics," Handbook of Public Economics, in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 2, chapter 15, pages 991-1042, Elsevier.
    4. Gernot Wagner & Martin L. Weitzman, 2016. "Climate Shock: The Economic Consequences of a Hotter Planet," Economics Books, Princeton University Press, edition 2, number 10725.
    5. Lawrence H. Goulder & Roberton C. Williams III, 2003. "The Substantial Bias from Ignoring General Equilibrium Effects in Estimating Excess Burden, and a Practical Solution," Journal of Political Economy, University of Chicago Press, vol. 111(4), pages 898-927, August.
    6. Ueckerdt, Falko & Hirth, Lion & Luderer, Gunnar & Edenhofer, Ottmar, 2013. "System LCOE: What are the costs of variable renewables?," Energy, Elsevier, vol. 63(C), pages 61-75.
    7. Severin Borenstein, 2012. "The Private and Public Economics of Renewable Electricity Generation," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 67-92, Winter.
    8. Endress, Lee H. & Roumasset, James A. & Zhou, Ting, 2005. "Sustainable growth with environmental spillovers," Journal of Economic Behavior & Organization, Elsevier, vol. 58(4), pages 527-547, December.
    9. Soren T. Anderson & Ryan Kellogg & Stephen W. Salant, 2018. "Hotelling under Pressure," Journal of Political Economy, University of Chicago Press, vol. 126(3), pages 984-1026.
    10. Karl Jandoc & Ruben Juarez & James Roumasset, 2014. "Towards an Economics of Irrigation Networks," Working Papers 201416, University of Hawaii at Manoa, Department of Economics.
    11. Fabella, Raul V., 2002. "The Regulatory Environment of the Energy Industry in the Philippines," Centre on Regulation and Competition (CRC) Working papers 30677, University of Manchester, Institute for Development Policy and Management (IDPM).
    12. Chakravorty, Ujjayant & Roumasset, James & Tse, Kinping, 1997. "Endogenous Substitution among Energy Resources and Global Warming," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1201-1234, December.
    13. Aldaba, Rafaelita M., 2003. "Regulatory Policies and Reforms in the Power and Downstream Oil Industries," Discussion Papers DP 2003-16, Philippine Institute for Development Studies.
    14. Ravago, Majah-Leah V. & Brucal, Arlan Zandro & Roumasset, James & Punongbayan, Jan Carlo, 2019. "The role of power prices in structural transformation: Evidence from the Philippines," Journal of Asian Economics, Elsevier, vol. 61(C), pages 20-33.
    15. Harberger, Arnold C, 1984. "Basic Needs versus Distributional Weights in Social Cost-Benefit Analysis," Economic Development and Cultural Change, University of Chicago Press, vol. 32(3), pages 455-474, April.
    16. Martin Chick, 2007. "Electricity and Energy Policy in Britain, France and the United States since 1945," Books, Edward Elgar Publishing, number 3650.
    17. Bovenberg, A.L. & Goulder, L.H., 1996. "Optimal environmental taxation in the presence of other taxes : General equilibrium analyses," Other publications TiSEM 5d4b7517-c5c8-4ef6-ab76-3, Tilburg University, School of Economics and Management.
    18. Richard S.J. Tol, 2011. "The Social Cost of Carbon," Annual Review of Resource Economics, Annual Reviews, vol. 3(1), pages 419-443, October.
    19. Kevin Novan, 2015. "Valuing the Wind: Renewable Energy Policies and Air Pollution Avoided," American Economic Journal: Economic Policy, American Economic Association, vol. 7(3), pages 291-326, August.
    20. James Roumasset & Lee Endress, 1996. "The yin and yang of sustainable development: A case for win‐win environmentalism," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 1(2), pages 185-194.
    21. Ujjayant Chakravorty & Michel Moreaux & Mabel Tidball, 2008. "Ordering the Extraction of Polluting Nonrenewable Resources," American Economic Review, American Economic Association, vol. 98(3), pages 1128-1144, June.
    22. Paul L. Joskow, 2011. "Comparing the Costs of Intermittent and Dispatchable Electricity Generating Technologies," American Economic Review, American Economic Association, vol. 101(3), pages 238-241, May.
    23. Pearce, David W, 1991. "The Role of Carbon Taxes in Adjusting to Global Warming," Economic Journal, Royal Economic Society, vol. 101(407), pages 938-948, July.
    24. G. Cornelis van Kooten, 2015. "The Economics of Forest Carbon Sequestration Revisited: A Challenge for Emissions Offset Trading," Working Papers 2015-04, University of Victoria, Department of Economics, Resource Economics and Policy Analysis Research Group.
    25. World Bank, 2005. "Philippines : Meeting the Infrastructure Challenges," World Bank Publications - Reports 8459, The World Bank Group.
    26. J. Roumasset & M. Ravago & K. Jandoc & C. Arellano, 2016. "Filipino 2040 Environmental Resources, Shocks, and National Well-Being," Working Papers 2016-3, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    27. Bovenberg, A Lans & Goulder, Lawrence H, 1996. "Optimal Environmental Taxation in the Presence of Other Taxes: General-Equilibrium Analyses," American Economic Review, American Economic Association, vol. 86(4), pages 985-1000, September.
    28. James Roumasset, 1989. "Decentralization and Local Public Goods: Getting the Incentives Right," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 26(1), pages 1-13, June.
    29. James A. Roumasset & Kimberly M. Burnett & Arsenio M. Balisacan, 2010. "Sustainability Science for Watershed Landscapes," Books on Agricultural Research and Development, Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), number 2010:3.
    30. Lee Endress, 2013. "Sustainable Development and the Hawaii Clean Energy Initiative," Working Papers 2013-4, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    31. Kenneth Lee & Edward Miguel & Catherine Wolfram, 2016. "Appliance Ownership and Aspirations among Electric Grid and Home Solar Households in Rural Kenya," American Economic Review, American Economic Association, vol. 106(5), pages 89-94, May.
    32. Basharat A. Pitafi & James A. Roumasset, 2009. "Pareto-Improving Water Management over Space and Time: The Honolulu Case," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 91(1), pages 138-153.
    33. Roumasset, James & Ravago, Majah-Leah & Jandoc, Karl & Arellano, Clarissa, 2016. "Environmental Resources, Shocks, and National Well-Being," MPRA Paper 87715, University Library of Munich, Germany.
    34. James A Roumasset, 2000. "Black-Hole Security," Working Papers 200005, University of Hawaii at Manoa, Department of Economics.
    35. Roger Fouquet (ed.), 2013. "Handbook on Energy and Climate Change," Books, Edward Elgar Publishing, number 14429.
    36. Paul L. Joskow & Catherine D. Wolfram, 2012. "Dynamic Pricing of Electricity," American Economic Review, American Economic Association, vol. 102(3), pages 381-385, May.
    37. Balisacan, Arsenio M. & Hill, Hal (ed.), 2003. "The Philippine Economy: Development, Policies, and Challenges," OUP Catalogue, Oxford University Press, number 9780195158984.
    38. Goldin,Ian & Winters,L. Alan (ed.), 1995. "The Economics of Sustainable Development," Cambridge Books, Cambridge University Press, number 9780521469579, October.
    39. Geoffrey Heal, 2008. "Climate Economics: A Meta-Review and Some Suggestions," NBER Working Papers 13927, National Bureau of Economic Research, Inc.
    40. William Nordhaus, 2015. "Climate Clubs: Overcoming Free-Riding in International Climate Policy," American Economic Review, American Economic Association, vol. 105(4), pages 1339-1370, April.
    41. Solow, Robert, 1993. "An almost practical step toward sustainability," Resources Policy, Elsevier, vol. 19(3), pages 162-172, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Majah-Leah V. Ravago & Arlan Zandro I. Brucal & James Roumasset & Jan Carlo Punongbayan, 2019. "The Role of Electricity Prices in Structural Transformation: Evidence from the Philippines," Working Papers 201904, University of Hawaii at Manoa, Department of Economics.
    2. Ravago, Majah-Leah V. & Brucal, Arlan Zandro & Roumasset, James & Punongbayan, Jan Carlo, 2019. "The role of power prices in structural transformation: Evidence from the Philippines," Journal of Asian Economics, Elsevier, vol. 61(C), pages 20-33.
    3. Clarete, Ramon, 2016. "The Value Added Tax and Red Tape: What Contributes More to Electricity Tariffs in the Philippines," MPRA Paper 87727, University Library of Munich, Germany.
    4. Majah-Leah V. Ravago & James A. Roumasset, 2020. "COVID-19, Coal, and the Energy Transition in the Philippines," Department of Economics, Ateneo de Manila University, Working Paper Series 202009, Department of Economics, Ateneo de Manila University.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Majah-Leah Ravago & James Roumasset, 2009. "Economic Policy for Sustainable Growth and Development vs. Greedy Growth and Preservationism," Working Papers 200909, University of Hawaii at Manoa, Department of Economics.
    2. Roumasset James & Wada Christopher A, 2011. "Ordering Renewable Resources: Groundwater, Recycling, and Desalination," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 11(1), pages 1-29, May.
    3. Renaud Coulomb & Oskar Lecuyer & Adrien Vogt-Schilb, 2019. "Optimal Transition from Coal to Gas and Renewable Power Under Capacity Constraints and Adjustment Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(2), pages 557-590, June.
    4. Roumasset, James & Ravago, Majah-Leah & Jandoc, Karl & Arellano, Clarissa, 2016. "Environmental Resources, Shocks, and National Well-Being," MPRA Paper 87715, University Library of Munich, Germany.
    5. Buchholz Wolfgang & Heindl Peter, 2015. "Ökonomische Herausforderungen des Klimawandels," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 16(4), pages 324-350, December.
    6. Oskar Lecuyer & Adrien Vogt-Schilb, 2013. "Assessing and ordering investments in polluting fossil-fueled and zero-carbon capital," CIRED Working Papers hal-00850680, HAL.
    7. Rozenberg, Julie & Vogt-Schilb, Adrien & Hallegatte, Stephane, 2020. "Instrument choice and stranded assets in the transition to clean capital," Journal of Environmental Economics and Management, Elsevier, vol. 100(C).
    8. Rong Wang & Juan Moreno-Cruz & Ken Caldeira, 2017. "Will the use of a carbon tax for revenue generation produce an incentive to continue carbon emissions?," Post-Print hal-03226925, HAL.
    9. van Kooten, G. Cornelis, 2015. "All you want to know about the Economics of Wind Power," Working Papers 241693, University of Victoria, Resource Economics and Policy.
    10. Fabra, Natalia, 2021. "The energy transition: An industrial economics perspective," International Journal of Industrial Organization, Elsevier, vol. 79(C).
    11. James Roumasset & Christopher Wada, 2013. "Ordering Extraction from Multiple Aquifers," Working Papers 2013-12, University of Hawaii Economic Research Organization, University of Hawaii at Manoa.
    12. Rausch, Sebastian & Yonezawa, Hidemichi, 2023. "Green technology policies versus carbon pricing: An intergenerational perspective," European Economic Review, Elsevier, vol. 154(C).
    13. James Roumasset & Christopher Wada, 2011. "Ordering Renewables: Groundwater, Recycling, and Desalination," Working Papers 201105, University of Hawaii at Manoa, Department of Economics.
    14. Mariana Conte Grand & Alejandro Rasteletti, 2021. "Pérdidas de bienestar por imposición subóptima en los impuestos a las gasolinas en América Latina y el Caribe," CEMA Working Papers: Serie Documentos de Trabajo. 821, Universidad del CEMA.
    15. Lint Barrage, 2020. "Optimal Dynamic Carbon Taxes in a Climate–Economy Model with Distortionary Fiscal Policy," Review of Economic Studies, Oxford University Press, vol. 87(1), pages 1-39.
    16. Carsten Helm & Mathias Mier, 2020. "Steering the Energy Transition in a World of Intermittent Electricity Supply: Optimal Subsidies and Taxes for Renewables Storage," ifo Working Paper Series 330, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    17. Gaël Callonnec & Frédéric Reynès & Yasser Y. Tamsamani, 2012. "Une évaluation macroéconomique et sectorielle de la fiscalité carbone en France," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(1), pages 121-154.
    18. Mathieu-Bolh, Nathalie, 2017. "Can tax reforms help achieve sustainable development?," Resource and Energy Economics, Elsevier, vol. 50(C), pages 135-163.
    19. Stiglitz, Joseph E., 2018. "Pareto efficient taxation and expenditures: Pre- and re-distribution," Journal of Public Economics, Elsevier, vol. 162(C), pages 101-119.

    More about this item

    Keywords

    Electricity; renewable energy; excess burden; deregulation; competition; Philippines;
    All these keywords.

    JEL classification:

    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hai:wpaper:201613. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Web Technician (email available below). General contact details of provider: https://edirc.repec.org/data/deuhius.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.