Distortion costs and effects of price liberalisation in Russian energy markets: A CGE analysis
Russia’s economy is energy intense and wasteful of resources. This situation has arisen in part due to the country’s ample energy supplies and regulated privileges for domestic con-sumers. Recently enacted and proposed reforms intended to increase the efficiency of the energy sector by raising domestic energy prices also have implications for the export levels of Russian energy commodities. In this study, we estimate the costs of the subsidised en-ergy system in an allocative sense and then analyse recent moves of the Duma to boost gas and electricity prices to bring them into line with market-based pricing. Our analysis uses a multi-region general equilibrium model (GTAP) modified to express the global dimensions of the subsidisation policy and suggested reforms. Preliminary results show that current subsidies extract over 6% of GDP and limit the potential benefits of Russia’s comparative advantage in energy commodities. Increases of 6% in electricity and 10% in the price of regulated gas improve efficiency by reducing distorting subsidies and distinctly shifting output from domestic markets to exports.
|Date of creation:||26 Jan 2004|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: + 358 10 831 2268
Fax: + 358 10 831 2294
Web page: http://www.suomenpankki.fi/bofit_en/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- McDougall, Robert, 2003. "Russian Energy Taxes for GTAP 5.3," GTAP Research Memoranda 1369, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Kennedy, David, 2002. "Regulatory reform and market development in power sectors of transition economies: the case of Kazakhstan," Energy Policy, Elsevier, vol. 30(3), pages 219-233, February.
- Sulamaa, Pekka & Widgrén, Mika, 2003.
"EU Enlargement and Beyond: A Simulation Study on EU and CIS Integration,"
CEPR Discussion Papers
3768, C.E.P.R. Discussion Papers.
- SULAMAA Pekka & WIDGRÉN Mika, . "EU Enlargement and Beyond: A Simulation Study on EU and CIS Integration," EcoMod2003 330700143, EcoMod.
- Benedict J. Clements & Sanjeev Gupta & Hong-Sang Jung, 2003. "Real and Distributive Effects of Petroleum Price Liberalization: The Case of Indonesia," IMF Working Papers 03/204, International Monetary Fund.
- repec:ebd:wpaper:69 is not listed on IDEAS
- W. Jill Harrison & J. Mark Horridge & K.R. Pearson, 2000.
"Decomposing Simulation Results with Respect to Exogenous Shocks,"
Society for Computational Economics, vol. 15(3), pages 227-249, June.
- W. Jill Harrison & J. Mark Horridge & K.R. Pearson, 1999. "Decomposing Simulation Results with Respect to Exogenous Shocks," Centre of Policy Studies/IMPACT Centre Working Papers ip-73, Victoria University, Centre of Policy Studies/IMPACT Centre.
- Riipinen, Toni, 2003. "Energy market liberalisation in the FSU - simulations with the GTAP model," BOFIT Discussion Papers 12/2003, Bank of Finland, Institute for Economies in Transition.
- Huff, Karen & Thomas W. Hertel, 2001. "Decomposing Welfare Changes in GTAP," GTAP Technical Papers 308, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
- Risto Vaittinen, 2003. "Liberalisation of Agricultural Trade - Global Implications and what it Means for the EU," Discussion Papers 303, Government Institute for Economic Research Finland (VATT).
- Brockmeier, Martina, 2001. "A Graphical Exposition of the GTAP Model," GTAP Technical Papers 311, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
When requesting a correction, please mention this item's handle: RePEc:hhs:bofitp:2004_002. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Päivi Määttä)
If references are entirely missing, you can add them using this form.