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Energy Efficiency Priority for Indonesia: A General Equilibrium Analysis

Arief Yusuf ()

No 201506, Working Papers in Economics and Development Studies (WoPEDS) from Department of Economics, Padjadjaran University

Abstract: Climate change mitigation, through the means of energy efficiency improvement, requires all countries to play important roles. Developing countries are not the exception. However, in the context of developing countries, the benefit of energy efficiency improvement need to be measured against a broad range of development indicators. Using a general equlibrium model of the Indonesian economy, we simulate various different energy efficiency scenarios and compare its impact not only on the amount of emissions reduction, but also on other relevant development indicators such as employment creation, poverty incidence and income distribution. The result suggests that energy efficiency improvement which leave more resource available for output expansion is employment-generating, poverty-reducing and can have a favorable distributional implication. For Indonesia, improving fuel efficiency in public road transportation and improving energy efficiency of the energy-intensive manufacturing sector has come out as the key priority areas where energy efficiency strategy should focus on.

Keywords: Energy efficiency; Computable General Equilibrium; Indonesia (search for similar items in EconPapers)
JEL-codes: Q40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp, nep-ene, nep-env and nep-sea
Date: 2015-12, Revised 2015-12
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http://ceds.feb.unpad.ac.id/wopeds/201506.pdf First version, 2015 (application/pdf)

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Persistent link: http://EconPapers.repec.org/RePEc:unp:wpaper:201506

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