Evaluating the economic and social benefits of global energy interconnection based on GTAP model

Sida Qian, Yan Song, Ming Zhang, Hanbing Hu and Wenhao Zhang

Energy, 2025, vol. 335, issue C

Abstract: The Global Energy Interconnection (GEI) development will bring various economic and social benefits to multiple regions. To effectively promote its implementation, examining how these benefits differ across economies is crucial. This study uses the Global Trade Analysis Project (GTAP) model to explore the economic and social impacts of the GEI initiative. Specifically, it incorporates two key factors—average wholesale electricity prices and electricity generation—into a multi-country, multi-sector simulation. The main findings of this study are as follows: (1) China is the largest beneficiary, with the GEI project increasing its 2050 GDP and employment levels by 4.64 % and 2.03 %, respectively, compared to 2017, realizing a synergistic increase in economic and social benefits. (2) Most countries in the world, especially the vast number of developing countries represented by China, ASEAN and African countries, will benefit from the GEI project to varying degrees. (3) Global carbon emissions are expected to decline as the project encourages a transition to clean energy. (4) Some negative effects may be observed in EU and North American countries, but the impact on South America is relatively mild. (5) The GEI project has enhanced countries' resilience to energy policy uncertainty and climate risk shocks. These findings provide a powerful reference for energy policymakers and investors.

Keywords: Global energy interconnection; GTAP model; Evaluation of economic and social benefits; Simulation forecasting (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:335:y:2025:i:c:s0360544225039027

DOI: 10.1016/j.energy.2025.138260

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