Feed‐in‐tariffs and the politics of renewable energy in Indonesia and the Philippines
Asia and the Pacific Policy Studies, 2019, vol. 6, issue 3, 417-431
The ability of Southeast Asia's largest economies to develop renewable energy sectors is important for the reduction of carbon emissions. A popular policy tool for jump‐starting growth in renewables is feed‐in‐tariffs (FITs), whereby the government pays a long‐term and mutually agreed rate to independent power producers to develop renewable energies such as solar, biomass, wind, and hydropower. Indonesia and the Philippines have both adopted FITs in recent years, and the result has been a strong growth of renewable energy in the Philippines, but not in Indonesia. This difference can be partly explained by variances in policy design and political economic conditions that have impacted policy success. The Philippines enacted a FIT scheme that reflected several best practices in policy design. The political economic conditions of energy markets in the Philippines were also initially more favourable. The variance in these components helps to explain the divergent results of their respective FIT systems.
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