Incentive-based policy to promote the production of geothermal power from carbon tax scheme: A case of Indonesian CGE model

Herbert Wibert, Victor Hasudungana and Sulthon Sjahril Sabaruddinb
Authors registered in the RePEc Author Service: Sulthon Sjahril Sabaruddin

RIVISTA DI STUDI SULLA SOSTENIBILITA', 2020, vol. X, issue 1, 105-127

Abstract: Indonesia has the largest geothermal potential resources in the world, however, its current utilization rate is about 6% of total geothermal potential. This paper investigates the impact of imposing the carbon taxation on fossil fuels and the tax is then allocated to incentivize the geothermal electricity supply. The results show that carbon taxation can effectively reduce the national GHG emissions. In the scenario of imposing the carbon tax only on coal consumption, the economy tends to improve better than imposing the tax on all types of fossil fuels. This finding indicates that the policy could only reduce the total production cost of electricity supply, but cannot offset the increased price of fossil fuels due to carbon tax. Our analysis also shows that a revenue-recycling scheme of carbon tax on coal uses by reducing the electricity price will lead to welfare improvements and inequality reductions since coal is only consumed in the industrial sector.

Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.francoangeli.it/riviste/Scheda_Rivista. ... 828&Tipo=ArticoloPDF (text/html)
Single articles can be downloaded buying download credits, for info: https://www.francoangeli.it/DownloadCredit

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fan:rissri:v:html10.3280/riss2020-001007

Ordering information: This journal article can be ordered from
http://www.francoang ... o.aspx?IDRivista=168

Access Statistics for this article

RIVISTA DI STUDI SULLA SOSTENIBILITA' is currently edited by FrancoAngeli

More articles in RIVISTA DI STUDI SULLA SOSTENIBILITA' from FrancoAngeli Editore
Bibliographic data for series maintained by Stefania Rosato ().