The Economics of Policy Instruments to Stimulate Wind Power in Brazil
Large-scale deployment of renewable energy technologies, such as wind power and solar energy, has been taking place in industrialized and developing economics mainly because of various fiscal and regulatory policies. An understanding of the economy...
| Main Authors: | , |
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2015
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2015/06/24736160/economics-policy-instruments-stimulate-wind-power-brazil http://hdl.handle.net/10986/22226 |
| Summary: | Large-scale deployment of renewable
energy technologies, such as wind power and solar energy,
has been taking place in industrialized and developing
economics mainly because of various fiscal and regulatory
policies. An understanding of the economy-wide impacts of
those policies is an important part of an overall analysis
of them. Using a perfect foresight computable general
equilibrium model, this study analyzes the economy-wide
costs of achieving a 10 percent share of wind power in
Brazil’s electricity supply mix by 2030. Brazil is in the
midst of an active program of wind capacity expansion. The
welfare loss would be small, 0.1 percent of total baseline
welfare in the absence of the 10 percent wind power
expansion. The study also finds that, in the case of Brazil,
production subsidies financed through increased value-added
tax would have superior impacts on welfare and greenhouse
gas mitigation, compared with a consumption mandate where
electricity utilities are allowed to pass the increased
electricity supply costs directly to consumers. These two
policies would impact various production sectors differently
to achieve the wind power expansion targets: the burden of
the mandate falls mostly on electricity-intensive production
and consumption, whereas the burden of the subsidy is
distributed toward goods and services with higher value added. |
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