Abstract:Abstract:This study contributes to the realization of intended nationally determined contributions (INDCs) by analyzing their implications for the energy production system and the economy, and determines the role of renewable energies (RE) in reducing the challenge of committing to the INDCs. The Asia-Pacific Integrated Model/Computable General Equilibrium (AIM/CGE) model was used to assess seven scenarios having the same socioeconomic development but different shares of RE in power generation. By comparing di… Show more
“…In general, this result showed that the energy reform could increase the use of gas and renewable energy, relatively more environmentally friendly than those of coal and oil. This result reflects those of [3,4,6,44] who stressed the benefit of phasing out energy subsidy on clean energy transition and later extended as one of the dominant strategies for carbon emission reduction. Without specific re-allocation in renewable energy, the share of this energy could increase from 0.16% (SIM 3) to 0.18% (SIM 1 and SIM2).…”
Section: The Impact On Energy MIXsupporting
confidence: 79%
“…Energy transition, from fossil-based to zero-carbon energy, has been a tremendous global concern in the Paris Agreement objective [1], as energy consumption is the most significant contributor to the increasingly growing emission. The transformations towards renewable energy and energy efficiency are essential strategies required for carbon reduction [2][3][4]. Countries implement various measurements to encourage energy transition.…”
A major energy transformation is required to prolong the rise in global temperature below 2 °C. The Indonesian government (GoI) has set a strategy to gradually remove fuel subsidies to meet its 2050 ambitious energy targets. Using a recursive dynamic computable general equilibrium (CGE) model, the present study aimed to determine whether or not the current energy subsidy reforms would meet the targets of both energy mix and energy intensity. It also incorporated the environmental aspect while developing a source of a detailed database in the energy sector. The energy subsidy reform policy (followed by an increase in infrastructure and renewable energy investments) could be the most appropriate alternative policy if the government aims to reduce energy intensity and emission, as well as improve energy diversification without pronounced reductions in the sectorial and overall economy. However, all simulations suggested that the removal of energy subsidy does not enough in attaining the targeted energy mix and energy intensity goals. Thus, the Indonesian government should also introduce progressive programs in renewable energy.
“…In general, this result showed that the energy reform could increase the use of gas and renewable energy, relatively more environmentally friendly than those of coal and oil. This result reflects those of [3,4,6,44] who stressed the benefit of phasing out energy subsidy on clean energy transition and later extended as one of the dominant strategies for carbon emission reduction. Without specific re-allocation in renewable energy, the share of this energy could increase from 0.16% (SIM 3) to 0.18% (SIM 1 and SIM2).…”
Section: The Impact On Energy MIXsupporting
confidence: 79%
“…Energy transition, from fossil-based to zero-carbon energy, has been a tremendous global concern in the Paris Agreement objective [1], as energy consumption is the most significant contributor to the increasingly growing emission. The transformations towards renewable energy and energy efficiency are essential strategies required for carbon reduction [2][3][4]. Countries implement various measurements to encourage energy transition.…”
A major energy transformation is required to prolong the rise in global temperature below 2 °C. The Indonesian government (GoI) has set a strategy to gradually remove fuel subsidies to meet its 2050 ambitious energy targets. Using a recursive dynamic computable general equilibrium (CGE) model, the present study aimed to determine whether or not the current energy subsidy reforms would meet the targets of both energy mix and energy intensity. It also incorporated the environmental aspect while developing a source of a detailed database in the energy sector. The energy subsidy reform policy (followed by an increase in infrastructure and renewable energy investments) could be the most appropriate alternative policy if the government aims to reduce energy intensity and emission, as well as improve energy diversification without pronounced reductions in the sectorial and overall economy. However, all simulations suggested that the removal of energy subsidy does not enough in attaining the targeted energy mix and energy intensity goals. Thus, the Indonesian government should also introduce progressive programs in renewable energy.
“…The model is specified and solved as a pure mixed complementary problem (MCP). There is a national version of this model, which was used for this study [17][18][19][20][21].…”
This study analyzed the role of low-carbon energy technologies in reducing the greenhouse gas emissions of Indonesia's energy sector by 2030. The aim of this study was to provide insights into the Indonesian government's approach to developing a strategy and plan for mitigating emissions and achieving Indonesia's emission reduction targets by 2030, as pledged in the country's Intended Nationally Determined Contribution. The Asia-Pacific Integrated Model/Computable General Equilibrium (AIM/CGE) model was used to quantify three scenarios that had the same socioeconomic assumptions: baseline, countermeasure (CM)1, and CM2, which had a higher emission reduction target than that of CM1. Results of the study showed that an Indonesian low-carbon energy system could be achieved with two pillars, namely, energy efficiency measures and deployment of less carbon-intensive energy systems (i.e., the use of renewable energy in the power and transport sectors, and the use of natural gas in the power sector and in transport). Emission reductions would also be satisfied through the electrification of end-user consumption where the electricity supply becomes decarbonized by deploying renewables for power generation. Under CM1, Indonesia could achieve a 15.5% emission reduction target (compared to the baseline scenario). This reduction could be achieved using efficiency measures that reduce final energy demand by 4%; This would require the deployment of geothermal power plants at a rate six times greater than the baseline scenario and four times the use of hydropower than that used in the baseline scenario. Greater carbon reductions (CM2; i.e., a 27% reduction) could be achieved with similar measures to CM1 but with more intensive penetration. Final energy demand would need to be cut by 13%, deployment of geothermal power plants would need to be seven times greater than at baseline, and hydropower use would need to be five times greater than the baseline case. Carbon prices under CM1 and CM2 were US$16 and US$63 (2005)/tCO 2 , respectively. The mitigation scenarios for 2030 both had a small positive effect on gross domestic product (GDP) compared to the baseline scenario (0.6% and 0.3% for CM1 and CM2, respectively). This is mainly due to the combination of two assumptions. The first is that there would be a great increase in coal-fired power in the baseline scenario. The other assumption is that there is low productivity in coal-related industries. Eventually, when factors such as capital and labor shift from coal-related industries to other low-carbon-emitting sectors in the CM cases are put in place, the total productivity of the economy would offset low-carbon investment.
“…Among such CGE models, AIM/CGE has unique characteristics in its detailed representation of agriculture, land, and energy supply sectors. In addition, AIM/CGE has been used for Asian-specific analyses [20,25,26].…”
Under the Paris Agreement, parties set and implement their own emissions targets as nationally determined contributions (NDCs) to tackle climate change. International carbon emissions trading is expected to reduce global mitigation costs. Here, we show the benefit of emissions trading under both NDCs and a more ambitious reduction scenario consistent with the 2°C goal. The results show that the global welfare loss, which was measured based on estimated household consumption change in 2030, decreased by 75% (from 0.47% to 0.16%), as a consequence of achieving NDCs through emissions trading. Furthermore, achieving the 2°C targets without emissions trading led to a global welfare loss of 1.4%-3.4%, depending on the burden-sharing scheme used, whereas emissions trading reduced the loss to around 1.5% (from 1.4% to 1.7%). These results indicate that emissions trading is a valuable option for the international system, enabling NDCs and more ambitious targets to be achieved in a cost-effective manner.Abbreviations
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