Template-Type: ReDIF-Paper 1.0

Author-Name: Mikhail Andreyev
Author-Email: andreevmyu@cbr.ru
Author-Email: m.andreyev@inbox.ru
Author-Workplace-Name: Bank of Russia, Russian Federation

Author-Name: Alyona Nelyubina
Author-Email: NelyubinaAS1@cbr.ru
Author-Workplace-Name: Bank of Russia, Russian Federation

Title: Energy transition scenarios in Russia: effects in macroeconomic general equilibrium model with rational expectations 
Abstract: We use a DSGE model for a hydrocarbon-rich country to examine the macroeconomic implications of scenarios that lead to an energy transition. Our findings show that the scenario of the fall in export revenues from brown energy sales is the least preferred for energy transition in terms of welfare loss, while the scenario of imposing higher taxes is more acceptable. The most favourable scenario leading to the smallest drop in public wealth and long-term growth in output and consumption involves the productivity incentives in the green energy sector. We also analyse the impact of mechanisms such as monetary policy inertia, the level of openness of the financial account, technological substitutability between brown and green energy. We found that news about the future implementation of green policies alone cannot trigger the energy transition. Investments become cleaner after the news announcement, but this barely increases green energy production.

Length: 64 pages
Creation-Date: 2024-01
Revision-Date:
Publication-Status:
File-URL: https://www.cbr.ru/StaticHtml/File/159358/wp_122.pdf
File-Format: Application/pdf
File-Function:
Number: wps122
Classification-JEL: D58, E47, E62, E63.
Keywords: : dynamic models, general equilibrium, rational expectations, green energy, energy transition, climate policy, cross-border tax, monetary policy. 
Handle:RePEc:bkr:wpaper:wps122