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Economic, welfare and environmental impact of feed-in tariff policy: A case study in Iran

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  • Tabatabaei, Sharareh Majdzadeh
  • Hadian, Ebrahim
  • Marzban, Hossein
  • Zibaei, Mansour

Abstract

Following a particular attention given to environmental issues over the last few decades, establishing proper developmental policies to increase electricity production from renewable energy (RE) has not only been an important issue but also a challenge for many countries. Feed-in Tariff (FIT) Policy is one of the tools that is being used to facilitate the development of RE. This research evaluated the economic, welfare and environmental impact of this policy on Iran's economy. Therefore, after developing an Economic-Energy-Environmental (E3) type of Hybrid General Equilibrium model, the effect of FIT policy was examined under different scenarios in order to find an optimal condition in which 10% of electrical energy could be produced from renewable resources. The comparison between the results showed that the application of subsidies to RE and the way the government finances these subsidies can affect the results of FIT policy. Meanwhile, regardless of the role considered for the impact of environmental factors, our policies under the scenario of technology neutral is the most efficient, as it has less impact on the decline of GDP of different sectors and also has less financial cost for government.

Suggested Citation

  • Tabatabaei, Sharareh Majdzadeh & Hadian, Ebrahim & Marzban, Hossein & Zibaei, Mansour, 2017. "Economic, welfare and environmental impact of feed-in tariff policy: A case study in Iran," Energy Policy, Elsevier, vol. 102(C), pages 164-169.
    • Handle: RePEc:eee:enepol:v:102:y:2017:i:c:p:164-169
    DOI: 10.1016/j.enpol.2016.12.028
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    2. Milad Mousavian, H. & Hamed Shakouri, G. & Mashayekhi, Ali-Naghi & Kazemi, Aliyeh, 2020. "Does the short-term boost of renewable energies guarantee their stable long-term growth? Assessment of the dynamics of feed-in tariff policy," Renewable Energy, Elsevier, vol. 159(C), pages 1252-1268.
    3. Pavel Tcvetkov, 2021. "Climate Policy Imbalance in the Energy Sector: Time to Focus on the Value of CO 2 Utilization," Energies, MDPI, vol. 14(2), pages 1-22, January.
    4. Lin, Boqiang & Li, Zhensheng, 2021. "Does natural gas pricing reform establish an effective mechanism in China: A policy evaluation perspective," Applied Energy, Elsevier, vol. 282(PA).
    5. Xiang, Hongjin & Kuang, Yanxiang, 2020. "Who benefits from China’s coal subsidy policies? A computable partial equilibrium analysis," Resource and Energy Economics, Elsevier, vol. 59(C).
    6. Chatri, Fatemeh & Yahoo, Masoud & Othman, Jamal, 2018. "The economic effects of renewable energy expansion in the electricity sector: A CGE analysis for Malaysia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 95(C), pages 203-216.
    7. Alizadeh, Reza & Soltanisehat, Leili & Lund, Peter D. & Zamanisabzi, Hamed, 2020. "Improving renewable energy policy planning and decision-making through a hybrid MCDM method," Energy Policy, Elsevier, vol. 137(C).
    8. Jamali, Mohammad-Bagher & Rasti-Barzoki, Morteza, 2022. "A game-theoretic approach for examining government support strategies and licensing contracts in an electricity supply chain with technology spillover: A case study of Iran," Energy, Elsevier, vol. 242(C).
    9. Dudlák, Tamás, 2018. "After the sanctions: Policy challenges in transition to a new political economy of the Iranian oil and gas sectors," Energy Policy, Elsevier, vol. 121(C), pages 464-475.
    10. Ifaei, Pouya & Farid, Alireza & Yoo, ChangKyoo, 2018. "An optimal renewable energy management strategy with and without hydropower using a factor weighted multi-criteria decision making analysis and nation-wide big data - Case study in Iran," Energy, Elsevier, vol. 158(C), pages 357-372.

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