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Energy transition scenarios in Russia: effects in macroeconomic general equilibrium model with rational expectations

Author

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  • Mikhail Andreyev

    (Bank of Russia, Russian Federation)

  • Alyona Nelyubina

    (Bank of Russia, Russian Federation)

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.

Suggested Citation

  • Mikhail Andreyev & Alyona Nelyubina, 2024. "Energy transition scenarios in Russia: effects in macroeconomic general equilibrium model with rational expectations," Bank of Russia Working Paper Series wps122, Bank of Russia.
    • Handle: RePEc:bkr:wpaper:wps122
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    Cited by:

    1. Yulia V. Vymyatnina & Aleksandr A. Chernykh, 2024. "Green bonds in the Russian market: Assessing environmental influence on returns," Russian Journal of Economics, ARPHA Platform, vol. 10(3), pages 211-228, October.

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    More about this item

    Keywords

    : dynamic models; general equilibrium; rational expectations; green energy; energy transition; climate policy; cross-border tax; monetary policy.;
    All these keywords.

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • E63 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Comparative or Joint Analysis of Fiscal and Monetary Policy; Stabilization; Treasury Policy

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