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The economic impact of electricity conservation policies: A case study of Ireland

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  • Nyamdash, Batsaikhan
  • Denny, Eleanor

Abstract

As electricity is an essential input in almost every production process, it is essential to quantify the impact of economic policies aimed at electricity conservation on the output. This research investigates the e®ect of unanticipated shocks in electricity consumption, technical e±ciency, and electricity price on the value added in the heterogenous service and industrial sectors, under a demand side model. Ireland is utilized as a case study as it is pursuing ambitious electricity conservation targets while in the midst of a severe economic recession. Given the important role of electricity as an input in both the services and industrial sectors, it was feared that these energy conservation targets may adversely impact on these sectors and as a result worsen the national economic situation. Findings show that value added, electricity consumption, electricity price and technical e±ciency are co-integrated for both the service and industrial sectors. However, impulse response functions show that positive technical e±ciency and consumption shocks have persistent negative e®ects on the value added of both sectors. Therefore, a direct electricity conservation policy, that puts a constraint on electricity consumption, should not have an adverse e®ect on sector speci¯c value added.

Suggested Citation

  • Nyamdash, Batsaikhan & Denny, Eleanor, 2011. "The economic impact of electricity conservation policies: A case study of Ireland," MPRA Paper 28384, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:28384
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    References listed on IDEAS

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    Cited by:

    1. Mehmood Mirza, Faisal & Bergland, Olvar & Afzal, Naila, 2014. "Electricity conservation policies and sectorial output in Pakistan: An empirical analysis," Energy Policy, Elsevier, vol. 73(C), pages 757-766.

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    More about this item

    Keywords

    Electricity consumption; Value added; Granger Causality; Impulse response;
    All these keywords.

    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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