Creative Destruction During Crises - An Opportunity for a Cleaner Energy Mix

Author/Editor:

Pragyan Deb ; Davide Furceri ; Jonathan David Ostry ; Nour Tawk

Publication Date:

December 3, 2021

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

Lockdowns resulting from the COVID-19 pandemic have reduced overall energy demand but electricity generation from renewable sources has been resilient. While this partly reflects the trend increase in renewables, the empirical analysis presented in this paper highlights that recessions result in a permanent, albeit small, increase in energy efficiency and in the share of renewables in total electricity. These effects are stronger in the case of advanced economies and when complemented with environment and energy policies—both market-based measures such as taxes on pollutants, trading schemes and feed-in-tariffs, as well as non-market measures such as emission and fuel standards and R&D investment and subsidies—to incentivize and hasten the transition towards renewable sources of energy.

Series:

Working Paper No. 2021/284

Frequency:

regular

English

Publication Date:

December 3, 2021

ISBN/ISSN:

9781616357115/1018-5941

Stock No:

WPIEA2021284

Pages:

49

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