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Economics of Energy & Environmental Policy
Volume 13, Number 2






Articles

Towards a Green Monetary Policy for Developing Countries: A Climate Rating Mechanism for Funding Sustainable Projects

Sahnoun Kacem, Himri Hicham, Bazzi Mehdi and El Alaoui Abdelkader

DOI: 10.5547/2160-5890.13.1.aela
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Abstract:
Even though the monetary policy first mission, has never been oriented to fight against global warming, central banks are starting to mobilize more efforts, in the financial sector, to tackle the negative impact posed by the uncontrolled climate change on the economy. In this paper, we propose a new mechanism contributing to the greening of the monetary policy for local authorities, particularly in developing countries, engaged in pro-environmental projects. Therefore, the low-carbon investments should be supported indirectly by the Central Bank and channelled to the real economy through local development banks using loans refinancing program. Analysis and illustration of the proposed mechanism show that funding sustainable projects, through an adequate climate rating mechanism, can be quite successful while central bank's primary mission of macroeconomic stabilization and inflation control, will not be altered but will be extended to encompass the climate change issues.




Regional Electricity Trade in Latin America Without Expanding Generation Capacities

Govinda Timilsina, Ilka Deluque Curiel, and Deb Chattopadhyay

DOI: 10.5547/2160-5890.13.1.gtim
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Abstract:
The current cross-border electricity trade provision in Latic America is limited, only to about 4% of the total regional generation. This study estimates the potential savings on electricity supply costs if 20 Latin American countries trade electricity between the borders without expanding their current electricity generation capacity. We simulated two scenarios on electricity trade—an unconstrained trade of electricity between the countries within the Andean, Central, and Mercosur subregions and a full regional trade involving all 20 countries using a power system model. The study shows that the volume of cross-border electricity trade would increase by 13% and 29% under the subregional and regional scenarios, respectively. The region would gain US$1.5 billion annually under the subregional scenario and almost US$2 billion under the full regional scenario. The Andean subregion would realize more than half of this gain under both scenarios. The findings of the study are expected to motivate policymakers in the region and international development partners in fostering their dialogues to enhance regional electricity trade in Latin America.






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