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Shresta, Ram M.
Department of Electrical Engineering, National Institute of Technology Malang - INDONESIA
Computer Science & IT Control & Systems Engineering Electrical & Electronics Engineering Energy

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Economy-wide CO 2 Emission Reduction Due to Carbon Tax in the Power Sector: A Structural Decomposition Analysis Marpaung, Charles O.P.; Shresta, Ram M.
International Journal of Smart Grid and Sustainable Energy Technologies Vol 1 No 1 (2017): IJSGSET TRANSACTIONS ON POWER, ELECTRONICS, TELECOMMUNICATION, AND CONTROL
Publisher : Department of Electrical Engineering, National Institute of Technology Malang - INDONESIA

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Abstract

In  this  paper,  a  structural  decomposition  analysis based  on  an  input-output  framework  has  been  developed  to examine the factors, which affect the economy-wide CO 2  emission changes due to the introduction of carbon tax in the Indonesian power sector during 2011-2030. There are three major components that affect the total economy-wide change in CO 2  emissions, i.e., fuel mix-, structural-, and final demand- effects. The results show that, the CO 2  mitigation under the carbon tax of US$200/tC would be 20.5 times higher than that with the carbon tax rate of US$5/tC.  The fuel mix effect is found to be most influential in reducing the CO 2  emission during the planning horizon under all of the carbon tax  rates  considered  and  is  followed  by  the  final  demand-  and structural-effects.
Structural Decomposition Analysis of CO2 Emission Reduction due to Energy Tax in Power Sector Planning Marpaung, Charles O. P.; Shresta, Ram M.
International Journal of Smart Grid and Sustainable Energy Technologies Vol 1 No 2 (2017): IJSGSET TRANSACTIONS ON POWER, ELECTRONICS, TELECOMMUNICATION, AND CONTROL
Publisher : Department of Electrical Engineering, National Institute of Technology Malang - INDONESIA

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Abstract

This study analyses the CO2 emission implications of considering energy tax in power sector planning for the case of Indonesia. There are four energy tax rates considered in this study i.e. US$0.5/MBtu, US$1.0/MBtu, US$2.0/MBtu and US$5/MBtu. Furthermore, this study also analyses the decomposition of the economy-wide CO2 emission changes due to the carbon tax rates by using an input-output model. The implications of energy tax on utility planning would bring the sytem more efficient because more energy efficient technology power plants, such as CCGT, would be selected, while in the case of environmental implications, CO2 emissions would be reduced. The results show that there is a significant change in the annual CO2 emissions if energy tax rate of US$5/MBtu is introduced. There are three major components that affect the total economy-wide change in CO2 emissions, i.e., fuel mix-, structural-, and final demand- effects. The results show that the fuel mix effect is found to be most influential in reducing the CO2 emission during the planning horizon under all of the energy tax rates considered and is followed by the final demand- and structural-effects.
Co-Authors Charles O.P. Marpaung, Charles O.P. Marpaung, Charles O. P.