De-risking policies as a substantial determinant of climate change mitigation costs in developing countries: Case study of the Middle East and North African region

Komendantova N ORCID: https://orcid.org/0000-0003-2568-6179, Schinko T ORCID: https://orcid.org/0000-0003-1156-7574, & Patt A (2019). De-risking policies as a substantial determinant of climate change mitigation costs in developing countries: Case study of the Middle East and North African region. Energy Policy 127: 404-411. DOI:10.1016/j.enpol.2018.12.023.

[img] Text
Manuscript_revised.pdf - Accepted Version
Restricted to Repository staff only until 7 January 2021.
Available under License Creative Commons Attribution Non-commercial No Derivatives.

Download (355kB)

Abstract

Ambitious goals for climate change mitigation and energy security policies are driving deployment of renewable energy sources globally. However, the deployment of renewable energies at scale requires not only public but also private capital, such as foreign direct investment (FDI). Many countries with favourable conditions for renewables, such as the countries of the Middle East and North African (MENA) region, are not attracting sufficient FDI. Risk perceptions of FDI stakeholders are one of the reasons. This paper discusses the de-risking approach as a possible tool to address subjective risk perceptions and assesses with a Computable General Equilibrium (CGE) model macroeconomic feedback-effects of employing a de-risking strategy for FDI into a particular kind of renewable electricity (RES-E) technology, concentrated solar power, in the MENA region. Our results show that the application of a de-risking approach reduces the costs for deployment of CSP, and therefore, also volumes of subsidies that would be needed to make CSP cost competitive with fossil fuel based electricity generation. This, in turn, leads to positive GDP and welfare effects in the MENA region. Our results allow us developing of recommendations for energy policy the implementation of the de-risking approach as a potential consensual option with high political feasibility to reduce climate change mitigation costs.

Item Type: Article
Uncontrolled Keywords: De-risking approach; Foreign direct investment; Middle East and North African region; Renewable energy sources
Research Programs: Advanced Systems Analysis (ASA)
Risk & Resilience (RISK)
Depositing User: Luke Kirwan
Date Deposited: 07 Jan 2019 07:18
Last Modified: 14 May 2019 06:37
URI: http://pure.iiasa.ac.at/15654

Actions (login required)

View Item View Item

International Institute for Applied Systems Analysis (IIASA)
Schlossplatz 1, A-2361 Laxenburg, Austria
Phone: (+43 2236) 807 0 Fax:(+43 2236) 71 313