• Environmental and Resource Economics Review
• /
• v.19 no.2
• /
• pp.215-242
• /
• 2010

This study constructs a bayesian neoclassical DSGE model that applies oil usage. The model includes technology shocks, oil price shocks, and shocks to energy policies as exogenous driving forces. First, this study aims to analyze the roles of these exogenous shocks in the Korean business cycle. Second, this study examines the effects of long-term changes in the energy consumption structure, including the reduction in oil use as a share of energy consumption and improvement in oil efficiency. In the case of oil price shocks, results show that these shocks exert recessionary pressure on the economy in line with those obtained in the previous literature. On the other hand, shocks to energy policies, which reduce oil consumption per capital, result in opposite consequences to oil price shocks, decreasing oil consumption. Also, counterfactual exercises show that long-term changes in the energy consumption structure would mitigate the contractionary effects of oil price shocks.

• Journal of Energy Engineering
• /
• v.17 no.3
• /
• pp.145-152
• /
• 2008

Approaching to the era of high energy price and energy sources scarcity, the demand for governmental intervention to mitigate the short-term shocks is highly increasing. When any energy policy is implemented, double-side effects would be derived. To begin with positive aspect, by decreasing energy import, unnecessary currency outflow can be prevented and the resultant saved money will be appropriately allocated. Furthermore, industrial competitiveness will be assured by reducing use of expensive energy. On the contrary, inappropriate energy saving policy may lead to unexpected negative effects that would hinder improvement in productivity due to indiscreet replacing energy by equipments. In order to enhance effectiveness of energy policy, efforts should be made in advance to understand the energy use pattern of each industry sector which composes the economy. Therefore, in this study, an energy input-output method, one of the macroscopic approaches, is applied to analyze energy use patterns of each industry sector in Korea. Using this method, a quantitative assessment is performed to obtain the energy use intensity and the amount of energy uses with respect to energy types.

• Environmental and Resource Economics Review
• /
• v.16 no.3
• /
• pp.653-682
• /
• 2007

In this study, multi-sectoral partial equilibrium and computable general equilibrium models of Taiwan are used to investigate the direct and indirect effects of energy price increases on overall economies and agro-food sector in Taiwan. The results suggest that agricultural prices, production cost would increase between 0.27% to 1.88%, and a reduction in GDP around 0.39% to 0.54 %. The negative impact on livestock sector is slightly higher than that on the crop sector. Negative impacts are also observed in the employment and wages. The rising oil price has the potential to discourage production of energy-intensive activity because of the possibility of substitution and adaptations. The growth rate of real GDP will shrink by 0.64% to 1.06% and CPI will increase by 1.17% to 1,95%. Both the agriculture and non-agricultural sector also respond by raising output prices by 0.80% to 1.33%. The rising international oil price has urged the government to take policy actions like using alternative fuels such as biodiesel, bioethanol, and adopting measures to cut down on energy consumptions mainly in transportation sectors in response to public concern over economic shocks.

• Environmental and Resource Economics Review
• /
• v.33 no.1
• /
• pp.1-32
• /
• 2024

The emissions trading system stands as a pivotal climate policy in Korea, incentivizing abatement equivalent to 87% of total emissions (as of 2021). As the system likely has a far-reaching impact, it is crucial to understand how the real economic activity, energy sector, as well as environment would be influenced by its implementation. Employing a macroeconometric model, this paper is the first study analyzing the effects of the Korean emissions trading policy. It interconnects the Korean Standard Industrial Classification (Economy), Energy Balance (Energy), and National Inventory Report (Environment), enhancing its real-world explanatory power. We find that a 50% increase in emission permit price over four years results in a decrease in greenhouse gas emissions (-0.043%) and downward shifts in key macroeconomic variables, including real GDP (-0.058%), private consumption (-0.003%), and investment (-0.301%). The price increase in emission permit is deemed crucial for achieving greenhouse gas reduction targets. To mitigate transition risk associated with price shocks, revenue recycling using auction could ensure the sustainability of the economy. This study confirms the comparative advantage of expanded current transfers expenditure over corporate tax reduction, particularly from an economic growth perspective.