Evaluating Public Policies for Fair Social Tariffs of Electricity in Brazil by Using an Economic Market Model

Abstract

This paper presents an evaluation of public policies for fare social tariffs of electricity in Brazil by using an economic model of the electricity market (TAROT-Optimized Tariff) that represents the regulated market of distribution of electrical energy. It was considered the scenario of an increasing number of prosumers (residential consumers who self-generate energy) in two of the five major regions of Brazil which have quite different socioeconomic characteristics. However, the current electricity regulation is the same for all concessionaires. In this work a new public policy is proposed, allowing the use of regulation in a different way aiming for a best result for Brazil and particularly for the poor population that today are not able to enjoy the benefits of electricity due to high tariff values. It is also discussed how this can contribute in a positive way to improve the income distribution in these regions, which is evaluated by using the GINI index.

Synopsis of Principles for the Authorities and Controlled Transactions

“…This means that the structural economic elements affect the dynamic of any economy and its robustness. Thereupon, are used the equilibriums of the cycle of money to analyze the appropriate conclusions, which are needed about the adequate policies that must be followed by the authorities (Arai et al, 2018;Brownell & Frieden, 2009;dos Santos Benso Maciel et al, 2020;Ewert et al, 2021;Fan et al, 2020;Mackean et al, 2020;Rizzo & Throsby, 2006;Sánchez et al, 2020;Shamah-Levy et al, 2019;Turner, 2010). On the other hand, the same happens for the companies that participate in controlled transactions.…”

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“…Mixed savings are defined as cash reserves that fall somewhere in between the escaped savings and the enforcement savings. When mixed savings reach near to enforcement savings, the economy benefits (Andriansyah, Taufiqurokhman & Wekke, 2019;Cai, 2017;dos Santos Benso Maciel, Bonatto, Arango & Arango, 2020;Driver, 2017;Farah, 2011;Gong, Zhang, Yuan & Chen, 2020;Moreno-Jiménez, Pérez-Espés & Velázquez, 2014;Suslov & Basareva, 2020;Tummers, 2019;Zamudio & Cama, 2020). On the contrary, once the mixed savings approach escaped savings, the economy suffers.…”

Index of the cycle of money: the case of Costa Rica

“…The key idea is to create a financial system that ensures the best allocation of production. Because they can make investments in sectors that smaller firms are unable to do, larger enterprises should not provide similar products and services to small companies (Acs & Szerb, 2007;Amanor-Boadu et al, 2014;Baldwin et al, 2011;Cruce & Quinn, 2019;Domingues & Pecorelli-Pere, 2013;dos Santos Benso Maciel et al, 2020;Johnston & Ballard, 2016;Kiktenko, 2020;McIsaac & Riley, 2020;Miailhe, 2017;Nowicki, 2019;Ortún et al, 2016;Pircher, 2020;Reeves et al, 2019;Russo Rafael et al, 2020;Stern, 2015;Swanstrom et al, 2002;Victral et al, 2020). This allows the economic system to attain its highest level of performance.…”