The Role of Government Climate Policy in an Oil Price Shock: A CGE Simulation Analysis

Solaymani, Saeed; Bt, Nora Yusma; Yusof, Bte Mohamed; Makmur, Pahang Darul; Yavari, Arash

doi:10.2991/msam-15.2015.60

Cited by 3 publications

(4 citation statements)

References 15 publications

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“…Uncertain surprises have a considerably greater impact on economic collapses than growths, according to the nonlinear power of improbability on the calculated U.S. economic factors (Liu et al, 2019). When this is considered, recessionary measures seem to be inventive phases for the studies of the corrupt capital to the worth surprises in the U.S. stock market (Solaymani et al, 2015).…”

Section: Introductionmentioning

confidence: 99%

RETRACTED: Rethinking sustainable energy development for green energy recovery: Empirical dynamism of oil prices shock

Feng

2022

Front. Energy Res.

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The purpose of the study is to test the role of market timing between oil price shock and energy efficiency mitigation in ASEAN countries. To achieve the study objective, a persistence econometric modeling technique is applied. The results revealed that oil prices are now the other main source of energy efficiency mitigation in ASEAN economies. Market timing-based factors are replaced with for oil price shock to increase, warranting a collaborative environment. Moreover, green financing loan schemes invest both public and private funds in energy efficiency mitigation to capitalize on a cleaner environment by controlling the oil price shock. The consideration and application of financial consideration for sustainable innovation-financing projects or companies is limitless. Providing for screening CO2 emission reduction and cooperation proposals with speedy greenhouse gas reduction rates might have large opportunity costs. There may be a case for governments to increase industrial growth, improve resource efficiency, and increase factor productivity while tackling energy efficiency. Economic growth in ASEAN may have an even greater influence on greenhouse gas reduction than in other countries. On such points, there is a need to pay attention. If the suggested policy suggestions are implemented successfully, they would help enhance the scope of financing considerations for sustainable innovation to uplift energy efficiency mitigation through market timing-based mechanisms.

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Section: Introductionmentioning

confidence: 99%

RETRACTED: Rethinking sustainable energy development for green energy recovery: Empirical dynamism of oil prices shock

Feng

2022

Front. Energy Res.

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“…Lundborg (1984) investigated the distributional impacts of tariffs and subsidies under competitive and monopoly power conditions. Recent studies in applying CGE models in Malaysian economy refer to Solaymani et al (2014, 2015b), Solaymani and Kari (2014) and Solaymani et al (2015a, 2015b, 2015c).…”

Section: Methodsmentioning

confidence: 99%

“…Joher Ali Ahmed and Mokhtarul Wadud (2011) showed that the volatility of a positive oil price shock on domestic prices is higher than the negative oil price shock in Malaysia. This is because Malaysia gains more from high global oil prices and can pay more subsidies to some necessity goods and energy commodities to protect the domestic economy from high oil prices (Solaymani et al, 2015a, 2015c). Another reason is that oil price shocks because of uncertainty may postpone household demand for goods leading to a lower price level and a decline in output.…”

Section: Literature Reviewmentioning

confidence: 99%

Social and economic aspects of the recent fall in global oil prices

Solaymani

2019

IJESM

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Purpose The global energy market has been facing lower prices of crude oil in recent years. Lower fuel price leads to lower transport cost and cheaper agricultural inputs (such as pesticides and chemical fertilizer), resulting in lower prices of agricultural commodities in the international markets. On the other hand, lower global oil price reduces the oil revenues of oil exporting countries, resulting in a decrease in government expenditures. Therefore, the purpose of this study is to examine the impacts of lower global oil and agricultural commodity prices and government expenditure on the entire economy and poverty level of Malaysia. Design/methodology/approach This study used a computable general equilibrium model (CGE) to investigate four simulation scenarios based on the latest Malaysia’s input-output table belonging to 2010. The first scenario is a 30 per cent fall in the export and import prices of agricultural commodity prices, while the second is a 50 per cent decline in the export and import prices of crude oil, and the third combines them. In the fourth scenario, government operating expenditure declines by 4 per cent because of the fall in government’s oil revenues as a result of the decline in global oil prices. Findings The simulation results suggest that lower international oil price decreases real gross domestic product (GDP) and investment in Malaysia and influences positively the output and employment of some agriculture sectors. However, lower agricultural commodity price increases real GDP and investment in the country and negatively influences the output, employment and exports of all agriculture sectors. The decline in government expenditures also increases the output and the employment in the economy, whereas it decreases household consumption. In conclusion, results show that the agriculture sector losses from the current decline in international agricultural commodity prices, while it benefits from lower oil and government expenditure. Originality/value The main contribution of this study is comparing the impacts of recent falls in global oil and agricultural prices on the entire economy and agriculture sector of Malaysia. Investigating the impacts of these issues on the poverty level of Malaysian households is another contribution to the study. Another contribution is analyzing the impact of a reduction in government expenditures because of the decline in global oil price on the economy and welfare of Malaysia. Therefore, this study makes a useful contribution to the small literature of the topic.

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“…Ref. [29] performed a comparative study on the impact of an oil price shock coupled with implementing a climate policy in Malaysia.…”

Section: Literature Reviewmentioning

confidence: 99%

Less Water, Less Oil: Policy Response for the Kenyan Future, a CGE Analysis

2022

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The continuous depletion of nonrenewable natural resources and climate change may lead to a future characterized by a higher frequency of extreme natural events (i.e., flooding, hurricanes, and droughts) and resource supply shocks (i.e., oil price shock). Sub-Saharan African countries will be particularly exposed to these types of shock due to their socioeconomic conditions and geographical conformation. This study investigates the impact of two contemporaneous covariant sudden shocks (i.e., drought and price oil shock) and the possible coping strategies through a static computable general equilibrium (CGE) model for Kenya. The results suggest that a mitigation policy as public transfers is an effective mitigation tool for drought effects, improving welfare and GDP in the short run. However, adopting public transfers during an oil crisis may have regressive effects on population income and welfare. Because the mitigation effectiveness is strongly affected by the complex interaction of combined shocks, the public authorities should pay attention to policy implementation. These findings call for a new scheme of transfer allocation where rural and low-income household quantiles should receive more attention by postdrought mitigation policy, being that they are more vulnerable to external shocks.

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The Role of Government Climate Policy in an Oil Price Shock: A CGE Simulation Analysis

Cited by 3 publications

References 15 publications

RETRACTED: Rethinking sustainable energy development for green energy recovery: Empirical dynamism of oil prices shock

RETRACTED: Rethinking sustainable energy development for green energy recovery: Empirical dynamism of oil prices shock

Social and economic aspects of the recent fall in global oil prices

Less Water, Less Oil: Policy Response for the Kenyan Future, a CGE Analysis

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