Energy insecurity in the asean region: The implications of energy policy reform

Budy P. Resosudarmo, Ditya A. Nurdianto, Yuventus Effendi

Research output: Contribution to journalArticlepeer-review

Abstract

Energy insecurity has become an alarming issue among ASEAN countries. One proposal to overcome this energy insecurity is to integrate energy markets among ASEAN countries. In order to do this integration, a major energy policy reform, particularly the elimination of energy subsidy policies, is needed. The main goal of this paper, hence, is to analyze the impact of an energy subsidy reduction policy in ASEAN, particularly in terms of economic growth, environmental improvement and welfare distribution. To achieve this goal, this paper uses a multi-country computable general equilibrium (CGE) for Inter-Regional System Analysis for ASEAN (IRSA-ASEAN) to conduct the analysis. This paper finds that countries in which energy subsidies significantly exist, i.e., Indonesia and Malaysia, stand to gain much from eliminating these subsidies. Gross domestic product (GDP) is likely to increase, with the added benefit of reduced CO 2 emissions. In terms of welfare distribution, this policy appears to be progressive in nature.

Original languageEnglish
Pages (from-to)345-368
Number of pages24
JournalSingapore Economic Review
Volume66
Issue number2
DOIs
Publication statusPublished - Mar 2021

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