Mexico’s Energy Prospects: Gains from Renewable Sources over a Fossil Fuel-Dominated Environment
Pedro Hancevic, Héctor Núñez y Juan Rosellón, Profesores Investigadores Titulares de la División de Economía del CIDE, escribieron el artículo Mexico’s Energy Prospects: Gains from Renewable Sources over a Fossil Fuel-Dominated Environment. Economics of Energy & Environmental Policy en la revista Economics of Energy & Environmental Policy.
Changing political conditions in Mexico threatens the future of clean energy in the country. A competitive electricity market and ambitious environmental goals were among the priorities of the previous administration, but the current administration aims to increase revenues from the national power company and acquire control of the electricity market at the expense of consumer welfare and the environment. In the medium and long term, however, renewable energies are expected to make significant progress as a very competitive energy source. In this work, we develop an economic framework to provide insights into the economic and environmental effects of promoting the renewable energy industry. Results show that maintaining the status quo will only favour electricity company revenues (for a limited time), but renewable energy won’t take off, while a green strategy would boost economic growth, reduce emissions, and ultimately improve social welfare.
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