Impacts of Energy Efficiency on Hawai`i’s Economy; A CGE-MODELING APPROACH

Iman Nasseri
UHERO, United States

Keywords: efficiency, economic impact, cge modeling, hawaii

This study models Hawai‘i’s economy in a CGE framework in order to analyze the economic and environmental impacts from marginal energy (electricity) efficiency across various sectors of the Hawai‘i economy. Results include the comprehensive effects of sector-level shocks including potential of energy savings, costs imposed on the overall economy, and the associated greenhouse gas emission reduction. This analysis sheds light on which sectors to optimally target with incentives and/or punishment policies to achieve a high rate of energy efficiency and conservation in the State. CGE analysis determines that the most significant economic impact occurs in sectors associated with tourism industry such as accommodations, services, trade, hotels, and restaurants. Likewise, the analysis predicts that the largest saving potential in energy and GHG emissions lies in electricity efficiency of the same sectors, with slightly different order in significance. This shows the high GHG emissions elasticity of technological changes in the tourism industry. Especially, considering the ratio of residents’ versus visitors’ population, it implies that the visitor expenditures are more energy and carbon intensive than that of Hawai‘i households on a per person basis. The study indicates the sensitivity of sectors to energy policy in a service-oriented economy.

← Back