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Investment in renewable energy, fossil fuel prices and policy implications for Latin America and the Caribbean

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Investment in renewable energy, fossil fuel prices and policy implications for Latin America and the Caribbean

Author: Griffith-Jones, Stephany - Spratt, Stephen - Andrade, Rodrigo - Griffith-Jones, Edward Physical Description: 53 páginas. Editorial: ECLAC Date: May 2017 ECLAC symbol: LC/TS.2017/27

Description

This paper examines if recent sharp declines in the price of oil and other fossil fuels will discourage private investment in renewable energy, which is key for climate change mitigation. The increase in private renewables investment in the Latin America and the Caribbean (LAC) region have been driven by sharp declines in costs alongside supportive policies.
The sharp fall in the price of oil and other fossil fuels since 2014 risks disrupting continued private investment in renewables if they becomes insufficiently profitable. The decline in oil and other fossil fuel prices presents an opportunity for governments to reduce subsidies to them. For countries without such large subsidies, governments could increase taxes on them. This would alleviate their negative effects on climate change.

Table of contents

Abstract .-- Introduction .-- I. Key economic background .-- II. The impact of different levels of future oil prices and evolution of the cost of renewables on future private investment in renewables .-- III. Chile case study .-- IV. Conclusions and policy recommendations.