Energy transition and economic growth in Colombia: A dynamic cge Model with Renewable Energies

Segura-García, Cristian Camilo and Botero-García, Jesús Alonso and Hurtado-Rendón, Álvaro Arturo (2025): Energy transition and economic growth in Colombia: A dynamic cge Model with Renewable Energies. Forthcoming in:

Abstract

Climate change has gained significant relevance in recent years, encouraging many countries to implement decarbonization policies aimed at reducing carbon dioxide (CO2) emissions. While much attention has been paid to the design of these policies, there is a growing interest in analyzing their macroeconomic implications. This study evaluates the impact of the energy transition on economic growth in Colombia using a recursive dynamic computable general equilibrium (CGE) model. The model is calibrated for the year 2022 and simulates the Colombian energy economy over a ten-year horizon. Results indicate that an ambitious and sustained policy promoting non-conventional renewable energy could increase GDP growth by up to 0.5 percentage points compared to a business-as-usual (BAU) scenario. Additionally, climate shocks such as El Ni˜no may negatively affect economic performance; however, early investment in renewable energy technologies can partially offset these adverse effects.

• Item Type: MPRA Paper
• Language: English
• Keywords: Computable General Equilibrium (CGE), Renewable Energy, Energy Transition, Economic Growth, Colombia, Policy Simulation
• Subjects: D - Microeconomics > D5 - General Equilibrium and Disequilibrium > D58 - Computable and Other Applied General Equilibrium Models; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O44 - Environment and Growth; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming

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