About "Energy market and macroeconomic dynamics using CGE modeling" Project
There have been several energy market shocks in the last few years that have had significant impacts on the global economy. These energy market shocks highlight the vulnerability of the global energy system to various risks and the need for a more resilient and sustainable energy infrastructure. Here are some of the most notable ones:
- COVID-19 Pandemic: The pandemic led to a massive decline in demand for oil and gas, as transportation and industrial activity decreased due to lockdowns and restrictions. This caused a steep drop in prices and led to significant financial losses for energy companies.
- OPEC+ Price War: In March 2020, Saudi Arabia and Russia failed to reach an agreement on oil production cuts, leading to a price war between the two countries. This resulted in a rapid increase in global oil supply and a sharp decline in prices.
- Texas Winter Storm: In February 2021, severe winter storms in Texas led to power outages and disrupted natural gas supplies, causing prices to surge. This had ripple effects throughout the energy market and led to higher electricity bills for many consumers.
-Colonial Pipeline Cyberattack: In May 2021, a cyberattack on the Colonial Pipeline, which supplies nearly half of the fuel for the U.S. East Coast, caused a temporary shutdown of the pipeline. This led to panic buying and shortages of gasoline in several states, driving up prices.
In this project, we use CGE modeling to analyze major energy market trend dynamics and their global corresponding policy responses. CGE (Computable General Equilibrium) modeling is a widely used tool for analyzing the impact of economic policies on various sectors of the economy. It is particularly useful for analyzing the energy market since energy is a key input in almost all economic activities.
-Mazen Diwani and Sherif Hassan. Through Thick or Thin: to what extent can FTAs with China and India benefit Kazakhstan? CGE based evidence