Macroeconomic Effects of a Low-Carbon Electricity Transition in Kenya and Ghana : An Exploratory Dynamic General Equilibrium Analysis

The present study applies purpose-built dynamic computable general equilibrium models for Ghana and Kenya with a disaggregated country-specific representation of the power sector to simulate the prospective medium-run growth and distributional implications associated with a shift towards a higher share of renewables in the power mix up to 2025. In both countries the share of fossil-fuel-based thermal electricity generation in the power mix will increase sharply over the next decade and beyond according to current national energy sector development plans. The overarching general message suggested by the simulation results presented here is that in both countries it appears feasible to reduce the carbon content of electricity generation significantly without adverse consequences for economic growth and without noteworthy distributional effects