Effects of consumer subsidy on household fuel switching from coal to cleaner fuels: A case study for anthracites in Korea

Hojeong Park, Hyucksoo Kwon

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

The Korean coal industry is in a transition under low carbon policy through the steady reduction of coal production. Since consumer subsidy for the consumption of anthracites briquette in low-income households caused a distortion in domestic coal market, the so-called coupon program will be the first target in energy reform policy in order to induce fuel switching from anthracites to alternative clean energy. This paper tries to identify various factors that influence households' fuel switching decision. Disutility from briquette consumption is also considered as an important factor. Using the 2007 census data on briquette-consuming households, it is found that the coupon program provides an adverse effect to switching fuels to clean energy while the disutility of briquettes is positively associated with the probability of fuel switching. However, the empirical finding suggests that the policy alone attempting to remove coupon program may fail to switch fuels unless the cost of boiler changes is substantially reduced through the provision of accessible networks to alternative energy sources. It indicates that reform policy for consumer subsidy must be understood in line with more comprehensive regional energy plans to resolve energy poverty issue.

Original languageEnglish
Pages (from-to)1687-1693
Number of pages7
JournalEnergy Policy
Volume39
Issue number3
DOIs
Publication statusPublished - 2011 Mar

Keywords

  • Anthracite
  • Consumer subsidy
  • Fuel switching

ASJC Scopus subject areas

  • Energy(all)
  • Management, Monitoring, Policy and Law

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