The policy that is most widely applied to the biofuel market in the world is the mandatory blend. This policy aims to induce the use of biofuels by setting a minimum level of biofuel per unit of blended fuel. This paper studies the costs and benefits of such a policy. To do so, a Recursive Computable General Equilibrium model (CGE), calibrated with a new own-developed energy-oriented Social Accounting Matrix of Argentina for 2018, has been developed. Such a model is extended by explicitly embedding a constrained fuel blending model into the CGE setup. This research addresses the following questions: What are the costs and benefits of a mandatory blend compared to a full flexibility scenario? Is it better to induce the use of biofuels through a tax on fossil fuels or a blending constraint? What is the impact of international price shocks when considering different blending regimes? This paper finds that the mandatory policy has a negative impact on the economic activity, poverty, income distribution, and energy affordability, but a positive one on emissions. When analysing the convenience of a special tax on fossil fuels instead of a mandatory regime, this paper finds that the cost and benefits of each policy are distributed differently over time. The special tax on fossil fuels performs better in the short run while the mandatory blend does so in the long run. Finally, this paper finds that flexibility in the fuel market improves the country's performance when there are shocks on international prices.

To assess the impact of policies promoting electric vehicles (EVs), I estimate a tractable dynamic model of the automobile market that incorporates both primary and secondary markets, a charging-service investment sector, and indirect network effects, using data from Argentina. I evaluate three counterfactual policy regimes: (i) subsidies for new EV purchases and charging infrastructure, (ii) the welfare-maximizing EV subsidy under alternative assumptions regarding externalities and tax settings, and (iii) a ban on new internal combustion engine (ICE) vehicle sales. Under purchase subsidies and baseline EV prices, the residential EV share reaches 11.88% with a 30% subsidy. Emissions decline from 12.99 to 10.84 MtCO2eq, while annual battery disposals increase to 27.09 thousand units. The results show that the tax regime used to finance EV promotion is not distributionally neutral and plays a central role in shaping the equity implications of these policies. By contrast, subsidies for charging infrastructure alone have a negligible impact. The welfare-maximizing EV subsidy is 29%. It falls to 24% when environmental externalities are excluded and to 20% when network effects are ignored, to 17% when vehicle taxes are removed, and to 25% when value-added tax (VAT) is removed. An ICE-sales ban requires EV prices to decline by 32% to preserve welfare (and by 39% to maintain the share of carless households), fully electrifying the vehicle fleet, reducing emissions to 3.83 MtCO2eq, but increasing battery waste to 134 thousand units per year.

Abstract is coming soon.

Renewable energy technologies offer a pathway to decarbonize power systems, yet intermittency remains a key challenge. Energy storage can mitigate this issue by shifting supply across time, thereby stabilizing markets and enhancing system flexibility. This paper studies the economic and environmental impacts of deploying energy storage in Argentina using a two-step approach: an optimal electricity dispatch model to estimate electricity cost changes, and a general equilibrium model to evaluate macroeconomic, sectoral, and distributional effects. I simulate storage capacities equal to 5% and 7% of total generation capacity under current conditions (2021) and under a projected 2030 system with higher demand and major expansions in renewable generation. Across scenarios, average electricity costs fall by 1.9–3.36%, with the largest gains in the 2030 system, where storage becomes more valuable as renewable penetration rises. These cost reductions generate broad economic benefits. GDP increases by 0.47–1.11 percentage points (p.p.) over a decade, unemployment falls by 0.07–0.19 p.p., and fiscal revenues rise by 0.43–1.13 p.p. Welfare improves for all households, especially among lower-income groups, reducing inequality. Emissions fall by 1.9–3.02% and the emissions intensity of the economy declines. Sectoral results show that electricity-intensive industries such as Construction, Non-Metallic Minerals, and Extraction are the main winners, while Fuels and Primary activities are the lossers. A comparison between annualized GDP gains and investment costs shows that the social benefits of storage exceed its capital expenditures in all scenarios. These findings highlight the strong case for public support to foster investment in energy storage and capture its full economic, environmental, and distributional benefits for Argentina.