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ISET Economist Blog

A blog about economics in the South Caucasus.
Apr
19

Is Georgia on the Right Path to Reduce Massive Plastic Bag Usage?

  In October 2018, a new law came into force which prohibits producing, importing, and selling single-use bags thinner than 15 microns.1 The second wave of this reform was introduced in April 2019, and expanded to all forms of plastic bags. It is important to ask, why was it necessary to impose a restriction on plastic bags? What are the implications and the expected consequences of the ban? Plastic shopping bags are produced at a rate of one trillion a year and distributed at store checkout counters across the globe. More than two thirds created a...
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Mar
29

Net-Metering: A Realistic Green Solution to the Generation-Consumption Deficit?

In February 2019, Georgian power plants generated 939 million kWh of electricity, which compared to the previous year represents a 0.5% increase in total generation. On the demand side, consumption amounted to 1,037 mln. kWh, a 2% decrease on an annual basis. Although the negative gap between generation and consumption decreased by 22% (from -126 to -98 mln. kWh), compared to the corresponding month of the previous year, it remained substantial. It is worth highlighting, once again, that this negative gap does not wholly reveal the extent of dependence o...
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Mar
04

Enguri and Vardnili Hydropower Plants (HPPs) and Abkhazian Demand. A Difficult (and Costly) Puzzle for Georgia

Winter has always been a problem for the Georgian electricity system. Even though Georgia has plenty of hydropower, during this season several HPPs — seasonal and small — either stop or substantially reduce electricity generation. In this season, a significant share of hydropower generation comes from two large-scale state-owned pumped-storage HPPs: Enguri and Vardnili. However, exactly when the generation-consumption gap is the largest, most of the electricity produced is used to satisfy the consumption of the Abkhazia region, which on a yearly basis co...
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Feb
25

Water Losses and Operational Efficiency in the Water Sector: Observations and Proposed Policy Interventions

The large and chronic water losses characterizing distribution networks constitute one of the major challenges faced by Georgian water utilities. The water supply generates approximately 700 million cubic meters of non-revenue water (NRW) each year1, considering just the urban centers. High water loss rates create excessive operational costs for the utilities and result in undesirable operational inefficiency in the water supply sector. This creates obstacles — from a financial point of view — to the achievement of full cost recovery and to the appropria...
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Feb
13

William Nordhaus’ Models – a Dubious Equation for the Climate Debate

In preparation for the COP24 climate change conference in Poland, in December 2018, researchers published a report from the Intergovernmental Panel on Climate Change (IPCC) outlining how significant the consequences of climate change would be following a global increase in temperature of just a half degree, from 1.5 to 2 degrees C. In the wake of the newly released IPCC report, alongside William Nordhaus’ Nobel Memorial award, this year’s winner in economics, a heated debate has surfaced. This has come about not only with the instigators in Sweden publis...
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