CAREC energy corridor: Opportunities, challenges, and IMPACT of regional energy trade integration on carbon emissions and energy access

The research paper examines Central Asia Regional Economic Cooperation (CAREC) integrated energy market potentials, challenges, and opportunities for 1) harnessing untapped renewable energy potential; 2) promoting the cross-border trade to cater the rising regional demand mismatch of electricity; 3) improving energy security; and 4) reducing the carbon footprint of the region. The research demonstrates that the CAREC Energy Corridor (CEC) will optimize regional trade cooperation by building cross-border energy trade infrastructure, systems, and governance mechanisms by employing a Regional Public Goods (RPG) framework. The research finds that a one percent increase in energy imports within the region is associated with the reduction in carbon dioxide emissions by 0.245 kg per $ of GDP; the increase in the Gross Domestic Product (GDP) per unit of energy use by 0.233 per kg of oil equivalent; and the growth in electricity production from renewable sources by 0.414 kW hour, thus improving regional electricity affordability, access, and energy security. The cost benefit analysis reveals that traditional (fossil fuel or hydro) power generation and transmission costs must either beat or match the price competition and transmission flexibility options offered by renewables to sustain competitiveness of the regional electricity market.