Carbon pricing and supporting policy tools for deep decarbonization; case of electricity generation of Sri Lanka

This study internalizes carbon pricing and other regulatory policy tools for decarbonizing the electricity generation mix of Sri Lanka. Carbon Pricing is shifted to supply side as a decision-making tool. We consider $10/tCO2, $20/tCO2, $30/tCO2, $44/tCO2, $130/tCO2, $297/tCO2 potential prices. Other tools, such mandatory renewable energy (RE) development, fuel switching, fossil phasing out, development moratoriums, RE utilization, are included possible supporting tools. Three capacity-development scenarios three optimization models with objective functions designed implemented in General Algebraic Modeling System (GAMS). Six options presented Lankan context considering cost, emission, diversification. Results suggest price that falls between $10/tCO2-$44/tCO2 suitable The contributes ongoing debate on effectiveness by empirically testing prices planning developing country. findings support emerging consensus adopting along achieve deep decarbonization. also assesses role LNG could play country’s mix. recommend transitioning from coal an intermediate decarbonization option until capacities developed make near-zero emission reality.