Energy price responsiveness in Zimbabwean mining and manufacturing: A disaggregated demand analysis

Abstract

This paper examines market signals that enhance efficiency in energy use and the allocation of energy resources, focusing on Zimbabwean manufacturing and mining. We estimate own- and cross -price elasticities of demand to determine how far industrial energy types consumed are substitutable for each other. Our main emphasis is on reducing imported liquid fuel and promoting the country's coal resources. While liquid fuel claims a huge proportion of the country's foreign exchange, there is plentiful supply of coal. Coal, however, is environmentally damaging. Elasticity estimates, obtained at a highly disaggregated industrial level, will provide information about the impact of energy taxes on the demand for the different energy types.