nep-ene New Economics Papers
on Energy Economics
Issue of 2005‒02‒01
nine papers chosen by
Roger Fouquet
Imperial College, UK

  1. Why Tax Energy? Towards a More Rational Energy Policy By David Newbery
  2. The More Cooperation, the More Competition? A Cournot Analysis of the Benefits of Electric Market Coupling By Benjamin F. Hobbs; Fieke A. M. Rijkers
  3. Strategic Behavior and Collusion: An Application to the Spanish Electricity Market. By Aitor Ciarreta; Carlos Gutierrez-Hita
  4. Do High Oil Prices Presage Inflation? The Evidence from G-5 Countries By Michael LeBlanc; Menzie Chinn
  5. General Purpose Technologies By Boyan Jovanovic; Peter L. Rousseau
  6. International inequalities in per capita CO2 emissions: a decomposition methodology by Kaya factors By Juan Antonio Duro Moreno; Emilio Padilla Rosa
  7. Environmental management problems, future generations and social decisions By Joan Pasqual Rocabert; Emilio Padilla Rosa
  8. Inequality in CO2 emissions across countries and its relationship with income inequality: a distributive approach By Emilio Padilla Rosa; Alfredo Serrano Mancilla
  9. Greenhouse Cultivation in a Hot Arid Area By Girja Sharan; Jethava Kamalesh; Shamante Anand

  1. By: David Newbery
    Abstract: The same fuels are taxed at widely different rates in different countries while different fuels are taxed at widely different rates within and across countries. Coal, oil and gas are all used to generate electricity, but are subject to very different tax or subsidy regimes. This paper considers what tax theory has to say about efficient energy tax design. The main factors for energy taxes are the optimal tariff argument, the need to correct externalities such as global warming, and second-best considerations for taxing transport fuels as road charges, but these are inadequate to explain current energy taxes. EU energy tax harmonisation and Kyoto suggest that the time is ripe to reform energy taxation.
    Keywords: tax, energy, oil, optimal tariff, externalities, exhaustible resources, global warming, road charges
    JEL: Q4 Q48 H21 H23 L71 R48
    Date: 2005–01
  2. By: Benjamin F. Hobbs; Fieke A. M. Rijkers
    Abstract: Market coupling in Belgian and Dutch markets would permit more efficient use of intercountry transmission, 1) by counting only net flows against transmission limits, 2) by improving access to the Belgian market, and 3) by eliminating the mismatch in timing between interface auctions and the energy spot market. A Cournot market model that accounts for the region’s transmission pricing rules and limitations is used to simulate market outcomes with and without market coupling. This accounts for 1) and 2). Market coupling improves social surplus in the order of 108 €/year, unless it encourages the largest producer in the region to switch from a price-taking strategy in Belgium to a Cournot strategy due to a perceived diminishment of the threat of regulatory intervention. Benefit to Dutch consumers depends on the behavior of this company. The results illustrate how large-scale oligopoly models can be useful for assessing market integration.
    Keywords: Electric power, Electric transmission, Liberalization, Oligopoly, Complementarity models, Computational models, Netherlands, Belgium, France, Germany, Market Coupling
    Date: 2005–01
  3. By: Aitor Ciarreta (Universidad del País Vasco (Spain)); Carlos Gutierrez-Hita (Universitat Jaume I Castellón)
    Keywords: collusion, repeated games, electricity market
    JEL: L11 L13 L51
    Date: 2005–01–27
  4. By: Michael LeBlanc (Economic Research Service, U.S. Department of Agriculture); Menzie Chinn (University of Wisconsin, Madison)
    Abstract: We estimate the effects of oil price changes on inflation for the United States, United Kingdom, France, Germany, and Japan using an augmented Phillips curve framework. We supplement the traditional Phillips curve approach taking into account the growing body of evidence suggesting that oil prices may have asymmetric and nonlinear effects on output and that structural instabilities may exist in those relationships. Our statistical estimates suggest current oil price increases are likely to have only a modest effect on inflation in the U.S, Japan, and Europe. Oil price increases of as much as 10 percentage points will lead to direct inflationary increases of about 0.1-0.8 percentage points in the U.S. and the E.U. Inflation in Europe, traditionally thought to be more sensitive to oil prices than in the U.S., is unlikely to show any significant difference in sensitivity from that in the United States and in fact may be less in some countries.
    Keywords: inflation, Phillips curve, oil prices, exchange rates,
    Date: 2004–02–19
  5. By: Boyan Jovanovic; Peter L. Rousseau
    Abstract: Electricity and Information Technology (IT) are perhaps the two most important general purpose technologies (GPTs) to date. We analyze how the U.S. economy reacted to them. The Electricity and IT eras are similar, but also differ in several important ways. Electrification was more broadly adopted, whereas IT seems to be technologically more "revolutionary." The productivity slowdown is stronger in the IT era but the ongoing spread of IT and its continuing precipitous price decline are reasons for optimism about growth in the 21st century.
    JEL: O3 N2
    Date: 2005–01
  6. By: Juan Antonio Duro Moreno (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Emilio Padilla Rosa (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)
    Abstract: In this paper we provide a methodology for decomposing international inequalities in CO2 emissions into Kaya (multiplicative) factors and two interaction terms. We use the Theil index of inequality and show that this decomposition methodology can be extended for analyzing between and within-group inequality components. The empirical illustration for international data suggests some points. Firstly, international inequality in per capita CO2 emissions is mainly attributable to inequalities in per capita income levels, which helps to explain its recent reduction, while differences in carbon and energy intensity have made a less significant contribution. This result is strongly influenced by the performance of China and India. Secondly, the between-group inequality component, which is the biggest component, is also largely explained by the income factor. Thirdly, the within-group inequality component increased slightly during the period, something mainly due to the change in the income factor and the interaction terms in a few regions.
    Keywords: Kaya factors, inequalities across countries, CO2 emissions, Theil index
    JEL: C19 D39 Q43
    Date: 2005–01
  7. By: Joan Pasqual Rocabert (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Emilio Padilla Rosa (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)
    Abstract: The decisions of many individuals and social groups, taking according to well-defined objectives, are causing serious social and environmental problems, in spite of following the dictates of economic rationality. There are many examples of serious problems for which there are not yet appropriate solutions, such as management of scarce natural resources including aquifer water or the distribution of space among incompatible uses. In order to solve these problems, the paper first characterizes the resources and goods involved from an economic perspective. Then, for each case, the paper notes that there is a serious divergence between individual and collective interests and, where possible, it designs the procedure for solving the conflict of interests. With this procedure, the real opportunities for the application of economic theory are shown, and especially the theory on collective goods and externalities. The limitations of conventional economic analysis are shown and the opportunity to correct the shortfalls is examined. Many environmental problems, such as climate change, have an impact on different generations that do not participate in present decisions. The paper shows that for these cases, the solutions suggested by economic theory are not valid. Furthermore, conventional methods of economic valuation (which usually help decision-makers) are unable to account for the existence of different generations and tend to obviate long-term impacts. The paper analyzes how economic valuation methods could account for the costs and benefits enjoyed by present and future generations. The paper studies an appropriate consideration of preferences for future consumption and the incorporation of sustainability as a requirement in social decisions, which implies not only more efficiency but also a fairer distribution between generations than the one implied by conventional economic analysis.
    Date: 2005–01
  8. By: Emilio Padilla Rosa (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Alfredo Serrano Mancilla (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona)
    Abstract: This paper analyses the inequality in CO2 emissions across countries (and groups of countries) and the relationship of this inequality with income inequality across countries for the period (1971-1999). The research employs the tools that are usually applied in income distribution analysis. The methodology used here gives qualitative and quantitative information on some of the features of the inequalities across countries that are considered most relevant for the design and discussion of policies aimed at mitigating climate change. The paper studies the relationship between CO2 emissions and GDP and shows that income inequality across countries has been followed by an important inequality in the distribution of emissions. This inequality has diminished mildly, although the inequality in emissions across countries ordered in the increasing value of income (inequality between rich and poor countries) has diminished less than the “simple” inequality in emissions. Lastly, the paper shows that the inequality in CO2 emissions is mostly explained by the inequality between groups with different per capita income level. The importance of the inequality within groups of similar per capita income is much lower and has diminished during the period, especially in the low-middle income group.
    Keywords: environmental Kuznets curve, inequality across countries, CO2 emissions.
    Date: 2005–01
  9. By: Girja Sharan; Jethava Kamalesh; Shamante Anand
    Abstract: A facility for controlled environment agriculture is under investigation at Kothara (Kutch), a hot and extremely arid region. It consists of a greenhouse of 120 m2 floor area coupled in closed-loop mode to an earth-tube-heat-exchanger (ETHE) buried directly below. The ETHE provides conditioned air at 20 air changes per hour when needed. A 7.5 hp blower moves the air. Greenhouse is furnished with two continuous roll-up side vents, close-able continuous ridge vents and a retractable top cover made of shade net. Greenhouse has a fertigation system and an array of overhead foggers to supplement humidity and cooling. The ETHE was able to heat the house easily from 9oC to 22-23oC in half hour in the cold winter nights. Static ventilation from side and ridge vents along with shading was effective for day time control till early March. Subsequently ETHE was operated. It limits the greenhouse temperature gain keeping the inside near 36oC while shaded on top and when crop is inside. ETHE holds promise as an effective environmental control device in hot arid areas. A higher air change rate appears desirable to lower the temperature further. Two rounds of cropping has been done, the third is in progress. The results of growing tomato were presented else where. In this paper we present the results of growing capsicum.
    Keywords: greenhouse, arid environment, earth-tube-heat-exchanger
    Date: 2005–01–20

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