nep-ene New Economics Papers
on Energy Economics
Issue of 2005‒04‒09
two papers chosen by
Roger Fouquet
Imperial College, UK

  1. Energy Consumption and GDP in Market and Transitional Economies By Ageeva Svetlana; Suslov Nikita
  2. Estimation of marginal abatement costs for undesirable outputs in India's power generation sector: An output distance function approach By Manish Gupta

  1. By: Ageeva Svetlana; Suslov Nikita
    Abstract: A cross-country analysis of factors affecting the levels of the energy intensity of production in the countries with both the market and the transitional economies is provided. Climatic conditions, variables of institutional environment, production structure variations and evaluations of unofficial economy shares are involved into consideration. These variables turned out to be significant when explaining the differences of energy intensity. We construct regressions for both the values of absolute levels and their time change indices involving 1993, 1995, 1996 and 2000 statistics. We show that the quality of institutional environment directly affects the process of energy consumers' adjustment to energy price changes: the higher is the institutions' quality the more effective are the measures aimed at the energy conservation. The samples used include up to 117 economies.
    Keywords: Russia, energy intensity, institutions, prices, unofficial economy
    JEL: C21 O13
    Date: 2005–04–01
  2. By: Manish Gupta (National Institute of Public Finance and Policy; National Institute of Public Finance and Policy)
    Abstract: Many production activities generate undesirable byproducts in conjunction with the desirable outputs they produce. The present study uses an output distance function approach and its duality with the revenue function to estimate the marginal abatement cost of CO2 emissions from a sample of thermal plants in India. Two sets of exercises have been undertaken. The marginal abatement cost is first estimated without considering the distinction between the clean and the dirty plants (model-1) and then by differentiating between the two (model-2). The shadow prices of CO2 for the coal fired thermal plants in India for the period 1991-92 to 1999-2000 was found to be Rs. 3,380.59 per ton of CO2 as per model-1 and Rs. 2401.99 per ton of CO2 as per model-2. The wide variation noticed in the marginal abatement costs across plants is explained by the ratio of CO2 emissions to electricity generation, the different vintages of capital used by different plants in the generation of electricity and provisions for abatement of pollution. The relationship between firm specific shadow prices of CO2 and the index of efficiency (ratio of CO2 emission and electricity generation) points to the fact that the marginal cost of abating CO2 emissions increases with the efficiency of the thermal plant.
    Date: 2005–03

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