nep-ene New Economics Papers
on Energy Economics
Issue of 2005‒07‒25
nine papers chosen by
Roger Fouquet
Imperial College, UK

  1. A Three-Layer Atmosphere-Ocean Time Series Model of Global Climate Change By David I. Stern
  2. Price Volatility and Banking in Green Certificate Markets By Eirik S. Amundsen; Fridrik M. Baldursson; Jørgen Birk Mortensen
  3. The Common Agricultural Policy and the greenhouse gases emissions. By Fernando Brito Soares; Roberto Ronco
  4. Prospective voluntary agreements to escape carbon lock-in By JAVIER CARRILLO
  5. Risk aversion, intergenerational equity and climate change. By Minh Ha-Duong; Nicolas Treich
  6. La mise en œuvre de la réglementation : une lecture économico-juridique du secteur électrique et des marchés publics By Thierry Kirat; Frédéric Marty
  7. Second-Best Pollution Taxation and Environmental Quality By Thomas Gaube
  8. Technology and the environment: an evolutionary approach to sustainable technological change By JAVIER CARRILLO
  9. Are shareholders environmental "laggards"? Corporate Governance and environmental firm performance By JUAN SANTALO; CARL KOCK

  1. By: David I. Stern (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA)
    Abstract: Time series models of global climate change have tended to estimate a low climate sensitivity and a fast adjustment rate to equilibrium. These results appear to be biased by omission of a key variable - heat stored in the ocean. I develop a time series model of the ocean atmosphere climate system where atmospheric temperature moves towards a long-run equilibrium with both radiative forcing and ocean heat content, which is distributed between upper ocean and deep ocean components. The time series model utilizes the notion of multicointegration to impose energy balance relations on an autoregressive model. As there are only around fifty years of observations on ocean heat content I use the Kalman filter to estimate heat content as a latent state variable constrained by the available observations. The estimate of the equilibrium climate sensitivity is 8.4K with a confidence interval of 5.0 to 11.7K. Temperature takes centuries to adjust to an increase in radiative forcing. The transient climate sensitivity at the point of carbon dioxide doubling is 1.7K.
    JEL: Q53 Q54
    Date: 2005–07
  2. By: Eirik S. Amundsen (Department of Economics, University of Bergen); Fridrik M. Baldursson (Department of Economics, University of Iceland); Jørgen Birk Mortensen (Institute of Economics, University of Copenhagen)
    Abstract: There is concern that prices in a market for Green Certificates (GCs) primarily based on volatile wind power will fluctuate excessively, leading to corresponding volatility of electricity prices. Applying a rational expectations simulation model of competitive storage and speculation of GCs the paper shows that the introduction of banking of GCs may reduce price volatility considerably and lead to increased social surplus. Banking lowers average prices and is therefore not necessarily to the benefit of “green producers”. Proposed price bounds on GC-prices will reduce the importance of banking and even of the GC system itself.
    Keywords: electricity; environment; commodity speculation; green certificates; marketable permits; uncertainty
    JEL: Q28 Q42 Q48
    Date: 2005–07
  3. By: Fernando Brito Soares; Roberto Ronco
    Abstract: The evolution of greenhouse gases emissions in the EU-15 countries is accessed. While the absolute level of emissions turns out to be declining in the last thirty years in EU-15 Member States, emissions per output tend to rise. A relationship between the adoption of the Common Agricultural policy and the emissions level can be detected for Spain, Austria, Finland and Sweden.
    Date: 2005–06
  4. By: JAVIER CARRILLO (Instituto de Empresa)
    Abstract: The paper looks for co-evolutionary policy responses to carbon lock-in - a persistent state that creates systemic market and policy barriers to carbon low technological alternatives. We address the coordination role for authorities rather than the corrective optimisation and analyse experiences from environmental voluntary agreements and foresight activities. The paper argues that combining the virtues of these tools into a new policy tool, named Prospective Voluntary Agreement (PVA), can help facilitate an escape from carbon lock-in and provide policy resources for addressing lock-in related issues.
    Keywords: Lock-in , Carbon, Policy responses, Agreements
    Date: 2004–09
  5. By: Minh Ha-Duong (CIRED - Centre International de Recherche sur l'Environnement et le Développement - - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales;Ecole Nationale du Génie Rural des Eaux et des Forêts;Ecole Nationale des Ponts et Chaussées); Nicolas Treich (LEERNA - Laboratoire d'Economie de l'Environnement et des Ressources Naturelles - - INRA - Université des Sciences Sociales - Toulouse I)
    Abstract: The paper investigates a climate-economy model with an iso-elastic welfare function in which one parameter gamma measures relative risk-aversion and a distinct parameter rho measures resistance to intertemporal substitution. We show both theoretically and numerically that climate policy responds differently to variations in the two parameters. In particular, we show that higher gamma but lower rho leads to increase emissions control. We also argue that climate-economy models based on intertemporal expected utility maximization, i.e. models where gamma = rho, may misinterpret the sensitivity of the climate policy to risk-aversion.
    Keywords: risk aversion; equity; discounting; climate change
    Date: 2005–07–18
  6. By: Thierry Kirat (IRISECREP - Institut de recherche interdisciplinaire en socio-économie - Centres de Recherches et d'Etudes Politiques - - CNRS : UMR7170 - Université Paris Dauphine - Paris IX); Frédéric Marty (IDEFI - Institut de droit et d'économie de la firme et de l'industrie - - CNRS : FRE2814 - Université de Nice Sophia-Antipolis)
    Abstract: Nous nous proposons d'appliquer une grille de lecture institutionnelle, sensible aux dimensions économiques du droit, aux dispositifs juridiques relatifs au secteur électrique et aux marchés publics, en particulier de la défense. Ces domaines ont en commun d'être fortement réglementés, de mettre en jeu la présence de l'Etat dans l'activité économique et, à ce titre, d'être liés à la conduite de l'action publique. Deux dimensions seront privilégiées : d'une part, celle de l'architecture institutionnelle des systèmes de réglementation et des conditions dans lesquelles ils opèrent ; d'autre part, celle de la mise en œuvre des règles, dont nous verrons qu'elle constitue un processus plus complexe qu'une simple application de règles prescrivant des comportements. <br />Une première section sera consacrée aux logiques d'action des institutions de réglementation. La seconde abordera la question de la mise en œuvre des règles, et insistera sur l'importance des recours aux tribunaux et des interdépendances entre règles. La conclusion reviendra sur les questions méthodologiques que l'utilisation de matériaux juridiques en économie permet de poser.
    Keywords: réglementation - droit - économie - secteur électrique - marchés publics
    Date: 2005–07–20
  7. By: Thomas Gaube (Max Planck Institute for Research on Collective Goods, Bonn, Germany)
    Abstract: This paper deals with second-best pollution taxation by investigating allocations instead of the corresponding tax rates. Assuming certain restrictions on utility and that the marginal revenue from environmental taxation is positive, it is shown that environmental quality is higher in second best where only distortionary taxes are used to finance public expenditures than in the first-best optimum where lump-sum taxes are available.
    Keywords: environmental taxation, public goods
    JEL: H21 H41
    Date: 2005–04
  8. By: JAVIER CARRILLO (Instituto de Empresa)
    Abstract: (WP 02/04 Clave pdf) The results of our model show that it would be advisable to undertake policies expressly aimed at the process of sustainable technological change in a way that is complementary to the conventional equilibrium oriented environmental policies. In short, the main objectives of this paper are to understand more fully the dynamics of the process of technological change, its role in sustainable development, and to assess the implications of this dynamic approach to techno-environmental policy. To achieve these goals we have developed an agent based model, using distributed artificial intelligence concepts drawn from the general methodology of social simulation.
    Keywords: Agent-based models, Evolutionary models, Lock-in , Standardization, Technology difussion, Sustainability
    Date: 2004–01
  9. By: JUAN SANTALO (Instituto de Empresa); CARL KOCK (Instituto de Empresa)
    Abstract: From a reactive, antagonistic stance towards environmental regulations, many firms have evolved to act in a pro-active fashion to integrate environmental issues into their core strategies. Using measures of different corporate governance instruments that proxy for the ability of managers or shareholders to implement their strategic preferences we demonstrate empirically that shareholders are indeed laggards because they lower firm environmental performance while the latter actually has positive effects on firm financial performance. Managers, however, push for better environmental and hence financial performance and thus act against shareholders preferences, but in their interest.
    Keywords: Corporate governance, Environmental performance, Financial performance
    Date: 2005–01

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