nep-ene New Economics Papers
on Energy Economics
Issue of 2006‒02‒12
seven papers chosen by
Roger Fouquet
Imperial College, UK

  1. Switch on the competition; causes, consequences and policy implications of consumer switching costs. By Marc Pomp; Victoria Shestalova; L. Rangel
  2. Analysis of Energy Supply and Usage in the Iowa Economy By Otto, Daniel; Imerman, Mark D.
  3. Deregulating Network Industries: Dealing with Price-Quality Tradeoffs By Stefan Buehler; Dennis Gaertner; Daniel Halbheer
  4. Spatial Effects of Willingness-to-Pay: The Case of Nuclear Risks By Peter Zweifel; Yves Schneider; Christian Wyss
  5. Mitigation factors By Jean-Charles Hourcade
  6. Introduction aux approches économiques de l'incertitude By Minh Ha-Duong
  7. Interactions d'échelles en économie : Application à l'évaluation intégré des dommages du changement climatique et des événements extrêmes By Stéphane Hallegatte

  1. By: Marc Pomp; Victoria Shestalova; L. Rangel
    Abstract: The success or failure of reforms aimed at liberalising markets depends to an important degree on consumer behaviour. If consumers do not base their choices on differences in prices and quality, competition between firms may be weak and the benefits of liberalisation to consumers may be small. One possible reason why consumers may respond only weakly to differences in price and quality is high costs of switching to another firm. This report presents a framework for analysing markets with switching costs and applies the framework in two empirical case studies. The first case study analyses the residential energy market, the second focuses on the market for social health insurance. In both markets, there are indications that switching costs are substantial. The report discusses policy options for reducing switching costs and for alleviating the consequences of switching costs.
    Keywords: Switching costs; consumer behaviour; competition; energy markets; health insurance
    JEL: L13 D12
    Date: 2005–09
  2. By: Otto, Daniel; Imerman, Mark D.
    Abstract: This report addresses the needs of state policymakers to understand the implications to the state’s economy from current levels of energy supply imports. Historical energy consumption patterns for the state and the role of energy in the performance of the Iowa economy are reviewed using current data. Economic modeling techniques are then used to analyze the linkages of these energy sectors, forward and backwards, with the rest of the economy. Information on the importance of energy to various economic activities and the share of energy expenditure that goes to in-state vs. out-of-state sources, including the energy distribution functions, is also provided. The objective of this report is to review the information on the quantities of energy consumed and dollars spent in Iowa and evaluate the share of these energy dollars that are leaving the state.
    Date: 2006–02–03
  3. By: Stefan Buehler (Socioeconomic Institute, University of Zurich); Dennis Gaertner (Socioeconomic Institute, University of Zurich); Daniel Halbheer (Socioeconomic Institute, University of Zurich)
    Abstract: This paper examines the e®ects of introducing competition into monopolized network industries on prices and infrastructure quality. Analyzing a model with reduced-form demand, we ¯rst show that deregulating an integrated monopoly cannot simultaneously decrease the retail price and increase infrastructure quality. Second, we derive conditions under which reducing both retail price and infrastructure quality relative to the integrated monopoly outcome increases welfare. Third, we argue that restructuring and setting very low access charges may yield welfare losses, as infrastructure investment is undermined. We provide an extensive analysis of the linear demand model and discuss policy implications.
    Keywords: infrastructure quality, deregulation, investment incentives, access charges, regulation
    JEL: D43 L43
    Date: 2004–01
  4. By: Peter Zweifel (Socioeconomic Institute, University of Zurich); Yves Schneider (Socioeconomic Institute, University of Zurich); Christian Wyss
    Abstract: This paper examines the spatial dimension of external effects stemming from nuclear power plants. Using data from a stated choice experiment conducted in Switzerland, marginal willingness to pay (MWP) for risk reduction and willingness to pay (WTP) for solving the nuclear waste problem are estimated. Interestingly, MWP for risk reduction increases with distance from the power plant, while WTP for solving the waste problem decreases in the vicinity of the plant and is zero thereafter. These findings suggest that distance is endogenous with respect to coverage because consumers self-insure through their residential choice, but exogenous (and of lesser relevance) with respect to the waste disposal problem.
    Keywords: nuclear energy, spatial effects of externalities, stated choice experiment
    JEL: R19 R22 D89 Q40
    Date: 2005–01
  5. By: Jean-Charles Hourcade (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)
    Abstract: The debate over the costs of GHG emission reduction has become more com-plex recently as disagreements over the existence of economic and environ-mental double dividents have been added to discussions over the existence of a negative cost potential. We argue that basic assumptions about economic effi-ciency, the (sub-)optimality of the baseline and the rate of technical change are more important than model structure, and we underline the importance of the timing of decisions for determining the costs. Moreover the use of a single baseline ‘no policy' scenario and several policy intervention scenarios may be fundamentally misleading in the longer term simply because the very idea of a business as usual scenario is deeply problematic. Ultimately the debate turns on political judgments about the desirability of alternative development paths. Copright© 1996 Elsevier Science Ltd.
    Keywords: Greenhouse gas emissions;Costs of GHG reduction; Mitigation options
    Date: 2006–02–01
  6. 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)
    Abstract: Cette communication définit quelques mots au sens où les entendent les économistes étudiant l'incertitude, les politiques climatiques et la modélisation intégrée. La première partie expose deux exemples pédagogiques définissant d'abord risque, incertitude, surprise, stratégie contingente. Pour l'incertitude qui n'est pas du risque, les probabilités subjectives et les critères safety first avec la valeur exposée au risque, les possibilités à la Shackle-Zadeh, le modèle de Dempster-Shafer ainsi que les probabilités imprécises dites aussi non-additives sont discutés. La seconde partie expose l'approche de l'incertitude dans les modèles: analyse de risque, sensitivité, Monte-Carlo et scénarios, puis analyse des bornes et viabilité et enfin l'optimisation dynamique stochastique.
    Keywords: Risque; Incertitude; Utilité; Probabilités imprécises; Modèles intégrés; Changement climatique.
    Date: 2006–01–31
  7. By: Stéphane Hallegatte (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, CNRM - Centre National de Recherches Météorologiques -
    Abstract: Alors que les évaluations des dommages du changement climatique utilisent en général des modèles de croissance qui négligent les déséquilibres économiques, supposés transitoires, cette thèse met en lumière, à partir d'une série d'exercices de modélisation, l'importance des déséquilibres et de la variabilité endogène de l'économie dans l'évaluation des dommages des événements extrêmes et du changement climatique. Elle affirme de plus l'impossibilité de séparer l'évaluation des dommages et la représentation de la croissance et de la dynamique économique : les pertes en bien-être dépendront tout autant de la nature et de l'intensité des impacts que de la dynamique et de la situation de l'économie sur laquelle ils s'appliqueront. Ainsi, les incertitudes sur les dommages futurs du changement climatique proviennent à la fois d'incertitudes scientifiques et de l'incertitude sur l'organisation future de nos économies.
    Keywords: dynamique économique, changement climatique, événements extrêmes
    Date: 2006–02–02

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