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on Energy Economics |
| By: | Richard Green; Arturo Lorenzoni; Yannick Perez; Michael Pollitt |
| Abstract: | In this paper, we discuss the choice and use of benchmarks in each of five areas relevant to an assessment of the progress of EU electricity sector liberalisation. These areas are market design, market power, EU enlargement, regulation, and sustainability. Our aim is to discuss the most important benchmarks for each area, and to do so in the context of that area. Where a benchmark can be used as a signal that things are going well (or badly) we will discuss the values associated with a good (or bad) signal. This paper forms part of the final report of the EU funded Sustainable Energy Specific Support Assessment project (SESSA, see www.sessa.eu.com). |
| Keywords: | electricity reform, market design, market power, regulation,EU enlargement, environmental sustainability |
| JEL: | L11 L50 L94 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:0629&r=ene |
| By: | Theocharis N. Grigoriadis; Benno Torgler |
| Abstract: | This paper investigates the role of the State Duma of Russia in energy regulation between 1994 and 2003. We applying Poole’s optimal classification model of roll call votes using an ordered probit model to show impact of partisan, bureaucratic, social and economic determinants on energy law reform in the first decade of Russia’s democratic transition. Our findings suggest that reforms strongly depend on negotiations, compromises and interest equilibrations. The cohesion and accountability of Russian political parties cannot be explained in terms of ideology; the traditional Left-Right axis does not hold in Russian legislative politics. Thus, our results suggest that Russia’s executive federalism and the personal interests of powerful parliamentary actors have the lead in developing competitive market structures in oil, gas and electricity markets. The paradoxical conclusion is that in this turbulent institutional setting State Duma functions as a de facto regulator by contributing to economic transparency and advancing energy law reform under conditions of democratic representation and political competition. |
| Keywords: | energy regulation; energy roll law reform; roll call votes; legislative politics; State Duma; Russia |
| JEL: | Q40 D72 K23 P27 P37 P31 R11 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:cra:wpaper:2006-07&r=ene |
| By: | Patrick Bayer; Nathaniel Keohane; Christopher Timmins |
| Abstract: | Conventional hedonic techniques for estimating the value of local amenities rely on the assumption that households move freely among locations. We show that when moving is costly, the variation in housing prices and wages across locations may no longer reflect the value of differences in local amenities. We develop an alternative discrete-choice approach that models the household location decision directly, and we apply it to the case of air quality in U.S. metro areas in 1990 and 2000. Because air pollution is likely to be correlated with unobservable local characteristics such as economic activity, we instrument for air quality using the contribution of distant sources to local pollution – excluding emissions from local sources, which are most likely to be correlated with local conditions. Our model yields an estimated elasticity of willingness to pay with respect to air quality of 0.34 to 0.42. These estimates imply that the median household would pay $149 to $185 (in constant 1982-1984 dollars) for a one-unit reduction in average ambient concentrations of particulate matter. These estimates are three times greater than the marginal willingness to pay estimated by a conventional hedonic model using the same data. Our results are robust to a range of covariates, instrumenting strategies, and functional form assumptions. The findings also confirm the importance of instrumenting for local air pollution. |
| JEL: | H5 Q2 Q5 R1 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:12106&r=ene |
| By: | Gunter Stephan; Georg Mueller-Fuerstenberger |
| Abstract: | There are two polar views on the issue of discounting. One is to focus on intergenerational equity which means discounting utilities at low rates. Alternatively, the focus is on efficiency where the choice of the discount rate should imply rates of return that are similar to those that prevail in the capital markets. This paper analyses how different discount rates affect greenhouse gas abatement and endogenous technological change. Starting point is a simple analytical model where we show that higher discount rates cannot result in smaller stocks of atmospheric carbon. However, we cannot rule out the paradoxical result that a higher discount rate may lead to a higher knowledge stock. Therefore an Integrated Assessment Model is set up to take a closer look into the time pattern of emissions. Surprisingly, low discount rates lead to a sharp increase in emissions during the beginning of the time horizon, which, however, is overcompensated through higher efforts in greenhouse gas mitigation during the rest of the time horizon. Furthermore, at low discount rates, the potential to save energy through technological innovation is utilized faster and more pronounced than with higher discount rates. |
| Keywords: | Integrated Assessment; discount rate; endogenous technological change; climate change |
| JEL: | Q40 O13 |
| Date: | 2006–03 |
| URL: | http://d.repec.org/n?u=RePEc:ube:dpvwib:dp0603&r=ene |