nep-ene New Economics Papers
on Energy Economics
Issue of 2007‒01‒13
eight papers chosen by
Roger Fouquet
Imperial College, UK

  1. China's Changing Energy Intensity Trend: A Decomposition Analysis By Chunbo Ma; David I. Stern
  2. Subnational Trade Flows and State-Level Energy Intensity By Chintrakarn, Pandej; Millimet, Daniel
  3. Richer and cleaner - at others' expense? By Taran Fæhn and Annegrete Bruvoll
  4. Utilities reforms and corruption in developing countries By Estache, Antonio; Goicoechea, Ana; Trujillo, Lourdes
  5. Backstop Technology Adoption By Matti Liski; Pauli Murto
  6. Direct load control of residential water heaters By Torgeir Ericson
  7. From natural resources and environmental accounting to construction of indicators for sustainable development By Knut H. Alfsen and Mads Greaker
  8. The Economics of Hurricanes in the United States By William D. Nordhaus

  1. By: Chunbo Ma (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA); David I. Stern (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA)
    Abstract: China experienced a dramatic decline in energy intensity from the onset of economic reform in the late 1970s until 2000, but since then rate of decline slowed and energy intensity actually increased in 2003. Most previous studies found that most of the decline was due to technological change, but disagreed on the role of structural change. To the best of our knowledge, no decomposition study has investigated the role of inter-fuel substitution in the decline in energy intensity or the causes of the rise in energy intensity since 2000. In this paper, we use logarithmic mean Divisia index (LMDI) techniques to decompose changes in energy intensity in the period 1980-2003. We find that: (1) technological change is confirmed as the dominant contributor to the decline in energy intensity; (2) structural change at the industry and sector (sub-industry) level actually increased energy intensity over the period of 1980-2003, although the structural change at the industry level was very different in the 1980s and in the post 1990 period; (3) structural change involving shifts of production between sub-sectors, however, decreased overall energy intensity; (4) the increase in energy intensity since 2000 is explained by negative technological progress; (5) inter-fuel substitution is found to contribute little to the changes in energy intensity.
    JEL: Q43
    Date: 2006–12
  2. By: Chintrakarn, Pandej (SMU); Millimet, Daniel (SMU)
    Abstract: In one strand of research, analysts examine trends in and the determinants of energy usage and intensity. In a second strand, researchers analyze the impact of trade flows on environmental outcomes. Recently, Cole (2006) bridges this gap, analyzing the impact of trade intensity on energy usage utilizing panel data at the country level. Here, we analyze the impact of subnational trade flows across U.S. states on state-level energy usage and intensity, controlling for the endogeneity of trade flows. Our findings indicate that an expansion of subnational trade at worst has no impact on state-level energy usage, and may actually reduce energy usage (contrary to Cole's country-level findings), although the impacts are not uniform across sectors.
    Keywords: Bilateral Trade, Energy Intensity, Pollution Haven Hypothesis
    JEL: F18 Q4
    Date: 2006–12
  3. By: Taran Fæhn and Annegrete Bruvoll (Statistics Norway)
    Abstract: Pollution intensive production can be avoided domestically by increased imports and less exports of dirty products. Such trade effects may imply more emissions abroad, or pollution leakages. We study whether such leakages may contribute to the observed inverted relationship between emissions and economic growth - the Environmental Kuznets Curve (EKC). In our case, the rich, open Norwegian economy, we find little evidence for the hypothesis that pollution leakages contribute to explain the EKC. Despite an observed decoupling of emissions from economic growth over the past 20 years, there was no increase in pollution leakages over this period. Rather, emissions related to export increased far more than the foreign emissions embodied in import, implying reduced leakages. In future projections, we find a lower degree of decoupling than in the past, but no corresponding reductions in leakages. Instead, leakages increase. This conclusion is fairly invariant to assumptions about future climate policy.
    Keywords: Climate policy; dynamic CGE model; endogenous policy; Environmental Kuznets Curve; pollution leakage
    JEL: D58 O11 Q25 Q28 Q48
    Date: 2006–09
  4. By: Estache, Antonio; Goicoechea, Ana; Trujillo, Lourdes
    Abstract: This paper shows empirically that " privatization " in the energy, telecommunications, and water sectors, and the introduction of independent regulators in those sectors, have not always had the expected effects on access, affordability, or quality of services. It also shows that corruption leads to adjustments in the quantity, quality, and price of services consistent with the profit-maximizing behavior that one would expect from monopolies in the sector. The results suggest that privatization and the introduction of independent regulators have, at best, only partial effects on the consequences of corruption for access, affordability, and quality of utility services.
    Keywords: Infrastructure Regulation,Energy Production and Transportation,Town Water Supply and Sanitation,Social Accountability,ICT Policy and Strategies
    Date: 2006–12–01
  5. By: Matti Liski; Pauli Murto
    Abstract: We consider how efficient markets adopt technologies that reduce dependence on volatile factors such as oil. We find a relationship between volatility and technology overlap: new technology entry rate exceeds old technology exit rate under sufficient uncertainty. From this follows that efficient adoption is characterized by prolonged coexistence of alternative technologies and that uncertainty increasingly propagates from input to output market despite the declining use of the volatile factor in production. The properties depend on (i) the option to remain idle rather than exit, (ii) heterogeneity in factor supply, and (iii) factor market volatility
    Keywords: technology adoption, factor markets, uncertainty, irreversible investment, energy
    JEL: D9 O30 Q40
    Date: 2006–12–03
  6. By: Torgeir Ericson (Statistics Norway)
    Abstract: In Norway there is a growing concern that electricity production and transmission may not meet the demand in peak-load situations. It is therefore important to evaluate the potential of different demand side measures that may contribute to reduce peak load. This paper analyses data from an experiment where residential water heaters were automatically disconnected during peak periods of the day. A model of hourly electricity consumption is used to evaluate the effects on the load of the disconnections. The results indicate an average consumption reduction per household of approximately 0.5 kWh/h during disconnection, and an additional average increase in consumption the following hour, due to the payback effect, of approximately 0.2 kWh/h.
    Keywords: Direct load control; Demand response; Load management; Water heaters
    JEL: D10 Q41
    Date: 2006–10
  7. By: Knut H. Alfsen and Mads Greaker (Statistics Norway)
    Abstract: Norway has a long history in trying to develop management tools for sustainable development. From the early development of natural resources accounts in the 1980’s, through discussions of the usefulness of indices like “green GDP” to efforts of developing sustainable development indicators, experiences have been gained. The paper seeks to both describe the landscape and discussions associated with the key terms, and to communicate some lessons drawn from the Norwegian experiences. The conclusion focuses on the fact that whatever information is collected and organised to support the relevant decision-making processes, the final outcome should always be judged in terms of its impacts on policy processes. Thus, we issue a warning against large-scale development of information systems, without due regard to the final utilisation of the output.
    Keywords: Green accounting; Natural resource and environmental accounting; sustainable development indicators; green GDP; SEEA
    JEL: N5 Q2 Q3
    Date: 2006–10
  8. By: William D. Nordhaus
    Abstract: The year 2005 brought record numbers of hurricanes and storm damages to the United States. Was this a foretaste of increasingly destructive hurricanes in an era of global warming? This study examines the economic impacts of U.S. hurricanes. The major conclusions are the following: First, there appears to be an increase in the frequency and intensity of tropical cyclones in the North Atlantic. Second, there are substantial vulnerabilities to intense hurricanes in the Atlantic coastal United States. Damages appear to rise with the eighth power of maximum wind speed. Third, greenhouse warming is likely to lead to stronger hurricanes, but the evidence on hurricane frequency is unclear. We estimate that the average annual U.S. hurricane damages will increase by $8 billion at 2005 incomes (0.06 percent of GDP) due to global warming. However, this number may be underestimated by current storm models. Fourth, 2005 appears to have been a quadruple outlier, involving a record number of North Atlantic tropical cyclones, a large fraction of intense storms, a large fraction of the intense storms making landfall in the United States, and an intense storm hitting the most vulnerable high-value region in the country.
    JEL: Q0 Q5 Q54
    Date: 2006–12

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