nep-ene New Economics Papers
on Energy Economics
Issue of 2007‒01‒14
25 papers chosen by
Roger Fouquet
Imperial College, UK

  1. Sustainable Urban Future in Southern Europe - What About the Heat Island Effect? By Eleftheria Alexandri; Phil Jones
  2. Small-scale technologies for energy innovations: role and implication directions By Knol, W.H.C.
  3. Sustainable Design of Energy Systems - The Case of Geothermal Energy By Heracles Polatidis; Dias Haralambopoulos
  5. Bioethanol As Basis for Regional Development in Brazil: An Input-Output Model With Mixed Technologies By Marcelo Pereira Da Cunha; Jose Antonio Scaramucci
  6. Energetic Interactions Between Minas Gerais State and the Rest of Brazil: An Inter-Regional Input-Output Analysis. By Fernando Perobelli; Rogerio Silva De Mattos; Weslem Rodrigues
  7. The Importance of the Oil and Gas Complex for the Brazilian Economy and Its States By Joaquim Jose Martins Guilhoto; Silvio Massaru Ichihara; Fernando Antonio Slaibe Postali
  8. The Role of Russia and the Countries of the Central Asia in Maintenance of Europe With Energy Carriers (Production of a Fuel and Energy Complex) By Vyacheslav Vashanov; Jahan Orazdurdiyeva
  9. Coalition Formation, Bargaining and Investments in Networks with Externalities: Analysis of the Eurasian Gas Supply Network By Ikonnikova, Svetlana
  10. Analysis of a liberalised German Gas Market By Philipp Scheib; Frieder Kalisch; Bernhard Graeber
  11. Trade Liberalization or Oil Shocks: Which Explains Structural Breaks in International Trade Ratios? By Suleiman Abu-Bader; Aamer Abu-Qarn
  12. Hedgers, Investors and Futures Return Volatility: the Case of NYMEX Crude Oil By George Milunovich; Ronald D. Ripple
  13. Point and interval forecasting of wholesale electricity prices: Evidence from the Nord Pool market By Weron, Rafal; Misiorek, Adam
  14. Regulating a Monopoly Offering Priority Service By Matsukawa, Isamu
  15. Lignite As Contributory Factor to Regional Development of Greece By Ilias Kordas
  16. Estimation Method for Emission of Road Transport By Torok Adam
  17. Environmental HDV Road Charging for Berlin - Theoretical Considerations and Empirical Estimations By Martin Winter; Christian von Hirschhausen
  18. Shadow Market Area for Air Pollutants By David Meintrup; Chang Woon Nam
  19. Are the Costs of Reducing Greenhouse Gases from Passenger Vehicles Negative? By Parry, Ian W.H.
  20. Economic Determinants for China’s Industrial SO2 Emission: Reduced vs. Structural form and the role of international trade By Jie He
  21. The Merits of New Pollutants and How to Get Them When Patents Are Granted By Grischa Perino
  22. Environmental problems and economic development in an endogenous fertility model By Frank Joest; Martin Quaas; Johannes Schiller
  23. Economic Development and Environmental Degradation: Testing the Existence of an Environmental Kuznets Curve At Regional Level By George Halkos
  24. Variation principles for modeling in resource economics By Bazhanov, Andrei
  25. Economic Growth with Energy By Alam, M. Shahid

  1. By: Eleftheria Alexandri; Phil Jones
    Abstract: In general cities, and especially cities in hot zones, as the Mediterranean, suffer from raised temperatures in the city core, generally known as the heat island effect. Raised temperatures, especially in summer, may turn city centres into unwelcome hot areas, with direct effects on energy consumption for cooling buildings and morbidity and mortality risks for the population. These raised temperatures in the city centre derive from the altered thermal balances in urban spaces, mainly due to the materials and activities taking place in cities, by far different to those in rural areas. The notably raised thermal capacity of urban materials, their low albedo and their lack of porosity are of the main characteristics of urban materials, responsible for the formation of raised urban temperatures. The general lack of vegetation is a strong characteristic of the formation of the heat island effect. If building surfaces, which are greatly responsible for the formation of raised urban temperatures are covered with vegetation (roofs with grasses and walls with ivies), it is expected that urban temperatures could lower significantly. With the case study of the city of Athens, this paper explores quantitatively how raised urban temperatures could reduce in the hot and dry Mediterranean summer, when the building envelope is covered with vegetation. With the use of a prognostic, two-dimensional, micro-scale heat and mass transfer model, the effect of vegetation in urban canyons with different geometries and orientations is explored and how this could be applied at an urban scale. The effect of vegetation on the building envelope is examined on the outdoors thermal comfort and the energy consumption for cooling. Conclusions are drawn about the relationship of the effect of diverse amounts of vegetation with the urban geometry and orientation and whether such a proposal could prove beneficial for cities in the South of Europe.
    Date: 2006–08
  2. By: Knol, W.H.C.
    Abstract: Energy innovations with sustainable fundamentals are needed to fulfill energy demands for the coming decades. This leads to a seeking process for new knowledge and technologies in order to create incremental and breakthrough energy innovations. The question is what the role is of small-scale technologies (nanotechnologies) for these innovations? This paper examines in a brief and non-exhaustive manor the role and implication directions of small-scale technologies for energy innovations. First, the paper describes the necessity for energy innovations and small-scale technologies. Next, based on examples role and implication directions are discussed. The conclusion focuses on the outline presented.
    JEL: Q40 O33 L00
    Date: 2005–01–26
  3. By: Heracles Polatidis; Dias Haralambopoulos
    Abstract: Geothermal energy is one of the renewable energy resources with a vast potential. It is extended spatially in many areas, isolated from urban areas and direct uses, whereas its utilisation when it is not for electricity production is many times hampered due to lack of a proper development framework. In this work we present a design framework for sustainable geothermal systems incorporating modules covering the various aspects of exploration, utilisation, end-use and management. The overall framework consists of the following sub modules: a. geophysical model of the assessment of the geothermal reservoir capacity b. model for the management of the geothermal wells, pumping and re-injection c. model for the distribution network d. model for the various end-uses, e. environmental model for sustainable operation The overall framework incorporates the basic axes of sustainable development, i.e. resources, economy, environment, energy, technology, society. The theoretical framework is applied to an existing geothermal reservoir which at the current is being underutilized, from an energy, environmental and economic perspective. The search for an optimum design includes the formulation of different scenarios and the multi-criteria decision analysis of them.
    Date: 2006–08
  4. By: Justin Quear; Wallace E. Tyner (Department of Agricultural Economics, College of Agriculture, Purdue University)
    Abstract: The federal government currently subsidizes ethanol with a fixed payment of $.51/gallon of ethanol blended with gasoline. Ethanol profitability is closely linked to the prices of corn and ethanol. The purpose of this paper was to develop a variable subsidy based on corn and ethanol prices and then to compare that variable subsidy with the fixed subsidy. This analysis proceeded in several distinct steps: • First, we estimated ethanol profitability over a wide range of ethanol, corn, and distillers grains prices. • This data was used in a regression analysis to estimate the ethanol profitability from the set of corn and ethanol prices. The regression coefficients became the basis for the variable subsidy. • A version of the subsidy that used gasoline prices instead of ethanol prices was also developed. • Administratively, it would be burdensome to have a subsidy that changed every month, so we implemented both variable subsidies using quarterly data. • We then compared the average annual government cost and monthly private profitability using historical data and assuming the variable subsidy and the $0.51 fixed subsidy was applied. When using historic gasoline and corn prices from the last ten years, the variable rate subsidy cost the government nearly 40% less than the flat rate subsidy. Profit received by producers on average is a little less; however, producer’s risk is lower with the variable subsidy than the flat rate subsidy.
    Keywords: Ethanol, variable subsidy, energy policy, ethanol economics
    JEL: Q48 Q42 Q28
    Date: 2006
  5. By: Marcelo Pereira Da Cunha; Jose Antonio Scaramucci
    Abstract: Many issues of strategic importance that have emerged in recent years are contributing to the formulation of national policies for promoting biofuels worldwide. In the developed countries, such initiatives result mainly from concerns on energy security and greenhouse gases emissions. Developing countries envisage biofuels as a potential means to improve access to energy, increase income and employment, alleviate poverty, spur rural development, reduce oil imports and enhance exports of biomass products. These interests converge as to render bioethanol trade a unique opportunity for sustainable development. Despite its simplicity and ease of use, the basic input-output (i-o) model does not allow the representation of technology-differentiated sectors producing the same good or service. For instance, in Brazil, sugarcane can be collected manually or via harvesting machines and alcohol can be produced in plants appended to a sugar mill or in autonomous distilleries. An i-o model with mixed technologies was constructed for the purposes of the study. A linear technology is used to represent the sugarcane and ethanol sectors, whereas the remaining industries are characterized by the usual Leontief production function. Activity levels for the linear-technology sectors are set by a scenario analysis, avoiding the use of much more complicated mathematical tools, such as a computable general equilibrium (cge) model. The construction of the database was done in two stages. Firstly, an i-o table containing 42 sector and 80 commodities was estimated for the base year of 2002. Secondly, the sugarcane and ethanol industries were disaggregated from the sectors they appear in IBGE economic tables, based on detailed engineering information obtained from experts and specialized publications. The extended input-output model with mixed technologies was used to analyze the socioeconomic impacts of a large-scale expansion of bioethanol production in Brazil so as to replace 5% of the estimated global demand for gasoline in 2025. The resulting direct, indirect and induced effects indicate that if ethanol production is augmented in nearly 800%, GDP would increase by a factor of 11.4%, equivalent to approximately the entire economy in the Northeast region of Brazil, and more than 5 million of jobs would be created.
    Date: 2006–08
  6. By: Fernando Perobelli; Rogerio Silva De Mattos; Weslem Rodrigues
    Abstract: This paper analyses the interdepence between the State of Minas Gerais and the rest of Brazil with regard to energy consumption. A hibryd interregional input-output model, by means of which energy intensity measures are computed, is used to undertake the analysis. The energy measures allow, for instance, to assess the degree in which a sector production in Minas Gerais impacts the energy consumption inside and outside the state. Also, the measures allow to assess the degree in which sector production in the rest of Brazil (outside Minas Gerais) impacts energy consumption inside and outside the state. The analysis presents disaggregate information for 14 economic sectors, two spatial areas (Minas Gerais and the rest of Brazil), and one kind of energy use (total energy), thus allowing to trace an accurate portrait of interdependence patterns.
    Date: 2006–08
  7. By: Joaquim Jose Martins Guilhoto; Silvio Massaru Ichihara; Fernando Antonio Slaibe Postali
    Abstract: This paper presents the results of a research conducted to measure the importance of the oil and gas complex in the Brazilian economy and in its states. Initially, the efforts were concentrated in the construction of an interregional input-output system for the 27 states of the Brazilian economy at the level of 42 industries, for the year of 2002. Using this system it was possible to make an analysis of role played by the oil and gas complex in the Brazilian economy and its states. First it is made an analysis of the economic flows linked with the oil and gas production, and then it is made an estimation of the GDP value generated by the oil and gas complex in the Brazilian economy and its states. It is also made an analysis in detail of the productive chain of the oil and gas, starting from the suppliers of inputs to the oil and gas production, going through the production itself and the various stages of refining and processing, and ending at the measuring of the services and distribution activities. The results show that the oil and gas complex has a share of around 10.4% of the Brazilian GDP, while the share in the GRP of the states can go from less than 1% to 27%.
    Date: 2006–08
  8. By: Vyacheslav Vashanov; Jahan Orazdurdiyeva
    Abstract: This paper gives a review on the role of Russia and the countries of the Central Asia (Kazakhstan, Kyrgyzstan, Turkmenistan, Uzbekistan and Tajikistan) in maintenance of the Europe with energy carriers. The paper examines the issues mentioned below. 1.Modern reserves of oil and gas (in % from world reserves) 2.Output of mineral products and distribution of their export on the countries 3.Volume of foreign (European) investments 4.Competitiveness 5.Forecasts of extraction and transportation of oil and gas 6.Opportunities of increase of volumes of export Being among the richest countries in the world in terms of hydrocarbon resources, this region represents unquestionable interest for European community as an oil and gas exporter and interests at the world’s energy markets as well.
    Date: 2006–08
  9. By: Ikonnikova, Svetlana
    Abstract: We present a new methodology to study how upstream (e.g. producers) and downstream (e.g. transiters) players form coalitions, bargain over joint profit sharing and invest. Within coalitions players combine resources, coalitions compete on a market. Profit of each coalition depends on the cooperation among the outside players. Hence, we consider a game with externalities. To find the equilibrium coalition structure and the expected payoffs, we use the solution proposed by Maskin (2003). Payoffs reflect the bargaining power and depend on capacities of players. We show, how investment options available to players matter. We apply the study to analyze the Eurasian gas supply network. Russia and Turkmenistan - producers and Ukraine, Belorus, Azerbaijan, Iran - transiters form coalitions to supply gas and bargain over profit sharing. Besides, the players invest in pipelines. We derive the bargaining power of the countries from the architecture of the network and calculate the strategic value of the different pipeline projects.
    Keywords: Partition Function; Coalitional Bargaining; Coalition Formation; Externalities; Gas Supply
    JEL: C72 C71
    Date: 2005–12
  10. By: Philipp Scheib (EnBW Trading, Methodology & Models department); Frieder Kalisch (EnBW Trading, Methodology & Models department); Bernhard Graeber (EnBW Trading, Methodology & Models department)
    Abstract: European gas markets are experiencing fundamental change due to decrease in domestic production, increase in demand and liberalisation efforts of the European Union. Germany represents the biggest single market in Continental Europe and is also a major transit country for gas. Gas market liberalisation in Germany, however, has so far shown few effects. In this paper we look at how third party network access in an entry-exit regime with different balancing zones (“market areas”) will influence the market. We have developed a multi-regional, inter-temporal model for Germany including transit flows to and from neighbouring countries with monthly resolution. The model is based on the following assumptions: Long term import contracts will stay in effect, network access is regulated based on an entry-exit-system, domestic production will continue to decline, no new infrastructure projects that are not known today can become operational before 2009 and access to storage is not regulated. The model focuses on the transmission system, looking at transit flows between entry-exit-zones. The model proves to be a valuable tool for analysing different set-ups of market areas. Preliminary model results did not confirm the need for 19 market areas in Germany. Data availability still needs to be improved, in order to allow a more detailed analysis and produce tangible and robust results.
    Keywords: natural gas, trading, regulation, network industry, linear optimisation
    JEL: L95 L14 Q41 C61
  11. By: Suleiman Abu-Bader (Department of Economics, Ben-Gurion University of the Negev); Aamer Abu-Qarn (Department of Economics, Ben-Gurion University of the Negev)
    Abstract: Ben-David and Papell's (1997) tests for structural breaks in international trade ratios over the post-WWII period revealed that trade ratios exhibited structural breaks in their paths and that postbreak trade averages exceeded prebreak averages. They attributed these breaks to trade liberalization policies executed during the postwar period. We reevaluate their results by comparing the postbreak trade ratios with extrapolated ratios based on the prebreak trend, and testing for structural breaks in the relative prices of imports (exports). We find that oil shocks rather than trade liberalization were the major factor behind the structural breaks in trade ratios.
    Keywords: International trade, Trade Liberalization, Structural change, Oil shocks, Kennedy Round
    JEL: C22 F1
    Date: 2006–12
  12. By: George Milunovich (Department of Economics, Macquarie University); Ronald D. Ripple (Department of Economics, Macquarie University)
    Abstract: We present a new model to evaluate the volatility of futures returns. The model is a combination of Dynamic Conditional Correlation and an augmented EGARCH, which allows us to evaluate the differential effects of the trading activity of two classes of optimizing traders. We apply the model to the NYMEX crude oil futures contract, and we find that the rebalancing activity of hedgers has a significant and positive effect on returns volatility. However, we also find that the rebalancing activity attributable to crude oil futures for non-hedging investors has no significant effect.
    Keywords: portfolio choice, WTI oil volatility, optimal hedge ratio, dynamic conditional correlation
    JEL: Q4 G11 G13
    Date: 2006–10
  13. By: Weron, Rafal; Misiorek, Adam
    Abstract: In this paper we assess the short-term forecasting power of different time series models in the Nord Pool electricity spot market. We evaluate the accuracy of both point and interval predictions; the latter are specifically important for risk management purposes where one is more interested in predicting intervals for future price movements than simply point estimates. We find evidence that non-linear regime-switching models outperform their linear counterparts and that the interval forecasts of all models are overestimated in the relatively non-volatile periods.
    Keywords: Wholesale electricity price; Point forecast; Interval forecast; AR model; Threshold AR model
    JEL: L94 Q40 C53 C22
    Date: 2006
  14. By: Matsukawa, Isamu
    Abstract: This paper investigates the effects of alternative forms of regulation on the market penetration and capacity, which are determined by a profit-maximizing monopolist providing priority service to consumers. For continuous priority service, a minimum reliability standard, price cap and rate of return regulation lead to larger capacity than in the absence of regulation. A minimum reliability standard reduces the market penetration while price cap and rate of return regulation increase it. The regulatory effects on the market penetration and capacity are also examined for discrete priority service, and policy implications of these effects are discussed for electricity supply industry.
    Keywords: priority service; monopoly; minimum reliability standard; price cap; rate of return regulation
    JEL: L51
    Date: 2006–11–17
  15. By: Ilias Kordas
    Abstract: Lignite (brown coal) is Greece's most important energy mineral raw material. Lignite exploitation has made a highly significant contribution to the development of energy sector of Greece on past 50 years, and will, according to estimations, continue to supply energy for another 40 years. Greece is very rich in Lignite resources. The two main basins - from where Lignite is extracted by opencast mining - are a) in Western Macedonia (northen Greece) where is generated the 70% of the whole electricity of Greece and b) in Central Peloponese (Southern Greece) where is generated the 10% of the whole electricity of Greece. In this respect, Public Power Corporation of Greece cooperates with the local administrative authorities and finances or undertakes social "compensation" projects for life improvement, and social and financial support of the residential areas near mines. Also provides technical services and contributes to the carrying out of small projects in municipalities and communities. Finaly provides thermal energy from the power stations for the district teleheating of the towns of Kozani, Ptolemais and Megalopolis and surrounting settlements. In addition to the works of social regeneration and the duty for the development of industrial areas, for the redevelopment works and environmental protection of the new ground at the lignite mines, more than 500.000 Euros are spent on a yearly basis (350.000 Euros at West Macedonia and 150.000 Euros at Central Peloponese). Moreover, according to data taken from the statement of accounts regarding only the operation of the mines (salaries, commossions, contracts assigned etc) the amount of 367.000.000 Euros is spent in the local societies of Kozani and Florina Prefectures. As a result, Lignite contributes to the regional Development of the country. Lignite mining and the generation of electric power take place in less developed areas, ensuring employment for a large number of scientific and labor personel, reducing unemployment and urban attraction and increasing the per capita local income in these areas.
    Date: 2006–08
  16. By: Torok Adam
    Abstract: It is a well-known that the growth of GDP induces the growth of motorization. Motorization has developed so dramatically that the air, soil, water pollutions are considerable to the amounts of air, soil and water of Earth. Some of the pollutants affect on local or regional scale while others affect on global scale. There is the natural, non-antropogeneous greenhouse gas emission developed before the human activity that has been essential for life on Earth. Without it the average world temperature would be -20ºC. [1] Sustainable development is a development where the pace of technical development, the satiation of increasing supply, raw materials and resources of Earth are poised so that the rate of living and opportunities of the next generations need not to be worse. So global warming caused by the antropogeneous and non-antropogeneous CO2 can be estimated. The measured data is from the non-antropogenous source, but prediction can be done. To have the best result I have made a Best Fit Analize. The prediction should be parabolic because when the CO2 concentration grows smog or cloud arises that blocks sunlight from Earth, the only source of heat. The growing CO2 concentration part of the parabola can be approximated by linear trend. The other part of the emissions caused by the motorization is local or regional. Theoretically one solution could be to stop motorised transportation. Transportation cannot be replaced because it is the part of the production chain. Societies are horizontally and vertically differential. People live in different places and do different things for living. The manpower, the stock, the semi-finished and finished products must be transported. The importance of the transportation sector is indicated by the sector production which is 10% of the GDP of the European Union and more than 10 million people are working in this sector. One of the most emphasized goals of the transport policy of the European Union is sustainable mobility. For this reason transportation systems must be developed and standardized, the effectiveness of transportation service must be increased, while the environmental pollution must be decreased or prevented. This is a task for engineers and operators as well. People who would like to make rational decisions, make an optimization, choosing the maximum utility and benefit. Theoretically, all benefits and costs should be accounted in the analysis. Externalities should be internalised and indicated in the cost of transportation according to the EU guideline „Users should pay the billâ€. Some of the external costs can simply be added to the average costs but some of them need a totally different aspect and pricing method, the marginal costs based pricing method. The more realistic pricing method we want the more externalities should be included to the marginal costs based pricing method. Some of them can be calculated and monetized, some of them can be estimated, and some of them cannot be expressed in monetary terms. The environmental external effects of transport cover a wide range of different impacts, including for example noise, local/regional air pollution and climate change. Transport infrastructure projects often affect local and regional air pollution. Emissions from road traffic are good examples of a complex system with an output that cannot be completely measured. It is natural to analyze the emissions from a sample of vehicles under different driving conditions and other conditions (temperature, fuel content, road gradients, etc.) and to try to create an emission model for the traffic. Depending on what data are collected about the traffic the model may be more or less detailed and complex. Traffic data are not collected in the same way and with the same level of detail in every country and this is a problem if a model is meant to be used for calculations in many countries or for comparisons between them. The EURO standards based on the ECE-R15 driving cycle: [3] Each vehicle category has its own limits. The vehicle flow can be divided into groups by EURO standards and vehicle categories with its pollutant limits. Being aware of the vehicle numbers in each category multiplied with the limit they can be summarised. Now the pollutants can be calculated from the given vehicle flow and the given distance. [4] References: [1] [2] MC-ICAM Deliverables 4, 5, 6 - EU Commission DG TREN, 2003 [3] Vehicle Emission Standards and Inspection and Maintenance - Recent European Union (EU) emissions standards [4] Calculation of the emission surplus of the incoming vehicles in the traffic flow consideration of the international limits (in Hungarian) - Scientific Review of Transport – 2005/9 Adam Torok, Mate Zoldy
    Date: 2006–08
  17. By: Martin Winter (Workgroup for Infrastructure Policy (WIP), Technische Universität Berlin); Christian von Hirschhausen (Chair of Energy Economics and Public Sector Management, Technische Universität Dresden)
    Abstract: Our paper estimates the effects of an environmentally-oriented, time-differentiated road charging system for heavy duty vehicles (HDV) in Berlin. We develop a network based simulation model, which explicitly takes into account the interdependence between HDV and passenger car traffic. The model covers the whole metropolitan area. Our estimations of traffic effects are based on our own estimates of trip demand elasticities, as well as on data taken from other recent studies. Three main effects of the HDV toll are estimated: The potential reductions of air pollution, noise and congestion. The welfare effects of diminished air pollution due to lower traffic levels are computed, taking into account Berlin specific fleet emission data. For the valuation of noise effects we apply the Impact- Pathway-Approach: changes of health risks due to changes in traffic levels are calculated and expressed in monetary terms, using an immission model, dose-response-functions, and monetary values from other studies. In addition, we estimate the welfare effects of reduced congestion due to fewer trips, a changed routing behaviour and subsequent higher average speeds. It is concluded that while there is a social surplus of a Berlin city charge for HDV (about 25 million €), it may be smaller than the installation and operation cost of such a system.
    Keywords: North-South, growth model, innovation assimilation
    JEL: E32 R10
  18. By: David Meintrup; Chang Woon Nam
    Abstract: This study identifies the shadow market area of air pollutants based on the Gaussian plume model. Since pollutants are dispersed by wind, transport costs are irrelevant in its formation. Pollutant distribution on the ground level has an asymmetric bell-shape in the wind direction. Apart from the linear functions, the exponential and quadratic shadow price functions are considered for the compensation of health hazard of consumers, when the strict liability in the framework of Coase theorem applies. The shadow market area for pollutants is shell-shaped. This specific characteristic has an implication for market boundaries between polluters and their location decisions.
    Date: 2006–08
  19. By: Parry, Ian W.H. (Resources for the Future)
    Abstract: Energy models suggest that the cost of reducing carbon emissions from the transportation sector is high relative to other sectors, such as electricity generation. However, this paper shows that taxes to reduce passenger vehicle emissions produce large net benefits, rather than costs, when account is taken of (a) their impact on reducing non-carbon externalities from passenger vehicle use, and (b) interactions with the broader fiscal system. Both of these considerations also strengthen the case for using a tax-based approach to reduce emissions over fuel economy regulation, while fiscal considerations strengthen the case for taxes over (non-auctioned) emissions permits.
    Keywords: carbon policies, passenger vehicles, externalities, welfare costs
    JEL: Q54 R48 H23
    Date: 2006–12–07
  20. By: Jie He (GREDI, Département d'économique, Université de Sherbrooke)
    Abstract: This paper discusses the validity of the Environmental Kuznets Curve hypothesis for the case of China’s industrial SO2 emission through both reduced and structural model. The estimated Chinaspecific EKC curve for per capital industrial SO2 emission predicts the turning point of 9000 yuan (2750 USD, PPP). However, given China’s fast population expansion speed, the decreasing trend in the per capita emission will not bring an immediate reduction in total industrial SO2 emission. Our structural EKC model succeeds in decomposing industrial SO2 emission density into the contribution from its three famous structural determinants and a marginal impact from international trade. The latter is actually composed of a significantly negative direct impact and indirect ones going through the composition effect, which further depends on the current capital/labour abundance ratio and the actual income level of a province.
    Keywords: : China, EKC, international trade, SO2 emission, decomposition, pollution haven.
    JEL: Q53 Q56 O13
    Date: 2006
  21. By: Grischa Perino (University of Heidelberg, Department of Economics)
    Abstract: The performance of market based environmental regulation is affected by patents and vice versa. This interaction is studied for a new type of innovation where new technologies reduce emissions of a specific pollutant but at the same time cause a new type of damage. A robust finding is that the efficiency of permits is affected by monopoly pricing of the patent-holding firm. This result carries over to other types of innovation. Taxes are inefficient if technologies produce perfect substitutes and share all scarce inputs. Moreover, the optimal tax on pollution might be negative.
    Keywords: Innovation; Environment; Instrument Choice; Patents; Monopoly Pricing
    JEL: Q55 L5 H23 O3
    Date: 2006–07
  22. By: Frank Joest (University of Heidelberg, Department of Economics); Martin Quaas (UFZ-Centre for Environmental Research Leipzig-Halle, Department of Ecological Modelling); Johannes Schiller (UFZ-Centre for Environmental Research Leipzig-Halle, Department of Economics)
    Abstract: Population growth is often viewed as a most oppressive global problem with respect to environmental deterioration, but the relationships between population development, economic dynamics and environmental pollution are complex due to various feedback mechanisms. We analyze society’s economic decisions on birth rates, investment into human and physical capital, and polluting emissions within an optimal control model of the coupled demographic-economic-environmental system. We show that a long-run steady state is optimal that is characterized by a stable pollution stock, and by population and economic growth rates depending on the possibilities of emission abatement and technical progress due to human capital accumulation. We derive a condition on the production technologies and opportunity costs of raising children, under which the optimal birth rate is constant even during the transition to a steady state. In particular in an economy where only human capital is needed to produce output, the optimal choice of the birth rate is not affected by the states of the economy or the environment. In such a setting, the optimal birth rate is constant and policy should concentrate on intertemporal adjustment of per-capita emissions.
    Keywords: sustainability, endogenous fertility, externalities
    JEL: J18 O13 Q25
    Date: 2006–08
  23. By: George Halkos
    Abstract: This paper uses a dynamic panel data for 23 OECD and 50 non-OECD countries for the time period 1960-1990 in order to estimate the relationship between economic development (in the form of GDP) and environmental pollution (in the form of sulphur emissions)
    Date: 2006–08
  24. By: Bazhanov, Andrei
    Abstract: A technique for the construction of the model of nonrenewable resources depletion is offered. The approach is based on the assumption of the fulfillment of a variation principle. The model adequacy is examined with respect to world oil extraction data from 1859 to 2005. The possibilities of the use of the model in forecasting problems and in construction of the path of extraction, satisfying the intergenerational justice principle are discussed. Empirical justification of the hypothesis of the fulfillment of the Hamilton principle in resource economics gives an opportunity of the use of some laws of mechanics in economics.
    Keywords: nonrenewable resource; variation principle; intergenerational justice
    JEL: C63 Q32
    Date: 2005–08–08
  25. By: Alam, M. Shahid
    Abstract: This paper works out some of the basic properties of an economy with energy as a factor of production. The economy now consists of streams of energy conversions that direct energy to the production of goods and services. The focus on energy generates a variety of insights. It yields a new taxonomy of economies and economic activities; allows a better grasp of the tasks performed by labor and capital; raises the prospect of examining growth as the speeding up of machines; and identifies greater use of energy as an important source of growth. In addition, we use these results to explain the near stagnation in living standards in agrarian economies in the millennia before 1800, and the dramatic acceleration in growth since that date.
    Keywords: Economy; energy; capital; labor; growth; sources of growth; Adam Smith; John Stuart Mill; industrial revolution
    JEL: Q40 B0 O40 O47 Q01 D2
    Date: 2006–12–25

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