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on Energy Economics |
| By: | Daniel M. Kammen; Majid Ezzati; Robert Bailis |
| Abstract: | We analyzed the mortality impacts and greenhouse gas (GHG) emissions produced by household energy use in Africa. Under a business-as-usual (BAU) scenario, household indoor air pollution will cause an estimated 9.8 million premature deaths by the year 2030. Gradual and rapid transitions to charcoal would delay 1.0 million and 2.8 million deaths, respectively; similar transitions to petroleum fuels would delay 1.3 million and 3.7 million deaths. Cumulative BAU GHG emissions will be 6.7 billion tons of carbon by 2050, which is 5.6% of Africa’s total emissions. Large shifts to the use of fossil fuels would reduce GHG emissions by 1 to 10%. Charcoalintensive future scenarios using current practices increase emissions by 140 to 190%; the increase can be reduced to 5 to 36% using currently available technologies for sustainable production or potentially reduced even more with investment in technological innovation. |
| Keywords: | Biomass, Petroleum, Energy, Africa |
| URL: | http://d.repec.org/n?u=RePEc:cis:africa:005&r=ene |
| By: | Marina Tsygankova (Statistics Norway) |
| Abstract: | Having exports from more than one Russian gas producer has been an important issue in the Russian–EU energy dialogue during the last decade. Nevertheless, in June 2006, Russian Federal law legalized the de facto export monopoly of Gazprom. Political and commercial interests have regularly explained the Russian strategy for the European gas market. However, it is important that economic efficiency is also taken into account. Economists often evaluate the efficiency of a policy through its effect on national welfare. In this paper, I examine both theoretically and numerically whether a liberalization of Russian gas exports would increase Russian national welfare, given that the Russian domestic market is already deregulated. The results of the paper show that the dominant position of Gazprom in the Russian gas industry might stimulate the government to support Gazprom's export monopoly. The market share of independent producers in the Russian gas market would have to be significantly increased for Russian export liberalization to be welfare enhancing. |
| Keywords: | Russia; Natural gas; export; monopoly; national welfare |
| JEL: | D43 D60 L13 Q38 |
| Date: | 2007–02 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:494&r=ene |
| By: | Christian von Hirschhausen |
| Abstract: | The objective of this paper is to analyze the development of US natural gas infrastructure over the last two decades and to discuss its perspectives. In particular, we focus on the relationship between the regulatory framework for the natural gas sector and the development of investment in LNG terminals, interstate pipelines, and storage facilities. We also discuss some cross-sectional investment issues related to financing (cost of capital, financial markets) and regulation (price caps, siting). We conclude that while some improvements in the regulatory framework might enhance investments in the US natural gas sector, there is no reason to be overly concerned about infrastructure investments, resource adequacy, or supply security. |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:0618&r=ene |
| By: | Gabriel De Paula |
| Abstract: | El control sobre los recursos naturales, la seguridad y el conflicto en los países de América del Sur, tal el título de la presente investigación, está en la actualidad en el tope de la agenda internacional. La presencia de la problemática en los foros intergubernamentales, en el tercer sector, y en la misma opinión pública da cuenta de que debe estudiarse desde la óptica de las relaciones internacionales. En la investigación abordaré el tema en dos partes. La primera tiene que ver estrictamente con la exploración teórica relacionada a los recursos naturales.En la segunda parte avanzo sobre el estudio de dos casos que llevan como título “El gas natural en Bolivia” y “El agua potable en la Argentina”. Estos dos casos dan cuenta de la problemática que afrontan y afrontarán los países Sudamericanos, y sobre la cual radica mi interés principal. El Objetivo General de la investigación es analizar los hechos conflictivos presentes y potenciales, relacionados con el control y la gestión sobre los recursos naturales estratégicos que existen en la región, tomando como estudio los casos del gas en Bolivia y el agua potable en la Argentina. |
| Keywords: | natural gas, water, natural resources, security, conflict, south america |
| URL: | http://d.repec.org/n?u=RePEc:cis:ebook0:007&r=ene |
| By: | Juan Recce |
| Abstract: | La finalidad del presente trabajo de investigación es explicar la construcción del interés nacional boliviano en materia gasífera y su consecuente política exterior. La confluencia de preferencias de los distintos grupos de interés determinan una lógica de resultante de fuerzas que reconfiguran el orden de preferencias del estado y redireccionan el rumbo de la política exterior. Tras el recurso cuantificable subyacen una serie de significaciones divergentes que hacen del gas un equívoco. El presente trabajo es un estudio de caso, en el que se intenta abordar una arista no explorada del juego político desatado en torno al gas en el Estado Boliviano y sus implicancias externas, desplegadas en los procesos de vinculación transnacional, multinacional e intergubernalmental |
| Keywords: | bolivia, gas, foreign policy |
| URL: | http://d.repec.org/n?u=RePEc:cis:ebook0:002&r=ene |
| By: | Marion PODESTA |
| Abstract: | Dans cet article nous nous proposons d'analyser les effets de l'ouverture à la concurrence sur les stratégies de tarification des ventes liées à travers un modèle de choix discret. Nous montrons que dans une situation de duopole vendre les biens de manière indépendante est un équilibre de Nash pareto dominant pour les deux firmes, cependant elles peuvent également se coordonner sur d'autres équilibres et notamment suivre une stratégie de ventes liées. Ce résultat vient à l'encontre de celui du monopole qui incite les firmes à pratiquer une stratégie de tarification mixte, alors que dans un environnement duopolistique, l'intensité concurrentielle domine l'effet positif des ventes liées via la discrimination par les prix. |
| JEL: | D43 L13 Q4 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:mop:credwp:06.66&r=ene |
| By: | Frédéric Marty (Observatoire Français des Conjonctures Économiques) |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fce:doctra:0705&r=ene |
| By: | Paul L. Joskow |
| Abstract: | This paper examines the economic and regulatory challenges that must be faced by potential investors in new nuclear power plants in the United States. The historical development of the existing fleet of over 100 nuclear plants and their recent performance history are discussed. The pattern of re-licensing of existing plants and the implications for the role of the extended operation of the existing fleet in the overall electricity supply portfolio over the next 50 years is examined. The economic competitiveness of investments in new nuclear power plants compared to investments in alternative base load technologies is discussed under a variety of assumptions about construction costs, fuel costs, competitive and economic regulatory environments and various levels of carbon emissions prices affected competing fossil-fueled technologies. Federal government efforts to facilitate investment in new nuclear power plants, including streamlined licensing procedures and financial incentive provided by the Energy Policy Act of 2005 are discussed. These regulatory changes and financial incentives improve the economic competitiveness of nuclear power. First mover plants that can benefit from federal financial incentives are most likely to be built in states that continue to regulate generating plants based on cost-of-service principles, transferring construction cost and operating performance risks to consumers, and where there is room on existing sites to build additional nuclear capacity. Once federal financial incentives come to an end lower and more stable construction costs combined with carbon emissions charges are likely to be necessary to make investments in new nuclear plants significantly more attractive than investments in pulverized coal plants. Unresolved waste disposal policies and local opposition to new nuclear plants are likely to represent barriers to investment in new nuclear power plants in some areas of the country. |
| Date: | 2006–12 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:0619&r=ene |
| By: | Böhringer, Christoph; Rutherford, Thomas F. |
| Abstract: | The formulation of market equilibrium problems as mixed complementarity problems (MCP) permits integration of bottom-up programming models of the energy system into top-down general equilibrium models of the overall economy. Despite the coherence and logical appeal of the integrated MCP approach, implementation cost and dimensionality both impose limitations on its practical application. A complementarity representation involves both primal and dual relationships, often doubling the number of equations and the scope for error. When an underlying optimization model of the energy system includes upper and lower bounds on many decision variables the MCP formulation may suffer in robustness and efficiency. While bounds can be included in the MCP framework, the treatment of associated income effects is awkward. We present a decomposition of the integrated MCP formulation that permits a convenient combination of top-down general equilibrium models and bottom-up energy system models for energy policy analysis. We advocate the use of complementarity methods to solve the top-down economic equilibrium model and quadratic programming to solve the underlying bottom-up energy supply model. A simple iterative procedure reconciles the equilibrium prices and quantities between both models. We illustrate this approach using a simple stylized model. |
| Keywords: | Mathematical Programming, Mixed Complementarity, Top-Down/Bottom-Up |
| JEL: | C61 C68 D58 Q43 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:4586&r=ene |
| By: | Necmiddin Bagdadioglu (Dept of Public Finance, Haceteppe University, Turkey); Thomas Weyman-Jones (Department of Economics, Loughborough University, UK) |
| Abstract: | This paper considers panel data procedures for regulatory benchmarking that allow for both latent heterogeneity and inefficiency, encapsulating the regulatory dilemma in comparative efficiency analysis for incentive regulation. It applies a distance function model with appropriate concavity properties for econometric estimation to a panel of electricity distribution utilities in Turkey, since electricity industry reform is a major policy issue there. The results confirm the importance of allowing simultaneously for heterogeneity and inefficiency and emphasise the need for specific time-invariant heterogeneity information, such as geographical data, on regulated utilities in different regions. |
| Keywords: | efficiency and productivity analysis, regulation, electricity distribution. |
| JEL: | L51 D24 C23 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:lbo:lbowps:2007_03&r=ene |
| By: | Pierre-André Jouvet; Philippe Michel; Gilles Rotillon |
| Abstract: | We study the optimal growth path and its decentralization in an overlapping generations model with two consumption goods and pollution effect. We consider two production sector i.e. one with a direct effect of pollution and the other with an indirect pollution effect by using energy. In the presence of externalities, decentralization of an optimal path needs some specific taxes in addition to lump-sum transfers. The introduction of a market for pollution permits, concerning only the polluting sector, neutralizes the external environmental effects. We show that there is a unique management of permits such that the equilibrium coincides with the optimal path: all permits should be auctioned i.e. no free permits to firms. This conclusion is in contradiction with the usual practice of grandfathering. |
| Keywords: | Optimal growth, environment, market of permits. |
| JEL: | D61 D9 Q28 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2006-1&r=ene |
| By: | Robert S. Pindyck |
| Abstract: | In a world of certainty, the design of environmental policy is relatively straightforward, and boils down to maximizing the present value of the flow of social benefits minus costs. But the real world is one of considerable uncertainty – over the physical and ecological impact of pollution, over the economic costs and benefits of reducing it, and over the discount rates that should be used to compute present values. The implications of uncertainty are complicated by the fact that most environmental policy problems involve highly nonlinear damage functions, important irreversibilities, and long time horizons. Correctly incorporating uncertainty in policy design is therefore one of the more interesting and important research areas in environmental economics. This paper offers no easy formulas or solutions for treating uncertainty – to my knowledge, none exist. Instead, I try to clarify the ways in which various kinds of uncertainties will affect optimal policy design, and summarize what we know and don’t know about the problem. |
| Date: | 2006–11 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:0617&r=ene |
| By: | Anger, Niels; Böhringer, Christoph; Lange, Andreas |
| Abstract: | In this paper we study political-economy determinants of the differentiation of environmental taxes between sectors. Using a common-agency model, we provide predictions on tax differentiation which are then tested using data from the German Ecological Tax Reform. As the reform is revenue neutral and reduces labor costs, tax differentiation is not only determined by the activity of lobby groups favoring reduced tax rates, but also by the groups’ interest in revenue rebates to labor. Empirical data underpin our theoretical findings: A regression analysis of Germany’s green tax reform explains environmental tax differentiation by the presence of sectoral interest groups. Besides market concentration and energy demand elasticities, the exposure of industries to international trade flows plays an important role in the environmental tax design. |
| Keywords: | environmental tax reform, interest groups, common agency |
| JEL: | D62 H23 P16 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:4582&r=ene |
| By: | Thierry Bréchet; Pierre-André Jouvet |
| Abstract: | Empirical evidence support the existence of pollution abatement possibilities at negative costs, the so-called 'no-regret options'. We provide a microeconomic rationale for the existence of such potential at the firm's level under environmental regulation. An econometric application confirms that marginal pollution abatement cost curves with no-regret options are compatible with a standard production function, as stated in our theoretical model. |
| Keywords: | No-regret options, pollution, regulation |
| JEL: | D20 Q50 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2006-12&r=ene |
| By: | Yusuf, Arief Anshory |
| Abstract: | Using a technology where pollution is regarded as by-product of industry's activity and applied in a simple setup of Heckscher-Ohlin-Copeland-Taylor model, this paper analyses the possible distributional impacts of stricter environmental policy in a developing country characterized by the presence of labor-intensive informal sector which may not be a subject to the environmental regulation, and capital intensive formal sector which may face minimum wage policy. The comparative static analysis illustrates that stricter environmental regulation if enforced uniformly accross industries in undistorted labor market, hurts both labor and capital owner, leaving income ditribution unchanged. On the contrary, when economy is dualistic, income distribution may change due to labor reallocation. When the stricter regulation can only be enforced in formal sector, capital owner will be worse-off while labor are better-off. If initially capital reward is higher, the environmental policy will improve income distribution in favor of labor. The change in income distribution is greater when economy is dualistic. |
| Keywords: | Environmental Policy; Dualistic Economy; Distribution |
| JEL: | Q52 O17 |
| Date: | 2007–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:1735&r=ene |
| By: | Pierre-André Jouvet; Fabien Prieur |
| Abstract: | We develop an overlapping generations model of growth in which production generates polluting harmful emissions. In order to control pollution, the government implements an emission permits system. However, subject to political constraints, it is not able to assign the optimal quota on emissions. Hence, in such a framework, regulating pollution solely by permits does not allow the decentralized economy to achieve the long run social optimum. Our contribution is then to show that the combination of the existing permits system with a policy intended to promote a price discrimination between agents on the permits market, is a mean not only to circumvent these rigidities but also to restore the Pareto optimality of the equilibrium. |
| JEL: | D91 Q28 H23 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2006-21&r=ene |
| By: | Böhringer, Christoph; Koschel, Henrike; Moslener, Ulf |
| Abstract: | Energy markets and energy-intensive industries in all EU member states – especially in Germany – are subject to a diverse set of policies related to climate change. We analyse the potential efficiency losses from simultaneous application of emission taxes and emissions trading in qualitative and quantitative terms within a partial equilibrium framework for the EU. It turns out that those firms within the EU Emissions Trading Scheme (EU ETS) which at the same time are subject to domestic energy or carbon taxes will abate inefficiently much while other firms within the EU ETS will benefit from lower international emission permit prices. The same logic disproves the argument that additional national emission taxes will reduce inefficiencies in abatement supposed to be resulting from allowance (over-) allocation. In essence, unilateral emission taxes within the EU ETS are ecologically ineffective and subsidise net permit buyers. Thus, all firms that are subject to emissions trading and any CO2 emission taxes at the same time should be exempt from the latter. The foregone tax revenue could be generated by auctioning a small fraction of the permits instead. This would be cheaper for the emissions trading sectors as a whole and could be compatible even with the tight auctioning restrictions of the EU directive. |
| Keywords: | emissions trading, emission taxes, National Allocation Plans |
| JEL: | D61 H21 H22 Q58 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:4597&r=ene |
| By: | Böhringer, Christoph; Moslener, Ulf; Sturm, Bodo |
| Abstract: | Since January 1st the European Union has launched an EU-internal emissions trading scheme (EU ETS) for emission-intensive installations as the central pillar to comply with the Kyoto Protocol. The EU ETS may be linked at some time to a Kyoto emissions market where greenhouse gas emission allowances of signatory Kyoto countries can be traded. In this paper we investigate the implications of Russian market power for environmental effectiveness and regional compliance costs to the Kyoto Protocol taking into account potential linkages between the Kyoto emissions market and the EU ETS. We find that Russia may have incentives to join the EU ETS as long as the latter remains separated from the Kyoto international emissions market. In this case, Russia can exert monopolistic price discrimination between two separated markets thereby maximizing revenues from hot air sales. The EU will be able to substantially reduce compliance costs when it does not restrain itself to EU-internal emission regulation schemes. However, part of the gains from extra-EU emissions trading will come at the expense of environmental effectiveness as (more) hot air will be drawn in. |
| Keywords: | market power, hot air, climate policy |
| JEL: | D42 Q25 |
| Date: | 2006 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:4595&r=ene |
| By: | Wittneben, B.B.F. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | The differences in the way climate change mitigation projects are facilitated under the Kyoto Protocol as compared to the financial mechanism of the United Nations Framework Convention on Climate Change (UNFCCC) demonstrate institutional change processes that evolved from global climate change negotiations. Institutional change happens when new practices become accepted and interactions between organizations carry new meanings. Models of the two policy options are presented in this paper depicting organizational interactions to demonstrate the evolution of rule-setting in this arena. A discussion of power implications is provided with the conclusion that countries of the North as well as business corporations have increased their influence in the institutional framework of international climate change mitigation. Institutional theory needs to be further developed to be able to explain the dynamic changes that led to this shift in power potential. |
| Keywords: | Power relations;Institutional change;Institutional theory;Climate change;Environmental policy; |
| Date: | 2007–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:30009606&r=ene |
| By: | Yusuf, Arief Anshory; Koundouri, Phoebe |
| Abstract: | Hedonic pricing studies estimating the value of clean air in developing countries have been constrained, by the absence of accurate pollution data. Although less accurate pollution data, produced through measurements based on environmental modeling, exists, if used in estimation is subject to attenuation bias due to measurement error in pollution. We show that, when pollution is spatially correlated, instrumental variable regression, using average pollution of the neighbouring observations as the instrument, can produce consistent estimation of the pollution coefficient of the hedonic function. We apply our approach to the Jakarta housing market. |
| Keywords: | Hedonic price; measurement error; air pollution |
| JEL: | Q51 C20 |
| Date: | 2006–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:1729&r=ene |
| By: | Cinzia Di Novi (Collegio Carlo Alberto, University of Turin and Department of Public Policy and Public Choice - POLIS, University of Eastern Piedmont, Alessandria) |
| Abstract: | This paper uses the Behavioral Risk Factor Surveillance System (2001) data in conjunctions with Environmental Protection Agency data to investigate on how individual health habits, air outdoor pollution and diseases combine to affect the likelihood of good health status and the amount of health investments. The environment is a second-best world characterized by uncertainty on the level of health, in which individuals are not able to avoid health shocks completely. Models are estimated using three different measures of overall health: a measure of self-assessed health and two health outcomes indicators (blood pressure and activity limitations due to health problems). |
| Keywords: | Health production, multivariate probit, life-style, pollution, self-assessed health, health outcome |
| JEL: | I12 C31 D13 D81 Q25 |
| Date: | 2007–01 |
| URL: | http://d.repec.org/n?u=RePEc:jep:wpaper:07001&r=ene |
| By: | Thierry, BRECHET (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics); Henry, TULKENS (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics) |
| Abstract: | Technological choices are multi-dimensional and thus one needs a multidimensional methodology to identify best available techniques. Moreover, in the presence of environmental externalities generated by productive activities, ÔbestÕ available techniques should be best from SocietyÕs point of view, not only in terms of private interests. In this paper we develop a comprehensive modeling tool, based on methodologies appropriate to serve these two purposes, namely linear programming and internalization of external costs. We conclude that in this context there is in general not a single best available technique (BAT), but well a best combination of available techniques to be used (BCAT). We take a fictitious but plausible numerical example in the lime industry. For a hypothetical plant that has to meet a given demand, we build an original technical economic model within which two scenarios are considered : minimizing the private costs and minimizing the generalized costs (private costs plus external costs). In the first case, only the cheapest fuel is used in all kilns. But in the second case, where the environmental external costs are included, fuel switches occur and cleaner techniques are used. Estending the analysis to the choice of kilns, we find that the socially best combination of available techniques (S-BCAT) is not a fixed one : it varies as a function of the external costs. We therefore trace in a single diagram the whole profile of these best techniques as successive solutions of our linear programs. We conclude by stressing that external cost internallization does influence not only the choice of techniques, but also their appropriate use. Moreover, local environmental conditions play a major role in that choice and in determining that use. |
| Keywords: | Best available techniques, eco-efficiency, IPPC |
| JEL: | D20 Q50 |
| Date: | 2006–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvec:2006060&r=ene |
| By: | Fleischer, Aliza; Lichtman, Ivgenia; Mendelsohn, Robert |
| Abstract: | The authors use a Ricardian model to test the relationship between annual net revenues and climate across Israeli farms. They find that it is important to include the amount of irrigation water available to each farm in order to measure the response of farms to climate. With irrigation water omitted, the model predicts that climate change is strictly beneficial. But with water included, the model predicts that only modest climate changes are beneficial, while drastic climate change in the long run will be harmful. Using the Atmospheric Oceanic Global Circulation Models scenarios, the authors show that farm net revenue is expected to increase by 16 percent in 2020, while in 2100 farm net revenue is expected to drop by 60-390 percent varying between the different scenarios. Although Israel has a relatively warm climate, a mild increase in temperature is beneficial due to the ability to supply international markets with farm products early in the season. The findings lead to the conclusion that securing water rights to the farmers and international trade agreements can be important policy measures to help farmers adapt to climate change. |
| Keywords: | Climate Change,Water Supply and Sanitation Governance and Institutions,Water Supply and Systems,Water and Industry,Common Property Resource Development |
| Date: | 2007–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4135&r=ene |
| By: | Dasgupta, Susmita; Laplante, Benoit; Meisner, Craig; Wheeler, David; Jianping Yan |
| Abstract: | Sea level rise (SLR) due to climate change is a serious global threat. The scientific evidence is now overwhelming. Continued growth of greenhouse gas emissions and associated global warming could well promote SLR of 1m-3m in this century, and unexpectedly rapid breakup of the Greenland and West Antarctic ice sheets might produce a 5m SLR. In this paper, the authors have assessed the consequences of continued SLR for 84 developing countries. Geographic Information System (GIS) software has been used to overlay the best available, spatially-disaggregated global data on critical impact elements (land, population, agriculture, urban extent, wetlands, and GDP) with the inundation zones projected for 1-5m SLR. The results reveal that hundreds of millions of people in the developing world are likely to be displaced by SLR within this century, and accompanying economic and ecological damage will be severe for many. At the country level, results are extremely skewed, with severe impacts limited to a relatively small number of countries. For these countries (such as Vietnam, A. R. of Egypt, and The Bahamas), however, the consequences of SLR are potentially catastrophic. For many others, including some of the largest (such as China), the absolute magnitudes of potential impacts are very large. At the other extreme, many developing countries experience limited impacts. Among regions, East Asia and the Middle East and North Africa exhibit the greatest relative impacts. To date, there is little evidence that the international community has seriously considered the implications of SLR for population location and infrastructure planning in developing countries. The authors hope that the information provided in this paper will encourage immediate planning for adaptation. |
| Keywords: | Wetlands,Climate Change,Population Policies,Country Strategy & Performance,Geographical Information Systems |
| Date: | 2007–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4136&r=ene |