nep-ene New Economics Papers
on Energy Economics
Issue of 2007‒06‒18
five papers chosen by
Roger Fouquet
Imperial College, UK

  1. Assessment of U.S. Cap-and-Trade Proposals By Sergey Paltsev; John M. Reilly; Henry D. Jacoby; Angelo C. Gurgel; Gilbert E. Metcalf; Andrei P. Sokolov; Jennifer F. Holak
  2. Pareto-efficient climate agreements By Geir B. Asheim and Bjart Holtsmark
  3. Price Volatility of the Mexican Export Crude Oil Blend By Dávila-Pérez, Javier; Nuñez-Mora, Jose Antonio; Ruiz-Porras, Antonio
  4. When and why does it pay to be green? By Stefan Ambec; Paul Lanoie
  5. Les biocarburants : d’une génération a l’autre By Alain Mathieu

  1. By: Sergey Paltsev; John M. Reilly; Henry D. Jacoby; Angelo C. Gurgel; Gilbert E. Metcalf; Andrei P. Sokolov; Jennifer F. Holak
    Abstract: The MIT Emissions Prediction and Policy Analysis model is applied to synthetic policies that match key attributes of a set of cap-and-trade proposals being considered by the U.S. Congress in spring 2007. The bills fall into two groups: one specifies emissions reductions of 50% to 80% below 1990 levels by 2050; the other establishes a tightening target for emissions intensity and stipulates a time-path for a "safety valve" limit on the emission price that approximately stabilizes U.S. emissions at the 2008 level. Initial period prices are estimated between $7 and $50 per ton CO2-e with these prices rising by a factor of four by 2050. Welfare costs vary from near zero to less than 0.5% at the start, rising in the most stringent case to near 2% in 2050. If allowances were auctioned these proposals could produce revenue between $100 billion and $500 billion per year depending on the case. Outcomes from U.S. policies depend on mitigation effort abroads, and simulations are provided to illuminate terms-of-trade effects that influence the emissions prices and welfare effects, and even the environmental effectiveness, of U.S. actions. Sensitivity tests also are provided of several of key design features. Finally, the U.S. proposals, and the assumptions about effort elsewhere, are extended to 2100 to allow exploration of the potential role of these bills in the longer-term challenge of reducing climate change risk. Simulations show that the 50% to 80% targets are consistent with global goals of atmospheric stabilization at 450 to 550 ppmv CO2 but only if other nations, including the developing countries, follow suit.
    JEL: Q4 Q48 Q54
    Date: 2007–06
  2. By: Geir B. Asheim and Bjart Holtsmark (Statistics Norway)
    Abstract: Recent contributions show that climate agreements with broad participation can be implemented as weakly renegotiation-proof equilibria in simple models of greenhouse gas abatement where each country has a binary choice between cooperating (i.e., abate emissions) or defecting (no abatement). Here we show that this result carries over to a model where countries have a continuum of emission choices. Indeed, a Pareto-efficient climate agreement can always be implemented as a weakly renegotiation-proof equilibrium, for a sufficiently high discount factor. This means that one need not trade-off a “narrow but deep” treaty with a “broad but shallow” treaty.
    Keywords: Climate; non-cooperative game-theory; repeated games; weakly renegotiation-proof agreements
    JEL: C72 F53 Q54
    Date: 2007–06
  3. By: Dávila-Pérez, Javier; Nuñez-Mora, Jose Antonio; Ruiz-Porras, Antonio
    Abstract: We propose a model to estimate the price volatility in of the Mexican Export Crude Oil Blend. The analysis relies on the conditional standard deviations obtained from a GARCH model. Data includes diary oil prices between January 2nd, 1998 and February 14th, 2007. The chosen model is of the GARCH (1,1) type. Asymmetric volatility effects are not detected. Furthermore, the results are compared with an estimate of the historic volatility based on previous returns. Such comparison confirms the convergence of the estimated GARCH conditional variance to its own non conditional one.
    Keywords: Volatility; Oil; ARCH-GARCH Models
    JEL: C53 C22
    Date: 2007–03–21
  4. By: Stefan Ambec; Paul Lanoie (IEA, HEC Montréal)
    Keywords: Environmental policy; innovation; Porter hypothesis; environmental regulation; pollution; capital market; green products.
    JEL: D21 D23 G22
    Date: 2007–05
  5. By: Alain Mathieu
    Abstract: Diverses externalités négatives peuvent hypothéquer l’avenir des biocarburants de première génération. Les biocarburants de seconde génération, relevant de la filière lignocellulosique, sont exempts de telles critiques. Il reste à savoir dans quelle mesure une matière première considérée traditionnellement comme biocombustible va pouvoir franchir le cap de la recherche pour constituer un biocarburant compétitif. Ces questions sont examinées dans ce document.
    Keywords: Biocarburants, Externalités, Energies Renouvelables
    Date: 2007

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