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on Energy Economics |
| By: | Ncemiddin Bagdadioglu (Department of Public Finance, Hacettepe University); Alparslan Basaran (Department of Public Finance, Hacettepe University); Catherine Waddams Price (Centre for Competition Policy, University of East Anglia) |
| Abstract: | This paper analyses the potential effect of electricity reform on different households, using a series of potential scenarios for price changes, and consumption information from the 2003 Turkish Household Expenditure Survey. Turkey is emerging as a regional energy market, hub, and transit country between Europe and Asia, and has been reforming her energy sector in line with EU Energy Acquis since 2001. Introducing a cost reflective tariff is an essential component of Turkish electricity reform. Yet, this tariff structure might create real hardship for, and thus strong opposition from, some households, which might not be compensated through the rather underdeveloped Turkish social security system. Perhaps to avoid the possible political costs of this before the general election of November 2007, the Turkish Government disregarded the sector regulator EMRA's insistence, and postponed pursuing such tariff for at least five years. Identifying these households, however, helps to anticipate opposition, and perhaps to mitigate it partially through compensation schemes. This might also facilitate Turkey's integration with the Energy Community of South East Europe created in 2005. To explore the likely effect of tariff changes on various groups of households we apply six scenarios. Firstly, we analyse the likely impact of EMRA's proposal of reflecting large regional variation in technical and non-technical losses. We also consider the effect of a potential efficiency saving from the proposed merger of distribution companies. Then, we explore the potential outcome of raising the currently low ratio of residential to industrial tariffs to OECD average. Furthermore, we study the effect of reducing the rather high level of taxes on households. Lastly, we examine the likely consequence of changing the present flat rate prices per kilowatt hour to a tariff which reflects more accurately the pattern of consumer-related and consumption-related costs. |
| Keywords: | Household survey, electric utilities, government policy |
| JEL: | D10 L94 Q48 |
| Date: | 2007–04 |
| URL: | http://d.repec.org/n?u=RePEc:ccp:wpaper:wp07-08&r=ene |
| By: | Andrea Coppola (University of Rome .Tor Vergata.) |
| Abstract: | Relying on the cost of carry model, we investigate the long-run relationship between spot and futures prices and use the information implied in these cointegrating relationships to forecast out of sample oil spot and futures price movements. In order to forecast oil price movements, we employ a Vector Error Correction Model (VECM), where the deviations from the long-run relationships between spot and futures prices constitute the equilibrium error. In order to evaluate forecasting performance we use the Random Walk Model (RWM) as a benchmark. We .nd that: (i) in-sample, the information in the futures market can explain a sizeable portion of oil price movements; (ii) out-of-sample, the VECM is able to beat the random walk model, both in terms of point forecasting and in terms of market timing ability |
| Keywords: | crude oil, futures market, forecasting. |
| JEL: | G1 Q3 Q4 |
| Date: | 2007–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:100&r=ene |
| By: | COPPOLA ANDREA |
| Abstract: | Relying on the cost of carry model, we investigate the long-run relationship between spot and futures prices and use the information implied in these cointegrating relationships to forecast out of sample oil spot and futures price movements. In order to forecast oil price movements, we employ a Vector Error Correction Model (VECM), where the deviations from the long-run relationships between spot and futures prices constitute the equilibrium error. In order to evaluate forecasting performance we use the Random Walk Model (RWM) as a benchmark. We find that: (i) in-sample, the information in the futures market can explain a sizeable portion of oil price movements; (ii) out-of-sample, the VECM is able to beat the random alk model, both in terms of point forecasting and in terms of market timing ability. |
| Date: | 2007–06 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceiswp:253&r=ene |
| By: | André MEUNIE (GREThA); Guillaume POUYANNE (GREThA) |
| Abstract: | The Environmental Kuznets Curve (EKC) has given rise to a flourishing literature since the beginning of the 90’s. The EKC postulates an inverted U-shaped relationship between income and polluting emissions: there would be a level of wealth beyond which polluting emissions would decrease. Surprisingly, this issue has rarely been applied to the cities. Yet we consider such a question as a pertinent one. This article aims at analyzing the Urban EKC (UEKC) hypothesis. It tests it with a sample of 37 cities in the world. Previous studies on the UEKC hypothesis are very scarce. They are the ground for us, to define a specific methodological posture. First, we use polluting emissions per capita instead of pollutants concentrations: thus we control for the influence of urban size. Second, we only take in account pollutants due to a unique source, which is daily mobility. This makes the explanation of the income-polluting emissions relation easier, as our comments are based on a specific, well constituted literature about factors of daily mobility. We expose the theoretical mechanisms by which the UEKC due to daily mobility could be validated. The impact of income on polluting emissions is threefold : behavioural, with a direct effect and an indirect one ; technical (the environmental efficiency of the vehicles increases) ; political (planning authorities wish to evolve towards a « sustainable mobility »). The empirical part of the paper is a test of the UEKC on a sample of 37 cities in the world. We present three important results. First, the estimation of quadratic regressions gives an inverted U-shaped relationship for most of the pollutants, which doesn’t permit to invalidate the UEKC hypothesis. Second, we show that the explanation of such curves is linked to two sets of factors: individual behaviours (e.g. modal choice) and collective choices (e.g. transit supply). Third, we discuss the validity of the UEKC hypothesis, that is we seek to explain the level of polluting emissions. As many factors are entangled, we use a principal components analysis to show that the influence of income may in fact reflect the influence of both urban form and consumers’ habits on polluting emissions due to daily mobility. |
| Keywords: | Environmental Kuznets Curve ; daily mobility ; urban ; polluting emissions |
| JEL: | Q53 Q56 R12 R14 R41 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2007-04&r=ene |
| By: | Basak Bayramoglu (PSE - Paris-Jourdan Sciences Economiques - [CNRS : UMR8545] - [Ecole des Hautes Etudes en Sciences Sociales][Ecole Nationale des Ponts et Chaussées][Ecole Normale Supérieure de Paris], CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I]); Jean-François Jacques (EQUIPE UNIVERSITAIRE DE RECHERCHE "INSTITUTIONS : COORDINATION, ORGANISATION" - EURIsCO - [Université Paris Dauphine - Paris IX]) |
| Abstract: | This note proposes an example which contradicts the idea that similar countries will negotiate an agreement on a uniform standard. It shows that strictly identical countries may have an interest in reducing their emissions differently, and not in a uniform way. This result relies on the existence of fixed costs in the abatement technology. Identical countries could be better off by signing an agreement on differentiated standards in order to exploit increasing returns to scale in the abatement activities. More specifically, one of the countries abates for both, and pays for the fixed cost of investment. In return, it is compensated by monetary transfers for this effort. We show that the level of fixed cost must be sufficiently high in this case. |
| Keywords: | Transboundary pollution, cooperative games, bargaining, standards, transfers, fixed cost. |
| Date: | 2007–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00159575_v1&r=ene |
| By: | Basak Bayramoglu (PSE - Paris-Jourdan Sciences Economiques - [CNRS : UMR8545] - [Ecole des Hautes Etudes en Sciences Sociales][Ecole Nationale des Ponts et Chaussées][Ecole Normale Supérieure de Paris], CES - Centre d'économie de la Sorbonne - [CNRS : UMR8174] - [Université Panthéon-Sorbonne - Paris I]) |
| Abstract: | This paper studies the link between the design of international environmental agreements and the incentives for the private sector to invest in cleaner technologies. More specifically, it compares the performance, in the Paretoo sense, of two types of agreement : an agreement on a uniform standard with transfers and an agreement on differentiated standards without transfers. To achieve this goal, we use a multi-stage game where the private sector anticipates its irreversible investment given the expected level of abatement standards, resulting from future bilateral negotiations. Our findings indicate that whenever countries are able to partially commit, the agreement on a uniform standard may be preferable, as it creates greater incentives for firms to invest in costly abatement technology. This result relies on the low level of the set-up cost of this technology. If this level is sufficiently high, the announcement and implementation of the agreement on a uniform standard with transfers is not optimal, because it takes away the incentive of all firms to invest in a new abatement technology. |
| Keywords: | agreements, standards, transfers, technology adoption, irreversible investment, bargaining, transboundary pollution. |
| Date: | 2007–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:papers:halshs-00159563_v1&r=ene |
| By: | Finger, Robert; Schmid, Stéphanie |
| Abstract: | A model that integrates biophysical simulations in an economic model is used to analyze the impact of climate change on crop production. The biophysical model simulates future plant-management-climate relationships and the economic model simulates farmers’ adaptation actions to climate change using a nonlinear programming approach. Beyond the development of average yields, special attention is devoted to the impact of climate change on crop yield variability. This study analyzes corn and winter wheat production on the Swiss Plateau with respect to climate change scenarios that cover the period of 2030-2050. In our model, adaptation options such as changes in seeding dates, changes in production intensity and the adoption of irrigation farming are considered. Different scenarios of climate change, output prices and farmers’ risk aversion are applied in order to show the sensitivity of adaptation strategies and crop yields, respectively, on these factors. Our results show that adaptation actions, yields and yield variation highly depend on both climate change and output prices. The sensitivity of adaptation options and yields, respectively, to prices and risk aversion for winter wheat is much lower than for corn because of different growing periods. In general, our results show that both corn and winter wheat yields increase in the next decades. In contrast to other studies, we find the coefficient of variation of corn and winter wheat yields to decrease. We therefore conclude that simple adaptation measures are sufficient to take advantage of climate change in Swiss crop farming. |
| Keywords: | climate change; robust estimation; yield variation; corn; winter wheat; market liberalization |
| JEL: | Q12 C61 C10 Q57 Q54 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:3943&r=ene |
| By: | Rajeev Dhawan; Karsten Jeske |
| Abstract: | Should a central bank accommodate energy price shocks? Should the central bank use core inflation or headline inflation with the volatile energy component in its Taylor rule? To answer these questions, we build a dynamic stochastic general equilibrium model with energy use, durable goods, and nominal rigidities to study the effects of an energy price shock and its impact on the macroeconomy when the central bank follows a Taylor rule. We then study how the economy performs under alternative parameterizations of the rule with different weights on headline and core inflation after an increase in the energy price. Our simulation results indicate that a central bank using core inflation in its Taylor rule does better than one using headline inflation because the output drop is less severe. In general, we show that the lower the weight on energy price inflation in the Taylor rule, the impact of an energy price increase on gross domestic product and inflation is also lower. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2007-14&r=ene |
| By: | Peter A. Groothuis; Jana D. Groothuis; John C. Whitehead |
| Abstract: | A willingness to accept framework is used to measure the compensation required to allow wind generation windmills to be built in the mountains of North Carolina. We address why the NIMBY syndrome may arise when choosing site locations, the perceived property rights of view-sheds, as well as the perceptions of the status quo in the southern Appalachian Mountains. We find that individuals who perceive wind energy as a clean source of power require less compensation. Those who retire to the mountains or individuals who have ancestors from Watauga County require more compensation to accept windmills in their view-shed. We find that annual compensation is about twenty three dollars per household. In the aggregate, citizens need to be compensated by about one-half million dollars a year to allow wind electrical generation turbines in Watauga County. In addition, we find in a bivariate-probit analysis that individuals who are more likely to participate in a green energy program also are more likely to allow electrical generation wind mills in their view-shed suggesting that the green on green environmental debate is overstated. |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:apl:wpaper:07-12&r=ene |
| By: | Catherine Waddams Price (Centre for Competition Policy, University of East Anglia); Karl Brazier (School of Computing Science, University of East Anglia); Khac Pham (Centre for Competition Policy, University of East Anglia); Laurence Mathieu (Centre for Competition Policy, University of East Anglia); Wenjia Wang (School of Computing Science, University of East Anglia) |
| Abstract: | The UK Government is committed to abolishing fuel poverty amongst vulnerable households by the year 2010 and in the general population by 2016, but definition and measurement of fuel poverty remains controversial. We define a new measure of subjective household experience and explore links between this measure and the official objective definition, using a unique data set and the Family Expenditure Survey. We identify the relation between the two measures; explore the characteristics of households in each group; and how each measure is related to other household factors. |
| Keywords: | Fuel poverty, energy expenditure |
| JEL: | L97 I38 C63 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:ccp:wpaper:wp07-11&r=ene |
| By: | Barbara Stoschek |
| Abstract: | This paper uses a political-economy framework to analyze what consequences the exogenous introduction of a quantitative restriction on total emissions in a small open economy has on the stringency of domestic trade policy. The question is whether and to what extent the government, if it takes different lobby groups´ interests into consideration, has an incentive to compensate the polluting industry for stricter environmental regulations by granting higher protection to it. It turns out that the government will indeed tend to increase subsidization of the industry affected by environmental regulation. This compensation will even be more than complete as long as environmental interests are taken into account. Hence, contrary to what might be expected, a net benefit for the polluting sector arises from environmental restrictions. |
| Keywords: | Environmental Regulations; International Competitiveness; Political |
| JEL: | F18 Q52 Q58 |
| Date: | 2007–06–26 |
| URL: | http://d.repec.org/n?u=RePEc:got:cegedp:65&r=ene |
| By: | Lorino, Philippe (ESSEC Business School) |
| Abstract: | Collective activity should be a focal subject to study organizational dynamics, particularly in relation with the implementation of management systems such as ERPs. Collective activity is analyzed here as an ongoing dialogical construction by actors. It is always mediated by signs and particularly by instruments. To design and adapt collective activity, a reflexive dialogical exchange between actors, a “collective activity about collective activity”, mediated by instruments, is necessary: we call it “the instrumental genesis of collective activity”. We analyze the case of an ERP implementation at EDF, a large electricity company, in the purchase and procurement area of the production division. The design and implementation of the new system was not clearly viewed as the instrumental genesis of collective activity. Difficulties appeared particularly for cross-functional cooperation and for the construction of new professional profiles of competence. In the light of this case, we suggest that key conditions for the intelligibility and the actionability of collective activity are the establishment of communities and the hybridization of professional competences. |
| Keywords: | Collective Activity; Collective Sensemaking; Community; Dialogical; ERP; Instruments; Instrumental Genesis of Activity; Interpretation; Sign |
| JEL: | Z00 |
| Date: | 2007–05 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-07014&r=ene |