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on Energy Economics |
| By: | Block, Paul J. |
| Abstract: | "Ethiopia is at a critical crossroads with a large and increasing population, a depressed national economy, insufficient agricultural production, and a low number of developed energy sources. The upper Blue Nile basin harbors considerable untapped potential for irrigation and hydropower development and expansion. Numerous hydrologic models have been developed to assess hydropower and agricultural irrigation potential within the basin, yet often fail to adequately address critical aspects, including the transient stages of large-scale reservoirs, relevant flow retention policies and associated downstream ramifications, and the implications of stochastic modeling of variable climate and climate change. A hydrologic model with dynamic climate capabilities is constructed to assess these aspects. The model indicates that large-scale development typically produces benefit-cost ratios from 1.2-1.8 under historical climate regimes for the projects specified. Climate change scenarios indicate potential for small benefit-cost increases, but reflect possible significant decreases. Stochastic modeling of scenarios representing a doubling of the historical frequency of El Niño events indicates benefit-cost ratios as low as 1.0 due to a lack of timely water. An evaluation of expected energy growth rates reinforces the need for significant economic planning and the necessity of securing energy trade contracts prior to extensive development. A Ramsey growth model for energy development specifies project multipliers on total GDP over the 100-year simulation ranging from 1.7-5.2, for various climatologic conditions." Author's Abstract |
| Keywords: | Water resources development, Hydrologic model, Energy, Climate variability, Climate change, Irrigation, |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:700&r=ene |
| By: | Melolinna, Marko (Bank of Finland Research) |
| Abstract: | This paper introduces a methodology for identifying oil supply shocks in a restricted VAR system for a small open economy. Financial market information is used to construct an identification scheme that forces the response of the restricted VAR model to an oil shock to be the same as that implied by futures markets. Impulse responses are then calculated by using a bootstrapping procedure for partial identification. The methodology is applied to Finland and Sweden in illustrative examples in a simple 5-variable model. While oil supply shocks have an inflationary effect on domestic inflation in these countries during the past decade or so, the effect on domestic GDP is more ambiguous. |
| Keywords: | oil futures; partial identification; macroeconomic shocks |
| JEL: | C01 E32 E44 |
| Date: | 2008–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofrdp:2008_009&r=ene |
| By: | Nhemachena, Charles; Hassan, Rashid M. |
| Abstract: | "Adaptation to climate change involves changes in agricultural management practices in response to changes in climate conditions. It often involves a combination of various individual responses at the farm-level and assumes that farmers have access to alternative practices and technologies available in the region. This study examines farmer adaptation strategies to climate change in Southern Africa based on a cross-section database of three countries (South Africa, Zambia and Zimbabwe) collected as part of the Global Environment Facility/World Bank (GEF/WB) Climate Change and African Agriculture Project. The study describes farmer perceptions to changes in long-term temperature and precipitation as well as various farm-level adaptation measures and barriers to adaptation at the farm household level. A multivariate discrete choice model is used to identify the determinants of farm-level adaptation strategies. Results confirm that access to credit and extension and awareness of climate change are some of the important determinants of farm-level adaptation. An important policy message from these results is that enhanced access to credit, information (climatic and agronomic) as well as to markets (input and output) can significantly increase farm-level adaptation. Government policies should support research and development on appropriate technologies to help farmers adapt to changes in climatic conditions. Examples of such policy measures include crop development, improving climate information forecasting, and promoting appropriate farm-level adaptation measures such as use of irrigation technologies." from Authors' Abstract |
| Keywords: | Climate change, Adaptation, |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:714&r=ene |
| By: | Hertel, Thomas; Rose, Steven; Tol, Richard |
| Abstract: | *Chapter 1 of the forthcoming book "Economic Analysis of Land Use in Global Climate Change Policy," edited by Thomas W. Hertel, Steven Rose, and Richard S.J. Tol |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:gta:workpp:2595&r=ene |
| By: | Joris Morbée; Stef Proost |
| Abstract: | In the course of 2006, Gazprom sharply increased gas prices for Ukraine, Belarus, Georgia and Moldova. This paper assesses (i) to what extent Europe is vulnerable to similar use of market power by Russia, and (ii) to what extent the construction of strategic gas storage could help Europe to reduce its vulnerability. The European market for imported gas is described by differentiated Cournot competition between Russia and other – potentially more reliable – suppliers, in particular LNG imports. The results show that Russian market power is limited, because demand is not completely inelastic even in the short run. Moreover, if Russia’s unreliability increases (or if European short-run demand elasticity decreases) Russia gives away more and more of its expected profits to the other suppliers. For Europe, buying gas from more reliable suppliers at a price premium turns out to be more attractive than building storage capacity. |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:ces0802&r=ene |
| By: | Zhang, Xiaobo; Xing, Li; Fan, Shenggen; Luo, Xiaopeng |
| Abstract: | "Over the past several decades, China has made tremendous progress in market integration and infrastructure development. Demand for natural resources has increased from the booming coastal economies, causing the terms of trade to favor the resource sector, which is predominantly based in the interior regions of the country. However, the gap in economic development level between the coastal and inland regions has widened significantly. In this paper, using a panel data set at the provincial level, we show that Chinese provinces with abundant resources perform worse than their resource-poor counterparts in terms of per capita consumption growth. This trend that resource-poor areas are better off than resource-rich areas is particularly prominent in rural areas. Because of the institutional arrangements regarding property rights of natural resources, most gains from the resource boom have been captured either by the government or state owned enterprises. Thus, the windfall of natural resources has more to do with government consumption than household consumption. Moreover, in resource-rich areas, greater revenues accrued from natural resources bid up the price of non-tradable goods and hurt the competitiveness of the local economy." from Authors' Abstract |
| Keywords: | Regional inequality, Resource curse, Dutch disease, Property rights, Rural-urban linkages, |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:713&r=ene |
| By: | Gérard Gaudet; Pierre Lasserre |
| Abstract: | Uncertainties as to future supply costs of nonrenewable natural resources, such as oil and gas, raise the issue of the choice of supply sources. In a perfectly deterministic world, an efficient use of multiple sources of supply requires that any given market exhausts the supply it can draw from a low cost source before moving on to a higher cost one; supply sources should be exploited in strict sequence of increasing marginal cost, with a high cost source being left untouched as long as a less costly source is available. We find that this may not be the efficient thing to do in a stochastic world. We show that there exist conditions under which it can be efficient to use a risky supply source in order to conserve a cheaper non risky source. The benefit of doing this comes from the fact that it leaves open the possibility of using it instead of the risky source in the event the latter’s future cost conditions suddenly deteriorate. There are also conditions under which it will be efficient to use a more costly non risky source while a less costly risky source is still available. The reason is that this conserves the less costly risky source in order to use it in the event of a possible future drop in its cost. <P>L’incertitude sur le coût futur d’une ressource non renouvelable telle le pétrole ou le gaz pose la question du choix des sources d’approvisionnement. Dans un monde déterministe, l’utilisation efficace de sources multiples exige que tout marché épuise une source de coût relativement faible avant de passer à une source de coût plus élevé; l’utilisation des sources d’approvisionnement doit se faire strictement par ordre de coût marginal croissant; on ne touchera à aucune source de coût élevé tant qu’existe une source moins coûteuse. Nous montrons que cette règle n’est pas forcément efficace en univers stochastique. Il existe des conditions sous lesquelles il peut être efficace de recourir à une source risquée pour conserver une ressource moins coûteuse non risquée. Une telle stratégie permet de se réserver la possibilité d’utiliser cette dernière au cas où les conditions d’accès à la source risquée se détérioreraient subitement. Il existe également des conditions sous lesquelles il sera efficace d’utiliser une source plus coûteuse mais non risquée alors qu’une source risquée mais meilleur marché est toujours disponible. Dans ce cas, il s’agit d’économiser la source bon marché dans l’éventualité d’une baisse possible de son coût, qui la rendrait encore plus intéressante. |
| Keywords: | Security of supply, uncertainty, nonrenewable resources, order of use, sécurité d’approvisionnement, incertitude, ordre d’utilisation |
| JEL: | Q31 D81 D90 |
| Date: | 2008–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2008s-08&r=ene |
| By: | Clemens Heuson (University of Augsburg, Department of Economics) |
| Abstract: | It is well known that uncertainty concerning firms’ costs as well as market power of the latter have to be taken into account in order to design and choose environmental policy instruments in an optimal way. As a matter of fact, in most actual regulation settings the policy maker has to face both of these complications simultaneously. However, hitherto environmental economic theory has restricted to either of them when submitting conventional policy instruments to a comparative analysis. The article at hand takes a first step in closing this gap. It investigates the welfare effects of emission standards and taxes against the background of uncertain emission control costs and various degrees of the polluting firms’ market power. |
| Keywords: | Cournot oligopoly, external diseconomies of pollution, cost uncertainty, emission standard, emission tax |
| JEL: | D62 D89 L13 Q58 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:aug:augsbe:0299&r=ene |
| By: | Solveig Glomsrød, Gang Liu, Taoyuan Wei and Jens B. Aune (Statistics Norway) |
| Abstract: | This paper studies the effect of a CDM tree-planting project on carbon sequestration and urban and rural income distribution, taking economy-wide impacts into account. Carbon sequestration in agricultural soil is considered in addition to the carbon in the tree farm itself. The study points to that project designs that raise the general investment level may add substantially to the project's carbon capture by stimulating the productivity of agriculture, thus binding more carbon in soil. As demand for crops is rising, the mode of agricultural production turns more intensive and improved plant growth leaves more plant residues for uptake as soil organic carbon. As for the income effect, the non-poor benefit more than the poor in economic terms, except when the project is hosted by the rural poorest. Foreign owned projects withdrawing the project surplus may turn out to reduce the income of urban poor and does not enhance agricultural productivity and beyond-project carbon sequestration. |
| Keywords: | CDM; afforestation; poverty reduction; CGE; Tanzania |
| JEL: | D58 O13 Q52 Q56 Q58 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:534&r=ene |
| By: | Clemens Heuson (University of Augsburg, Department of Economics) |
| Abstract: | It is well known that uncertainty concerning firms’ costs as well as market power of the latter have to be taken into account in order to design and choose environmental policy instruments in an optimal way. As a matter of fact, in the most actual environmental regulation settings the policy maker has to face both of these complications simultaneously. However, hitherto environmental economic theory has restricted itself to either of them when submitting conventional policy instruments to a comparative analysis. The article at hand accounts for closing this gap by investigating the welfare effects of emission standards and taxes against the background of uncertain emission control costs and a polluting asymmetric Cournot duopoly. |
| Keywords: | asymmetric Cournot duopoly, external diseconomies of pollution, cost uncertainty, emission standard, emission tax |
| JEL: | D62 D89 L13 Q58 |
| Date: | 2008–03 |
| URL: | http://d.repec.org/n?u=RePEc:aug:augsbe:0300&r=ene |
| By: | Carriquiry, Miguel A.; Osgood, Daniel E. |
| Abstract: | Index insurance and probabilistic seasonal forecasts are becoming available in developing countries to help farmers manage climate risks in production. Although these tools are intimately related, work has not been done to formalize the connections between them. We investigate the relationship between the risk management tools through a model of input choice under uncertainty, forecasts, and insurance. While it is possible for forecasts to undermine insurance, we find that when contracts are appropriately designed, there are important synergies between forecasts, insurance, and effective input use. Used together, these tools overcome barriers preventing the use of imperfect information in production decision making. |
| Keywords: | basis risk, climate forecast, index insurance, input decisions, insurance, risk management. |
| Date: | 2008–03–17 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genres:12884&r=ene |