nep-ene New Economics Papers
on Energy Economics
Issue of 2008‒07‒20
twenty-two papers chosen by
Roger Fouquet
Imperial College, UK

  1. High Economic Growth, Equity and Sustainable Energy Development of India By Ramprasad Sengupta
  2. "Twin Peaks" in Energy Prices: A Polluting Fossil Fuel with Learning in the Clean Substitute By CHAKRAVORTY Ujjayant; LEACH Andrew; MOREAUX Michel
  3. A European Perspective on Recent Trends in U.S. Climate Policy By Moslener, Ulf; Sturm, Bodo
  4. A Brief Energy Outlook for the XXI Century By Lorca-Susino, Maria
  5. Energy sector in Gujarat: Performance and prospects By Sudha, venu Menon
  6. Marginal Abatement Costs of Carbon-Dioxide Emissions: A Meta-Analysis By Onno Kuik; Luke Brander; Richard S. J. Tol
  7. The effect of opening up ANWR to drilling on the current price of oil By Coats, R. Morris; Pecquet, Gary M.
  8. Breaking the Link between Food and Biofuels By Bruce A. Babcock
  9. Testing for Energy Market Integration in China By Hengyun Ma; Les Oxley; John Gibson
  10. Public Interest vs. Interest Groups: Allowance Allocation in the EU Emissions Trading Scheme By Anger, Niels; Böhringer, Christoph; Oberndorfer, Ulrich
  11. Macro Wine in Financial Skins: The Oil-FX Interdependence By Enzo Weber
  12. Speculation, Futures Prices, and the U.S. Real Price of Crude Oil By Stevans, Lonnie; Sessions, David
  13. A Comparison of Results From MRIO and Interregional Computable General Equilibrium (CGE) Analyses of the Impacts of a Positive Demand Shock on the ‘CO2 Trade Balance’ Between Scotland and the Rest of the UK By Michelle Gilmartin; Kim Swales; Karen Turner
  14. Short-term electricity futures prices: Evidence on the time-varying risk premium By Hipòlit Torró; Julio Lucia
  15. The Distributional Implications of a Carbon Tax in Ireland By Tim Callan; Sean Lyons; Sue Scott; Richard S. J. Tol; Stefano Verde
  16. Energy services at local and national level in the transition period in Hungary By Pal Valentiny
  17. Auctioning Wind Power Sites when Environmental Quality Matters By Gervasio Ciaccia; Nicola Doni; Fulvio Fontini
  18. A Comparison of the Limits to Growth with Thirty Years of Reality By Graham Turner
  19. ESSAM General Equilibrium Model: Estimation of 2005/06 Input-Output Tables By Adolf Stroombergen
  20. Population growth and natural resource scarcity: long-run development under seemingly unfavourable conditions By Lucas Bretschger
  21. The Extractive Firm's Cost Spillover Tax for the Extended Hotelling Model By John Hartwick; Andrei Bazhanov; Zhen Song
  22. Maximin-optimal sustainable growth with nonrenewable resource and externalities By Bazhanov, Andrei

  1. By: Ramprasad Sengupta (Jawaharlal Nehru University/ Visiting Professor, Research Institute for Economics and Business Administration, Kobe University)
    Abstract: India has been experiencing sustained high economic growth in the recentyears. However, there exists substantial amount of unacceptable poverty among the people in the country. The expressions of symptoms of such poverty include among others inadequate educational and health attainment of the people and lack of access to basic amenities like modern clean energy, safe water and sanitation which are crucial determinants of capability development. There exists in fact significant amount of energy poverty among the people, particularly in the rural India which has more than 70% share of its population, in the form of use of traditional inefficient biomass as the primary fuel with injurious health effect and the lack of connectivity of the households with electricity. The eleventh five year plan of India which has recently been initiated has taken the approach of inclusive faster growth for the development of the Indian economy. This paper analyses the implications of this high inclusive growth in respect of the twin challenges of environmental sustainability of the energy use required by such growth and the removal of energy poverty, which have to be addressed in India's energy planning. The paper defines the concept of sustainable development and points out its resource accounting implications in respect of energy related resource use. It focuses in this context on the instrumental role of the efficiency of energy use and energy supply, fuel composition and technology in determining the strength of the linkage between the GDP growth and the growth of energy use and that between the energy use and the pollution intensity of energy. The paper also defines, on the other hand, the notion of energy poverty and discusses the problem of equity and energy development in a dual society like that of India. It then reviews the past trend and pattern of energy use and the future projections of energy requirement and supply with special reference to the twin issues of equity and environmental sustainability. In this context it makes a decomposition analysis of the past energy use and CO2 emissions in India for examining its environmental sustainability and if economic reforms of India could make any impact on it. It makes further a brief review of the methodologies of projections and policy planning for the future energy sector development in India as existing in the recent literature. Finally, the paper discusses certain selected issues of energy security and macroeconomic viability of such energy development in the background of the sustained steep rise of oil prices and high cost of carbon free new technologies. It concludes by highlighting certain policy issues relating to pricing, technology and institution for the attainability of inclusive growth and particularly for meeting the gaps in such attainment that would possibly remain as per the existing alternative projections for the future. However, this paper does not pay any special attention to the climate change related global policy issues that would affect India and gives priority to the national level issues relating to energy equity and energy related environmental sustainability of Indian development.
    Date: 2007–12
  2. By: CHAKRAVORTY Ujjayant; LEACH Andrew; MOREAUX Michel
    Date: 2008–07
  3. By: Moslener, Ulf; Sturm, Bodo
    Abstract: Without participation of the United States, the world’s largest emitter of greenhouse gases, mitigation of global climate change seems hardly conceivable. Despite the U.S. rejection of the Kyoto Protocol and the reluctance of the Bush administration to engage in Post-Kyoto negotiations, recent developments suggest that the U.S. position towards climate policy might change in the medium run. This study provides an overview on current trends in U.S. climate policy. Besides the main elements of national climate policy proposals and state-level initiatives the climate contents in the U.S. presidential candidates’ agendas are outlined. Based on this overview recent trends in U.S. climate policy are related to the European approach to combat climate change. Furthermore, we elaborate on the aspects which may be important for Europe to design its own domestic and international climate policy in order to achieve the long-term goal of stabilizing greenhouse gas concentrations.
    Keywords: environmental regulation, climate policy, emissions trading
    JEL: H73 K32 N50 Q58
    Date: 2008
  4. By: Lorca-Susino, Maria
    Abstract: The price of oil has surged five-fold since 2003. A variety of factors are used to explain this: turbulence in the Middle East and rising demand in emerging economies such as India and China are the most common ones. In fact, the latest World Economic Outlook (WEO) from the International Monetary Fund (IMF) has declared that the Chinese and Indian economies “account for more than 90 per cent of the rise in consumption of oil products and metals, and 80 per cent of the rise in consumption of grains since 2002.” On Thursday, June 26, 2008, the price of oil broke the all time high of $140 per barrel. The Organization of Petroleum Exporting Countries (Opec) predicted that this summer the price of oil will range between $150-170 per barrel. This extraordinarily high price has a detrimental impact on an already fragile world economy, forcing governments to work desperately to find alternatives to help reduce the high energy bill for their economies and people. According to some experts, one of the most efficient alternatives is bio-ethanol obtained from corn and sugar cane. However, the production of bio-ethanol raises two concerns: One is a trade-off between arable land to grow food or to grow the source for bio-ethanol. The second has to do with the ecological damage associate with growing sugar-cane. However, Brazil proves these two concerns wrong. Brazil has the most successful bio-ethanol program in the world and has obtained its energy independence at no high environmental or food production cost. Brazil’s success story is closely followed by the EU, US, UK, and even China. Furthermore, there are other energy alternatives such as nuclear energy, which in France covers 75% of the national electricity demand. Additionally, there are others sources of energy like the sun, the wind, and the sea that provide free (beyond the generating equipment) and abundant energy, but which require government investment in terms of start-up subsidies to develop them. Unfortunately, despite the exorbitant current price of oil and the inspiring example of Brazil, governments continue to look for new petroleum resources, rather than new energy alternatives. For example, Cuba recently announced that is has new oil reserves twenty miles north of Havana, and European companies have been the first ones to bid for exploration rights. Lately, Florida Governor Crist has announced that he might change its policy regarding oil exploration off the Florida Cost. This demonstrates that governments still are not fully aware of the great risk globally as a result of the dependency on oil. It seems that a situation similar to that causing “The Great Smog of 1952” in London would have to occur for governments to take the search for new energy sources seriously.
    Keywords: Oil; Price of crude;
    JEL: A1 E6
    Date: 2008–08
  5. By: Sudha, venu Menon
    Abstract: With the presence of MNCs and Big corporate players of the country, Gujarat holds a strategic position in the Indian power industry. It has been ranked 2nd in the Power Sector rating Report (2005) of CRISIL-ICRA submitted to the Ministry Of Power, India. Gujarat has installed capacity of 9288 MW with the projected peak demand of 10605 MW. The expected addition of 536 MW by the end of 2007 will still result into the deficit of almost 2652 MW in the installed capacity by the year end. This depicts the growth prospects in the power sector of the state. The article gives an overview of the major public and private players in energy sector, performance and prospects of energy sector including oil& natural gas and renewable energy sources. The projections of the per capita energy consumption suggest a tremendous growth, which will be nearly impossible to deal with the current power generation capacity. The massive expansion is needed to cater the growing power needs in order to sustain a growth in not only secondary but also in the primary and tertiary sectors of the economy. The article also highlights the achievements of Jyotigram Yojana, the flagship programme of Gujarat Government to provide uninterrupted supply of electricity to rural areas
    Keywords: Gujarat;India; energy
    JEL: A10
    Date: 2008–02–04
  6. By: Onno Kuik (VU University Amsterdam); Luke Brander (VU University Amsterdam); Richard S. J. Tol (Economic and Social Research Institute (ESRI))
    Abstract: In this paper we carry out a meta-analysis of recent studies into the costs of greenhouse gas mitigation policies that aim at the long-term stabilization of these gases in the atmosphere. We find the cost estimates of the studies to be sensitive to the level of the stabilization target, the assumed emissions baseline, intertemporal optimisation, the choice of control variable (CO2 only versus multigas), assumptions on future technological options (backstop and carbon capture and storage), and, to a lesser degree, the scientific ?forum? in which the study was developed.
    Keywords: greenhouse gas mitigation; meta-analysis, marginal abatement costs.
    Date: 2008–06
  7. By: Coats, R. Morris; Pecquet, Gary M.
    Abstract: The Effect of Opening up ANWR to Drilling on the Current Price of Oil R. Morris Coats and Gary M. Pecquet
    Abstract: Everyone knows that oil discovered today, perhaps in the Alaskan National Wildlife Refuge (ANWR), has no effect on prices until that oil hits the market. For instance, on its website, the Democratic Policy Committee, ( states that “it will require seven to twelve years from approval before there is any oil production from the ANWR area. Therefore, production in ANWR will have no impact on current or short-term gasoline and oil supplies and prices.” While this is something that everyone seems to know, it is a case that the theory held by everyone just happens to be wrong. Since future prices are expected to be lower, future profits are also lower, so the value of oil not produced now, but held for future sales, is lower, making it more profitable to go ahead and produce and sell now instead of waiting for future profits. Using oil now reduces the amount of oil available for the future, which involves the opportunity cost of forgone future profits, which are sometime called the marginal user costs or scarcity rents. In this paper, we use simple two-period models to show that if an amount of newly discovered oil is significant enough to reduce prices in the future, any drop in future prices reduces the future profitability of oil, reducing the marginal user costs of oil now. That reduction in the marginal user costs reduces the current price of oil just as if there were a reduction in the marginal costs of extracting oil now. We explore the effects of the reduction in marginal user costs in the competitive or price-taker case as well as the price-searcher case, where a monopolist or dominant supplier responds to a substantial discovery by another seller, but where the discovery will not contribute to production for some years to come. In both cases, we find that oil that is expected to reach the market at some time in the future has an immediate impact on oil prices. Topic Area: Q4 Energy
    Keywords: ANWR; resource discovery; timing of price impact; speculation
    JEL: Q41
    Date: 2008–05–04
  8. By: Bruce A. Babcock (Center for Agricultural and Rural Development (CARD); Midwest Agribusiness Trade Research and Information Center (MATRIC))
    Abstract: Production of biofuels from feedstocks that are diverted from food production or that are grown on land that could grow crops has two important drawbacks: higher food prices and decreased reduction in greenhouse gas emissions. If U.S. policy were to change and place greater emphasis on food prices and greenhouse gas reductions, then we would transition away from current feedstocks toward those that do not reduce our ability to produce food. Examples of such feedstocks include crop residues, algae, municipal waste, jatropha grown on degraded land, and by-products of edible oil production. Policy options that would encourage use of these alternative feedstocks include placing a hard cap on ethanol and biodiesel production that comes from corn and refined vegetable oil, thereby forcing growth in biofuel production to come from alternative feedstocks; differentiation of tax credits and subsidies so that the alternative feedstocks receive a higher incentive than do corn and refined vegetable oil; and greatly increased funding for research to hasten the feasibility of producing and refining alternative feedstocks.
    Keywords: biofuels, feedstocks, food prices, policy.
    Date: 2008–07
  9. By: Hengyun Ma; Les Oxley (University of Canterbury); John Gibson
    Abstract: The paper investigates energy market integration in China by employing univariate, and panel-based unit root tests and Granger causality tests applied to a new, energy price data set. We identify price series that converge either to absolute or relative price parity. In addition we estimate the rates (speed) at which relative prices converge to their long-run values, and the direction of causality. The results show that gasoline and diesel markets are very well integrated as a whole; that once some geographically isolated regions are excluded, we can regard the coal market as integrated; however, the electricity markets is not well integrated. The estimated intercept terms are all very small and close to zero, such that most of the relative price series can be regarded as convergent to absolute price parity. The convergence rates vary little and are relatively short when compared internationally. A rich set of causal relationships are established many showing bi-directional causality between regional centres.
    Keywords: China; Energy; Market integration; Price convergence; Time series tests
    JEL: D24 O33 Q41
    Date: 2008–06–20
  10. By: Anger, Niels; Böhringer, Christoph; Oberndorfer, Ulrich
    Abstract: This paper presents a political-economy analysis of allowance allocation in the EU Emissions Trading Scheme (EU ETS). A common-agency model suggests that a politicalsupport maximizing government considers the preferences of sectoral interest groups besides public interest when allocating emissions permits. In the stylized model, industries represented by more powerful lobby groups face a lower regulatory burden, which for sufficiently high lobbying power leads to an inefficient emissions regulation. An empirical analysis of the first trading phase of the EU ETS corroborates our theoretical prediction for a cross-section of German firms, but also shows that the political-economy determinants of permit allocation depend on firm characteristics. We find that large carbon emitters that were heavily exposed to emissions regulation and simultaneously represented by powerful interest groups received higher levels of emissions allowances. In contrast, industrial lobbying power stand-alone or threats of potential worker layoffs did not exert a significant influence on the EU ETS allocation process.
    Keywords: Emissions trading, interest groups, regression analysis
    JEL: C10 P16 Q58
    Date: 2008
  11. By: Enzo Weber
    Abstract: This paper analyses mutual causalities between crude oil price and euro / US dollar exchange rate. Instead of focusing on long-run macroeconomic linkages like the bulk of the relevant literature, the present approach takes a financial markets perspective using daily data. The fast-running simultaneous impacts are identified through heteroscedasticity by specifying multivariate EGARCH processes for the structural variances. While for the decade after 1986 no significance is found, thereafter oil price changes cause inverse reactions of the dollar price and affect its volatility. Reversely, dollar appreciation asymmetrically increases the oil price.
    Keywords: Crude Oil Price, Foreign Exchange, Identification
    JEL: C32 F31 Q43
    Date: 2008–07
  12. By: Stevans, Lonnie; Sessions, David
    Abstract: In this study, we examine the relationship between the U.S. real price of oil and factors that affect its movement over time: futures prices, the value of the dollar, exploration, demand, and supply. All of these variables are treated as jointly endogenous and a reduced form vector error correction model, testing for cointegration amongst the variables, is estimated. We find that for model specifications with short-term futures contracts, supply does indeed dominate price movements in the crude oil market. However, for specifications including longer-term contracts that are inherently more speculative, the real price of oil appears to be determined predominantly by the futures price. Moreover, there is empirical evidence of hoarding in the crude oil market: both oil stocks/inventories and futures prices are found to be positively cointegrated/correlated with each other. From a policy perspective, the results of this analysis indicate that if regulators really wanted to limit speculation in the oil market, it should keep the shorter-term futures contracts and eliminate the more speculative six months futures contracts.
    Keywords: futures prices; cointegration; speculation; hoarding
    JEL: C32 Q41 G00
    Date: 2008–07–02
  13. By: Michelle Gilmartin (Department of Economics, University of Strathclyde); Kim Swales (Department of Economics, University of Strathclyde); Karen Turner (Department of Economics, University of Strathclyde)
    Abstract: In previous work we have applied the environmental multi-region input-output (MRIO) method proposed by Turner et al (2007) to examine the ‘CO2 trade balance’ between Scotland and the Rest of the UK. In McGregor et al (2008) we construct an interregional economy-environment input-output (IO) and social accounting matrix (SAM) framework that allows us to investigate methods of attributing responsibility for pollution generation in the UK at the regional level. This facilitates analysis of the nature and significance of environmental spillovers and the existence of an environmental ‘trade balance’ between regions. While the existence of significant data problems mean that the quantitative results of this study should be regarded as provisional, we argue that the use of such a framework allows us to begin to consider questions such as the extent to which a devolved authority like the Scottish Parliament can and should be responsible for contributing to national targets for reductions in emissions levels (e.g. the UK commitment to the Kyoto Protocol) when it is limited in the way it can control emissions, particularly with respect to changes in demand elsewhere in the UK. However, while such analysis is useful in terms of accounting for pollution flows in the single time period that the accounts relate to, it is limited when the focus is on modelling the impacts of any marginal change in activity. This is because a conventional demand-driven IO model assumes an entirely passive supply-side in the economy (i.e. all supply is infinitely elastic) and is further restricted by the assumption of universal Leontief (fixed proportions) technology implied by the use of the A and multiplier matrices. In this paper we argue that where analysis of marginal changes in activity is required, a more flexible interregional computable general equilibrium approach that models behavioural relationships in a more realistic and theory-consistent manner, is more appropriate and informative. To illustrate our analysis, we compare the results of introducing a positive demand stimulus in the UK economy using both IO and CGE interregional models of Scotland and the rest of the UK. In the case of the latter, we demonstrate how more theory consistent modelling of both demand and supply side behaviour at the regional and national levels affect model results, including the impact on the interregional CO2 ‘trade balance’.
    Keywords: CGE modelling, MRIO, CO2 trade balance, environmental responsibility
    JEL: D57 D58 R15 Q56
    Date: 2008–06
  14. By: Hipòlit Torró (Universitat de València); Julio Lucia (Universitat de València)
    Abstract: This paper examines empirically the relationship between electricity spot and futures prices, by analysing a decade of data for a set of short term-to-maturity futures contracts traded in the Nordic Power Exchange, Nord Pool. It is found that, on average, there are significant positive risk premiums in short-term electricity futures prices. The significance and size of the premiums, however, varies seasonally over the year; whereas it is greatest during winter, it is zero in summer. It is also found that time-varying risk premiums are significantly related to unexpectedly low reservoir levels. Furthermore, before the unprecedented supply-shock that hit the Nord Pool market around the end of year 2002, the variation of the risk premiums was related to the variance and the skewness of future spot prices. This result is consistent with the view that risk considerations played a role in the determination of futures prices. Finally, additional evidence provided throughout the paper supports the view that circumstances changed in the Nord Pool market after the shock period. Este trabajo estudia la relación entre los precios de contado y a futuro de la electricidad a través de un análisis empírico realizado sobre los precios a futuro a corto plazo negociados durante una década en el mercado nórdico de electricidad, Nord Pool. Los resultados indican que existen primas de riesgo positivas en media en los contratos de futuro a corto plazo. Sin embargo, la significatividad y tamaño de las primas varia estacionalmente a lo largo del año, siendo las de mayor tamaño durante el invierno y nulas durante el verano. También se encuentra evidencia significativa relativa a la capacidad explicativa de los niveles anormalmente bajos de las reservas hidráulicas sobre la variación temporal de las primas de riesgo. Además, antes del shock de oferta que azotó el mercado Nord Pool a finales del año 2002, la variación de las primas de riesgo estaba relacionada con la varianza y asimetría de los precios futuros de la electricidad. Este resultado es coherente con la visión de que el riesgo se tomaba en consideración en la determinación de los precios a futuro. Finalmente, a lo largo de todo el documento se muestra evidencia adicional a favor de la opinión de que las cirscustancias cambiaron en el Nord Pool después del periodo turbulento.
    Keywords: Prima de riesgo, futuros sobre la electricidad, Nord Pool risk premium, electricity futures, Nord Pool
    JEL: G13 L94
    Date: 2008–05
  15. By: Tim Callan (Economic and Social Research Institute (ESRI)); Sean Lyons (Economic and Social Research Institute (ESRI)); Sue Scott (Economic and Social Research Institute (ESRI)); Richard S. J. Tol (Economic and Social Research Institute (ESRI)); Stefano Verde (Trinity College Dublin)
    Abstract: We study the effects of carbon tax and revenue recycling across the income distribution in the Republic of Ireland. In absolute terms, a carbon tax of €20/tCO2 would cost the poorest households less than €3/week and the richest households more than €4/week. A carbon tax is regressive, therefore. However, if the tax revenue is used to increase social benefits and tax credits, households across the income distribution can be made better off without exhausting the total carbon tax revenue.
    Keywords: Carbon tax, Ireland, income distribution
    JEL: D31 H23 Q54
    Date: 2008–07
  16. By: Pal Valentiny (Institute of Economics, Hugarian Academy of Sciences)
    Abstract: Energy industries are mainly organised at national level in Hungary, however local governments have their specific role in the system. Local governments have been major performers in the first period of the transition process: they were entitled to receive 25 per cent of the shares in electric utilities and 40 per cent of the shares in gas supply during the privatisation process. They did not build up long standing portfolios in these utilities. They became more important players at district heating, where they have a contradictory triple function - owner, regulator and provider of the local social safety net. Local governments are also in the forefront of the energy saving programmes.
    Keywords: energy industries, regulation, local governments
    JEL: L43 L51 L97 Q48
    Date: 2008–04
  17. By: Gervasio Ciaccia (Italian Authority for Electricity and Gas (AEEG) and Sapienza University of Rome); Nicola Doni (University of Florence); Fulvio Fontini (University of Padua)
    Abstract: In this work we frame within auction theory an index that allows to order different projects for the construction of onshore wind energy plants and that explicitly takes into account their environmental quality. Wind farm projects are defined as vectors of attributes, encompassed in four categories: the technical properties of each project; its social impact; its environmental impact and the share of earnings that proponents offer to the collectivity in compensation for the negative externalities of the wind plant. We define an absolute index that allows to order different proposals and evaluate the acceptability of each project, providing the monetary value of each point and inducing a truthful revelation of firms' private information. Moreover, we calibrate the index, on the basis of a representative project and derive the corresponding iso-scoring curves.
    Keywords: Renewable Energy, Wind Power, Scoring Rule, Environmental Externalities
    JEL: Q42 Q58 D4
    Date: 2008
  18. By: Graham Turner (CSIRO Sustainable Ecosystems, Australia)
    Abstract: In 1972, the Club of Rome’s infamous report “The Limits to Growth” (Meadows et al., 1972) presented some challenging scenarios for global sustainability, based on a system dynamics computer model to simulate the interactions of five global economic subsystems, namely: population, food production, industrial production, pollution, and consumption of non-renewable natural resources. Contrary to popular belief, The Limits to Growth scenarios by the team of analysts from the Massachusetts Institute of Technology did not predict world collapse by the end of the 20th Century. This paper focuses on a comparison of recently collated historical data for 1970–2000 with scenarios presented in the Limits to Growth. The analysis shows that 30 years of historical data compares favorably with key features of a business-as-usual scenario called the “standard run” scenario, which results in collapse of the global system midway through the 21st Century. The data does not compare well with other scenarios involving comprehensive use of technology or stabilizing behaviour and policies. The results indicate the particular importance of understanding and controlling global pollution.
    Keywords: integrated global model, limits to growth, scenarios, data comparison, model validation, collapse, pollution
    JEL: Q01 Q56 O13
    Date: 2008–06
  19. By: Adolf Stroombergen (Infometrics)
    Abstract: This paper describes the compilation of a preliminary input-output able for 2005/06 for use in the ESSAM (Energy Substitution, Social Accounting Matrix) general equilibrium model. A more accurate update is expected to be undertaken in 2009/10 with the envisaged release by Statistics New Zealand of an official set of input-output tables for 2005/06. The last official set of input-output tables produced by SNZ relates to 1995/96. The updating process comprised four main phases: 1. Analysis in the SNA Data Laboratory 2. Balancing of the input-output table 3. Re-aggregation of industries 4. Update to 2005/06 Associated data tables are available for download from Please advise when you download this data.
    Keywords: energy, input-output, general equilibrium modelling, New Zealand
    JEL: C67 C68 Q41
    Date: 2008–04
  20. By: Lucas Bretschger (CER-ETH - Center of Economic Research at ETH Zurich)
    Abstract: The paper develops a model with non-exponential population growth, nonrenewable natural resources, and endogenous knowledge creation to analyse substitution between primary inputs and an essential use of resources in the innovation sectors, which is generally considered as most unfavourable for growth. We show that population growth and poor input substitution are not detrimental but even needed to obtain sustainable consumption. A permanent increase in living standards can be achieved under free market conditions. With a backstop technology, the system converges to a balanced growth path with classical properties.
    Keywords: Population growth, non-renewable resources, poor input substitution, technical change, sustainability
    JEL: Q32 Q55 Q56 O41
    Date: 2008–06
  21. By: John Hartwick (Queen's University); Andrei Bazhanov; Zhen Song
    Abstract: We consider a competitive extraction industry comprising many small …firms, each with a slightly different quality of mineral holdings. With "rapidly" declining quality of holding per fi…rm we observe rent declining over an interval. We then take up the familiar planning model and isolate the tax required to make decentralized extraction by many distinct, competitive fi…rms replicate the planning solution.
    Keywords: exhaustible resources, resource rent, competitive extraction, corrective tax
    JEL: Q31 D41
    Date: 2007–11
  22. By: Bazhanov, Andrei
    Abstract: I offer an approach linking a welfare criterion to the "sustainable development potential" of the economy. This implies a dependence of a criterion on the information about the current state. I consider the problem for the Dasgupta-Heal-Solow-Stiglitz model with externalities. The economy-linked criterion is constructed on an example of the maximin principle applied to a hybrid level-growth measure. This measure includes as special cases the conventional measures of consumption level and percent change as a measure of growth. The hybrid measure or geometrically weighted percent can be used for measuring sustainable growth as an alternative to percent. The closed form solutions are obtained for the optimal paths including the paths, dynamically consistent with the information updates.
    Keywords: essential nonrenewable resource; modified Hotelling Rule; economy-linked criterion; geometrically weighted percent; normative resource peak
    JEL: Q32 Q38 O47 D63 O13 H23
    Date: 2008–01–02

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