|
on Energy Economics |
|
Issue of 2009‒06‒10
twenty-six papers chosen by Roger Fouquet Basque Climate Change Centre, Bilbao, Spain |
| By: | Nicholas Apergis (Department of Financial & Banking Management, University of Piraeus); Stephen M. Miller (Department of Economics, University of Nevada, Las Vegas) |
| Abstract: | This paper investigates how explicit structural shocks that characterize the endogenous character of oil price changes affect stock-market returns in a sample of eight countries – Australia, Canada, France, Germany, Italy, Japan, the United Kingdom, and the United States. For each country, the analysis proceeds in two steps. First, modifying the procedure of Kilian (2008a), we employ a vector error-correction or vector autoregressive model to decompose oil-price changes into three components: oil-supply shocks, global aggregate-demand shocks, and global oil-demand shocks. The last component relates to specific idiosyncratic features of the oil market, such as changes in the precautionary demand concerning the uncertainty about the availability of future oil supplies. Second, recovering the oil-supply shocks, global aggregate-demand shocks, and global oil-demand shocks from the first analysis, we then employ a vector autoregressive model to determine the effects of these structural shocks on the stock market returns in our sample of eight countries. We find that international stock market returns do not respond in a large way to oil market shocks. That is, the significant effects that exist prove small in magnitude. |
| Keywords: | real stock returns; structural oil-price shocks; variance decomposition |
| JEL: | G12 Q43 |
| Date: | 2009–03 |
| URL: | http://d.repec.org/n?u=RePEc:nlv:wpaper:0917&r=ene |
| By: | Hoffmann, Tim; Voigt, Sebastian |
| Abstract: | The efficiency of electricity generation in hard coal fired power plants varies considerably from country to country and over time. These differences occur both between developing and developed countries and between industrialised nations. The econometric analysis presented in this paper tests for the reasons of these discrepancies. In this examination abundance of hard coal and the price of hard coal are the two variables of our major interest. We assume that countries with an abundance of hard coal or relatively low costs of extraction show smaller degrees of efficiency than countries with poor deposits of this resource because the latter nations have a stronger dependency on efficient power plants than the former. Furthermore, higher prices should lead to more efficient electricity generation since production costs increase with growing hard coal prices. Our findings partially confirm these hypotheses and suggest that, among the chosen explanatory variables, hard coal abundance or the accessibility of hard coal, respectively, the hard coal price, the level of foreign direct investment inflows as well as the average power plant age are identified as principal drivers of power plant efficiency. From an environmental policy perspective we conclude that flexible policy instruments which internalise external effects caused by emissions as well as support for foreign investments are important means to foster energy efficiency. However, economic efficiency – even if contrasting with energy efficiency – must not be neglected in the design of energy policies. |
| Keywords: | energy efficiency, natural resources, hard coal fired power plant |
| JEL: | O13 Q40 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:7536&r=ene |
| By: | Holmberg, Pär (Research Institute of Industrial Economics (IFN)) |
| Abstract: | This paper characterizes the Nash equilibrium in a pay-as-bid (discriminatory), divisible-good, procurement auction. Demand by the auctioneer is uncertain as in the supply function equilibrium model. A closed form expression is derived. Existence of an equilibrium is ensured if the hazard rate of the perfectly inelastic demand is monotonically decreasing and sellers have non-decreasing marginal costs. Multiple equilibria can be ruled out for markets, for which the auctioneer’s demand exceeds suppliers’ capacity with a positive probability. The derived equilibrium can be used to model strategic bidding behaviour in pay-as-bid electricity auctions, such as the balancing mechanism of United Kingdom. Offer curves and mark-ups of the derived equilibrium are compared to results for the SFE of a uniform-price auction. |
| Keywords: | Supply Function Equilibrium; Pay-as-bid Auction; Discriminatory Auction; Divisible |
| JEL: | C62 D43 D44 L11 L13 L94 |
| Date: | 2009–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0787&r=ene |
| By: | Holmberg, Pär (Research Institute of Industrial Economics (IFN)); Newbery, David (Faculty of Economics); Ralph, Daniel (Judge Business School) |
| Abstract: | In most wholesale electricity markets generators must submit step-function offers of supply to a uniform price auction, and the market is cleared at the price of the most expensive offer needed to meet realised demand. Such markets can most elegantly be modelled as the pure-strategy, Nash Equilibrium of continuous supply functions, in which each supplier has a unique profit maximising choice of supply function given the choices of other suppliers. Critics argue that the discreteness and discontinuity of the required steps can rule out pure-strategy equilibria and may result in price instability. This paper argues that if prices must be selected from a finite set the resulting step function converges to the continuous supply function as the number of steps increases, reconciling the apparently very disparate approaches to modelling electricity markets. |
| Keywords: | Auctions; Supply Function Equilibria; Convergence of Step-Functions; Electricity Markets |
| JEL: | C62 D43 D44 L11 L13 L94 |
| Date: | 2009–01–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:0788&r=ene |
| By: | Mirza, Bilal (UNU-MERIT); Kemp, Rene (UNU-MERIT, ICIS, Maastricht University) |
| Abstract: | The paper tries to explore the rationale behind the complexities of energy poverty among different income groups in rural communities. We attempted to understand why rural rich, despite their relatively high purchasing power use energy sources which tend to categorize them as energy poor. Using Energy Poverty Survey (EPS), a dataset of more than 600 rural households from 27 different rural communities of Punjab, Pakistan, we presented energy access situation in rural households among different income groups. Subsequently, we used logit to assess access factors which could impact the energy source choices among different income groups. The insignificance of household income for traditional biomass use and high significance of community remoteness indicators imply that households give high importance on the proximity of energy sources available to them and, in many cases, will prefer to be in the state of energy poor, than to use modern energy source like LPG. |
| Keywords: | energy poverty, rural rich, rural poor, rural communities, Punjab, Pakistan, fuelwood, animal waste, plant waste, kerosene, liquid petroleum gas |
| JEL: | Q01 Q42 I32 O33 |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2009024&r=ene |
| By: | Arpita Mukherjee (Indian Council for Research on International Economic Rela); Ramneet Goswami (Indian Council for Research on International Economic Rela) |
| Abstract: | Energy plays a vital role in the development of any economy and given its unequal distribution trade in energy, especially fossil fuels, is an important component of international trade. In the past, due to its public good characteristics, energy-related services were mostly supplied by the government. With liberalization and globalization the sector underwent significant transformation. Many new services developed and large multinationals emerged which increased global trade in energy services. Energy services is now an important component of all trade agreements. In the above context, this paper examines India's opportunities and constraints to trade in energy services within the GATS framework. The study found that India has the capability of exporting high-skilled manpower at competitive prices but is facing various market access, discriminatory and regulatory barriers in markets of export interest. With the entry of energy- producing countries such as Saudi Arabia into the WTO, the Doha negotiations provide an important platform to offensively push for liberalization in this sector. India needs foreign investment, technical know-how and international best practices in energy. The country has progressively liberalized this sector and there are no major entry barriers. However, India has not been successful in attracting large foreign investment and technology. This is due to various domestic barriers which make it difficult to set up a competitive operation. The study lists the reform measures which will help the sector become globally competitive, protect the interests of consumers and meet the energy needs of society. Since this sector is sensitive and is closely monitored by governments across the world, government-to-government collaborations would ease the entry process for Indian companies in foreign markets, diversify our energy resource base and improve energy security |
| Keywords: | GATS, Energy, Trade, India & the WTO |
| JEL: | F13 F14 L71 L72 L94 L95 Q4 |
| URL: | http://d.repec.org/n?u=RePEc:ind:icrier:231&r=ene |
| By: | OECD |
| Abstract: | This paper summarizes, structures, and provides some context for discussions of the round table mentioned in the title. The first part of the paper focuses on sources of market power for airports and on policy responses. When an airport is congested and competition with other airports is limited, regulation may be justified, and the dual till approach likely works best. In other cases, however, policy should establish conditions for competition to emerge as much as possible, instead of attempting to design a general regulatory framework. The second part of the paper discusses elements of climate change policy in aviation. Including aviation in emission trading schemes is a sensible idea, but should not be expected to produce major cuts in CO2-emissions from aviation; containing its growth possibly is a more realistic, yet ambitious, objective. High-speed rail is justified in a number of situations, but is not a general alternative for air travel and certainly not a second-best way to reduce greenhouse gas emissions from aviation. |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaaa:2009/7-en&r=ene |
| By: | Stéphane Couture; Serge Garcia; Arnaud Reynaud |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ler:wpaper:09.08.284&r=ene |
| By: | Wang, Michael Q. |
| Abstract: | The use of fuel ethanol in the United States has increased from fewer than 200 million gallons (gal) at the beginning of the US fuel ethanol program in 1980 to 6.5 billion gal in 2007. The recent federally adopted Energy Independence and Security Act of 2007 established the goal of 36 billion gal of biofuel use in the United States by 2022, of which 15 billion gal will be corn-based ethanol. In addition, the promotion of low-carbon fuel standards (LCFS) by California and several other states could help increased use of ethanol, especially cellulosic ethanol. In the United States, corn ethanol is produced through the fermentation of corn in dry and wet milling plants, most of which are located in the Midwest. In 2006, about 82% of the total US fuel ethanol was produced from dry milling plants, and the remaining 18% from wet milling plants (Renewable Fuels Association, 2007). Ethanol can be produced from cellulosic biomass through fermentation of cellulose and semicellulose. The US Department of Energy (DOE) has been undertaking extensive research and development (R&D) efforts for cellulosic ethanol technologies. Since 1997, Argonne National Laboratory has been evaluating the energy and emission effects of fuel ethanol relative to those of petroleum gasoline. In 1997, Argonne National Laboratory published its findings from an ethanol analysis conducted for the State of Illinois (Wang et al., 1997). With DOE support, Argonne National Laboratory has continued its efforts to analyze the effects of fuel ethanol (Wang et al., 1999a,b; Wang et al., 2003; Wu et al., 2005; and Wu et al., 2006). As fuel ethanol production and usage in the United States have rapidly expanded in the past several years, corn ethanol plant technologies have been evolving. In addition, while corn yield per acre continues to increase, concerns have been raised that increased corn farming could result in switches in crop farming in the United States and potential land use changes in other countries. These factors together could cause different energy and greenhouse gas (GHG) emission results for corn ethanol. This chapter presents Argonne National Laboratoryâs updated energy and GHG emission results for fuel ethanol. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:fflc08:49098&r=ene |
| By: | Rosa, Franco |
| Abstract: | The heavy dependence of the EU countries from the imported oil, a growing economic vulnerability caused by wider and almost unforeseeable price changes of the crude oil commodity, the global warming are some of the reasons that have induced the policy makers to incentive the production of domestic biofuels derived from agricultural biomasses. This paper analyzes the supply chain model of biofuel production by focussing the economic and environment potential benefits that production and use of these biofues might have for the primary sector and the society. The suggestions are that biofuels can be a promising renewable sources of energy; the positive perceived advantages are: less dependence on turbulent exporting countries, higher security from diversified domestic sources of energy, some environmental benefits derived from the capture of GHG emission. This paper is structured as follows: paragraphs 1 and 2 describe the scenario and the theoretical background; paragraphs 3 and 4 illustrates the problem specification and the algebraic formulation of the LP model addressed to test the sustainability of the supply chain named Biorefinery under the three assumptions hypothesized at the beginning, paragraph 5 reports some of the experimental results with comments and paragraphs 6 describes the main conclusions. This model of cogeneration is more efficient in terms of energy compared to other biofuel chains, and is more socially acceptable because fuel and food productions are complementary each others. The partial energy balance of the fuel and biogas are positive while the livestock energy balance is heavily energy consuming, the total energy balance is neutral. |
| Keywords: | Agribusiness, Agricultural and Food Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Industrial Organization, |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eea110:49889&r=ene |
| By: | Henderson, Jason; Gloy, Brent |
| Abstract: | Corn ethanol plants consume large amounts of corn and their location has the potential to alter local crop prices and surrounding agricultural land values. The relationship between ethanol plant location and agricultural land prices is examined using data obtained from the Agricultural Credit Survey administered by the Federal Reserve Bank of Kansas City. The findings indicate that the portion of land price changes attributable to location is consistent with previous estimates of basis changes associated with ethanol plant location. As a result, the land markets appear to be rationally adjusting to the location of ethanol plants. |
| Keywords: | farmland, ethanol, land values, Land Economics/Use, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nc1007:48148&r=ene |
| By: | Ogle, Stephen M.; Del Grosso, Stephen J.; Adler, Paul R.; Parton, William J. |
| Keywords: | Crop Production/Industries, Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:fflc08:49097&r=ene |
| By: | Hines, Peter; Zokaei, Keivan; Evans, Barry; Beale, Jo; Miele, Mara; Cole, Matthew |
| Abstract: | The new found popular interest in sustainable development is highly skewed towards areas that are politically visible, such as transport and in particular the evils of air travel. This situation is mirrored in the academic community with an explosion of articles on sustainable transport (an EBSCO web search yielded 552 academic references to Sustainable Transport while for example Sustainable Livestock only found less than 10% of that number1). Nonetheless, only 14% of GHGâs actually result from transport, with as little as 2% coming from aviation, against 32% resulting from agriculture and land use â a major part of which can be directly attributed to the food chain (Stern, 2006). Moreover within the food system, certain areas such as livestock production are particularly problematic with meat and dairy products contributing more than 50% of the total GHGâs emitted (Kramer et al, 1999). Another recent study in the UK shows that GHG emissions attributable to meat and dairy consumption are about 4 times more than the GHG emissions generated from fruit and vegetable consumption (Garnett, 2007). |
| Keywords: | Agribusiness, Agricultural and Food Policy, Farm Management, Food Consumption/Nutrition/Food Safety, Industrial Organization, |
| Date: | 2008–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eea110:49895&r=ene |
| By: | OECD |
| Abstract: | This second ITF Transport Outlook continues building towards a full-fledged Transport Outlook, building upon the first Outlook (JTRC, 20081). The 2008 Outlook investigated the relation between expected GDP evolution and the demand for road transport, pointing out that transport demand and CO2-emissions could well turn out higher than commonly assumed given the projected evolution of GDP, and underlining the potential of improvements of fuel efficiency in controlling CO2-emissions from road transport. These topics were developed further in the “50 by 50 Global Fuel Economy Initiative”.2 The 2009 Outlook considers two themes that are closely linked to the International Transport Forums’s them for the 2009 meeting in Leipzig: Transport for a global economy – Challenges and opporturnities in the downturn. First, in Section 2, we focus on the evolution of GDP itself and how this evolution interacts with transport demand and investments in transport infrastructure. The analysis is a first brush at gauging the potential impacts of the economic and financial crisis. Specifically, we consider (a) the impact of the aggregate demand shock on the evolution of global GDP, (b) the need and potential for a rebalancing of global growth patterns, with their implications for trade and transport demand, and (c) the consequences of the widening funding gap for transport infrastructure investments. Second, in Sections 3 through 5, we discuss projections of the demand for road transport, aviation, and maritime transport. For road transport, more modest global growth leads to slower growth of the vehicle stock and of CO2-emissions, but the basic messages of the 2008 Outlook continue to hold. For aviation, we attempt to disentangle the effects of economic growth and of increased openness of markets on volume growth, and find that the latter is an important growth factor. For maritime transport, the focus is on likely development patterns and how they could be affected by the crisis, and how this does (not) affect recommendations for dealing with expected CO2-emissions. |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaaa:2009/12-en&r=ene |
| By: | Kurt Van Dender; Philippe Crist |
| Abstract: | Transport activities have adverse environmental and health impacts, of which local and regional air pollution, climate change, and noise impacts are the most important. This paper is a non-comprehensive overview of existing and potential policies to deal with these negative impacts, with a focus on “international transport”. We define “international transport” as those transport activities that are mainly derived from the globalization of economic activity, not as cross-border transport flows in a more narrow sense. We discuss surface transport, aviation, and maritime transport. The overview is not comprehensive: we focus on climate change, treating other adverse impacts (including aviation noise and local and regional pollution from shipping) more succinctly. This does not reflect a judgment on which impacts are more or less important policy problems, but rather policy interest and the authors’ expertise. |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaaa:2009/9-en&r=ene |
| By: | Quariguasi Frota Neto, J.; Bloemhof-Ruwaard, J.M. (Erasmus Research Institute of Management (ERIM), RSM Erasmus University) |
| Abstract: | Remanufacturing has long been perceived as an environmentally-friendly initiative. The question of how remanufacturing moderates the relation between environmental impact and economic returns is still unanswered, however. In this paper, we focus our attention on the electronics industry. In particular, we take a close look at remanufacturing within the mobile and personal computers industries. We analyze whether remanufacturing for such products substantially mitigates the energy used in the life-cycle of these products, or whether as in most electrical equipments, it can only marginally contribute to such reduction. Using both process-based and economic input-output data, we show that remanufacturing significantly reduces total energy consumption. Furthermore, we test the ubiquitous hypothesis that the market of remanufactured products is composed by products that have been downgraded and are therefore sold for prices below the average price of the new equipments. Using data from 9,900 real transactions obtained from eBay, we show that this assumption is true for personal computers, but not for mobiles. More importantly, despite the fact that remanufactured products may suffer downgrading, and that consumers therefore command a high discount for them, the economic output per energy unit used is still higher for remanufactured products. We thus conclude that remanufacturing for these two products is not only environmentally friendly, but also eco-efficient. |
| Keywords: | sustainability;eco-efficiency;remanufacturing;closed-loop supply chains |
| Date: | 2009–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureri:1765015912&r=ene |
| By: | Ronald Steenblik; Joy A. Kim |
| Abstract: | It is in every country's interest that the deployment of carbon-change-mitigation technologies (CCMTs) be accomplished at the lowest possible cost to society and that their diffusion be rapid. Reducing barriers to trade is one way to accomplish that, especially given that it is unlikely that every country will become proficient in the production of every CCMT. This study provides a preliminary assessment of the significance of tariff and non-tariff barriers to trade in a representative selection of CCMTs chosen from among those that have been identified by the IPCC and the IEA as having a large economic potential for mitigation, are globally traded, and can be easily adapted to national circumstances. Those examined in the report include: (a) technologies, such as gas-fired reciprocating engines, used in the co-production of both process (or district) heat and electric power (CHP); (b) technologies, such as pipes and meters, used in the production and delivery of heating and cooling at the scale of a city district (DHC); (c) technologies that harness solar energy to heat water or heat or cool the air in buildings (SHC); and (d) relatively energyefficient electric motors and related systems. The study finds that trade in CCMTs faces higher tariffs in some non-OECD countries than in OECD countries. Judging from information provided by exporters in response to a questionnaire, non-tariff measures are common, and in some countries are acting as barriers to trade. Overcoming some of the general measures that impede trade will take time. However, the problems that lax enforcement of intellectual property rights, cumbersome customs-clearance procedures and non-transparent government procurement create for trade in CCTMs should be regarded as providing additional reasons for importing countries to address these issues urgently. Finally, importers may need, at the same time, to examine their domestic policies in order to address behind-the-border impediments to the diffusion of CCMT technologies. |
| Date: | 2009–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaaa:2009/2-en&r=ene |
| By: | McCarl, Bruce |
| Abstract: | Agriculture may help mitigate climate change risks by reducing net greenhouse gas (GHG) emissions (McCarl and Schneider, 2000). One way of doing this is that agriculture may provide substitute products that can replace fossil fuel intensive products or production processes. One such possibility involves providing feedstocks for conversion into consumable forms of energy, where the feedstocks are agriculturally produced products, crop residues, wastes, or processing byproducts. Such items may be used to generate bioenergy encompassing the possibilities where feedstocks are used: ⢠to fuel electrical power plants; ⢠as inputs into processes making liquid transportation fuels e.g., ethanol or biodiesel. Employing agriculturally produced products in such a way generally involves recycling of carbon dioxide (CO2) because the photosynthetic process of plant growth removes CO2 from the atmosphere while combustion releases it. This has implications for the need for permits for GHG emissions from energy generation or use (Assuming we ever have such a program). Namely: ⢠Direct net emissions from biofeedstock combustion are virtually zero because the carbon released is recycled atmospheric carbon. As such this combustion may not require electrical utilities or liquid fuel users/producers to have emissions permits. ⢠Use of fossil fuels for power and liquid fuels releases substantial CO2 and would require emission rights. This would mean that the willingness to pay for agricultural commodities on behalf of those using them for bioenergy use would rise because their use would not require acquisition or use of potentially costly/valuable emissions permits. As a result, biofeedstocks may be a way that energy firms can cost effectively reduce GHG liabilities and also be a source of agricultural income. But, before wholeheartedly embracing biofuels as a GHG reducing force, one fully account for the GHGs emitted when raising feedstocks, transporting them to a plant and transforming them into bioenergy. This is the domain of lifecycle accounting and the subject of this conference. However, lifecycle accounting can provide biased accounting of such phenomenon. It is typically done assuming nothing changes elsewhere in the economy or world. In reality, large biofuel programs embody many violations of this assumption. For example, the recent corn boom induced changes in exports, reactions from foreign producers, and changes in livestock herds. Such issues involve a concept called leakage in the international GHG control. Additionally, these issues imply that a full analysis needs to conduct a broader sectoral level â partial (or perhaps economy wide general) equilibrium form of lifecycle accounting. Finally, biofuel opportunities embody differential degrees of GHG offsets. This is apparent by the widespread belief that cellulosic ethanol has a âbetterâ net energy and GHG balance than does corn ethanol. This chapter addresses these issues by discussing lifecycle accounting relative to different fuels, leakage concepts and full greenhouse gas accounting in a partial equilibrium setting. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:fflc08:49100&r=ene |
| By: | Considine , Timothy J.; Larson, Donald F. |
| Abstract: | The use of carbon-intense fuels by the power sector contributes significantly to the greenhouse gas emissions of most countries. For this reason, the sector is often key to initial efforts to regulate emissions. But how long does it take before new regulatory incentives result in a switch to less carbon intense fuels? This study examines fuel switching in electricity production following the introduction of the European Union’s Emissions Trading System, a cap-and-trade regulatory framework for greenhouse gas emissions. The empirical analysis examines the demand for carbon permits, carbon based fuels, and carbon-free energy for 12 European countries using monthly data on fuel use, prices, and electricity generation. A short-run restricted cost function is estimated in which carbon permits, high-carbon fuels, and low-carbon fuels are variable inputs, conditional on quasi-fixed carbon-free energy production from nuclear, hydro, and renewable energy capacity. The results indicate that prices for permits and fuels affect the composition of inputs in a statistically significant way. Even so, the analysis suggests that the industry’s fuel-switching capabilities are limited in the short run as is the scope for introducing new technologies. This is because of the dominant role that past irreversible investments play in determining power-generating capacity. Moreover, the results suggest that, because the capacity for fuel substitution is limited, the impact of carbon emission limits on electricity prices can be significant if fuel prices increase together with carbon permit prices. The estimates suggest that for every 10 percent rise in carbon and fuel prices, the marginal cost of electric power generation increases by 8 percent in the short run. The European experience points to the importance of starting early down a low-carbon path and of policies that introduce flexibility in how emission reductions are achieved. |
| Keywords: | Energy Production and Transportation,Energy and Environment,Environment and Energy Efficiency,Carbon Policy and Trading,Markets and Market Access |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4957&r=ene |
| By: | Philippe Crist |
| Abstract: | In this paper, we discuss the greenhouse gas emission reduction potential from international shipping. Drawing from the International Maritime Organization’s most recent assessment of maritime greenhouse gas emissions and other sources, we investigate the current level of emissions from international maritime activity and look at factors influencing future emission levels such as projected activity levels, GHG-reducing technology options and the rate of their uptake, operational measures – foremost speed reduction – and fuel switching. We do not discuss the marginal abatement costs of maritime GHG-reduction measures – with the exception of speed reduction – due to insufficient evidence. Finally, we discuss factors that may influence international responses to maritime GHG reduction policies, though these are discussed more thoroughly in a companion paper (Kågeson, 2009). CO2 emissions from maritime transport are larger than has previously been estimated The IMO finds that international maritime activity accounted for 843 Mt of CO2 in 2007 or 45% more than previous emission estimates from marine bunkers. This finding, for illustrative purposes, places 2007 international shipping emissions between the 2005 national emissions of India and Germany. International shipping accounts for approximately 2.7% of world CO2 emissions from fossil fuel combustion with all shipping activity (fishing, domestic and international) representing approximately 3.3% of total CO2 from fuel combustion. Despite projected efficiency improvements, the IMO projects that CO2 emissions from international maritime activity will grow through 2050 though this growth may significantly slowed through uptake of fuel efficient technologies and operating procedures. |
| Date: | 2009–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:itfaaa:2009/11-en&r=ene |
| By: | Rajagopal, Deepak; Zilberman, David |
| Abstract: | A key argument in the societal debate against polices to support biofuels is that production of these alternative fuels may in fact consume more energy than they generate and emit more greenhouse gases than they sequester (Fargione et al., 2008; Searchinger et al., 2008; Rajagopal and Zilberman, 2007; Farrell et al., 2006; Pimentel and Patzek, 2005). Metrics like net energy value, net carbon value and net petroleum offset are the basis for comparing the various fuels and are the source of these debates. The technique that underlies the calculation of these metrics is called lifecycle assessment or lifecycle analysis (LCA). A central aspect of LCA (described in detail in the next section) is it assumes linear technologies and produces outcomes that are numbers â how many units of energy are needed to produce a liter of ethanol fuel from a ton of corn. But as basic economics suggests, under reasonable conditions of some substitution between inputs and processes in production, this ratio is not a number but a function of prices. For instance, with energy being a ubiquitous input to production, a change in the relative price of different energy sources or with respect to other inputs will induce adjustments in the form of fuel switching, substitution between capital, energy and labor etc. This switching can occur at several levels in the production chain of a commodity. This will obviously alter the net carbon indicator for a fuel in the future. Also current LCA outcomes change only if the physical quantities of various inputs such as quantity of coal or electricity used in calculating LCA change. In other words, today LCA is capable of answering, how does a 10% decrease in the share of natural gas in the average electricity mix decrease the net carbon value of ethanol? But it is not capable of answering, if natural gas prices increase by 10% what is the impact on the net carbon value of ethanol? Obviously the latter is more intuitive and useful way of framing the question than the former from a policy standpoint. In this paper, we introduce a framework which can be used to derive LCA indicators directly as a function of underlying economic parameters and make it easier to simulate the impact of policies like pollution taxes and fuel mandates which in one way or another ultimately alter the relative price of commodities. Next we provide some background on current LCA literature. We then introduce a micro-economics based LCA that integrates prices directly into the lifecycle framework. We point out some implications of our model with simple illustrations. We finally describe directions for future work. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2008 |
| URL: | http://d.repec.org/n?u=RePEc:ags:fflc08:49090&r=ene |
| By: | Jean-Marc Burniaux; Jean Château; Rob Dellink; Romain Duval; Stéphanie Jamet |
| Abstract: | This paper examines the cost of a range of national, regional and global mitigation policies and the corresponding incentives for countries to participate in ambitious international mitigation actions. The paper illustrates the scope for available instruments to strengthen these incentives and discusses ways to overcome barriers to the development of an international carbon price, based on the quantitative assessment from two global and sectorially-disaggregated CGE models. Key step towards the emergence of a single international carbon price will most likely involve the phasing out of subsidies of fossil fuel consumption and various forms of linking between regional carbon markets, ranging from direct linking of existing emission trading systems to more indirect forms through the use of sectoral crediting mechanisms. The paper discusses regulatory issues raised by the expansion of emission trading and crediting schemes as well as the complementary contribution of non-market based instruments such as the imposition of technical standards and R&D policies. Finally, the paper emphasises the important role of international transfers, not least to overcome the relatively strong economic incentives in some countries to free ride on other regions mitigation actions. While they can take various explicit or implicit forms, transfers made primarily through market mechanisms, for instance via the allocation of binding emission reduction commitments across countries, would be most cost-effective.<P>L'économie de l'atténuation du changement climatique : comment élaborer l'action nécessaire au niveau mondial avec un rapport coût-efficacité optimal ?<BR>Cette étude examine le coût d’un éventail de mesures prises au plan national, régional et mondial pour réduire les émissions de gaz à effet de serre, ainsi que les incitations pour les pays à participer à des actions mondiales ambitieuses de mitigation. L’étude illustre la capacité des instruments disponibles à renforcer ces incitations et discute des moyens pour surmonter les barrières au développement d’un prix mondial du carbone, sur la base d’une évaluation quantitative à partir de deux modèles d’équilibre général désagrégés au plan sectoriel. Parmi les étapes essentielles vers l’émergence d’un prix mondial unique du carbone on trouvera vraisemblablement la suppression des subventions à la consommation des combustibles fossiles ainsi que des formes diverses d'intégration des marchés du carbone régionaux, allant des couplages directs des systèmes d’échange de droits d’émission à des formes plus indirectes par le biais d’un mécanisme de crédits d’émission. Cette étude examine les questions de réglementation soulevées par l’expansion des systèmes d’échange de droits et de crédits d’émissions ainsi que le rôle complémentaire politique de R&D. |
| Keywords: | climate change, changement climatique, carbon leakage, climate policy, fuites de carbone, politique climatique, energy subsidies, crediting mechanism, sectoral approach, approche sectorielle, deforestation, déforestation, intégration des marchés du carbone |
| JEL: | H23 H41 O13 O3 Q32 Q34 Q54 |
| Date: | 2009–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:701-en&r=ene |
| By: | Jonathan Aldred (Department of Land Economy, University of Cambridge) |
| Abstract: | The Stern Review on the economics of climate change (hereafter ‘Stern’) has received much attention regarding its potential political impact.1 It has also been extensively discussed among academic economists because its conclusions are more radical, in terms of action to mitigate climate change, than previous orthodox economic analyses. This paper aims to contribute to the debate by critically assessing three key features of climate change CBA, with particular reference to Stern: monetary valuation of human life, discounting, and the treatment of risk and uncertainty. This assessment reveals some common themes, which are examined in the final section. They concern the tensions which emerge in climate change CBA between ethical arguments, market-based preferences, and the claims of CBA to scientific objectivity. |
| Keywords: | Climate change, Stern report, Cost benefit analysis, discounting, uncertainty |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:lnd:wpaper:442009&r=ene |
| By: | Stéphane Couture; Arnaud Reynaud |
| Date: | 2009–05 |
| URL: | http://d.repec.org/n?u=RePEc:ler:wpaper:09.09.285&r=ene |
| By: | Seo, John; Mahul, Olivier |
| Abstract: | Catastrophe risk models allow insurers, reinsurers and governments to assess the risk of loss from catastrophic events, such as hurricanes. These models rely on computer technology and the latest earth and meteorological science information to generate thousands if not millions of simulated events. Recently observed hurricane activity, particularly in the 2004 and 2005 hurricane seasons, in conjunction with recently published scientific literature has led risk modelers to revisit their hurricane models and develop climate conditioned hurricane models. This paper discusses these climate conditioned hurricane models and compares their risk estimates to those of base normal hurricane models. This comparison shows that the recent 50 year period of climate change has potentially increased North Atlantic hurricane frequency by 30 percent. However, such an increase in hurricane frequency would result in an increase in risk to human property that is equivalent to less than 10 years’ worth of US coastal property growth. Increases in potential extreme losses require the reinsurance industry to secure additional risk capital for these peak risks, resulting in the short term in lower risk capacity for developing countries. However, reinsurers and investors in catastrophe securities may still have a long-term interest in providing catastrophe coverage in middle and low-income countries as this allows reinsurers and investors to better diversify their catastrophe risk portfolios. |
| Keywords: | Natural Disasters,Hazard Risk Management,Insurance&Risk Mitigation,Disaster Management,Insurance Law |
| Date: | 2009–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4959&r=ene |
| By: | Makena Coffman (Department of Urban and Regional Planning, University of Hawaii at Manoa; University of Hawaii Economic Research Organization); Ilan Noy (Department of Economics, University of Hawaii at Manoa) |
| Abstract: | Hurricane Iniki, that hit the island of Kauai on September 11th, 1992, was the strongest hurricane that hit the Hawaiian Islands in recorded history, and the one that wrought the most damage, estimated at 7.4 billion (in 2008 US$). We provide an assessment of Hawaii’s vulnerability to disasters using a framework developed for small islands. In addition, we provide an analysis of the ex post impact of Iniki on the economy of Kauai. Using indicators such as visitor arrivals and agricultural production, we show that Kauai’s economy only returned to pre-Iniki levels 7-8 years after the storm. Today, it has yet to recover in terms of population growth. As an island state, Hawaii is particularly susceptible to the occurrence of disasters. Even more worrying, Hawaii’s dependence on tourism, narrow export base, high level of imports and relatively small agricultural sector make Hawaii much more likely to struggle to recover in the aftermath. By thoroughly learning from Kauai’s experience and the state’s vulnerabilities, we hope we can better prepare for likely future disaster events. |
| Keywords: | natural disasters, hurricane, Iniki, Kauai, Hawaii, climate change, global warming |
| JEL: | Q54 R50 |
| Date: | 2009–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:hai:wpaper:200904&r=ene |