nep-ene New Economics Papers
on Energy Economics
Issue of 2009‒07‒03
thirty-two papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao, Spain

  1. Measuring Energy Supply Risks: A G7 Ranking By Manuel Frondel; Nolan Ritter; Christoph M. Schmidt
  2. Energy policy and regulatory challenges in natural gas infrastructure and supply in the energy transition in Sweden By Hernández Ibarzábal, José Alberto
  3. Energy efficiency in Europe: trends, convergence and policy effectiveness By Arigoni Ortiz, Ramon; Bastianin, Andrea; Bigano, Andrea; Cattaneo, Cristina; Lanza, Alessandro; Manera, Matteo; Markandya, Anil; Plotegher, Michele; Sferra, Fabio
  4. Testing for Energy Market Integration in China By Hengyun Ma; Les Oxley; John Gibson
  5. China’s Energy Situation and Its Implications in the New Millennium By Hengyun Ma; Les Oxley; John Gibson
  6. Choice experiment study on the willingness to pay to improve. By Sabah Abdullah; Petr Mariel
  7. Driving for Fun? – A Comparison of Weekdays and Weekend Travel By Manuel Frondel; Colin Vance
  8. Housing, Energy Cost, and the Poor – Counteracting Effects in Germany’s Housing Allowance Program By Peter Grösche
  9. Forecasting volatility and spillovers in crude oil spot, forward and future markets By Chang, C-L.; McAleer, M.; Tansuchat, R.
  10. Fiscal policy challenges in oil-exporting countries – a review of key issues. By Michael Sturm; François Gurtner; Juan Gonzalez Alegre
  11. External shocks and international inflation linkages: a Global VAR analysis. By Alessandro Galesi; Marco J. Lombardi
  12. Modelling conditional correlations for risk diversification in crude oil markets By Chang, C-L.; McAleer, M.; Tansuchat, R.
  13. Understanding the build-up of a Technological Innovation System around Hydrogen and Fuel Cell Technologies By Roald A.A. Suurs; Marko P. Hekkert; Ruud E.H.M. Smits
  14. Biofuels Policies and Welfare: Is the Stick of Mandates Better than the Carrot of Subsidies? By Lapan, Harvey E.; Moschini, GianCarlo
  15. Interdependencies in the Energy-Bioenergy-Food Price Systems: A Cointegration Analysis By Pavel Ciaian; d'Artis Kancs
  16. Predicting share price of energy companies: June-September 2009 By Kitov, Ivan; Kitov, Oleg
  17. Basic Infrastructure for a Nuclear Power Project By International Atomic Energy Agency IAEA
  18. Assessing Vulnerability of Selected Sectors under Environmental Tax Reform By Fitz Gerald, John; Keeney, Mary; Scott, Sue
  19. The role of fiscal instruments in environmental policy By Katri Kosonen; Gaëtan Nicodème
  20. Theoretical Perspectives on Resource Tax Design By Robin Boadway; Michael Keen
  21. Taxes, Permits and the Adoption of Abatement Technology under Imperfect Compliance By Villegas, Clara; Coria, Jessica
  22. The Impact of the EU Emissions Trading System on CO2 Intensity in Electricity Generation By Widerberg, Anna; Wråke, Markus
  23. Global and Regional Impacts of the Clean Development Mechanism By Shunli Wang; Henri L.F. de Groot; Peter Nijkamp; Erik T. Verhoef
  24. Achieving Sustainable Consumption for Sustainable Development: Issues and Solutions By K, Sudarkodi
  25. Decision Making for Sustainable Development: How Assessment Can Help By Nick Bonvoisin
  26. Environmental Kuznets Curve for CO2 in Canada By Jie He; Patrick Richard
  27. Addressing Climate Change through Innovation: The Challenges Ahead By Jose Palacin
  28. Forest, Wood and Climate Change: Challenges and Opportunities in the UNECE Region By Kit Prins; Sebastian Hetsch; Franziska Hirsch; Roman Michalak; Ed Pepke; Florian Steierer
  29. Japan’s Contribution to Cool Earth By Kikkawa, Takeo
  30. Climate Change and Youth and/in Local Governments By John Anugraha
  31. The ABCs of Global Warming By Robert Shelburne
  32. The Knowing Doing Gap By Eva Molnar

  1. By: Manuel Frondel; Nolan Ritter; Christoph M. Schmidt
    Abstract: The security of energy supply has again become a similarly hot topic as it was during the oil crises in the 1970s, not least due to the recent historical oil price peaks. In this paper, we analyze the energy security situation of the G7 countries using a statistical risk indicator and empirical energy data for the years 1978 through 2007.We find that Germany’s energy supply risk has risen substantially since the oil price crises of the 1970s, whereas France has managed to reduce its risk dramatically, most notably through the deployment of nuclear power plants. As a result of the legally stipulated nuclear phase-out, Germany’s supply risk can be expected to rise further and to approach the level of Italy.Due to its resource poverty, Italy has by far the highest energy supply risk among G7 countries.
    Keywords: Herfindahl Index, Energy Supply Risk Indicator
    JEL: C43 Q41
    Date: 2009–04
  2. By: Hernández Ibarzábal, José Alberto (Institute for Futures Studies)
    Abstract: <p> Sweden is undergoing a major energy transition in which the present regulatory, competition and energy decisions will determine future involvement in the “oil and gas game” after decades of successful implementation of non-fossil fuel dependence policies. Contrary to major energy policies implemented since the oil crisis of the 70’s, higher natural gas investment in infrastructure – in particular regarding offshore pipelines – is not an outcome of a consented agreement between the government and private firms. The lack of clear governmental definition towards the time to phase out nuclear terminals, and how this source of energy would be replaced, is leading the country towards an energy bottleneck that could condition future energy supply, thus governance. Under these conditions, crucial decisions shall be taken in the near future regarding granting permissions to pipelines that connect to the Russian natural gas fields following an EU trend, to the Norwegian natural gas reserves on the trail of a Nordic energy path-dependence, or to both, sharing potential benefits and risks. <p>
    Keywords: Energy policy; Future energy supply; Natural gas infrastructure; Energy transition; Sweden; Russian natural gas fields; Norwegian natural gas reserves; Swedish energy transition.
    JEL: Q41 Q43 Q48
    Date: 2009–06–10
  3. By: Arigoni Ortiz, Ramon; Bastianin, Andrea; Bigano, Andrea; Cattaneo, Cristina; Lanza, Alessandro; Manera, Matteo; Markandya, Anil; Plotegher, Michele; Sferra, Fabio
    Abstract: This paper analyses energy efficiency in the EU, both in terms of reductions in energy intensity and in terms of physical indicators, looking at the differences among sectors and among Member States. We test econometrically the existence of convergence in energy intensity across Europe. We find a sensible catching–up of less performing countries, particularly in the agricultural and in the industrial sectors. Against this background, we analyse the role played by energy policies in EU Member States and we identify the most effective classes of policies and measures by means of a panel analysis of the EU-15 and Norway. It turns out that, in the residential sector, energy efficiency is particularly affected by heating regulations, by subsidies as well as tax reductions; in the transport sector, effective policies are tax reductions, incentives to eliminate old and polluting cars, car sharing, commuter plan and traffic management; in the industrial sector, mandatory technology standards, financing at low interest rate, information activities, education and outreach proved to be effective.
    Keywords: energy intensity; energy efficiency; convergence; European energy policy
    JEL: Q48 O13 E65 Q01 Q43
    Date: 2009
  4. By: Hengyun Ma (University of Canterbury); Les Oxley (University of Canterbury); John Gibson (Motu Economic and Public Policy Research and The University of Waikato)
    Abstract: This 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; and that once some geographically isolated regions are excluded, we can regard the coal market as integrated; however, the electricity market 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: 2009–03
  5. By: Hengyun Ma (University of Canterbury); Les Oxley (University of Canterbury); John Gibson (Motu Economic and Public Policy Research and The University of Waikato)
    Abstract: Many are interested in China’s energy situation, however, numerous energy related issues in China still remain unanswered. For example, what are the potential forces driving energy demand and supply? Previous reviews focused only on fossil fuel based energy and ignored other important elements including renewable and ‘clean’ energy sources. The work presented here is intended to fill this gap by bringing the research on fossil-based and renewable energy economic studies together and identifying the potential drivers behind both energy demand and supply to provide a complete picture of China’s energy situation in the new millennium. This will be of interest to anyone concerned with the development of China’s economy in general, and in particular with its energy economy.
    Keywords: China China; Energy; Fossil fuels; Renewable Energy
    JEL: D24 O33 Q41
    Date: 2009–04
  6. By: Sabah Abdullah (University of Bath, UK); Petr Mariel (Universidad del País Vasco)
    Abstract: Modern forms of energy are an important vehicle towards poverty alleviation in rural areas of developing countries. Most developing countries’ households heavily rely on wood fuel which impact their health and social–economic status. To ease such a dependency, other modern forms of energy, namely electricity, need to be provided. However, the quality of the electricity service, namely reliability, is an important factor in reducing this dependency. This paper discusses a choice experiment valuation study conducted among electrified rural households located in Kisumu, Kenya, in which the willingness to pay (WTP) to avoid power outages or blackouts was estimated. A mixed logit estimation was applied to identify the various socio-economic and demographic characteristics which determine preferences to reduce power outages among a household’s users. In conclusion, several of the socio-economic and demographic characteristics outlined in this paper were identified and can assist service differentiation to accommodate the diverse households’ preferences towards the improvement of the electricity service.
    Keywords: developing country, rural, power outages, willingness to pay, random parameter logit
    JEL: Q56 C25
    Date: 2009–06–19
  7. By: Manuel Frondel; Colin Vance
    Abstract: Focusing on individual motorists in car-owning households in Germany, this paper econometrically investigates the determinants of automobile travel with the specific aim of quantifying the effects of fuel prices and person-level attributes on travel conducted over a five-day week and weekend. Our analysis is predicated on the notion that car use is an individual decision, albeit one that is dependent on intra-household allocation processes, thereby building on a growing body of literature that has identified the importance of socioeconomic factors such as employment status, gender, and the presence of children in determining both access to the car and distance driven. To capture this two-stage decision process, we employ the Two-Part Model, which consists of Probit and OLS estimators, and derive elasticity estimates that incorporate both the discrete and continuous choices pertaining to car use.With fuel price elasticity estimates ranging between –0.42 and –0.48, our results suggest raising prices via fuel taxes to be a promising energy conservation and climate protection measure.
    Keywords: Automobile travel, Two-Part Model, interaction effects
    JEL: D13 Q41
    Date: 2009–04
  8. By: Peter Grösche
    Abstract: Adequate housing and affordable warmth are essential human needs, the lack of which may seriously harm people’s health. Germany provides an allowance to low-income households, covering the housing as well as the space heating cost, to protect people from the consequences of poor housing conditions and fuel poverty. In order to limit public expenditures, payment recipients are required to choose low-cost dwellings, with the consequence that they probably occupy flats with a poor thermal performance. Recipients are thus likely to have a higher energy consumption and energy expenditures. Using a large data set of German households, this paper demonstrates that this counteracting effect is of negligible magnitude. Yet, from an ecological perspective, the allowance scheme creates distorted incentives and should be reformed.
    Keywords: Housing allowance, energy efficiency, simultaneous-equation system
    JEL: C33 H53 Q48
    Date: 2009–05
  9. By: Chang, C-L.; McAleer, M.; Tansuchat, R. (Erasmus Econometric Institute)
    Abstract: Crude oil price volatility has been analyzed extensively for organized spot, forward and futures markets for well over a decade, and is crucial for forecasting volatility and Value-at-Risk (VaR). There are four major benchmarks in the international oil market, namely West Texas Intermediate (USA), Brent (North Sea), Dubai/Oman (Middle East), and Tapis (Asia-Pacific), which are likely to be highly correlated. This paper analyses the volatility spillover effects across and within the four markets, using three multivariate GARCH models, namely the CCC, VARMA-GARCH and VARMA-AGARCH models. A rolling window approach is used to forecast the 1-day ahead conditional correlations. The paper presents evidence of volatility spillovers and asymmetric effects on the conditional variances for most pairs of series. In addition, the forecasted conditional correlations between pairs of crude oil returns have both positive and negative trends.
    Keywords: volatility spillovers;multivariate GARCH;conditional correlations;crude oil spot prices;spot returns;forward returns;futures returns
    Date: 2009–06–16
  10. By: Michael Sturm (European Central Bank, Directorate General International and European Relations, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); François Gurtner (European Central Bank, Directorate General International and European Relations, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Juan Gonzalez Alegre (Universidad Pablo de Olavide, Economics Department, Seville, Spain.)
    Abstract: Fiscal policy choices have a particularly significant impact on economic performance in oil-exporting countries, owing to the importance of the oil sector in the economy and the fact that in most countries oil revenues accrue to the government. At the same time, fiscal policy in oil-centred economies s facing specific challenges, both in the long run, as regards intergenerational equity and fiscal sustainability, and in the short run, as regards macroeconomic stabilisation and fiscal planning. Institutional responses to the specific fiscal challenges in oil-exporting countries involve conservative oil price assumptions in the budget, the establishment of oil stabilisation and savings funds and fiscal rules. Fiscal policy in most oil-exporting countries has been expansionary over the past years in the wake of high oil prices. Fiscal expansion has added to inflationary pressure, and monetary policy has been constrained in tackling inflation as a result of prevailing exchange rate regimes. While, in this context, fiscal policy is the major tool for macroeconomic stabilisation, it has faced competing objectives and considerations. Cyclical considerations would have warranted fiscal restraint, but, in times of high oil prices, pressures to increase public spending have been mounting. Such pressures stem from primarily distribution-related considerations, development-related spending needs (e.g. in the areas of physical and social infrastructure) and international considerations in the context of, for example, global imbalances. The sharp fall in oil prices since mid-2008 has brought to the fore a different question – whether oil exporters can sustain spending levels reached in previous years. JEL Classification: E62, E63, H30, H60, Q32, Q38.
    Keywords: Fiscal policy, oil-exporting countries, inflation, global imbalances.
    Date: 2009–06
  11. By: Alessandro Galesi (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.); Marco J. Lombardi (European Central Bank, Kaiserstrasse 29, D-60311 Frankfurt am Main, Germany.)
    Abstract: Amid the recent commodity price gyrations, policy makers have become increasingly concerned in assessing to what extent oil and food price shocks transmit to the inflationary outlook and the real economy. In this paper, we try to tackle this issue by means of a Global Vector Autoregressive (GVAR) model. We first examine the short-run inflationary effects of oil and food price shocks on a given set of countries. Secondly, we assess the importance of inflation linkages among countries, by dis-entangling the geographical sources of inflationary pressures for each region. Generalized impulse response functions reveal that the direct inflationary effects of oil price shocks affect mostly developed countries while less sizeable effects are observed for emerging economies. Food price increases also have significative inflationary direct effects, but especially for emerging economies. Moreover, significant second-round effects are observed in some countries. Generalized forecast error variance decompositions indicate that considerable linkages through which inflationary pressures spill over exist among regions. In addition, a considerable part of the observed headline inflation rises is attributable to foreign sources for the vast majority of the regions. JEL Classification: C32, E31.
    Keywords: oil shock, commodity prices, inflation, second-round effects, Global VAR.
    Date: 2009–06
  12. By: Chang, C-L.; McAleer, M.; Tansuchat, R. (Erasmus Econometric Institute)
    Abstract: This paper estimates univariate and multivariate conditional volatility and conditional correlation models of spot, forward and futures returns from three major benchmarks of international crude oil markets, namely Brent, WTI and Dubai, to aid in risk diversification. Conditional correlations are estimated using the CCC model of Bollerslev (1990), VARMA-GARCH model of Ling and McAleer (2003), VARMA-AGARCH model of McAleer et al. (2009), and DCC model of Engle (2002). The paper also presents the ARCH and GARCH effects for returns and shows the presence of significant interdependences in the conditional volatilities across returns for each market. The estimates of volatility spillovers and asymmetric effects for negative and positive shocks on conditional variance suggest that VARMA-GARCH is superior to the VARMA-AGARCH model. In addition, the DCC model gives statistically significant estimates for the returns in each market, which shows that constant conditional correlations do not hold in practice.
    Keywords: conditional correlations;crude oil spot prices;futures prices;forward prices;risk diversification
    Date: 2009–06–16
  13. By: Roald A.A. Suurs; Marko P. Hekkert; Ruud E.H.M. Smits
    Abstract: This study provides insight into the development of hydrogen and fuel cell technologies in the Netherlands (1980-2007). This is done by applying a Technological Innovation System (TIS) approach. This approach takes the perspective that a technology is shaped by a surrounding network of actors, institutions and technologies. When a technology is in an early stage of development, a TIS has yet to be built up in order to propel technological progress. This paper focuses on the historical build-up of the hydrogen and fuel cell innovation system in the Netherlands. The research focuses on processes that accelerated or slowed down the developments of hydrogen and fuel cell technologies. We suggest that this framework is helpful for actors who intend to accelerate the development and deployment of hydrogen and fuel cells in other countries.
    Keywords: fuel cell; technological innovation system; system functions; cumulative causation.
    Date: 2009–06
  14. By: Lapan, Harvey E.; Moschini, GianCarlo
    Abstract: Significant government support for biofuels has led to rapid growth in U.S. ethanol production and research to develop more advanced biofuels. In this paper we construct a general equilibrium, open economy model that captures the rationale typically invoked to justify government intervention in this setting: to alleviate the environmental impact of energy consumption and to decrease U.S. energy dependence on foreign sources. The model is used to study both the positive and normative implications of alternative policy instruments, including the subsidies and mandates specified by the 2007 Energy Independence and Security Act. From a positive perspective, we find that biofuels mandates are equivalent to a combination of fuel taxes and biofuels subsidies that are revenue neutral. From a welfare perspective, we show that biofuels mandates dominate biofuels subsidies, and that combining fuel taxes (rather than subsidies) with mandates would be welfare enhancing.
    Keywords: Biofuels policies, Greenhouse gas emissions, Mandates, Second best, Subsidies, Welfare.
    JEL: F1 H2 Q0
    Date: 2009–06–09
  15. By: Pavel Ciaian; d'Artis Kancs
    Abstract: The present paper examines a long-run relationship between the energy, bioenergy and food prices. In the recent years the bioenergy production has increased significantly around the world. The increase has been driven by rising energy prices as well as by environmental policies aiming at reducing the harmful effects of conventional sources of energy, such as climate change. Bioenergy, in turn, affects agricultural markets, because it uses agricultural commodities as inputs. The theoretical model we develop predicts that, because of price inelastic food demand, the agricultural price increase may be substantial. The empirical findings confirm the theoretical hypothesis that energy prices do affect prices of agricultural commodities. However, the co-integration is weaker than theoretically predicted. The price effect of bioenergy might be mitigated by new technological development, which improve yields and lead to an offsetting effect in the supply of agricultural commodities, and by fallow land brought into cultivation, when agricultural profitability is rising.
    Keywords: Energy, bioenergy, crude oil, prices, cointegration.
    JEL: Q11 Q13 Q42
    Date: 2009–06–06
  16. By: Kitov, Ivan; Kitov, Oleg
    Abstract: Previously, we have revealed the presence of a reliable linear dependence between share prices of energy-related companies and the difference between CPI and core CPI: any change in share prices is transmitted into a proportional change in this difference two and half months later. The difference itself is characterized by sustainable trends reigning over seven to twenty-year intervals. As a result, the link between the share prices and the difference allows predicting the former over longer intervals. Since mid-2008, the previously observed trend has been undergoing a transition to a new trend. Accordingly, one may formulate two principal problems: “What is the dependence between share price and CPI during the transition?” and “When and how can one determine the properties of the new trend?” Currently available information on the CPI allows predicting the share prices between June and September 2009.
    Keywords: COP; CVX; DVN; HAL; XOM; prediction; share price; CPI
    JEL: G1 D4 E3
    Date: 2009–06–22
  17. By: International Atomic Energy Agency IAEA
    Abstract: This publication was produced as a direction to increase the capability of Member States to plan and implement nuclear power programmes and to establish and enhance national nuclear infrastructure. This publication should be used in conjunction with the IAEA Safety Standards Series and other appropriate safety related and safeguards publications. [IAEA-TECDOC-1513]
    Keywords: nuclear power, infrastructure, safety, project, physical facilities, water supply, power, transport, earthquake monotoring station, foreign investment
    Date: 2009
  18. By: Fitz Gerald, John (Economic and Social Research Institute (ESRI)); Keeney, Mary (Central Bank and Financial Services Authority of Ireland); Scott, Sue (Economic and Social Research Institute (ESRI))
    Date: 2009–06
  19. By: Katri Kosonen (European Commission.); Gaëtan Nicodème (Centre Emile Bernheim, Solvay Brussels School of Economics and Management, ECARES, Université Libre de Bruxelles, Brussels, European Commission and CESifo.)
    Abstract: Environmental protection is one of Europe's key values. The EU has set clear policy objectives to achieve its environmental goals. The EU has favoured market-based instruments, among which fiscal instruments to tackle the climate change problem. This paper takes a policy-making perspective and provides an overview of key issues on the role of fiscal instruments in energy and environmental policies. It describes fiscal instruments as cost-effective means to promote environmental goals and highlights in which cases taxes and other types of fiscal instruments can usefully complement each other to achieve environmental target.
    Keywords: taxation, environmental policy, VAT, fiscal incentives
    JEL: H23 Q38 Q48 Q58
    Date: 2009–06
  20. By: Robin Boadway (Queen's University); Michael Keen (IMF)
    Abstract: The importance and complexity of petroleum and hard minerals operations is matched by the importance and complexity of finding effective ways to tax them. Many of these challenges arise in other activities too (exhaustibility of deposits being the main exception), but they take such extreme form in relation to resources as to have led to a proliferation of creative instruments and analytical methods. This paper reviews the challenges for tax policy in dealing with the resource sector, the principal instruments used, and some of the central design issues.
    Keywords: natural resources, resource taxation, non-renewable resources
    JEL: H25 Q38
    Date: 2009–01
  21. By: Villegas, Clara (Department of Economics, School of Business, Economics and Law, Göteborg University); Coria, Jessica (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: his paper analyzes the effects of the choice between price-based and quantity-based emission regulations on compliance incentives and social welfare in the presence of incomplete enforcement and technology adoption. We show that in contrast to taxes, the extent of violations under tradable emission permits (TEPs) decreases with the rate of technology adoption. However, in terms of welfare, the ranking of the instruments is not so straightforward: taxes induce lower emission damages while TEPs induce lower abatement, investment, and expected enforcement costs. Thereby, the overall ranking depends on the extent to which these effects offset each other.<p>
    Keywords: Technological adoption; environmental policy; imperfect compliance; enforcement; social welfare
    JEL: K32 K42 L51 Q55
    Date: 2009–06–16
  22. By: Widerberg, Anna (Department of Economics, School of Business, Economics and Law, Göteborg University); Wråke, Markus (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: Prior to the launch of the EU Emissions Trading System (EU ETS) in 2005, the electricity sector was widely proclaimed to have more low-cost emission abatement opportunities than other sectors. If this were true, effects of the EU ETS on carbon dioxide (CO2) emissions would likely be visible in the electricity sector. Our study looks at the effect of the price of emission allowances (EUA) on CO2 emissions from Swedish electricity generation, using an econometric time series analysis for the period 2004–2008. We control for effects of other input prices and hydropower reservoir levels. Our results do not indicate any link between the price of EUA and the CO2 emissions of Swedish electricity production. A number of reasons may explain this result and we conclude that other determinants of fossil fuel use in Swedish electricity generation probably diminished the effects of the EU ETS.<p>
    Keywords: Emissions trading; carbon dioxide; climate change; electricity; carbon intensity
    JEL: C22 D21 D24 Q54
    Date: 2009–06–09
  23. By: Shunli Wang; Henri L.F. de Groot (VU University); Peter Nijkamp (VU University); Erik T. Verhoef (VU University)
    Abstract: Climate change is a serious concern worldwide. Policy research on climate change in the past decades has largely focused on applied modelling exercises. However, the implications of specific policy strategies such as the clean development mechanism (CDM) for global and regional economic and environmental developments has received relatively little attention. This is partly caused by the complexities of modelling an instrument like CDM. By using and modifying the GTAP-E modelling system, this paper sets out to trace the combined economic and environmental impacts of CDM policies. Particular emphasis is placed on technology transfer induced by alternative CDM policies. Specific attention is devoted to the possible negative consequences of non-participation of the USA in the global coalition, and the associated distributional impacts world-wide.
    Keywords: Climate Change; Clean Development Mechanism; Regional Development
    JEL: F18 O13 Q54 Q56
    Date: 2009–05–20
  24. By: K, Sudarkodi
    Abstract: Promoting sustainable consumption and production are important aspects of sustainable development. Agenda 21, endorsed by the United Nations Conference on Economic Development (UNCED) in 1992, identified unsustainable consumption and production patterns, particularly in industrialised countries, as the major cause behind the continued deterioration of the global environment. Agenda 21 stresses that changes in consumption and production patterns are necessary to ensure more sustainable development. It calls on industrialised countries to take the lead in achieving sustainable consumption patterns and demonstrate that resource-efficient, low-pollution lifestyles are feasible. The World Summit on Sustainable Development (WSSD) in Johannesburg recognised the necessity of “changing unsustainable patterns of consumption and production”. Current patterns of consumption and production, particularly, in the developed countries are unsustainable. They are depleting forest resources, fisheries, groundwater and bio diversity, polluting air, water and eco systems and causing dangerous climate changes. Environmental decay is occurring everywhere around the globe. This article focuses on sustainable consumption. Without sustainable consumption, sustainable development is impossible. Sustainable consumption has become an important issue on the global governance agenda. There is an increasing recognition that increases in resource productivity alone will not be sufficient to deliver sustainable development. Shifts in the scale and pattern of consumption are essential and it depends on the expectations, choices, behaviours and the lifestyles of consumers. These issues are key components within the emerging concept of ‘Sustainable Consumption’.
    Keywords: Sustainable Consumption; Sustainable Development
    JEL: A1 D40 D1 O1 E2 N5 E23 R2 O4
    Date: 2009–06–05
  25. By: Nick Bonvoisin (United Nations Economic Commission for Europe)
    Abstract: Despite recent progress in developing a political consensus that policy changes are needed at both the domestic and international level to address climate change, the required political and public will is still insufficient to overcome a number of political barriers limiting progress.This essay discusses the importance of raising public awareness of environmental issues and the role that assessment processes can have in this regard. Awareness of the environmental dimension of economic activities can be increased in numerous ways such as through education and training, public-service campaigns, product labelling, product marketing, and consumer activism. This essay, however, focuses on the role of environmental assessments; they provide a more formal and scientific way for information to be incorporated into policy decisions and the planning process.
    Keywords: Climate change, global warming, environmental assessment
    JEL: Q50 Q52 Q54 Q58
    Date: 2009–01
  26. By: Jie He (GREDI, Faculte d'administration, Université de Sherbrooke); Patrick Richard (GREDI, Faculte d'administration, Université de Sherbrooke)
    Abstract: The environmental Kuznets curve hypothesis is a theory by which the relationship between per capita GDP and per capita pollutant emissions has an inverted U shape. This implies that, past a certain point, economic growth may actually be profitable for environmental quality. Most studies on this subject are based on estimating fully parametric quadratic or cubic regression models. While this is not technically wrong, such an approach somewhat lacks flexibility since it may fail to detect the true shape of the relationship if it happens not to be of the specified form. We use semiparametric and flexible nonlinear parametric modelling methods in an attempt to provide more robust inferences. We find little evidence in favour of the environmental Kuznets curve hypothesis. Our main results could be interpreted as indicating that the oil shock of the 1970s has had an important impact on progress towards less polluting technology and production.
    Keywords: Environmental Kuznets curve, CO2 emissions, Partially linear regression model, Flexible parametric inference, Oil shock.
    JEL: Q53 Q56
    Date: 2009–06–18
  27. By: Jose Palacin (United Nations Economic Commission for Europe)
    Abstract: A key component of climate change mitigation efforts will be the need to develop new technological solutions and to diffuse current state-of-the-art technologies to developing countries. However, due to a number of market failures, the required research and technological transfers are currently not being undertaken. The essay discusses how what has been learned about promoting innovation policies at the general level can be applied to the specific challenges in the environmental area. It stresses the need to establish the proper regulatory and institutional frameworks as a precondition for attracting funding into these activities. More specifically, there is a current need to set a realistic price for carbon emissions that will provide an important financial incentive for firms to invest in mitigation technologies. The issue of finding finance for often long-term and risky environmental projects is likely to become especially difficult due to the 2008 financial crisis.
    Keywords: Climate change, global warming, innovation, finance
    JEL: G24 G38 Q50 Q52 Q54 Q58
    Date: 2009–01
  28. By: Kit Prins (United Nations Economic Commission for Europe); Sebastian Hetsch (United Nations Economic Commission for Europe); Franziska Hirsch (United Nations Economic Commission for Europe); Roman Michalak (United Nations Economic Commission for Europe); Ed Pepke (United Nations Economic Commission for Europe); Florian Steierer (United Nations Economic Commission for Europe)
    Abstract: This essay explains the importance of the forests as a factor in addressing the challenges in mitigating climate change. The potential of using the forest sector more fully to capture and store carbon has been limited by the failure of current protocols and other climate change mechanisms to adequately account for the contribution of this sector. Thus, a better accounting, which will give the proper credit to the impacts that this sector is having, is viewed to be an important next step to increasing the resources that countries will devote to this factor in addressing climate change. The degree to which global warming is already affecting the forest is also discussed; increasingly mankind may be required to be more proactive in implementing “planned adaptation” activities such as increasing the diversification of forestry resources.
    Keywords: Climate change, global warming, forest, biofuels
    JEL: Q23 Q50 Q52 Q54 Q57 Q58
    Date: 2009–01
  29. By: Kikkawa, Takeo
    Abstract: The purpose of the “Cool Earth 50 Plan” announced by the Japanese Government is to cut global greenhouse gas emissions to half the current level by 2050. This paper focuses on the following two points: (i) How compatibility between environmental protection and economic growth could be made, and (ii) How Japan should contribute to “Cool Earth” on a long-term basis. In regard to point (i), this paper makes clear the validity of energy conservation and technological innovation. One of the most important innovations is CCS (Carbon Dioxide Capture and Storage) / EOR (Enhanced Oil Recovery) technology. In regard to point (ii), this paper introduces two unique Japanese methods for cutting global greenhouse gases, those are the “Top Runner Program” and the “Sector by Sector Approach”. The former is effective in the residential, commercial, and transportation sectors, and the latter is valid in the industrial sectors.
    Date: 2009–06
  30. By: John Anugraha
    Abstract: Can young people help to increase awareness about climate change and its impacts working through local bodies? A perceptive and informative presentation by the UN-HABITAT Youth Advisory Board Member at the Local Government Climate Leadership Summit held in Copenhagen last week.
    Keywords: young people, climate change, government, leadership, population, developing countries, India, carbon emissions
    Date: 2009
  31. By: Robert Shelburne (United Nations Economic Commission for Europe)
    Abstract: This essay provides a broad methodological framework for thinking about what is needed policy-wise for addressing climate change due to increased carbon emissions. Climate change will require mankind to decide whether it is best to adapt to higher temperatures or attempt to mitigate the increase by drastically reducing emissions of carbon dioxide into the atmosphere. The optimal choice is to minimize the sum of the adaptation and mitigation costs; it is argued that much more needs to be done to reduce carbon emissions and thus the focus should be on mitigation activities. This, however, will require a considerable amount of technological advancement and the creation of a global institutional mechanism to manage the process; an attempt is made to explain what is going to be required regarding both of these.
    Keywords: Climate change, global warming,
    JEL: Q50 Q52 Q54 Q58
    Date: 2009–01
  32. By: Eva Molnar (United Nations Economic Commission for Europe)
    Abstract: This essay addresses two major challenges confronting the road tranportation sector: reducing emissions and improving road safety. After energy production, the transportation sector is the second largest source of carbon emissions, accounting for about one quarter of all fossil fuel emissions. Three quarters of this is due to road transport. The huge task in reducing emissions is compounded by the expected rapid increase in the number of cars; their number is expected to more than double between now and 2020. As for highway safety, every year over one million people die in highway fatalities and they are the leading cause of death globally for those 15-19 years old. This essay argues that the task is to close the gap between what we know about these issues and what we are actually doing about them.
    Keywords: Climate change, global warming, transport infrastructure, road safety
    JEL: Q50 Q52 Q54 Q58 H41 H54 H87 I18
    Date: 2009–01

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