nep-ene New Economics Papers
on Energy Economics
Issue of 2009‒09‒11
thirteen papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao, Spain

  1. Energy in a Bathtub: Electricity Trade between Countries with Different Generation Technologies By Førsund, Finn R.
  2. Socially Optimal Liability Rules for Firms with Natural Monopoly By Atsushi Tsuneki;
  3. Vers une rupture profonde du modèle énergétique mondial By Patrick Criqui
  4. Nature of Oil Price Shocks and Monetary Policy By Junhee Lee; Joonhyuk Song
  5. An Alternative Explanation for the Resource Curse: The Income Effect Channel By Arezki, Rabah; Alichi, Ali
  6. WCD Thematic Review V.2:Contributing Paper: Environmental and Social Impact Assessment for Large Dams -Thematic Review from the Point of View of Developing Countries By Iara Verocai
  7. Solar PV rural electrification and energy-poverty: A review and conceptual framework with reference to Ghana By Obeng, George Yaw; Evers, Hans-Dieter
  8. The Impact of Biofuels Policy on Agribusiness Stock Prices By Tepe, Fatma; Du, Xiaodong (Sheldon); Hennessy, David A.
  9. Transboundary Pollution and Absorptive Capacity By Ben Youssef, Slim
  10. Inciting Protocols – How International Environmental Agreements Trigger Knowledge Transfers By Thijs Dekker; Herman R.J. Vollebergh; Frans P. de Vries; Cees A. Withagen
  11. Moral Concerns on Tradable Pollution Permits in International Environmental Agreements By Eyckmans, Johan; Kverndokk, Snorre
  12. Comment mobiliser les communes dans les Plans Climat Territoriaux ? By Gilles Debizet
  13. Price Volatility and Risk Exposure: on the Interaction of Quota and Product Markets By Baldursson, Fridrik M.; von der Fehr, Nils-Henrik M.

  1. By: Førsund, Finn R. (Dept. of Economics, University of Oslo)
    Abstract: Many countries have followed a policy of being self-sufficient in electricity. However, in the last two decades exchange of electricity across borders has become more widespread, and the European Union's policy is to encourage a gradual expansion of crossborder trading and integration of electricity markets. It is therefore of interest to study what happens with the price formation in home markets when borders are opened up for trade in electricity and generating technologies differ. There is a common international market, Nord Pool, between the Nordic countries since 1996, and trade now takes place between many European countries on a bilateral basis. A stylised general equilibrium model of trade of electricity between two countries; Hydro and Thermal, with hydro and thermal technologies, is used to investigate price and quantity consequences going from autarky to trade in a competitive market, as revealed by using a social planning perspective for cooperation between countries.
    Keywords: Electricity; hydropower; thermal power; international trade
    JEL: F14 Q40
    Date: 2009–08–06
  2. By: Atsushi Tsuneki;
    Abstract: It has been shown by Polinsky and Shavell that the strict liability rule is socially superior to the negligence liability rule when firms are injurers, strangers are victims, and accidents have a unilateral nature if prefect competition among firms prevails. This article considers the problem of socially efficient liability rules in a market where natural monopoly prevails due to decreasing average cost. We especially consider a quasi-competitive case where average cost pricing is achieved in a naturally monopolized market either through well-organized government regulation or the weak invisible hands of contestability. In contrast to the perfectly competitive economy, the present article shows that in most cases, the negligence regime is socially more desirable than the strict liability regime from the view point of economic efficiency.
    Date: 2009–08
  3. By: Patrick Criqui (LEPII - Laboratoire d'Économie de la Production et de l'Intégration Internationale - CNRS : UMR5252 - Université Pierre Mendès-France - Grenoble II)
    Abstract: Le paradigme énergétique mis en œuvre avec la révolution industrielle au début du XIXème siècle aura duré deux siècles. Il n'est aujourd'hui plus soutenable en raison d'une contrainte amont sur les ressources d'hydrocarbures et d'une contrainte aval sur la capacité de l'atmosphère à stocker les gaz à effet de serre. Un nouveau paradigme énergétique permettant de surmonter cette double contrainte doit être déployé dès la première moitié du XXIème siècle. Il imposera une bien plus grande sobriété et efficacité énergétique, la mise en œuvre massive des sources sans carbone et des changements profonds dans les infrastructures urbaines et de transport comme dans les comportements des consommateurs.
    Date: 2009–07
  4. By: Junhee Lee; Joonhyuk Song
    Abstract: We investigate the nature of oil price shocks to the Korean economy in recent years and find that the recent hike in oil price is induced by the increase in oil demand in contrast to the previous years when oil price run-up is mostly from supply disruptions. We also study how monetary responses to oil price shocks affect economic stability and find that an accommodative policy yields more stable outcomes.
    JEL: E32 E52 E58
    Date: 2009–09
  5. By: Arezki, Rabah; Alichi, Ali
    Abstract: The paper provides an alternative explanation for the “resource curse” based on the income effect resulting from high government current spending in resource rich economies. Using a simple life cycle framework, we show that private investment in the non-resource sector is adversely affected if private agents expect extra government current spending financed through resource sector revenues in the future. This income channel of the resource curse is stronger for countries with lower degrees of openness and forward altruism. We empirically validate these findings by estimating non-hydrocarbon sector growth regressions using a panel of 25 oil-exporting countries over 1992–2005.
    Keywords: resource curse; fiscal policy; investment and growth
    JEL: O11 O41 C81 C01 Q30
    Date: 2009–05
  6. By: Iara Verocai
    Abstract: It presents an overview of the theme based on the author’s experience on EIA in developing countries. In many of these countries, a holistic approach has been adopted to EIA requiring the consideration of both biophysical and socioeconomic impacts. This is expressed in regulations concerning the basic EIA contents. Thus, social variables are implicit in the following items, wherever environment is mentioned.
    Keywords: EIA, developing countries, biophysical, socioeconomic, environment, social variables, dams
    Date: 2009
  7. By: Obeng, George Yaw; Evers, Hans-Dieter
    Abstract: In spite of the intention of governments to increase the use of renewable energy in electricity supply, particularly the use of solar photovoltaic (PV) for energy poverty reduction in rural and peri-urban areas of Africa, there is relatively little information on how solar PV electrification impacts on energy poverty reduction. Therefore, there is a gap in the literature and hence the need for continuous research. Using Ghana as a reference country, the historical trend, donor cooperation and other aspects of solar PV rural electrification are discussed . The paper illustrates the intersectoral linkages of solar PV electrification and indicators on education, health, information acquisition, agriculture and micro-enterprises. It also reviews sustainability related issues including costs and market barriers, subsidies, stakeholders involvement, political and policy implications, which are critical factors for sustainable market development of solar PV and other renewables. Finally, a common framework is developed to provide a basic understanding of how solar PV electrification impacts on energy-poverty. This framework provides a structure of the interrelated concepts and principles relevant to the issues under review.
    Keywords: Rural electrification; solar PV electrification; energy-poverty; renewable energy; economic development; Ghana; Africa.
    JEL: N57 O55 N37 O13 Q42 N7 P28 Q43
    Date: 2009–02–02
  8. By: Tepe, Fatma; Du, Xiaodong (Sheldon); Hennessy, David A.
    Abstract: Corn markets are important for many industries, including the seed, fertilizer, meat production/processing and agricultural machinery sectors, all of which are highly concentrated. Oligopoly theory suggests that corn input and field equipment suppliers likely benefit from policies that support corn markets, such as U.S. biofuels policy, while meat companies are likely adversely affected. Employing a linear two-factor (S&P 500 and corn prices) equilibrium asset pricing model, this study investigates the impact of biofuels policy on U.S. agribusiness and food processing firm stock prices. Conditional heteroskedasticity in stock returns is accounted for using a GARCH(1,1) model. Corn price increases are found to have positive effects on excess stock returns for seed, fertilizer and machinery companies, while the impact on meat companies is negative. The results may be interpreted as evidence that crop input suppliers gain from U.S. biofuels policy while meat processors lose.
    Keywords: biofuels policy, excess stock returns, GARCH effect, linear factor model.
    Date: 2009–09–02
  9. By: Ben Youssef, Slim
    Abstract: The impact of the investment in absorptive capacity on transboundary pollution is studied by considering two countries each of them regulating a firm. Firms can invest in original research and in absorptive research to lower their pollution intensity. The absorptive research enables a firm to capture part of the original research made by the other one. We show that by means of adequate emission taxes, original and absorptive R&D subsidies, non-cooperating regulators can reach the social optimum. Interestingly, we show that the investment in absorptive research enables non-cooperating regulators to better internalize transboundary pollution. The higher is the ability parameter of absorption, the greater is the proportion of transboundary pollution internalized. Therefore, it is recommended for the international community to make the patent laws more flexible and enabling learning from the research made by others more interesting.
    Keywords: Transboundary Pollution; Original Research; Absorptive Research; Internalization; Social Optimum.
    JEL: D62 O32 H23 C72
    Date: 2009–09–05
  10. By: Thijs Dekker (Institute for Environmental Studies, VU University Amsterdam); Herman R.J. Vollebergh (Netherlands Assessment Agency, Bilthoven); Frans P. de Vries (Stichting Management School, Division of Economics, University of Stirling); Cees A. Withagen (Dept. of Spatial Economics, VU University Amsterdam, Dept. of Economics, and CentER, Tilburg University)
    Abstract: This paper studies how sulfur protocols trigger invention and diffusion of technologies for reducing SO2 emissions. For this goal we constructed a patent data set on SO2 abatement technologies filed in 15 signatory and non- signatory countries in the period 1970-1997. Our data enable us to study intended knowledge diffusion by separating so called mother patents, or original inventions, from family patents, which represent the same invention but are patents filed in foreign countries. We find that innovating firms file both types of patent applications before the protocols are actually implemented. Moreover, the filing of patents abroad (‘families’) is particularly strong in the countries that cooperate through the international protocols, i.e., the signatory countries. Our results suggest that firms are aware of the potential private benefits of such international agreements. They exploit potential advantages of larger product markets by seeking protection in countries that participate in the protocols.
    Keywords: International environmental agreements; Inventions; Knowledge transfers; Patents; Acid rain
    JEL: D7 D8 Q5
    Date: 2009–08–18
  11. By: Eyckmans, Johan (Hogeschool-Universiteit Brussel); Kverndokk, Snorre (Ragnar Frisch Centre for Economic Research)
    Abstract: We investigate how moral concerns about permit trading affect an endogenous pollution permit trading equilibrium, where governments choose non-cooperatively the amount of permits they allocate to domestic industries. Politicians may feel reluctant to allow permit trading and/or may prefer that abatement is undertaken domestically due to moral concerns. This will have an effect on the initial permit allocations, and, therefore, on global emissions. The impact on global emissions depends on the precise formulation of the moral concerns, but under reasonable assumptions, we show that global emissions may increase. Thus, doing what is perceived as good does not always yield the desired outcome. However, this can be offset by restrictions on permit trading when governments have moral concerns about this trade.
    Keywords: Tradable emission permits; international environmental agreements; non-cooperative game theory; moral motivation; identity
    JEL: D63 Q54
    Date: 2009–06–25
  12. By: Gilles Debizet (PACTE - Politiques publiques, ACtion politique, TErritoires - CNRS : UMR5194 - Université Pierre Mendès-France - Grenoble II - Institut d'Études Politiques de Grenoble - Université Joseph Fourier - Grenoble I)
    Abstract: Atelier rassemblant les chefs de projet et chargés de mission Plan Climat (PCT) des collectivités locales de la Région Rhône-Alpes. 1- Dans la phase de généralisation des PCT, l'adaptation résulte d'abord d'une logique ascendante (bottom up) des acteurs de terrain contrairement à l'atténuation (mitigation) qui relève d'un logique descendante (top-down). ==> Les politiques d'adaptation vont être très diversifiées selon les territoires, les branches d'activités et les thématiques sectorielles. Elles sont difficiles à appréhender et à définir. La gouvernance d'un PCT pourrait différer selon le volet atténuation ou adaptation. 2- Les émetteurs de GES sont en grande majorité des particuliers, des entreprises ou des organismes sur lesquels la collectivité porteuse (une intercommunalité ou un parc régional ...) du PCT n'a pas d'autorité. ==> Le PCT doit s'appuyer sur des acteurs/vecteurs intermédiaires : prescripteurs, régulateurs et diffuseurs de connaissances. 3- L'action publique locale prend nécessairement des formes différentes selon la sphère d'influence ; on distingue la maîtrise d'ouvrage en propre, l'influence directe (via subvention, autorisation administrative ...) et l'influence indirecte (via communication, formation ...). ==> Selon ses compétences institutionnelles et les secteurs d'activités, la collectivité porteuse du PCT dispose d'une gamme de leviers tels que la réglementation, l'incitation économique, le porter à connaissance et la pression sociétale (par des tiers).
    Keywords: "atténuation GES" ; adaptation ; Energie Climat ; Territorial ; PECT ; PCT
    Date: 2009–06–02
  13. By: Baldursson, Fridrik M. (Reykjavik University); von der Fehr, Nils-Henrik M. (Dept. of Economics, University of Oslo)
    Abstract: We consider an industry with firms that produce a final good emitting pollution to different degree as a side effect. Pollution is regulated by a tradable quota system where some quotas may have been allocated at the outset, i.e. before the quota market is opened. We study how volatility in quota price affects firm behaviour, taking into account the impact of quota price on final-good price. The impact on the individual firm differs depending on how polluting it is - whether it is ‘clean’ or ‘dirty’- and whether it has been allocated quotas at the outset. In the absence of long-term or forward contracting, the optimal initial quota allocation turns out to resemble a grandfathering regime: clean firms are allocated no quotas - dirty firms are allocated quotas for a part of their emissions.With forward contracts and in the absence of wealth effects initial quota allocation has no effect on firm behaviour.
    Keywords: regulation; effluent taxes; tradable quotas; uncertainty; risk aversion; environmental management
    JEL: D81 H23 L51 Q28 Q38
    Date: 2009–04–22

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