nep-ene New Economics Papers
on Energy Economics
Issue of 2009‒12‒05
twelve papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao, Spain

  1. On the Dynamics of Competing Energy Sources By Tsur, Yacov; Zemel, Amos
  2. Energy efficiency developments in the manufacturing industries of Germany and Colombia, 1998–2005 By Clara Inés Pardo Martínez
  3. Assessing the influence of spot price predictability on electricity futures hedging By Torro, Hipolit
  4. North Dakota Lignite Energy Industry's Contribution to the State Economy for 2008 and Projected for 2009 By Coon, Randal C.; Leistritz, F. Larry
  5. The historical connection between short term output and prices in a small open economy By ola Grytten; Arngrim Hunnes
  6. Do Oil Windfalls Improve Living Standards? Evidence from Brazil By Caselli, Francesco; Michaels, Guy
  7. Choc pétrolier et performance des marchés du mil au Niger By Claudio ARAUJO; Catherine ARAUJO BONJEAN; Johny EGG
  8. The Impact of Trade Barriers on Mandated Biofuel Consumption in Canada By Le Roy, Danny; Elobeid, Amani E.; Klein, K.K.
  9. The Impact of Trade Barriers on Mandated Biofuel Consumption in Canada By Le Roy, Danny G.; Elobeid, Amani E.; Klein, K.K.
  10. Price Discovery, Causality and Volatility Spillovers in European Union Allowances Phase II: A High Frequency Analysis By Rittler, Daniel
  11. Climate change meets trade in promoting green growth: potential conflicts and synergies By Zhang, ZhongXiang
  12. The Long-Lived Effects of Historic Climate on the Wealth of Nations By Bluedorn, John; Valentinyi, Akos; Vlassopoulos, Michael

  1. By: Tsur, Yacov; Zemel, Amos
    Keywords: fossil and solar energy, optimal processes, characteristic curves, price thresholds, environmental regulation., Resource /Energy Economics and Policy,
    Date: 2009–10
  2. By: Clara Inés Pardo Martínez
    Abstract: This paper describes the energy efficiency development in the German and Colombian industrial sectors between 1998 and 2005. Using data at the two- and three-digit levels for the German and Colombian manufacturing industry, the performance of the industrial sector is analysed in terms of energy intensity, value of production, value added, fuel sources and energy costs. It was found that energy consumption in the industrial sector has increased by 2.3% in Germany and 5.5% in Colombia, whereas energy intensity decreased by 12% and 6% respectively during the sample period. A decomposition analysis was performed in order to separate structural, production and intensity effects. It was found that in both countries, the aggregate energy intensity in the industrial sector was highly dependent on the changes in the energy intensive sectors (EISs). The trend is to produce more while consuming less energy. In Germany, structural and intensity effects contributed to energy efficiency improvement, whereas in Colombia, intensity effects dominated over structural effects. Moreover, in both countries the capital intensity and energy prices influenced the changes in the aggregate energy intensity, whereas the changes in labour intensity did not show a clear relationship with the energy intensity results. These results showed the importance of the formulation and adoption of energy policies in the industrial sector, taking into account that several differences in energy efficiency performance exist at the different levels of aggregation and that energy policy instruments ought to encourage cost-effective energy efficiency
    Date: 2009–11–22
  3. By: Torro, Hipolit
    Abstract: A common feature of energy prices is that spot price changes are partially predictable due to weather and demand seasonalities. This paper follows the Ederington and Salas (2008) framework and considers the expected change in spot prices when minimum variance hedge ratios are computed. The poor effectiveness of hedging strategies obtained in previous studies on electricity was because the standard hedging approach underestimates the effectiveness of hedging. In the empirical study made in this paper, weekly spot price risk is hedged with weekly futures in the Nord Pool electricity market. In this case, the optimal selection of the futures contract may produce risk reductions whose values vary between 60% and 80% – depending on the hedging duration (one to three weeks) and the analysed sub-period (in-sample and out-of-sample sub-periods).
    Keywords: electricity markets; futures; hedging ratio;electricity price risk
    JEL: G11 L94 G13
    Date: 2009–03–31
  4. By: Coon, Randal C.; Leistritz, F. Larry
    Keywords: Agribusiness, Land Economics/Use,
    Date: 2009–04
  5. By: ola Grytten (Norwegian School of Economics and Business Administration (NHH)); Arngrim Hunnes (University of Agder (UiA))
    Abstract: According to a Keynesian view, short term output fluctuations are normally demand side led. Since prices reflect demand, they should mirror output fluctuations. Thus, prices and output are expected to move in the same direction in the short run. The present paper investigates the historical co-movements of output and prices for a small open raw material based economy, in this case Norway 1830-2006. We find little evidence of a positive relationship. On the contrary, we rather find negative correlations between the two variables, indicating that supply side shocks through the foreign sector were more important for historical business cycles in Norway than assumed hitherto.
    Keywords: Business cycles; Output; Small open economy; Price fluctuations.
    JEL: E31 E32 N10 N13 N14
    Date: 2009–10–29
  6. By: Caselli, Francesco; Michaels, Guy
    Abstract: We use variation in oil output among Brazilian municipalities to investigate the effects of resource windfalls. We find muted effects of oil through market channels: offshore oil has no effect on municipal non-oil GDP or its composition, while onshore oil has only modest effects on non-oil GDP composition. However, oil abundance causes municipal revenues and reported spending on a range of budgetary items to increase, mainly as a result of royalties paid by Petrobras. Nevertheless, survey-based measures of social transfers, public good provision, infrastructure, and household income increase less (if at all) than one might expect given the increase in reported spending. To explain why oil windfalls contribute little to local living standards, we use data from the Brazilian media and federal police to document that very large oil output increases alleged instances of illegal activities associated with mayors.
    Keywords: Brazil; corruption; Dutch disease; fiscal windfalls; natural resources; oil
    JEL: E62 H11 H40 H71 H72 H75 H76 O11 O13 O32 O33
    Date: 2009–11
  7. By: Claudio ARAUJO (Centre d'Etudes et de Recherches sur le Développement International); Catherine ARAUJO BONJEAN (Centre d'Etudes et de Recherches sur le Développement International); Johny EGG
    Abstract: L'objectif de cet article est de tester l'impact du récent choc pétrolier sur la performance des marchés du mil au Niger. Dans ce pays où les coûts de transport représentent l'essentiel des coûts de commercialisation des céréales, on peut craindre que l'augmentation du coût des carburants entraîne un ralentissement des échanges, l'activité commerciale devenant moins rentable, et aggrave les tensions sur les marchés locaux de céréales. L'impact de la hausse des prix du pétrole sur les marchés nigériens du mil est testé à partir de l'estimation de la relation de long terme qui lie les prix du mil sur différentes places lorsque que les marchés sont arbitrés. Les résultats obtenus sur un panel de 66 paires de marchés, couvrant la période allant de janvier 1990 à octobre 2008, mettent en évidence des effets de seuil dans la relation d'équilibre. En période de bas prix des carburants, les écarts de prix entre marchés se resserrent. Inversement, lorsque le prix de l'essence atteint des niveaux élevés, les commerçants ajustent leur marge à la hausse. Ces résultats reflètent une bonne intégration des marchés et une efficacité accrue des opérations d'arbitrage sur la fin de période pendant laquelle la hausse du prix du carburant est transmise de façon atténuée.
    Keywords: afrique, choc petrolier, coûts de transaction, marches cerealiers, panel à effet de seuil
    Date: 2008
  8. By: Le Roy, Danny; Elobeid, Amani E.; Klein, K.K.
    Keywords: biofuel ethanol trade canada, Agricultural and Food Policy, Demand and Price Analysis, International Relations/Trade,
    Date: 2009–10
  9. By: Le Roy, Danny G.; Elobeid, Amani E.; Klein, K.K.
    Abstract: In 2008 the Canadian government passed amendments to the Environmental Protection Act requiring five percent ethanol in transportation fuels sold in Canada by 2010 and two percent renewable content in diesel and heating fuels by 2012. Agricultural commodity and other groups have lobbied for further marketplace intervention that would ensure the biofuel needed to meet the legislated requirement be produced from domestic sources. Indeed, many of these special interests would like the biofuels content increased from five to ten percent and for the increase to be met by domestic firms only. The objective of this study is to compare the relative economic impacts in Canada of achieving a ten percent biofuel content either through increased imports or by substituting domestic production in place of increased imports.
    Keywords: biofuel trade policy ethanol canada, Demand and Price Analysis, International Relations/Trade,
    Date: 2009–10
  10. By: Rittler, Daniel
    Abstract: This paper deals with the modeling of the relationship of European Union Allowance spot- and futures-prices within the second commitment period of the European Union Emission Trading Scheme. Based on high frequency data, we analyze causality in the first and the second conditional moments. To reveal long run price discovery we compute the common factor weights proposed by Schwarz and Szakmary (1994) and the information share proposed by Hasbrouck (1995) based on the estimated coefficients of a vector error correction model. To analyze the short run dynamics we perform Granger causalty tests. The GARCH-BEKK model introduced by Engle and Kroner (1995) is employed to analyze the volatility transmission structure. We identify the futures market to be the leader of the long run price discovery process whereas a bidirectional short run causality structure is observed. Furthermore we detect unidirectional volatility transmission from the futures to the spot market at highest frequencies.
    Keywords: CO2 Emission Allowances; Causality; Volatility Transmission; Spot Prices; Futures Prices
    Date: 2009–11–25
  11. By: Zhang, ZhongXiang
    Abstract: To date, border adjustment measures in the form of emissions allowance requirements (EAR) under the U.S. proposed cap-and-trade regime are the most concrete unilateral trade measure put forward on the table to level the carbon playing field. If improperly implemented, such measures could disturb the world trade order and trigger trade war. Because of these potentially far-reaching impacts, this paper focuses on this type of unilateral border adjustment that requires importers to acquire and surrender emissions allowances corresponding to the embedded carbon contents in their goods from countries that have not taken climate actions comparable to that of home country. Our discussion is mainly on the legality of unilateral EAR under the WTO rules. Given that the inclusion of border carbon adjustment measures is widely considered essential to secure passage of any U.S. legislation capping its greenhouse gas emissions, we argue that, on the U.S. side, in designing such trade measures, WTO rules need to be carefully scrutinised, and efforts need to be made early on to ensure that the proposed measures comply with them. After all, a conflict between the trade and climate regimes, if it breaks out, helps neither trade nor the global climate. The U.S. needs to explore with its trading partners cooperative sectoral approaches to advancing low-carbon technologies and/or concerted mitigation efforts in a given sector at an international level. Moreover, to increase the prospects for a successful WTO defence of the Waxman-Markey type of border adjustment provision, 1) there should be a period of good faith efforts to reach agreements among the countries concerned before imposing such trade measures; 2) WTO consistency also requires considering alternatives to trade provisions that could be reasonably expected to fulfill the same function but are not inconsistent or less inconsistent with the relevant WTO provisions; and 3) trade provisions can refer to the designated special international reserve allowance pool, but should allow importers to submit equivalent emission reduction units that are recognized by international treaties to cover the carbon contents of imported products. The paper concludes by arguing that the major developing countries being targeted by such border carbon adjustment measures should make the best use of the forums provided under the United Nations Framework Convention on Climate Change to effectively deal with the proposed border adjustment measures to their advantage.
    Keywords: Post-2012 climate negotiations; Border carbon adjustments; Carbon tariffs; Emissions allowance requirements; Cap-and-trade regime; Lieberman-Warner bill; Waxman-Markey bill; World Trade Organization; Kyoto Protocol; Developing countries; United States
    JEL: F18 Q48 Q56 Q54 Q58
    Date: 2009–07–15
  12. By: Bluedorn, John; Valentinyi, Akos; Vlassopoulos, Michael
    Abstract: We investigate the long-run consequences of historic, climatic temperatures (1730-2000) for the modern cross-country income distribution. Using a newly constructed dataset of climatic temperatures stretching over three centuries (18th, 19th, and 20th), we estimate a robust and significant time-varying, non-monotonic effect of climatic temperature upon current incomes for a cross-section of 167 countries. We find a large, positive effect of 18th century climatic temperature and an even larger, negative effect of 19th century climatic temperature upon current incomes. When historic, climatic temperature is introduced, the effect of 20th century climatic temperature on current income is either weakly positive or insignificant. Our findings are robust to various sub-samples, additional geographic controls, and alternative income measures. The negative relationship between current, climatic temperature and current income that is commonly estimated appears to reflect the long-run effect of climatic variations in the 18th and 19th centuries.
    Keywords: climate; economic performance; geography; history; temperature
    JEL: N50 O11 O40 O50 O57
    Date: 2009–11

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