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on Energy Economics |
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Issue of 2010‒03‒20
thirteen papers chosen by Roger Fouquet Basque Climate Change Centre, Bilbao, Spain |
| By: | Wasantha Athukorala (QUT); Clevo Wilson (QUT) |
| Abstract: | This study investigates the short-run dynamics and long-run equilibrium relationship between residential electricity demand and factors influencing demand - per capita income, price of electricity, price of kerosene oil and price of liquefied petroleum gas - using annual data for Sri Lanka for the period, 1960-2007. The study uses unit root, cointegration and error correction models. The long-run demand elasticities of income, own price and price of kerosene oil (substitute) were estimated to be 0.78, - 0.62, and 0.14 respectively. The short-run elasticities for the same variables were estimated to be 0.32, -0.16 and 0.10 respectively. Liquefied petroleum (LP) gas is a substitute for electricity only in the short-run with an elasticity of 0.09. The main findings of the paper support the following (1) increasing the price of electricity is not the most effective tool to reduce electricity consumption (2) existing subsidies on electricity consumption can be removed without reducing government revenue (3) the long-run income elasticity of demand shows that any future increase in household incomes is likely to significantly increase the demand for electricity (4) any power generation plans which consider only current per capita consumption and population growth should be revised taking into account the potential future income increases in order to avoid power shortages in the country. |
| Keywords: | Electricity demand, Price and income elasticities, Cointegration analysis |
| JEL: | Q40 Q41 Q48 Q50 Q56 |
| Date: | 2010–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:qut:dpaper:254&r=ene |
| By: | Kristie M. Engemann; Kevin L. Kliesen; Michael T. Owyang |
| Abstract: | Hamilton (2005) noted that nine of the last ten recessions in the United States were preceded by a substantial increase in the price of oil. In this paper, we consider whether oil price shocks significantly increase the probability of recessions in a number of countries. Because business cycle turning points generally are not available for other countries, we estimate the turning points together with oil's effect in a Markov-switching model with time-varying transition probabilities. We find that, for most countries, oil shocks do affect the likelihood of entering a recession. In particular, an average sized shock to oil prices increases the probability of recession in the U.S. by about 60 percentage points over the following year. |
| Keywords: | Business cycles ; Petroleum industry and trade |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedlwp:2010-007&r=ene |
| By: | Chang, C.; McAleer, M.J.; 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 and asymmetric effects across and within the four markets, using three multivariate GARCH models, namely the constant conditional correlation (CCC), vector ARMA-GARCH (VARMA-GARCH) and vector ARMA-asymmetric GARCH (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 forecast conditional correlations between pairs of crude oil returns have both positive and negative trends. Moreover, the optimal hedge ratios and optimal portfolio weights of crude oil across different assets and market portfolios are evaluated in order to provide important policy implications for risk management in crude oil markets. |
| Keywords: | volatility spillovers;multivariate GARCH;conditional correlation;crude oil prices;spot returns;forward returns;futures returns |
| Date: | 2010–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:eureir:1765018329&r=ene |
| By: | Begalli, Diego; Codurri, Stefano; Gaeta, Davide |
| Abstract: | This paper aims to investigate if the legislation will allow the production of energy from winery by-products and how this can contribute to multifunctionality of the wine makersâ income. A medium size winery was selected and an anaerobic digestor process was simulated using the companyâs data. The main methods of financial evaluation were studied to create information to see if the project concepts were valid. The results highlight the positive level of earnings that the project will generate due to the high level of methane included in the pressings that could be transformed in energy, the short period needed for obtaining methane and the recent substantial level of government support both in Green Certificates and financing of the initial cost of the investments. |
| Keywords: | Biomass, winery by-products, multifunctionality, energy, wine district, Agribusiness, Community/Rural/Urban Development, Resource /Energy Economics and Policy, |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ea113a:57492&r=ene |
| By: | Morley, Bruce |
| Abstract: | The aim of this study is to determine whether environmental taxes affect levels of pollution and energy consumption. Using a panel of EU members and Norway, we find a significant negative relationship between taxes and pollution, but no relationship with energy consumption. A further contribution to the literature involves the use of the Arellano-Bover approach to dynamic panels, to account for the potential partial adjustment towards desired or target levels of pollution and energy usage. The results provide evidence of partial adjustment, as well as evidence of the negative relationship between environmental taxes and pollution. |
| Keywords: | environmental tax; pollution; energy; dynamic panel; partial adjustment |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:eid:wpaper:02/10&r=ene |
| By: | Daniela Marconi (Bank of Italy, Economics and International Relations) |
| Abstract: | The paper proposes a two-country general equilibrium model of endogenous growth and trade between two regions, North and South, with different environmental standards. Pollution is a by-product of consumption and in order to abate it the northern region unilaterally imposes a green tax on consumption. As the tax affects domestic demand of consumer goods according to their pollution intensities, regardless of where those goods are produced, the model shows that such a unilateral environmental policy can increase the speed of technological change and pollution abatement in both regions. |
| Keywords: | Trade, environment, consumption externality, technological change |
| JEL: | O30 I32 F14 F18 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:wptemi:td_744_10&r=ene |
| By: | Sylvie FERRARI (GREThA UMR CNRS 5113); Mohammed Mehdi MEKNI (GREThA UMR CNRS 5113); Emmanuel PETIT (GREThA UMR CNRS 5113); Sébastien ROUILLON (GREThA UMR CNRS 5113) |
| Abstract: | The idea of regulating pollutions by means of tradable emission permits on a competitive market was developed for the first time by Dales in 1968. The question of the citizens’ participation on these markets received little attention in the economic literature. However, people are allowed to buy emission permits and can therefore reduce the level of pollution by removing them from the market. From a practical viewpoint, the citizen’s preferences are not taken into account neither in the elaboration nor in the functioning of pollution permits markets. However, such a situation does not comply with both the democratic values and the prevailing economic principles. This article aims to discuss the legitimacy of a participation of the citizens to a pollution permits market by introducing both the economic efficiency and the ethical dimension. As the problem of free riding is fundamental when the citizen participation takes place, we show that it can be partly solved by funding the citizen demand. In addition, it seems that the free riding behaviour is overestimated by theoretical economics as experimental economics applied to the game of the public good shows. In addition, the ethical stakes associated to the opening of the pollution markets permits to the citizens are analyzed. An ethics based on the freedom and the sovereignty of the citizens commands us to authorize the participation of the citizens to these markets. This point is finally discussed towards the cumulative pollutions and towards the intergenerational dimension of the equity. |
| Keywords: | equity, altruism, public good, economic efficiency, ethics, tradable emission permits, citizen participation, intergenerational justice, free rider, cumulative pollutions |
| JEL: | D63 H21 H41 Q58 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:grt:wpegrt:2010-06&r=ene |
| By: | Marius-Cristian Frunza (Structuring Department - Sagacarbon et Centre d'Economie de la Sorbonne); Dominique Guegan (Centre d'Economie de la Sorbonne - Paris School of Economics) |
| Abstract: | The aim of this work is to bring an econometric approach upon the CO2 market. We identify the specificities of this market, and analyze the carbon as a commodity. We investigate the econometric particularities of CO2 prices behavior and their result of the calibration. We apprehend and explain the reasons of the non-Gaussian behavior of this market focusing mainly upon jump diffusions and generalized hyperbolic distributions. These models are used for pricing and hedging of carbon options. We estimate the pricing accuracy of each model and the capacity to provide an efficient dynamic hedging. |
| Keywords: | Carbon, Normal Inverse Gaussian, CER, EUA, swap. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:10007&r=ene |
| By: | Eric Paul Marius-Cristian Frunza (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, Sagacarbon - Sagacarbon SA); Dominique Guegan (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | The aim of this work is to bring an econometric approach upon the CO2 market. We identify the specificities of this market, and analyze the carbon as a commodity. We investigate the econometric particularities of CO2 prices behavior and their result of the calibration. We apprehend and explain the reasons of the non-Gaussian behavior of this market focusing mainly upon jump diffusions and generalized hyperbolic distributions. These models are used for pricing and hedging of carbon options. We estimate the pricing accuracy of each model and the capacity to provide an efficient dynamic hedging. |
| Keywords: | Carbon, Normal Inverse Gaussian, CER, EUA, swap. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00461474_v1&r=ene |
| By: | Matei, Mirela; Stancu, Adrian; Vukovic, Predrag |
| Abstract: | Global climate changes are taking place and its impacts on economy are already occurring in fields like tourism, agriculture, forestry, infrastructure, insurance industry or capital market. Specialists draw attention that climate change has negative effects and positive effects. For example, in some parts of Europe, especially in north, the agricultural may benefit from temperature rise increasing carbon dioxide levels in the atmosphere. The most important part of these changes is due to greenhouse gas (GHG) emissions from human activity. Between greenhouse gases, carbon dioxide (CO2) is the largest contributor with a weight around of 80 % of total GHG emissions. The agriculture is the most affected sector by the climate change, but agricultural activities have many implications on environment through emissions of methane and nitrous oxide that result from changes in land use and agricultural production or through the production of bio fuels. |
| Keywords: | climate change, agriculture, greenhouse gas, Agribusiness, Environmental Economics and Policy, |
| Date: | 2009–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ea113a:57350&r=ene |
| By: | Arie ten Cate |
| Abstract: | A simple model of "hourglass" problems is presented. For such problems, the benefit of a national policy measure is propagated to all countries through one single world-wide variable. The prime example is the effect of the reduction of CO2 emission on the world climate. <P> Five optimal solutions are given, for various situations and points of view, followed by a comparison with the outcome of permit trading. |
| Keywords: | climate change; CO2; international cooperation |
| JEL: | F5 Q42 Q48 Q54 Q58 |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:memodm:238&r=ene |
| By: | Thomas Bernauer; Anna Kalbhenn; Vally Koubi; Gabi Ruoff |
| Abstract: | We argue that participation in international agreements is influenced by their design characteristics, notably commitment levels, measured by the specificity of obligations, and compliance mechanisms, measured by monitoring, enforcement, assistance, and dispute settlement provisions in treaties. We submit that specific obligations as well as monitoring and enforcement have a negative, and assistance and dispute settlement a positive effect on participation. These arguments are tested on a new dataset that includes information on ratifications of more than 200 global environmental agreements in 1950- 2006. We find that specific obligations, assistance, and dispute settlement have the expected effects. Surprisingly, our results show that the presence (or absence) of monitoring and enforcement has no effect on participation. The latter finding suggests that monitoring and enforcement through mechanisms operating outside of treaties rather than through treaty obligations themselves are likely to play a significant role. |
| Date: | 2010–01–25 |
| URL: | http://d.repec.org/n?u=RePEc:got:cegedp:94&r=ene |
| By: | Ignazio Musu (Department of Economics, University Of Venice Cà Foscari) |
| Abstract: | Simple growth accounting shows that the negative scale effect of economic growth on the environment can be compensated by a composition effect, increasing the weight of less polluting productions, and by a technical progress favorable to the environment, in order to make possible a sustainable growth path. To achieve this result a combination of environmental regulation and innovation policy is required. Revenues from economic instruments of environmental regulation can be earmarked to environmental friendly innovations; difficulties arise because of the trade off with using those revenues as redistributive means to compensate the usually regressive nature of environmental regulation. The “case study” of the energy and climate program of President Obama is an example of the complexity of the challenge to move towards the target of a “green economy”. A complementary essential role of social environmental responsibility both of consumers and firms is required. |
| Keywords: | Economic Development, Innovation, Environmental Policies, Sustainable Development |
| JEL: | O11 O38 Q56 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ven:wpaper:2010_01&r=ene |