nep-ene New Economics Papers
on Energy Economics
Issue of 2010‒09‒11
fifty-five papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao, Spain

  1. The Gas Transportation Network as a ‘Lego’ Game: How to Play with It? By Jean Michel Glachant and Michelle Hallack
  2. Legal Feasibility of Schengen-like Agreements in European Energy Policy: The Cases of Nuclear Cooperation and Gas Security of Supply By Nicole Ahner; Jean-Michel Glachant and Adrien de Hauteclocque
  3. Concentrating Solar Power in China and India: A Spatial Analysis of Technical Potential and the Cost of Deployment By Kevin Ummel
  4. Venture Capital Investment in the Clean Energy Sector By Shikhar Ghosh; Ramana Nanda
  5. Grün aus der Krise – Was können «grüne» Konjunkturpakete leisten? By Julia Blasch; Renate Schubert; Birgit Soete
  6. The Economics of Trade, Biofuel, and the Environment By Hochman, Gal; Sexton, Steven; Zilberman, David D.
  7. Advanced biofuel technologies : status and barriers By Cheng, Jay J.; Timilsina, Govinda R
  8. Second-generation biofuels : economics and policies By Carriquiry, Miguel A.; Du, Xiaodong; Timilsina, Govinda R
  9. The effect of biofuel on the international oil market By Hochman, Gal; Rajagopal, Deepak; Zilberman, David D.
  10. Natural Resources and State Fragility By Paul Collier and Anthony J. Venables
  11. Dynamic regulations in non –renewable resources oligopolistic markets By Halkos, George
  12. Trends in National and Regional Investors Financing Crossborder Infrastructure Projects in Asia By De, Prabir; Samudram, Muthi; Moholkar, Sanjeev
  13. Venezuela: Retos de un país petrolero al diversificar su economía reducir su vulnerabilidad externa. By Pedro Carmona
  14. Dynamic optimization in natural resources management By Halkos, George
  15. On Optimal Scarcity Prices By Zöttl, Gregor
  16. The Consumption Terms of Trade and Commodity Prices By Martin Berka; Mario J. Crucini
  17. The Asymmetric Effects of Oil Price Shocks By Apostolos Serletis; Sajjadur Rahman
  18. On The Influence of Oil Prices on Stock Markets: Evidence from Panel Analysis in GCC Countries By Mohamed El Hedi Arouri; Christophe Rault
  19. Modeling the Effect of Oil Price on Global Fertilizer Prices By Ping-Yu Chen; Chia-Lin Chang; Chi-Chung Chen; Michael McAleer
  20. The Optimal Gas Tax for California By Lin, C.-Y. Cynthia; Prince, Lea
  21. Roadmap for Hydrogen and Fuel Cell Vehicles in California: A Transition Strategy through 2017 By Ogden, J; Cunningham, Joshua M; Nicholas, Michael A
  22. Fuel Cell Powered Vehicles Using Supercapacitors: Device Characteristics, Control Strategies, and Simulation Results By Zhao, Hengbing; Burke, Andy
  23. An Analysis of Near-Term Hydrogen Vehicle Rollout Scenarios for Southern California By Nicholas, Michael A; Ogden, J
  24. Are Batteries Ready for Plug-in Hybrid Buyers? By Axsen, Jonn; Burke, Andy; Kurani, Kenneth S
  25. Economic Assessment of Electric-Drive Vehicle Operation in California and the United States By Lidicker, Jeffrey R.; Lipman, Timothy E.; Shaheen, Susan A.
  26. Anticipating plug-in hybrid vehicle energy impacts in California: Constructing consumer-informed recharge profiles By Axsen, Jonn; Kurani, Kenneth S
  27. Climate and Transportation Solutions: Findings from the 2009 Asilomar Conference on Transportation and Energy Policy By Sperling, Daniel; Cannon, James S.
  28. Review of technical literature and trends related to automobile mass-reduction technology By Lutsey, Nicholas P.
  29. Modeling Bicycle Facility Operation: A Cellular Automaton Approach By Gould, Gregory; Karner, Alex
  31. Unintended environmental impacts of nighttime freight logistics activities By Sathaye, Nakul; Harley, Robert; Madanat, Samer
  32. Envisioning Parking Strategies for the Post-Automobile City By Circella, Giovanni
  33. An Analytical Model of a Vertically Separated Railway Market By Markus Lang; Marc Laperrouza; Matthias Finger
  34. External Costs of Transport in the U.S. By Delucchi, Mark A.; McCubbin, Donald R.
  35. Greenhouse Gas Emissions from Aviation and Marine Transportation: Mitigation Potential and Policies By McCollum, David L; Gould, Gregory; Greene, David L
  36. Assessing the Environmental and Health Impacts of Port-Related Freight Movement in a Major Urban Transportation Corridor By Lee, Gunwoo; You, Soyoung Iris; Sangkapichai, Mana; Ritchie, Stephen G.; Saphores, Jean-Daniel M; Ogunseitan, Oladele; Ayala, Roberto; Jayakrishnan, R.; Torres, Rodolfo
  37. Bikesharing in Europe, the Americas, and Asia: Past, Present, and Future By Shaheen, Susan; Guzman, Stacey; Zhang, Hua
  38. The role of patent protection in (clean/green) technology transfer. By Bronwyn H. Hall; Christian Helmers
  39. An Analysis of the health impacts from PM and NOx emissions resulting from train operations in the Alameda Corridor, CA By Sangkapichai, Mana; Saphores, Jean-Daniel M; Ogunseitan, Oladele; Ritchie, Stephen G.; You, Soyoung Iris; Lee, Gunwoo
  40. Influence of Regional Development Policies and Clean Technology Adoption on Future Air Pollution Exposure By Hixson, Mark; Mahmud, Abdullah; Hu, Jianlin; Bai, Song; Niemeier, Debbie A.; Handy, Susan L; Gao, Shengyi; Lund, Jay R; Sullivan, Dana C; Kleeman, M J
  41. Capacity Investment under Demand Uncertainty. An Empirical Study of the US Cement Industry, 1994‐2006 By Jean-Pierre Ponssard; Catherine Thomas
  42. Global Cement Industry: Competitive and Institutional Dimensions By Selim, Tarek; Salem, Ahmed
  43. Rationing Public Goods by Cooperation or Pecuniary Incentives: Evidence from the Spare-the-Air Program By Sexton, Steven E.
  44. Optimal Monitoring for project-based Emissions Trading Systems under incomplete Enforcement By Markus Ohndorf
  45. Risk and aversion in the integrated assessment of climate change By Crost, Benjamin; Traeger, Christian P.
  46. Impact of Global Recession on Sustainable Development and Poverty Linkages By Venkatachalam Anbumozhi; Armin Bauer
  47. Climate Change, Economic Growth, and Health By Ikefuji, M.; Magnus, J.R.; Sakamoto, H.
  48. The Triple Crisis: Finance, Food and Climate Change By Addison, Tony; Tarp, Finn
  49. The implications of climate change for extreme weather events and their socio-economic consequences in Finland By Adriaan Perrels; Tarja Tuovinen; Noora Veijalainen; Kirsti Jylhä; Juha Aaltonen; Riitta Molarius; Markus Porthin; Jari Silander; Tony Rosqvist
  50. Firm Incentives for Environmental R&D under Non-cooperative and Cooperative Policies By Hattori, Keisuke
  51. Environmental Policy and Public Debt Stabilization By Mouez Fohda; Thomas Seegmuller
  52. Green regulations in Califorina and Sweden By Berck, Peter; Braennlund, Runar
  53. Uncertain Climate Policy and the Green Paradox By Smulders, Sjak; Tsur, Yacov; Zemel, Amos
  54. Climate Change Governance By Thomas Bernauer; Lena Maria Schaffer
  55. Climate Change and Public Policy After Copenhagen By Kahn, Matthew E; Somerville, Richard

  1. By: Jean Michel Glachant and Michelle Hallack
    Abstract: Gas transportation networks exhibit a quite substantial variety of technical and economical properties ranges roughly from an entrenched natural monopoly to near to an open competition platform. This empirical fact is widely known and accepted. However the corresponding frame of network analysis is lacking or quite fuzzy. As an infrastructure, can a gas network evolve or not from a natural monopoly (an essential facility) to an open infrastructure (a highway facility)? How can it be done with the same transportation infrastructure components within the same physical gas laws? Our paper provides a unified analytical frame for all types of gas transportation networks. It shows that gas transport networks are made of several components which can be combined in different ways. This very lego property of gas networks permits different designs with different economic properties while a certain infrastructural base and set of gas laws is common to all transportation networks. Therefore the notion of gas transportation network as a general and abstract concept does not have robust economic properties. The variety and modularity of gas networks come from the diversity of components, the variety of components combinations and the historical inclusion of components in the network. First, a gas network can combine different types of network components (primary or secondary ones). Second, the same components can be combined in different ways (notably regarding actual connections and flow paths). Third, as a capital-intensive infrastructure combining various specific assets, gas transportation networks show strong path dependency properties as they evolve slowly over time by moving from an already existing base. The heterogeneity of gas networks as sets of components comes firstly from the heterogeneity of the network components themselves, secondly from the different possibilities to combine these components and thirdly from the ‘path dependence’ character of gas network constructions. These three characteristics of gas networks explain the diversity of economic proprieties of the existent gas networks going from natural monopoly to competitive markets.
    Date: 2010–05–15
  2. By: Nicole Ahner; Jean-Michel Glachant and Adrien de Hauteclocque
    Abstract: European energy policy is characterized by a complex allocation of authority between the European Union and its Member States which results in an intricate interplay of regulatory competence. Knowing the difficulties European countries face in coordinating and proposing common solutions in the area of energy, there is the urgent need to question the legal foundations underlying the decisionmaking process. Institutional paralysis, low reactivity to events and changes as well as systematic political horse-trading across all questions call for an alternative framework allowing some pioneering Member States to promote ad hoc common policies escaping the formal and procedural requirements of EU law. Our paper assesses the legal feasibility of short-run differentiation by means of partial international agreements inspired by the Schengen regime, namely entirely outside the EU framework. The key challenge from a legal point of view is to assess the substantive compatibility of such agreements in energy with the existing rules of the Union. Short run differentiation in energy cannot indeed be assessed at a high level of generalities. We therefore take two areas where legally-binding coordination at the sub-Union level is often called for: nuclear policy and gas security of supply. The possible substantive content of such cooperation is derived from the economic and political literature before legal feasibility is assessed. Our findings suggest that the scope for such agreements is limited for security of gas supply whereas it could be an improved cooperation device in certain areas of nuclear policy.
    Keywords: Schengen
    Date: 2010–05–15
  3. By: Kevin Ummel
    Abstract: This study provides an in-depth assessment of Concentrating solar power (CSP) potential in China and India using high-resolution spatial data for site selection and modeling of plant performance, assessment of alternative land-use scenarios, estimation of generating costs, and simulation of transmission requirements. The results are used to estimate the costs and Green House Gas (GHG) abatement of an illustrative CSP expansion program that provides 20 per cent of Chinese and Indian electricity by midcentury. [Working Paper No. 219].
    Keywords: solar thermal power, greenhouse gas mitigation, abatement cost, electricity generation, technological, learning, energy economics, developing countries, India, technical potential, china, coal
    Date: 2010
  4. By: Shikhar Ghosh (Harvard Business School, Entrepreneurial Management Unit); Ramana Nanda (Harvard Business School, Entrepreneurial Management Unit)
    Abstract: We examine the extent to which venture capital is adequately positioned for the rapid commercialization of clean energy technologies in the United States. While there are several startups in clean energy that are well-suited to the traditional venture capital investment model, our analysis highlights a number of structural challenges related to VC investment in the sector that are particularly acute for startups involved in the production of clean energy. One of key bottlenecks threatening innovation in energy production is the inability of VCs to exit their investments at the appropriate time. This hurdle did exist in industries such as biotechnology and communications networking that faced a similar problem when they first emerged, but was ultimately overcome by changes in the innovation ecosystem. However, incumbents in the oil and power sector are different in two respects. First, they are producing a commodity and hence face little end-user pressure to adopt new technologies. Second, they do not tend to feel as threatened by potential competition from clean energy startups, given the market structure and regulatory environment in the energy sector. We highlight that the problem is unlikely to get solved without the active involvement of the government. Even if it does, historical experience suggests it may take several years.
    Date: 2010–08
  5. By: Julia Blasch (Chair of Economics, Institute for Environmental Decisions IED, ETH Zurich); Renate Schubert (Chair of Economics, Institute for Environmental Decisions IED, ETH Zurich); Birgit Soete (Wissenschaftlicher Beirat Globale Umweltveränderungen (WBGU))
    Keywords: Global Green Recovery, Economic Stimulus Package, Job Creation, Cliamte Change
    JEL: E62 E63 H50 Q54 Q58
    Date: 2010–07
  6. By: Hochman, Gal; Sexton, Steven; Zilberman, David D.
    Abstract: The introduction of renewable biofuels was associated with global food crisis and unintended environmental consequences. This paper incorporates energy environment and agricultural sector to the classic Hecksher-Ohlin model to address these issues. A household production function model was introduced to model consumer energy choices and concern about externalities related to climate change and open space. The conceptual model links energy and food markets and derives guidelines for the development of climate change and land-use policies. The results suggest that globalization and capital flows increase demand for energy, leading to decline in food production, increase in food prices, and loss of environmental land. Globally optimal outcomes may require introducing an emission tax and a land-use tax. The introduction of these policies may undermine the factor price equalization theorem. Policies that allow enhancing either agriculture productivity (e.g., agriculture biotechnology) or biofuel productivity (e.g., second-generation biofuels), are shown to lessen the resource constraint associated with the cost of introducing renewable energy.
    Keywords: trade, biofuel, environment, globalization, capital flows, technical changes, household production
    Date: 2010–03–11
  7. By: Cheng, Jay J.; Timilsina, Govinda R
    Abstract: Large-scale production of crop based (first generation) biofuels may not be feasible without adversely affecting global food supply or encroaching on other important land uses. Because alternatives to liquid fossil fuels are important to develop in order to address greenhouse gas mitigation and other energy policy objectives, the potential for increased use of advanced (non-crop, second generation) biofuel production technologies has significant policy relevance. This study reviews the current status ofseveral advanced biofuel technologies. Technically, it would be possible to produce a large portion of transportation fuels using advanced biofuel technologies, specifically those that can be grown using a small portion of the world's land area (for example, microalgae), or those grown on arable lands without affecting food supply (for example, agricultural residues). However, serious technical barriers limit the near-term commercial application of advanced biofuels technologies. Key technical barriers include low conversion efficiency from biomass to fuel, limits on supply of key enzymes used in conversion, large energy requirements for operation, and dependence in many cases on commercially unproven technology. Despite a large future potential, large-scale expansion of advanced biofuels technologies is unlikely unless and until further research and development lead to lowering these barriers.
    Keywords: Energy Production and Transportation,Climate Change Mitigation and Green House Gases,Renewable Energy,Crops&Crop Management Systems,Sanitation and Sewerage
    Date: 2010–09–01
  8. By: Carriquiry, Miguel A.; Du, Xiaodong; Timilsina, Govinda R
    Abstract: Recent increases in production of crop-based (or first-generation) biofuels have engendered increasing concerns over potential conflicts with food supplies and land protection, as well as disputes over greenhouse gas reductions. This has heightened a sense of urgency around the development of biofuels produced from non-food biomass (second-generation biofuels). This study reviews the economic potential and environmental implications of production of second-generation biofuels from a variety of various feedstocks. Although second-generation biofuels could significantly contribute to the future energy supply mix, cost is a major barrier to increasing commercial production in the near to medium term. Depending on various factors, the cost of second-generation (cellulosic) ethanol can be two to three times as high as the current price of gasoline on an energy equivalent basis. The cost of biodiesel produced from microalgae, a prospective feedstock, is many times higher than the current price of diesel. Policy instruments for increasing biofuels use, such as fiscal incentives, should be based on the relative merits of different types of biofuels.
    Keywords: Energy Production and Transportation,Renewable Energy,Climate Change Mitigation and Green House Gases,Crops&Crop Management Systems,Transport Economics Policy&Planning
    Date: 2010–08–01
  9. By: Hochman, Gal; Rajagopal, Deepak; Zilberman, David D.
    Abstract: This paper derives a method to quantify the impact of biofuel on fuel markets, assuming that these markets are dominated by cartel of oil-rich countries, and that prices in these countries are set to maximize the sum of domestic consumer and producer surplus, leading to a wedge between domestic and international fuel prices. We model this behavior by applying the optimal export tax model (henceforth, the cartel-of-nations model) to the fuel markets. Using data from 2007 to calibrate the model, we show that the introduction of biofuels reduces global fossil fuel consumption and international fuel prices by about 1% and 2%, respectively. We identify large differences between the effects of introducing biofuels using the cartel-of-nations model, in contrast to the competitive or the standard cartel model (henceforth, the cartel-of-�firms model). Given that the cartel-of-nations model correctly captures fuel markets, we illustrate that assessing the effect of introducing biofuels under a competitive fuel markets overestimates the reduction in fuel price, and underestimates the reduction of fossil fuel consumption, and therefore the reduction of greenhouse gas emissions. Similar conclusions are derived with respect to cartel-of-�firms model. Finally, we illustrate that a 20% increase in fuel demand more than doubles the impact of biofuels on fuel markets.
    Keywords: Energy, OPEC, biofuel, fuel, carbon savings, optimal export tax model, cheap oil
    Date: 2010–03–10
  10. By: Paul Collier and Anthony J. Venables
    Abstract: This paper provides an overview of the relationships between natural resources, governance, and economic performance. The relationships run in both directions, with re-sources potentially altering the quality of governance, and governance being particularly important for resource poor countries. Both these relationships have threshold effects; if governance quality is above a certain level, then natural resources can lead to further improvement, while, below the threshold, further deterioration may take place. Theoretical and empirical work is reviewed, the interactions between the relationships discussed, and policy implications outlined.
    Date: 2010–04–15
  11. By: Halkos, George
    Abstract: Traditional economic theory, up to the middle of the twentieth century, builds up the production functions regardless the inputs’ scarcity. In the last few decades has been clear that both the inputs are depletable quantities and a lot of constraints are imposed in their usage in order to ensure economic sustainability. Furthermore, the management of exploitation and use of natural resources (either exhaustible or renewable) has been discussed by analyzing dynamic models applying methods of Optimal Control Theory. This theory provides solutions that are concerned with a single decision maker who can control the model dynamics facing a certain performance index to be optimized. In fact, market structures or exploitation patterns are often oligopolistic, i.e. there are several decision makers whose policies influence each other. So, game theoretical approaches are introduced into the discussion. According to the theory of continuous time models of Optimal Control, the appropriate analogue of differential games is used. Roughly, this is the extension of Optimal Control, when there is exactly one decision maker, to the case of N(N≥ 2) decision makers interacting with each other.
    Keywords: Nonrenewable resources; dynamic interaction; economic regulation;differential games
    JEL: Q32 C61 C62
    Date: 2010
  12. By: De, Prabir (Asian Development Bank Institute); Samudram, Muthi (Asian Development Bank Institute); Moholkar, Sanjeev (Asian Development Bank Institute)
    Abstract: This study examines a range of cross-border infrastructure development issues related to the Asian countries. Despite active pursuit of private investment in infrastructure by most developing countries in Asia and a growing number of success stories, the pace of such investment remains slow. Participation by the private sector in infrastructure development has been mixed. While there has been moderate progress in national infrastructure development by the private sector, progress is rather limited in the case of development of cross-border infrastructure in Asia. This study documents that Asian countries have attracted higher private sector investment for the development of national infrastructure projects such as seaports and airports as compared to cross-border infrastructure projects. The rising trend among private investors in infrastructure projects indicates a decline of investments by developed country investors. One of the findings of this study is that cross-border energy projects have received greater private sector investment globally as compared to transport, telecommunication, and water projects. In the context of Asia, too, energy sector projects still dominate the investment scenario. By considering all modes of financing, this study finds that cross-border infrastructure financing in Asia has witnessed an upward trend in the last decade and a half. Aside from hydropower projects in Bhutan, cross-border infrastructure in Asia is pursued through public-private partnerships. Interestingly, these few cross-border projects in Asia have limited private sector investors, compared to other regions, despite a wide base of local investors in Asia. This paper also shows that public sector investment drives cross-border energy and transportation projects in Asia, whereas private sector investments have picked up the pace only recently, specifically after the 1997 Asian financial crisis. This study recommends that given the huge infrastructure investment needs of the region and insufficient government resources, the role of the private sector and public-private partnerships in enhancing infrastructure facilities in Asia is very crucial. A review of select case studies of cross-border infrastructure projects clearly indicates that the major reasons for slow progress of regional infrastructure development by private sector stem from both economic to non-economic issues that need to be addressed in order to promote seamless Asia.
    Keywords: asia regional infrastructure; crossborder infrastructure
    JEL: F20 F30 G20
    Date: 2010–09–02
  13. By: Pedro Carmona
    Abstract: Venezuela es uno de los primeros países productores de petróleo del mundo, con cuantiosas reservas de petróleo convencional, ultrapesado y de gas natural. La legislación petrolera venezolana evolucionó desde los inicios de la industria con miras a incrementar los ingresos fiscales, hasta la nacionalización de la industria en 1975, y así buscar la redistribución de los ingresos en la sociedad. Pero ello generó una mentalidad rentista y, después de noventa años, el país no ha logrado diversificar su economía sino que, por el contrario, es hoy más dependiente del petróleo. Las políticas adoptadas durante la presente década sustituyeron las diseñadas en los años 90 para internacionalizar la industria y expandir la producción en asociación con capital privado. Ello ha afianzado el predominio del Estado, además de haberse modificado la conducción meritocrática de Petróleos de Venezuela S.A., PDVSA, lo cual ha tenido como resultado ineficiencias, baja inversión y caída de la producción petrolera. El deterioro del aparato productivo interno venezolano ha obligado al aumento de las importaciones. El gasto público constituye el motor de la economía y ello potencia el consumo y la inflación. Además, el petróleo como eje de la diplomacia implica crecientes compromisos internacionales, los cuales, sumados a subsidios internos de dimensión inconmensurable, amenazan la sostenibilidad fiscal del país hacia el mediano y largo plazo.
    Date: 2010–08–31
  14. By: Halkos, George
    Abstract: Dynamic modeling is general and recently the most interesting perspective to solve a dynamic economic problem based on Pontryagin’s maximum principle. Moreover traditional economic theory, up to the middle of twentieth century, builds up the production functions regardless the inputs’ scarcity. Nowadays it is clear that both the inputs are depletable quantities and a lot of constraints are imposed in their usage in order to ensure economic sustainability. For example the input “oil” used in the production is a non renewable resource so it can be exhausted. In a same way every biomass resides in ecosystems is a resource that can be used in a generalized production function for capital accumulation purposes but the latter resource is a renewable one. The purpose of this paper is the presentation of some natural resources dynamic models in order to extract the optimal trajectories of the state and control variables for the optimal control economic problem. We show how methods of infinite horizon optimal control theory developed for natural resources models.
    Keywords: Dynamic optimization; optimal control; maximum principle; natural resources
    JEL: Q32 C61 C62
    Date: 2010
  15. By: Zöttl, Gregor
    Abstract: This article contributes to the debate of missing money (compare Joskow(2007a)). This debate has seriously questioned the desirability of limiting scarcity prices in markets with fluctuating demand by emphasizing their potentially negative impact on firms investment decisions in the long run. A prominent example are recently liberalized electricity markets, where competition authorities have imposed price caps or adopted other mitigation measures which lead to a reduction of scarcity prices. The impact of reduced scarcity prices in the long run still is only incompletely explored. We thus analyze investment of firms in base load and peak load technologies in a market with fluctuating demand under imperfect competition. We show that an appropriately chosen limitation of scarcity prices is not only beneficial in the short run but also in the long run. It leads to a strict increase of investment in the peak load technologies, leaving investment in the base load technologies unchanged. Furthermore, we characterize the optimal limit on scarcity prices.
    Keywords: Investment Incentives; Fluctuating Demand; Scarcity Rents; Missing Money; Electricity Markets
    JEL: D24 D43 L50 L94
    Date: 2010–09–05
  16. By: Martin Berka; Mario J. Crucini
    Abstract: Movements in a nation's terms of trade are widely viewed as important for the understanding the sources of business cycle °uctuations, the dynamics of the trade balance and economic welfare. Backus, Kehoe and Kydland (1994) emphasize the role of productivity movements in a two-country, two-good setting. In their model an increase in domestic productivity expands out- put at home relative to output abroad and the terms of trade deteriorates. Put di®erently: a large country expanding the supply of the traded good it produces must (in equilibrium) drive down the relative price of its prod- ucts on world markets. The importing country's terms of trade improves, a positive spillover. Backus and Crucini (2000) add a third region to this model; a region that specializes in oil production. When the oil region cuts back production, the relative price of oil rises, a terms of trade improvement for oil producers. Output falls in the oil importing regions because oil is an intermediate input into production of the two manufactured goods produced in those regions. The business cycle implications of this model are consis- tent with empirical work by Hamilton (1983) showing oil price increases in advance of U.S. recessions. Mendoza (1995) studies the terms of trade and business cycles in an extensive cross-country panel using a partial equilibrium business cycle model where terms of trade movements are exogenous. In his theoretical setting, terms of trade shocks are analogous to lotteries with the sign and magnitude of the payout dependent upon a country's pattern of specialization across an array of internationally traded goods.
    Date: 2010–09
  17. By: Apostolos Serletis; Sajjadur Rahman
    Abstract: In this paper we investigate the effects of oil price uncertainty and its asymmetry on real economic activity in the United States, in the context of a bivariate vector autoregression with GARCH-in-Mean errors, as detailed in Engle and Kroner (1995), Grier et al. (2004), and Shields et al. (2005). The model allows for the possibilities of spillovers and asymmetries in the variance-covariance structure for real output growth and the change in the real price of oil. Our measure of oil price uncertainty is the conditional variance of the oil price change forecast error. We isolate the effects of volatility in the change in the price of oil and its asymmetry on output growth and, following Koop et al. (1996), Hafner and Herwartz (2006), and van Dijk et al. (2007), we employ simulation methods to calculate Generalized Impulse Response Functions (GIRFs) and Volatility Impulse Response Functions (VIRFs) to trace the effects of independent shocks on the conditional means and the conditional variances, respectively, of the variables. We Â…find that oil price uncertainty has a negative effect on output, and that shocks to the price of oil and its uncertainty have asymmetric effects on output.
    JEL: E32 C32
    Date: 2010–01–01
  18. By: Mohamed El Hedi Arouri (Université d’Orléans); Christophe Rault
    Abstract: This paper implements recent bootstrap panel cointegration techniques and seemingly unrelated regression (SUR) methods to investigate the existence of a long-run relationship between oil prices and Gulf Corporation Countries (GCC) stock markets. Since GCC countries are major world energy market players, their stock markets are likely to be susceptible to oil price shocks. Using two different (weekly and monthly) datasets covering respectively the periods from 7 June 2005 to 21 October 2008, and from January 1996 to December 2007, our investigation shows that there is evidence for cointegration of oil prices and stock markets in GCC countries, while the SUR results indicate that oil price increases have a positive impact on stock prices, except in Saudi Arabia.
    Date: 2010–08
  19. By: Ping-Yu Chen (Department of Applied Economics, National Chung Hsing University); Chia-Lin Chang (Department of Applied Economics, National Chung Hsing University); Chi-Chung Chen (Department of Applied Economics, National Chung Hsing University); Michael McAleer (Erasmus University Rotterdam, Tinbergen Institute, The Netherlands, and Institute of Economic Research, Kyoto University)
    Abstract: The main purpose of this paper is to evaluate the effect of crude oil price on global fertilizer prices in both the mean and volatility. The endogenous structural breakpoint unit root test, the autoregressive distributed lag (ARDL) model, and alternative volatility models, including the generalized autoregressive conditional heteroskedasticity (GARCH) model, Exponential GARCH (EGARCH) model, and GJR model, are used to investigate the relationship between crude oil price and six global fertilizer prices. Weekly data for 2003-2008 for the seven price series are analyzed. The empirical results from ARDL show that most fertilizer prices are significantly affected by the crude oil price, which explains why global fertilizer prices reached a peak in 2008. We also find that that the volatility of global fertilizer prices and crude oil price from March to December 2008 are higher than in other periods, and that the peak crude oil price caused greater volatility in the crude oil price and global fertilizer prices. As volatility invokes financial risk, the relationship between oil price and global fertilizer prices and their associated volatility is important for public policy relating to the development of optimal energy use, global agricultural production, and financial integration.
    Keywords: Volatility, Global fertilizer price, Crude oil price, Non-renewable fertilizers, Structural breakpoint unit root test
    Date: 2010–09
  20. By: Lin, C.-Y. Cynthia; Prince, Lea
    Abstract: This paper calculates the optimal gasoline tax for the state of California. According to our analysis, the optimal gasoline tax in California is $1.37/gallon, which is over 3 times the current California tax when excluding sales taxes. The Pigovian tax is the largest part of this tax, comprising $0.85/gallon. Of this, the congestion externality is taxed the most heavily, at $0.27, followed by oil security, accident externalities, local air pollution, and finally global climate change. The other major component, a Ramsey tax, comprises a full $0.52 of this tax, reflecting the efficiency in raising revenues from a tax on gasoline consumption due to the inelastic demand of this consumption good.
    Keywords: UCD-ITS-RP-10-03
    Date: 2010–01–01
  21. By: Ogden, J; Cunningham, Joshua M; Nicholas, Michael A
    Abstract: Global energy challenges, including climate change, energy security and air quality, require that we transform the way we produce and use energy in transportation and other sectors. To reach long-term goals for deep reductions in transportation-related greenhouse gas emissions, more efficient vehicles, lower carbon fuels, and electric drive technologies will play important roles. Hydrogen (H2) and fuel cell vehicles (FCVs) are one of many solutions that will be needed to address these challenges.
    Keywords: UCD-ITS-RR-10-04
    Date: 2010–02–01
  22. By: Zhao, Hengbing; Burke, Andy
    Abstract: The fuel cell powered vehicle is one of the most attractive candidates for the future due to its high efficiency and capability to use hydrogen as the fuel. However, its relatively poor dynamic response, high cost, and limited life time have impeded its widespread adoption. With the emergence of large supercapacitors (also know as ultracapacitors, UCs) with high power density and the shift to hybridization in the vehicle technology, fuel cell/supercapacitor hybrid fuel cell vehicles are gaining more attention. Fuel cells in conjunction with supercapacitors can create high power with fast dynamic response, which makes it well suitable for automotive applications. Hybrid fuel cell vehicles with different powertrain configurations have been evaluated based on simulations performed at the Institute of Transportation Studies, University of California-Davis. The following powertrain configurations have been considered: (a) Direct hydrogen fuel cell vehicles (FCVs) without energy storage (b) FCVs with supercapacitors directly connected in parallel with fuel cells (c) FCVs with supercapacitors coupled in parallel with fuel cells through a DC/DC converter (d) FCVs with fuel cells connected to supercapacitors via a DC/DC converter Simulation results show that hybridization of fuel cell vehicles with supercapacitors with load leveling control can significantly reduce the stress on fuel cells electrically and mechanically and benefit fuel economy of the vehicles. Compared to fuel cell vehicles without energy storages, fuel cell-supercapacitor hybridization achieved fuel economy increases of up to 28% on the FUDS cycle and up to 24% on the US06 cycle for mid-size passenger vehicles. In general, the maximum fuel economy improvements are greater using supercapacitors than batteries. The simulation results show that the power assist control strategy is better than load-level control for batteries because of the lower losses in the DC/DC converter and batteries, but load level control is better for supercapacitors. The best approach for hybridization of the fuel cell vehicles is to use supercapacitors with load leveled control as it greatly mitigates the stress on fuel cells and results in a near maximum improvement in fuel economy and fuel cell durability.
    Date: 2010–01–01
  23. By: Nicholas, Michael A; Ogden, J
    Abstract: There is rapid, ongoing progress in development of both fuel cell vehicle technology, and hydrogen refueling systems. Although hydrogen and fuel cell vehicles are not yet ready for full commercial deployment, they are ready to take the next step toward commercialization. This is widely seen as a “networked demonstration†in a localized region or “lighthouse city,†involving hundreds to thousands of vehicles and an early network of tens of refueling stations. Because of California’s ZEV regulation, Southern California has been proposed as an ideal site for this early introduction of hydrogen vehicles and is a major focus of interest worldwide. Developing a successful early hydrogen refueling network in Southern California, even at the relatively small scale envisioned for 2009-2017, requires a coordinated strategy, where vehicles and stations are introduced together. A major question is how many stations to build, what type of stations, and where to locate them. Key concerns include fuel accessibility, customer convenience, quality of refueling experience, network reliability, cost, and technology choice. In this paper, a strategy of “clustering†is explored. Clustering refers to the focused introduction of hydrogen vehicles in defined geographic areas such as smaller cities (e.g. Santa Monica, Irvine) within a larger region (e.g. LA Basin). By focusing initial customers in a few small areas, station infrastructure can be similarly focused, reducing the number of stations necessary to achieve a given level of convenience as measured by the travel time from home to the nearest station and “diversion time†explained later. We evaluate the potential for clustering to improve customer convenience, reduce refueling network costs, and enhance system reliability.
    Keywords: UCD-ITS-RR-10-03
    Date: 2010–02–01
  24. By: Axsen, Jonn; Burke, Andy; Kurani, Kenneth S
    Abstract: The notion persists that battery technology and cost remain as barriers to commercialization of electric-drive passenger vehicles. Within the context of starting a market for plug-in hybrid electric vehicles (PHEVs), we explore two aspects of the purported problem: (1) PHEV performance goals and (2) the abilities of present and near-term battery chemistries to meet the resulting technological requirements. We summarize evidence stating that battery technologies do not meet the requirements that flow from three sets of influential PHEV goals due to inherent trade-offs among power, energy, longevity, cost, and safety. However, we also show that part of this battery problem is that those influential goals are overly ambitious compared to goals derived from consumers’ PHEV designs. We elicited PHEV designs from potential early buyers among U.S. new car buyers; most of those who are interested in a PHEV are interested in less technologically advanced PHEVs than assumed by experts. Using respondents’ PHEV designs, we derive peak power density and energy density requirements and show that current battery chemistries can meet them. By assuming too aggressive PHEV goals, existing policy initiatives, battery research, and vehicle development programs mischaracterize the batteries needed to start commercializing PHEVs. To answer the question whether batteries are ready for PHEVs, we must first answer the question, ‘‘whose PHEVs?’’
    Keywords: UCD-ITS-RP-10-08
    Date: 2010–02–01
  25. By: Lidicker, Jeffrey R.; Lipman, Timothy E.; Shaheen, Susan A.
    Abstract: This study examines the relative economics of electric vehicle operation in the context of current electricity rates in specific utility service territories. The authors examined 14 utility territories offering electric vehicle (EV) rates, focusing on California but also including other regions of the United States. The consumer costs of EV charging were examined in comparison with gasoline price data, geographic location, and during three highly variable gasoline price periods of July 2008, January 2009, and July 2009. In a switch from a conventional 23 mile per gallon (10.2 liters/100 kilometers) vehicle to a 300 watt-hours/mile electric vehicle driven 10,000 miles (16,100 km) per year, the study finds that savings in fuel costs ranged from approximately $100US to $1,800US annually, with considerable geographic variation and with higher-end values mostly in Summer 2008 when gasoline prices were relatively high. Charging off-peak instead of during peak periods saves an average of only a few hundred dollars US per year, rendering the incentive to charge off-peak a relatively small one except perhaps during some summer months when the on-peak prices are especially high. Gasoline price variances have a larger effect and switching from a low fuel economy conventional vehicle to the reference EV (compared with a switch from an already efficient vehicle) presents the highest savings level. The West and Midwest are generally the most favorable regions for EV economics, when EV charging rates and gasoline prices are considered together.
    Keywords: UCD-ITS-RR-10-06
    Date: 2010–03–15
  26. By: Axsen, Jonn; Kurani, Kenneth S
    Abstract: Plug-in hybrid electric vehicles (PHEVs) can be powered by gasoline, grid electricity, or both. To explore potential PHEV energy impacts, a three-part survey instrument collected data from new vehicle buyers in California. We combine the available information to estimate the electricity and gasoline use under three recharging scenarios. Results suggest that the use of PHEV vehicles could halve gasoline use relative to conventional vehicles. Using three scenarios to represent plausible conditions on PHEV drivers’ recharge patterns (immediate and unconstrained, universal workplace access, and off-peak only), tradeoffs are described between the magnitude and timing of PHEV electricity use. PHEV electricity use could be increased through policies supporting non-home recharge opportunities, but this increase occurs during daytime hours and could contribute to peak electricity demand. Deferring all recharging to off-peak hours could eliminate all additions to daytime electricity demand from PHEVs, although less electricity is used and less gasoline displaced.
    Keywords: UCD-ITS-RP-10-12
    Date: 2010–04–01
  27. By: Sperling, Daniel; Cannon, James S.
    Abstract: Climate change has fully entered the public consciousness, but what to do and how fast to do it remains intensely controversial. Questions about how to mold transportation policy to help achieve climate goals were the focus of the Asilomar conference hosted by the UC Davis Institute of Transportation Studies in July 2009. Two hundred leaders and experts were assembled from the automotive and energy industries, start-up technology companies, public interest groups, academia, national energy laboratories in the United States, and governments from around the world. Three broad strategies for reducing greenhouse gas emissions were investigated: reducing vehicle travel, improving vehicle efficiency, and reducing the carbon content of fuels. This book examines strategies, technologies, and policies to reduce GHGs and oil use. The book is aimed at researchers, policymakers, and students interested in the future of energy and transportation. <a href="" >Individual chapters of this book are available to download free of charge.</a> A paperback version of the book will be available soon on
    Keywords: UCD-ITS-RP-10-09
    Date: 2010–03–01
  28. By: Lutsey, Nicholas P.
    Abstract: Past automotive trends, ongoing technology breakthroughs, and recent announcements by automakers make it clear that reducing the mass of automobiles is a critical technology objective for vehicle performance, carbon dioxide (CO2) emissions, and fuel economy. Vehicle mass-reduction technology offers the potential to reduce the mass of vehicles without compromise in other vehicle attributes, like acceleration, size, cargo capacity, or structural integrity. As regulatory agencies continue to assess more stringent CO2 and fuel economy standards for the future, it is unclear the exact extent to which vehicle mass-reduction technology will be utilized alongside other efficiency technologies like advanced combustion and hybrid system technology. This report reviews ongoing automotive trends, research literature, and advanced concepts for vehicle mass optimization in an attempt to better characterize where automobiles – and their mass in particular – might be headed.
    Keywords: UCD-ITS-RR-10-10
    Date: 2010–05–01
  29. By: Gould, Gregory; Karner, Alex
    Abstract: Current concerns surrounding regional air pollution, climate change, rising gasoline prices and urban congestion could presage a substantial increase in bicycle mode share. However, state-of-the-art methods for the safe and efficient design of bicycle facilities are based on difficult to collect data and potentially dubious assumptions regarding cyclist behavior. Simulation models offer a way forward, but existing bicycling models in the academic literature have not been validated using actual data. This paper addresses these shortcomings by obtaining real-world bicycle data and implementing a multilane, inhomogeneous cellular automaton simulation model that can reproduce observations. The existing literature is reviewed to inform the data collection and model development. It is found that the model emulates field conditions while possibly under-predicting bike path capacity. Since the simulation model can “observe†individual cyclists, it is ideally suited to determine level of service based on difficult to observe cycling events such as passing. The conclusion suggests future work on data collection and model development.
    Keywords: UCD-ITS-RP-10-04
    Date: 2010–01–01
  30. By: Martin, Elliot; Shaheen, Susan Alison; Lidicker, Jeffrey
    Abstract: Carsharing has grown considerably in North America during the past decade and has flourished within metropolitan regions across the United States and Canada. The result has been a new transportation landscape, which offers urban residents an alternative to automobility without car ownership. As carsharing has expanded, there has been a growing demand to understand its environmental impacts. This paper presents the results of a North American carsharing member survey (N = 6,281). The authors establish a “before-and-after†analytical design with a focus on carsharing’s impacts on household vehicle holdings and the aggregate vehicle population. The results show that carsharing members reduce their vehicle holdings to a degree that is statistically significant. The average vehicles per household of the sample drops from 0.47 to 0.24. Most of this shift constitutes one-car households becoming carless. The average fuel economy of carsharing vehicles used most often by respondents is 10 miles per gallon (mpg) more efficient than the average vehicle shed by respondents. The median age of vehicles shed by carsharing households is 11 years, but the distribution covers a considerable range. An aggregate analysis suggests that carsharing has taken between 90,000 to 130,000 vehicles off the road. This equates to 9 to 13 vehicles (including shed and postponed auto purchases) for each carsharing vehicle.
    Keywords: UCD-ITS-RR-10-05
    Date: 2010–03–15
  31. By: Sathaye, Nakul; Harley, Robert; Madanat, Samer
    Abstract: In recent years, the reduction of freight vehicle trips during peak hours has been a common policy goal. To this end, policies have been implemented to shift logistics operations to nighttime hours. The purpose of such policies has generally been to mitigate congestion and environmental impacts. However, the atmospheric boundary layer is generally more stable during the night than the day. Consequently, shifting logistics operations to the night may increase 24â€hour average concentrations of diesel exhaust pollutants in many locations. This paper presents realistic scenarios for two California cities, which provide exhaust concentration and human intake estimates after temporal redistributions of daily logistics operations. Estimates are made for multiple redistribution patterns, including from 07:00â€19:00 to 19:00â€0:700, similar to daytime congestion charging polices and from 03:00â€18:00 to 18:00â€03:00, corresponding to the PierPASS program at the ports of Los Angeles and Long Beach. Results for these two redistribution scenarios indicate that 24â€hour average exhaust concentrations would increase at most locations in California, and daily human intake is likely to worsen or be unimproved at best. These results are shown to be worse for inland than coastal settings, due to differences in meteorology. Traffic congestion effects are accounted for, using a new graphical method, which depicts how offâ€peak policies can be environmentally improving or damaging, depending on traffic speeds and meteorology. An investigation into the decreasing marginal environmental benefits of offâ€policies is then provided, through the application of traffic flow theory. Finally, related environmental and human exposure concerns are considered to provide a comprehensive policy discussion of the environmental effects of shifting logistics operations from day to night.
    Date: 2009–10–01
  32. By: Circella, Giovanni
    Abstract: Parking policies and regulations are important tools in planning for the governance of urban mobility. The proper design and location of parking facilities, in fact, contributes to an efficient use of the transportation system (or it may reduce its efficiency, when these infrastructures are not properly planned). This paper discusses the role of parking as part of the policy packages for strategic planning aimed at increasing the sustainability of urban and metropolitan areas. In particular, the integration of parking strategies in a comprehensive vision for the future of a city may significantly improve the allocation of resources and the reduction of the overall environmental externalities. The role of parking in the strategic planning of cities is discussed through the analysis of several recent projects in the city of Bari (Italy). The paper discusses the way these projects are linked (or eventually not linked) to broader strategies for urban mobility, and how they might be coordinated into policy packages that promote more sustainable transportation. The use of an integrated land use transportation modeling approach to simulate the long-term evolution of the urban area may significantly contribute to estimate the long-term effects of the proposed policies. This approach may successfully support the process of policy evaluation and the selection of the optimal strategies to implement.
    Keywords: UCD-ITS-RP-10-13
    Date: 2010–03–01
  33. By: Markus Lang (Institute for Strategy and Business Economics, University of Zurich); Marc Laperrouza (Management of Network Industries, Swiss Federal Institute of Technology Lausanne (EPFL)); Matthias Finger (Management of Network Industries, Swiss Federal Institute of Technology Lausanne (EPFL))
    Abstract: This paper presents a game-theoretic model of a liberalized railway market in which train operation and ownership of infrastructure are fully vertically separated. The objective of this paper is to analyze how the regulatory agency will socially optimally set the charges that operators have to pay to the infrastructure manager for access to the tracks and how these charges change with increased competition in the railway market. Our analysis shows that an increased number of competitors in the freight and/or passenger segment reduces prices per kilometer and increases total output in train kilometers. The regulatory agency reacts to more competition with a reduction in access charges in the corresponding segment. Consumers benefit through lower prices while the effect on the operators' profits is ambiguous and depends on the degree of competition. We further show that social welfare always increases through more competition in the freight and/or passenger segment. Finally, social welfare is higher under two-part tariffs than under one-part tariffs if rising public funds is costly to society.
    Keywords: Access charges, optimal pricing, railways, regulation, vertical integration
    JEL: D40 L22 L51 L92
    Date: 2010–09
  34. By: Delucchi, Mark A.; McCubbin, Donald R.
    Abstract: In this chapter we report estimates of the external costs of transport in the United States.1 Generally, we cover road, rail, air, and water transport; passenger transport and freight transport; and congestion, accident, air pollution, climate change, noise, water pollution, and energy-security costs. However, we were not able to find estimates for all cost categories; in particular, there are fewer estimates for freight transport than for passenger transport, fewer estimates for water transport than for other modes, and fewer estimates of water pollution costs than of other costs. Table 1 summarizes the quality of estimates in each category. In our review, negative externalities are the unaccounted for or unpriced costs of an action. This means that they are the result of individual decisions or actions, such as whether to drive or take a train, or freight something by ship or plane, and are related to the explicit prices and unaccounted-for costs of those choices. Estimates of the external costs of transport may be used for several purposes: as a guide to more economically efficient pricing (given that the optimal price is equal to the private market price plus the estimated marginal external costs); as a guide to allocating research and development funds to mitigate the largest external costs; as part of a cost-benefit analysis of optimal investment in transportation modes and infrastructure; and as part of historical or comparative analyses. As indicated in Table 1, the available estimates do not fully characterize all costs for all modes. Moreover, the wide variations in estimation methods, data, and assumptions among even the “good†estimates confound the comparison of estimates across modes. As a result, we are able to make only general comparisons among modes and general statements about total costs of transport. In the following sections we review recent estimates of external costs by mode in the U. S. In each section we first review methods and issues in the estimation of the cost, and then present estimates of the costs. For each cost category (e.g., congestion delay, accidents) we summarize estimates of the cost by mode and study. Presenting the estimates in this way indicates where more research and analysis is needed.
    Keywords: UCD-ITS-RP-10-10
    Date: 2010–01–01
  35. By: McCollum, David L; Gould, Gregory; Greene, David L
    Abstract: Combined, aviation and marine transportation are responsible for approximately 5 percent of total greenhouse (GHG) emissions in the United States and 3 percent globally and are among the fastest growing modes in the transportation sector. Controlling the growth in these emissions will be an important part of reducing emissions from the transportation sector. A range of near-, medium- and long-term mitigation options are available to slow the growth of energy consumption and GHG emissions from aviation and marine shipping. Implementation of these options could result in reductions of more than 50 percent below BAU levels by 2050 from global aviation and more than 60 percent for global marine shipping. For these reductions to be realized, however, international and domestic policy intervention is required. Developing an effective path forward that facilitates the adoption of meaningful policies remains both a challenge and an opportunity. “Aviation and Marine Transportation: GHG Mitigation Potential and Challenges†presents an introduction to aviation and marine transportation and a discussion of the determinants of GHG emissions from transportation; gives overview of current emissions and trends and growth projections; explains the technological mitigation options and potential GHG emission reductions; and discusses policy options at both the domestic and international level to achieve deep and durable reductions in emissions.
    Keywords: UCD-ITS-RP-10-01
    Date: 2010–01–01
  36. By: Lee, Gunwoo; You, Soyoung Iris; Sangkapichai, Mana; Ritchie, Stephen G.; Saphores, Jean-Daniel M; Ogunseitan, Oladele; Ayala, Roberto; Jayakrishnan, R.; Torres, Rodolfo
    Abstract: The San Pedro Bay Ports (SPBP) complex of Los Angeles and Long Beach is the largest container port in the U.S., and a very important contributor to both California’s and the nation’s economies. Although the benefits of the SPBP activities are enjoyed by the whole country, the burden of the congestion and air pollution it generates falls mostly on the shoulders of people who live and work in the transportation corridor serving the SPBP. This corridor includes two busy freeways, the I-710 and the I-110, and a busy rail link, the Alameda corridor. The objective of this paper is to explore an integrated approach for evaluating the environmental and health impacts of freight operations between the SPBP complex and downtown Los Angeles, some 22 miles north. Our integrated approach combines a number of models, including a microscopic traffic simulation model and an emissions model to better estimate the impacts of congestion on air pollution, emission estimates from line-haul and switching train activities, a spatial dispersion model, and a health impact model. We analyze emissions for year 2005, which serves as a baseline in various air pollution inventories of the SPBP complex. Our results show that emissions concentrations are strongly affected by meteorological conditions and seasonal variations (winter is worse than summer); moreover, we found that health impacts from NOx and PM exposure exceed 200 million dollars, which justifies a number of regional initiatives to improve air quality. Our analysis is a starting point for analyzing the economic efficiency of these initiatives, which include modal shift (from trucks to trains) and the Clean Trucks Program.
    Date: 2010–03–01
  37. By: Shaheen, Susan; Guzman, Stacey; Zhang, Hua
    Abstract: Growing concerns over global motorization and climate change have led to increasing interest in sustainable transportation alternatives, such as bikesharing (the shared use of a bicycle fleet). Since 1965, bikesharing has grown across the globe on four continents including: Europe, North America, South America, and Asia (including Australia). Today, there are approximately 100 bikesharing programs operating in an estimated 125 cities around the world with over 139,300 bicycles. Bikesharing’s evolution is categorized into three generations: 1) White Bikes (or Free Bike Systems); 2) Coin-Deposit Systems; and 3) IT-Based Systems. In this paper, the authors propose a fourth-generation: “Demand-Responsive, Multi-Modal Systems.†A range of existing bikesharing business models (e.g., advertising) and lessons learned are discussed including: 1) bicycle theft and vandalism; 2) bicycle redistribution; 3) information systems (e.g., real-time information); 4) insurance and liability concerns; and 5) pre-launch considerations. While limited in number, several studies have documented bikesharing’s social and environmental benefits including reduced auto use, increased bicycle use, and a growing awareness of bikesharing as a daily mobility option. Despite bikesharing’s ongoing growth, obstacles and uncertainty remain, including: future demand; safety; sustainability of business models; limited cycling infrastructure; challenges to integrating with public transportation systems; technology costs; and user convenience (e.g., limited height adjustment on bicycles, lack of cargo space, and exposure to weather conditions). In the future, more research is needed to better understand bikesharing’s impacts, operations, and business models in light of its reported growth and benefits.
    Keywords: UCD-ITS-RR-10-07
    Date: 2010–03–01
  38. By: Bronwyn H. Hall; Christian Helmers
    Abstract: Global climate change mitigation will require the development and diffusion of a large number and variety of new technologies. How will patent protection affect this process? In this paper we first review the evidence on the role of patents for innovation and international technology transfer in general. The literature suggests that patent protection in a host country encourages technology transfer to that country but that its impact on innovation and development is much more ambiguous. We then discuss the implications of these findings and other technology-specific evidence for the diffusion of climate change-related technologies. We conclude that the “double externality” problem, that is the presence of both environmental and knowledge externalities, implies that IP may not be the ideal and cannot be the only policy instrument to encourage innovation in this area and that the range and variety of green technologies as well as the need for local adaptation of technologies means that patent protection may be neither available nor useful in some settings.
    Keywords: Climate change; intellectual property; innovation; technology transfer
    JEL: D1 I2 O1 O3
    Date: 2010
  39. By: Sangkapichai, Mana; Saphores, Jean-Daniel M; Ogunseitan, Oladele; Ritchie, Stephen G.; You, Soyoung Iris; Lee, Gunwoo
    Abstract: The goal of this paper is to estimate the health impacts resulting from exposure to PM and NOx emitted by train operations in the Alameda corridor, a crucial rail link that serves the Ports of Los Angeles and Long Beach, also known as the San Pedro Bay Ports (SPBP). We link a pollutant dispersion model (CalPUFF) to a health benefits assessment model (BenMAP) to discover population-based health impacts of PM and NOx emissions from train operations (switching and line haul). After analyzing year 2005 as our baseline, we consider two scenarios that correspond to switching to Tier 2 and Tier 3 locomotives. We find that mortality from PM exposure accounts for the largest health impacts, with health costs in excess of $40 million annually. A shift to Tier 2 locomotives would save approximately half of the annual health costs but the benefits of shifting from Tier 2 to Tier 3 locomotives would be much smaller. This assessment is only partial, however, because of gaps in available health data. To our knowledge, this is the first application of BenMAP to conduct a health assessment at the county level.
    Date: 2010–03–01
  40. By: Hixson, Mark; Mahmud, Abdullah; Hu, Jianlin; Bai, Song; Niemeier, Debbie A.; Handy, Susan L; Gao, Shengyi; Lund, Jay R; Sullivan, Dana C; Kleeman, M J
    Abstract: Future air pollution emissions in the year 2030 were estimated for the San Joaquin Valley (SJV) in central California using a combined system of land use, mobile, off-road, stationary, area, and biogenic emissions models. Four scenarios were developed that use different assumptions about the density of development and level of investment in transportation infrastructure to accommodate the expected doubling of the SJV population in the next 20 years. Scenario 1 reflects current land-use patterns and infrastructure while scenario 2 encouraged compact urban footprints including redevelopment of existing urban centers and investments in transit. Scenario 3 allowed sprawling development in the SJV with reduced population density in existing urban centers and construction of all planned freeways. Scenario 4 followed currently adopted land use and transportation plans for the SJV. The air quality resulting from these urban development scenarios was evaluated using meteorology from a winter stagnation event that occurred on December 15, 2000 to January 7, 2001. Predicted base-case PM2.5 mass concentrations within the region exceeded 35 μg m-3 over the 22-day episode. Compact growth reduced the PM2.5 concentrations by approx. 1 µg m-3 relative to the base-case over most of the SJV with the exception of increases (approx. 1 µg m-3) in urban centers driven by increased concentrations of elemental carbon (EC) and organic carbon (OC). Low-density development increased the PM2.5 concentrations by 1-4 µg m-3 over most of the region, with decreases (0.5-2 µg m-3) around urban areas. Population-weighted average PM2.5 concentrations were very similar for all development scenarios ranging between 16 and 17.4 µg m-3. Exposure to primary PM components such as EC and OC increased 10-15% for high density development scenarios and decreased by 11-19% for low-density scenarios. Patterns for secondary PM components such as nitrate and ammonium ion were almost exactly reversed, with a 10% increase under low-density development and a 5% decrease under high density development. The increased human exposure to primary pollutants such as EC and OC could be predicted using a simplified analysis of population-weighted primary emissions. Regional planning agencies should develop thresholds of population-weighted primary emissions exposure to guide the development of growth plans. This metric will allow them to actively reduce the potential negative impacts of compact growth while preserving the benefits.
    Keywords: UCD-ITS-RP-10-02
    Date: 2010–01–01
  41. By: Jean-Pierre Ponssard (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Catherine Thomas (Columbia Business School - Finance and Economics Division)
    Abstract: Uncertainty about the level of demand is thought to influence irreversible capacity decisions. This paper examines some implications of the theory literature on this topic in an empirical study of the US cement industry between 1994 and 2006. Firms in this sector have the ability to deliver cement either from domestic plants or from imports. Since cement is costly to transport via land, the difference in marginal cost between local production and imports varies across local markets. The marginal cost of imports is lower in areas with access to a sea port, decreasing the relative value of investing in local capacity sufficient to supply positive local demand shocks. In the presence of uncertain demand, firms may choose to serve these markets via both domestic production and imports. Consistent with the theory, we find a negative relationship between the average level of excess capacity and demand volatility only for coastal areas. An increase in demand volatility is associated with an increase in excess capacity only in landlocked areas. More generally, the paper shows that the cost of imports relative to the cost of domestic production affects the relationship between uncertainty and domestic capacity decisions. The results suggest that a unilateral climate policy in the US may induce a partial international relocation of capacity in carbon intensive industries, such as cement, by increasing the relative cost of domestic production.
    Keywords: Capacity Investment, Demand Uncertainty, Imports, Cement
    Date: 2010–08–30
  42. By: Selim, Tarek; Salem, Ahmed
    Abstract: The cement industry is a capital intensive, energy consuming, and vital industry for sustaining infrastructure of nations. The international cement market –while constituting a small share of world industry output—has been growing at an increasing rate relative to local production in recent years. Attempts to protect the environment in developed countries –especially Europe—have caused cement production plants to shift to countries with less stringent environmental regulations. Along with continually rising real prices, this has created a concerning pattern on economic efficiency and environmental compliance. This paper attempts to critically analyze the forces affecting pricing and production of cement from two perspectives. Porter’s five forces serve as our tool to analyze the competitive forces that move the industry from a market economy standpoint. On the other hand, the institutional economics framework serves to explain how governments and policymakers influence the structure and production distribution in the global market. Our findings suggest that the cement industry does not follow expected patterns of a market economy model. Additionally, it does not fully behave along the institutional economics paradigm. Hence, neither perspective explains the pricing or nature of the market on its own. Combining market forces within an institutional setting provides a more clear understanding of price dynamics and industry performance. We find that local regulation alone is insufficient to ensure market efficiency due to weak institutional governance in developing countries aligned with private business interests of global cement firms. Moreover, the global impact of local environmental non-compliance generates economic spillover effects that cannot be corrected by market forces alone. Due to asymmetries in governance and structure, this paper recommends the establishment of an independent international regulatory body for the cement industry that serves to provide sustainable industry development guidelines within a global context.
    Keywords: Keywords: cement – global industry– institutional economics – Porter competition – market niche
    JEL: F18 L61 D43
    Date: 2010–06
  43. By: Sexton, Steven E.
    Abstract: Policy-makers have relied on non-coercive mechanisms to achieve socially optimal outcomes in a variety of contexts when prices fail to ration scarce resources. Amid heightened concern about environmental damage and climate change, public appeals for cooperation and pecuniary incentives are frequently used to achieve resource conservation and other prosocial behavior. Yet the relative effectiveness of these two instruments is poorly understood when pecuniary incentives are small. This paper examines the extent to which free transit fares and appeals for car trip avoidance reduce car pollution on smoggy days. Using data on freeway traffic volumes and transit ridership, public appeals for cooperation are shown to reduce car trips. The marginal effect of free transit fares, however, is to increase car trips. Public appeals are shown to increase carpooling but not transit ridership. Free fares increase transit ridership but not carpooling. These results suggest that free transit rides do not induce motorists to substitute to transit, but instead subsidize regular transit rides and additional trips. They support findings in the behavioral literature that extrinsic incentives can crowd-out altruism.
    Date: 2010–07–01
  44. By: Markus Ohndorf (Chair of Economics, Institute for Environmental Decisions IED, ETH Zurich)
    Abstract: Project-based Emissions Trading Schemes, like the Clean Development Mechanism, are particularly prone to problems of asymmetric information between the project parties and the regulator. Given the specificities of these schemes, the regulator’s optimal monitoring strategy significantly differs from the one to be applied for capand- trade schemes or environmental taxes. In this paper, we extend the general framework on incomplete enforcement of policy instruments to reflect these specificities. The main focus of the analysis is to determine the regulator’s optimal spot-check frequency under the plausible assumption that the submitted projects vary with respect to their verifiability. We find that, given a limited monitoring budget, the optimal monitoring strategy is discontinuous, featuring a jump within the set of projects with lower verifiability. In this region, actual abatement is low and can fall to zero. For these cases, the sign of the slope of the strategy function depends on the actual relationship of the abatement cost and the penalty function. We conclude that, in a real-world context, project admission should ultimately be based on the criterion of verifiability.
    Keywords: environmental regulation, emissions trading systems, audits and compliance
    JEL: K32 D42 D82
    Date: 2010–08
  45. By: Crost, Benjamin; Traeger, Christian P.
    Abstract: We analyze the impact of uncertainty on optimal mitigation policies derived from the integrated assessment of climate change. For this purpose, we construct a close relative of the DICE model in a recursive dynamic programming framework. First, our framework can capture persistent uncertainty and we compare it to the simpler and more frequently employed analysis of ex-ante uncertainty. Second, our framework makes it possible to disentangle effects deriving from risk, from risk aversion, and from a decision maker’s aversion to intertemporal substitution. We analyze uncertainty over climate sensitivity as well as over damages.
    Keywords: climate change, uncertainty, integrated assessment, risk aversion, intertemporal substitution, recursive utility, dynamic programming
    Date: 2010–06–01
  46. By: Venkatachalam Anbumozhi; Armin Bauer (Asian Development Bank Institute)
    Abstract: The global financial crisis and the resulting economic slowdown may be assumed to have at least the benefit of also reducing environmental degradation in the individual countries. This paper discusses the consequences of the crisis for energy use, pollution prevention, and land use in Asia and the associated emissions of greenhouse gases—the principal global warming pollutants—as well as their linkage with poverty. There are some short-term benefits to the global environment from the economic slowdown. Such benefits include reduction in the rate of air and water pollution from reduced energy use—which has direct implications for the urban poor’s health. However, modest benefits to global and local environments arising from the economic slowdown are likely to be much smaller than the costs associated with many environmental conservation measures, related to energy savings, natural resources protection, and water environment. Both supply and demand side investments in energy and environment are being affected. Many ongoing projects are being slowed and a number of downward revisions are being made in expected profitability. Meanwhile, businesses and households are spending less on energy efficiency measures. Tighter credit and lower prices make investment in energy savings and environmental conservation less attractive financially, while the economic crisis is encouraging end users to rein in spending across the board. This is delaying the deployment of more efficient technology and equipment. Furthermore, solution providers are expected to reduce investment in research, development, and commercialization of more energy-efficient models, unless they are able to secure financial support from governments. The economic slowdown is likely to alter land use patterns by increasing the pressure to clear forests for firewood, timber, or agricultural purposes—the livelihood opportunities available with the rural poor. Further, the likely additional delay in many countries in the construction of effluent treatment plans for limiting the discharge of pollutants into the rivers is expected to harm the water environment. Thus on balance, the modest benefits to global and local environments arising from the economic slowdown are likely to be much smaller than the costs of many environmental conservation measures for improving the livelihood conditions of the poor. Natural resources and ecosystem services provided by the environment are essential to support economic growth and better livelihood conditions of the poor. Inaction on key environmental challenges, such as climate change, could lead to severe economic consequences in the future. These concerns justify government action to support investment in green growth measures, promoting direct investment or fiscal incentives for energy efficiency and clean environment low-carbon technologies. But much more needs to be done. The investment needed to put national economies in lowcarbon green growth pathways far exceeds what is expected to occur. Governments should be looking to increase the new funds they commit to long-term energy and environmental policies to improve livelihood conditions and to shift our development trend into an environmentally sustainable future. Hence a commitment that extends well beyond the economic stimulus packages is needed.
    Keywords: global financial crisis, energy use, pollution prevention, land use, climate change, poverty, agriculture
    JEL: Q27 Q42 Q48 Q54 Q57
    Date: 2010
  47. By: Ikefuji, M.; Magnus, J.R.; Sakamoto, H. (Tilburg University, Center for Economic Research)
    Abstract: This paper studies the interplay between climate, health, and the economy in a stylized world with four heterogeneous regions, labeled ‘West’ (cold and rich), ‘China’ (cold and poor), ‘India’ (warm and poor), and ‘Africa’ (warm and very poor). We introduce health impacts into a simple integrated assessment model where both the local cooling effect of aerosols as well as the global warming effect of CO2 are endogenous, and investigate how those factors affect the equilibrium path. We show how some of the important aspects of the equilibrium, including emission abatement rates, health costs, and economic growth, depend on the economic and geographical characteristics of each region.
    Keywords: Climate change;health;economic growth;local dimming;cobenefits.
    JEL: D91 I18 Q54 Q58
    Date: 2010
  48. By: Addison, Tony; Tarp, Finn
    Keywords: Triple Crisis, Finance, Food, Climate Change
    Date: 2010
  49. By: Adriaan Perrels; Tarja Tuovinen; Noora Veijalainen; Kirsti Jylhä; Juha Aaltonen; Riitta Molarius; Markus Porthin; Jari Silander; Tony Rosqvist
    Abstract: This publication reports on the main findings of the entire TOLERATE project, which was an integrated natural science ? social science project for the assessment of climate changed induced changes of extreme weather events and their social-economic consequences at a regional level. It includes regional projections of changes in climate conditions in Finland, with special reference to (short) periods with extremely abundant and extreme scant precipitation respectively. Based on these projections changes in river flood risks are assessed for two water shed areas by means of hydrological models. The resulting flood maps for events with different return times are subsequently evaluated with respect to their direct damage cost and with respect to the overall macroeconomic impacts in the region. With the aid of a group decision support system alternative flood risk mitigation options (investment alternatives) were preliminary explored with the aim to arrive at a ranking of alternatives based on a mix of criteria.
    Keywords: Adaptation, climate change, cost-benefit analysis, decision support, flood risk, hazard economics, regional climate scenario
    JEL: Q54 D81 O18 H43 R11
    Date: 2010–07–07
  50. By: Hattori, Keisuke
    Abstract: This paper investigates firm incentives for developing environmentally clean technologies in a simple two-country model with international oligopoly, and compares them under price and quantity regulations with and without policy cooperation between governments. Under any policy regime, whether firm incentives are either excessive or insufficient from a welfare point of view depends on the marginal environmental damage and the degree of emission spillovers. If the marginal damage is relatively large, a quantity instrument encourages innovation more than a price instrument. In addition, under either regime of price and quantity regulations, policy cooperation (harmonization) necessarily enhances welfare in each country, but it does not necessarily increase firms' innovation incentives.
    Keywords: Technology innovation; International oligopoly; Environmental policy; Policy harmonization
    JEL: D62 L13 Q55 Q58
    Date: 2010–09–02
  51. By: Mouez Fohda (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I); Thomas Seegmuller (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR6579)
    Abstract: This article analyzes the consequences of environmental tax policy under public debt stabilization constraint. A public sector of pollution abatement is financed by a tax on pollutant emissions and/or by public debt. In the same time, households can also invest in private pollution abatement activities. We show that the economy may be characterized by an environmental-poverty trap if debt is too large or public abatement is not sufficiently efficient with respect to the private one. However, there exists a level of public abatement and debt for a stable steady state to be optimal.
    Keywords: Environmental taxation, public and private abatements, public debt, trap, optimality.
    Date: 2010–08–31
  52. By: Berck, Peter; Braennlund, Runar
    Abstract: California and Sweden are both leaders in green regulations and actions. In both there is a substantial political base for environmental regulation, yet the path to regulation in these two political entities is quite different. California emphasizes command and control regulations while Sweden makes heavy use of taxes. We show that both underlying economic factors and the constraints of the larger systems in which these economies are embedded contribute to their choice of control methods.
    Keywords: energy policy, environmental aspects, climate change, automobiles, regulations
    Date: 2010–04–01
  53. By: Smulders, Sjak; Tsur, Yacov; Zemel, Amos
    Abstract: Unintended consequences of announcing a climate policy well in advance of its implementation have been studied in a variety of situations. We show that a phenomenon akin to the so-called âGreen- Paradoxâ holds also when the policy implementation date is uncertain. Governments are compelled, by international and domestic pressure, to demonstrate an intention to reduce greenhouse gas emissions. Taking actual steps, such as imposing a carbon tax on fossil energy, is a different matter altogether and depends on a host of political considerations. As a result, economic agents often consider the policy implementation date to be uncertain. We show that in the interim period between the policy announcement and its actual implementation the emission of green-house gases increases vis-`a-vis business-as-usual.
    Keywords: Climate policy, carbon tax, uncertainty, green paradox, Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2010
  54. By: Thomas Bernauer (Center for Comparative and International Studies (CIS), Institute for Environmental Decisions IED, ETH Zurich); Lena Maria Schaffer (Center for Comparative and International Studies (CIS), Institute for Environmental Decisions IED, ETH Zurich)
    Keywords: Climate change, Governance
    JEL: Q54
    Date: 2010–08
  55. By: Kahn, Matthew E; Somerville, Richard
    Abstract: Richard Somerville argues that one of the most important factors left out of debates on policies to address climate change is population growth. He asserts that the Intergovernmental Panel on Climate Change Report of 2007 probably understates the rapid rise of carbon dioxide in the earth’s atmosphere and rising temperatures as measured and observed from a wide variety of sources: CO2 levels, melting of ice sheets, sea level rising, changing ocean temperatures et cetera. Moreover, it is clear that these phenomenon result from human activities. If anthropogenic climate change is not mitigated a whole host of threats will manifest themselves that demand policy-makers address these challenges quickly and frankly. He hopes that scientists will have a central role in crafting and negotiating new policies as well as raising the public’s scientific knowledge of the problem. Matthew Kahn agrees with the general conclusions presented by Richard Somerville and turns to some economic questions that emerge from climate change. Thus, he considers two important approaches to the problem, mitigation through national policies and international agreements and adaptation to the consequences. He is skeptical that strong policies will be enacted in the US because of voting patterns and variable energy-consumption at the state-level. Pointing to the failure of the Copenhagen summit and the “tragedy of the commonsâ€, he also contends that international agreements are unlikely to reduce the kinds of human activity that contribute to climate change. He suggests that it is important to consider strategies for adaptation to the inevitable. He contends that self-interest and rational behavior will drive innovation. In turn, these new technological palliatives will be disseminated through global markets.
    Date: 2010–04–05

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