|
on Energy Economics |
| By: | Sherzod N. Tashpulatov |
| Abstract: | Promoting competition among electricity producers is crucial for ensuring allocative efficiency and lower electricity prices. In this paper, I empirically examine the electricity market of England and Wales in order to analyze to what extent the regulatory reforms were successful in promoting competition among electricity producers during 1995-2000. This research provides further evidence of the effects of the reforms undertaken by the regulatory authority during the liberalization process and could be also of interest to countries that created their wholesale electricity markets similar to the original model of the England and Wales wholesale electricity market. |
| Keywords: | liberalization; electricity markets; uniform price auction; market power |
| JEL: | D21 D44 L90 L94 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp415&r=ene |
| By: | Liebl, Dominik |
| Abstract: | The instantaneous nature of electricity distinguishes its spot prices from spot prices for equities and other commodities. Up to now electricity cannot be stored economically and therefore demand for electricity has an untempered effect on electricity prices. In particular, hourly electricity spot prices show a vast range of dynamics which can change rapidly. In this paper we introduce a robust version of functional principal component analysis for sparse data. The functional perspective interprets spot prices as functions of demand for electricity and allows to estimate a single price curve for each day. Variations in market fundamentals such as commodity prices are absorbed by the first principal components. |
| Keywords: | Functional principal component analysis, non stationary functional time series data, sparse data, electricity spot market prices, European Electricity Exchange (EEX). |
| JEL: | C14 C01 C1 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25017&r=ene |
| By: | Payal Malik |
| Abstract: | In this paper, the different market structure options and the broad organisational forms of restructured wholesale markets for electricity that have emerged, have been critically analysed. [Working Paper No. 95] |
| Keywords: | structure, options, wholesale, markets, electricity |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ess:wpaper:id:2848&r=ene |
| By: | Oona Nanka-Bruce (Power Networks and Energy Strategic Consulting, Parsons Brinckerhoff, Godalming, Surrey, GU7 2AZ, UK) |
| Abstract: | A significant proportion of the population in sub-Saharan Africa live in the rural areas, with the majority living on less than US$1 per day. Access to electricity is considered an essential element in the sustainable development of rural areas and an enabler for countries to achieve their Millennium Development Goals. This paper contributes the first analytical study of the socio-economic factors which have a significant impact on rural electrification (RE) development in sub-Saharan Africa. The study employs cross-sectional data for 24 of the 47 countries in the sub-Saharan region and finds factors including the Human Development Index, wealth distribution, institutional development and urban population size of a country to have a significant impact on RE development. A detailed policy survey of four countries from the sample; two countries categorised as over-performing (Nigeria and Madagascar) and two as under-performing (Tanzania and Chad), highlights that collaboration with international partners, integration of national policies and strategies and the use of renewable energy sources enhances the development of rural electrification in sub-Saharan Africa. |
| Keywords: | rural electrification; socio-economic factors; developing countries; Sub-Sahara Africa; sustainable development; MDGs; econometric modelling; policy survey |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:sur:seedps:128&r=ene |
| By: | William J. Hausman (Department of Economics, The College of William and Mary); John L. Neufeld (Department of Economics, University of North Carolina, Greensboro); Till Schreiber (Department of Economics, The College of William and Mary) |
| Abstract: | Access to electricity is widely recognized as an essential element of economic development. This paper uses a comprehensive dataset on electrification aid projects to quantify and model the determinants of multilateral and bilateral electrification aid in the last three decades of the 20th century. Total annual electrification aid fluctuated substantially over the period. While multilateral and bilateral donors were relatively concentrated, aid recipients were widely dispersed. Our major finding is that electrification aid by the 1990s had moved marginally toward poorer countries, except for those in Africa, and toward countries with better governance structures and ones that had restructured their electric power sector. This likely reflected the liberalization and privatization policies affecting the industry from the mid-1980s on. |
| Keywords: | bilateral aid, development, electric power, energy, hydroelectric power,multilateral aid, World Bank |
| JEL: | L94 N70 N80 O13 |
| Date: | 2010–09–16 |
| URL: | http://d.repec.org/n?u=RePEc:cwm:wpaper:98&r=ene |
| By: | George Verikios; Xiao-guang Zhang |
| Abstract: | We develop a framework for estimating the direct and indirect effects on household income of industry changes; it combines a computable general equilibrium model with a microsimulation model in a two-stage simulation procedure. We apply the framework to analysing changes in the Australian electricity industry during 1990s and their effect on household income across households. Almost all income deciles are found to have benefited from the changes but the pattern of effects meant that there was also a small increase in income inequality. |
| Keywords: | computable general equilibrium, electricity, household income distribution, microeconomic reform, microsimulation |
| JEL: | C68 C69 L94 D31 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cop:wpaper:g-207&r=ene |
| By: | Lewis Evans (Victoria University Of Wellington); Greame Guthrie; Andrea Lu |
| Abstract: | In this paper, we introduce an electricity market model and use it to explore the effect of climate change on electricity output and prices. It is calibrated to the New Zealand Electricity Market, and includes multiple generation fuels, uncertain fuel availability, and storage options. The model is formulated in continuous time, which mimics the many short trading periods that are common to electricity spot markets, while properly incorporating forward-looking generation decision making. Specifically, it is used to estimate the effects of changes that may arise in characteristics of fuels -water and gas- as a consequence of climate change and climate change policies. The model does this under the polar cases of a competitive market structure and monopoly. There are three key findings from the results. First, the results illustrate the importance of allowing for volatility and including management of storage in electricity market models. Second, they suggest that reductions in average hydro fuel availability will reduce welfare significantly. Increases in the volatility of hydro fuel availability will also affect welfare, but to a very small extent. Third, the value of reservoir expansion is sensitive to the distribution of hydro fuel availability. Finally, the effects of a carbon tax are also reported. |
| Keywords: | dynamic optimisation, electricity spot market performance, stochastic fuel availability, storage options, climate change |
| JEL: | D4 D9 L1 L5 L9 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:10_09&r=ene |
| By: | Trillas, Francesc (IESE Business School) |
| Abstract: | The economics of federalism is a broad discipline with more than five decades of experience. It may shed light on how regulatory jurisdiction is allocated in EU electricity and telecommunications markets. Specifically, this paper assesses the evolution of reform up to and including the third EU packages, which continue the liberalization and integration process in these markets. Liberalization has been accompanied by gradual harmonization of national markets to overcome resistance to competitive forces. Less steps than necessary have been undertaken to promote market integration; yet, positive and normative reasons remain for the participation of national or even regional/local powers. Vertical institutional cooperation will remain a necessary condition for a sound regulatory framework, but cooperation may sometimes be inhibited by distributive considerations. |
| Keywords: | federalism; regulation; electricity; telecommunications; |
| JEL: | H77 K23 L50 L94 L96 L97 |
| Date: | 2010–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0861&r=ene |
| By: | Perrot, Radhika (UNU-MERIT); Filippov, Sergey (Delft University of Technology) |
| Abstract: | This paper looks at the localisation strategies of multinational companies in wind energy sector in the emerging countries of China and India. It seeks to explain why western multinationals are localising new manufacturing and R&D facilities in emerging economies such as China and India, and how local knowledge and capabilities are being increasingly integrated into global technology and manufacturing networks of multinationals. It explores the reasons behind the localisation of multinational companies that helps them gain strategic access to wind energy technological capabilities in emerging economies. It examines the case of the company Vestas in expanding wind energy cluster of Tianjin in China and Chennai in India. At the strategic level, it explains the importance of the role of local capabilities and skills in the global production networks of multinationals. At the policy level, the discussions leading from the case focuses on the concrete steps necessary to integrate technology and innovation more closely into development of sustainable energy markets in developing countries. |
| Keywords: | renewables, multinational companies, emerging economies |
| JEL: | F23 L72 O32 Q20 Q42 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010047&r=ene |
| By: | Bodas-Freitas, Isabel Maria (Grenoble Ecole de Management, and Politecnico di Torino); Dantas, Eva (German Development Institute, and Science and Technology Policy Research Unit(SPRU), University of Sussex); Iizuka, Michiko (UNU-MERIT) |
| Abstract: | This paper examines the role of the global institutional frameworks on the national processes of innovation diffusion. we focus on the influence of the Kyoto mechanisms on the diffusion of renewable energy technologies in the BRICS countries i.e. Brazil, China India, Russia and South Africa. Our preliminary analysis suggests that the Kyoto Mechanisms may support the diffusion of some simple, low cost and mature technologies which are already diffused in the host countries, rather than the diffusion of new renewable energy technologies. This observation raises questions about the extent to which the Kyoto Mechanisms at its present state create major incentives for the diffusion of new renewable energy technologies in the BRICS, in the absence of a indigenous technological efforts and capabilities in new renewable technologies and national policy initiatives to attract and leverage the implementation of Kyoto Mechanism projects to support technology diffusion. We analyse these issues theoretically as well as empirically making use of national aggregated data from the World Development Indicators, the International Energy Agency, the United Nations Framework Convention on Climate Change and secondary sources. |
| Keywords: | technology diffusion, renewable energy, global institutions, BRICS, Kyoto mechanisms |
| JEL: | O33 O19 O13 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010045&r=ene |
| By: | Kley, Fabian; Wietschel, Martin; Dallinger, David |
| Abstract: | Electric vehicles can reduce carbon dioxide emissions, increase energy efficiency, and help to reduce the dependency on oil imports. However, today's technical and economic challenges are preventing mass-market adoption. In order to create an early market and support economies of scale in production, some European countries have already established support schemes. This research study aims to provide an overview of the existing support schemes in Europe and to assess them using four criteria: effectiveness, efficiency, practicability, and political acceptance. The study concludes with an impact analysis of today's economic support schemes which considers the total costs of ownership. While one-time support schemes help to reduce the large initial investments for EVs, recurring instruments are often more effective and efficient but also smaller in volume. The comparison of the different regional incentive schemes reveals that EVs today are only economically attractive in Denmark and Norway, but at relatively high prices. Thus, regulators need to increase the volume and efficiency of the support schemes, establish high scoring instruments, and align these on a European scale. In addition, non-monetary support, e.g. free-parking, can help to overcome technical or smaller economic hurdles. -- |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s72010&r=ene |
| By: | Lerch, Christian; Kley, Fabian; Dallinger, David |
| Abstract: | Climate change and global resource shortages lead to a rethinking of classic individual mobility basing on combustion engines. As a result of technological improvements first electric vehicles are introduced and further market penetrations can be expected. But due to a possible wider implementation of battery-powered electrical propulsion systems in future, new challenges arise for both the classic automotive industry and further new players, e.g. battery manufacturers, the power supply industry or other service providers. Due to the various application cases of electric vehicles discussed topically, numerous business models can emerge leading to new shares in the value creation and involving new participating players. Consequently, the individual stakeholders are uncertain as to which business models are really effective with regard to targeting a profitable overall concept. Therefore, the aim of this contribution is to define a holistic approach to developing business models for electric mobility, regarding the holistic system on the one hand and giving decision support for concerning enterprises on the other hand. For this, the basic elements of electric mobility will be observed and topical approaches for business models for various stakeholders will be discussed. The paper closes with a systemic instrument for business models basing on morphological methods. -- |
| Keywords: | business models,electric vehicles,morphologic box |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s52010&r=ene |
| By: | Altman, Ira; Sanders, Dwight; Moon, Wanki; Coulibaly, Ibrahima |
| Abstract: | Given the recent interest in renewable energy from agriculture based on row crop waste and energy crops, this paper takes a transaction cost view of biomass supply chain strategies. First an investigation of the biomass and bioenergy literature reveals a need for an organizational perspective on emerging bioenergy industries. Second, transaction cost economic theory is applied to the general relationship between biomass producer and processor. Finally the case of the Iogen Corporation is examined to identify their planned biomass supply chain strategy as they attempt to commercialize their cellulose ethanol technology. Two general options emerge: one where processors can choose to enter developed biomass areas and expect to use spot markets with low transaction costs but experience intense competition for biomass and another where the processor enters an undeveloped biomass area, expects the use of long term contracts with higher transaction costs but can expect less intense competition. |
| Keywords: | Agribusiness, |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:wera10:93417&r=ene |
| By: | Zhang, Qingfeng; Watanabe, Makiko; Lin, Tun |
| Abstract: | The developing world is looking for effective, creative ideas for upscaling clean, renewable energy. No place will gain more socially, economically, and environmentally from increased access to clean, reliable energy than poor, rural areas. Biomass energy, produced from animal and crop wastes, is a sensible renewable energy option for rural areas and it can be cost-effective at community and industry scales if guided effectively by governments. This publication explores the potential of biomass energy to close the urban–rural energy gap, raise farmer incomes, and mend the environment in the People’s Republic of China (PRC). Its findings are instructive for other developing and medium-income countries exploring energy-for-all strategies. The report examines the promises and limitations of leading biomass energy technologies and resources for various distribution scales, including but not limited to household biogas digesters. The information is based on lessons learned and experiences from the Asian Development Bank–financed Efficient Utilization of Agricultural Wastes Project in the PRC, as well as findings and conclusions from a technical assistance grant to assist the government draft a national strategy for developing rural biomass energy. |
| Keywords: | rural biomass energy; rural development; biomass resources; biomass technologies; China |
| JEL: | O1 O13 Q42 Q4 |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:24987&r=ene |
| By: | Andrade de Sa, Saraly; Palmer, Charles; Engel, Stefanie |
| Abstract: | This paper investigates the direct and indirect impacts of ethanol production on land use, deforestation and food production. A partial equilibrium model of a national economy with two sectors and two regions, one of which includes a residual forest, is developed. It analyses how an exogenous increase in the ethanol price affects input allocation (land and labor) between sectors (energy crop and food). Three potential effects are identified. First, the standard and well-documented effect of direct land competition between rival uses increases deforestation and decreases food production. Second, an indirect displacement of food production across regions, provoked by a shift in the price of food, increases deforestation and reduces the total output of the food sector. Finally, labor mobility between sectors and regions tends to decrease food production but also deforestation. The overall impact of ethanol production on forest conversion is ambiguous, providing a number of interesting pointers to further, empirical research. -- |
| Keywords: | Ethanol,Deforestation,Indirect impacts,Land use,Migration |
| JEL: | Q11 Q24 Q42 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:gdec10:21&r=ene |
| By: | Bouët, Antoine; Dimaranan, Betina V.; Valin, Hugo |
| Abstract: | There is rising skepticism about the potential positive environmental impacts of first generation biofuels. Growing biofuel crops could induce diversion of other crops dedicated to food and feed needs. The relocation of production could increase deforestation and bring significant new volumes of carbon into the atmosphere. In this paper, we develop a methodology for assessing the indirect land use change effects related to biofuel policies in a computable general equilibrium framework. We rely on the trade policy model MIRAGE and on the GTAP 7 database, both of which have been modified and improved to explicitly capture the role of different types of biofuel feedstock crops, energy demand and substitution, and carbon emissions. Land use changes are represented at the level of agroecological zones in a dynamic framework using land substitution with nesting of constant elasticity of transformation functions and a land supply module that takes into account the effects of economic land expansion. In this integrated global approach, we capture the environmental cost of different land conversions due to biofuels in the carbon budget, taking into account both direct and indirect carbon dioxide emissions related to land use change. We apply this methodology to look at the impacts of biofuel (ethanol) policies for transportation in the United States and in the European Union with and without ethanol trade liberalization. We find that emissions released because of ethanol programs significantly worsen the total carbon balance of biofuel policies. Ethanol trade liberalization benefits are ambiguous and depend highly on the parameters governing land use change, particularly in Brazil. We conclude by pointing out the critical aspects that have to be refined in order to improve our understanding of the environmental implications of biofuel development. |
| Keywords: | Biofuels, indirect land use change, trade liberalization, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1018&r=ene |
| By: | Steglin, Forrest |
| Abstract: | Livestock producers operating large-scale confinement operations, such as dairies, are looking for ways to handle and dispose of manure that are cost effective and efficiently meet odor and pollution policies. Farm level production of biogas using anaerobic digesters is one solution that helps control methane emissions. Methane is an odorless gas that can be used to generate electricity, develop fiber products (such as fiber boards, decking, cow pots and building materials) and potting medium as a soil or peat replacement and livestock bedding, establish carbon credits, or provide other value-added products like fertilizer and raw gas or transport fuel, thereby having marketability and economic value. Substantial environmental benefits of odor control, water quality protection, and greenhouse gas reductions also exist. Because of the tangible and intangible benefits possible from reducing methane emissions via anaerobic digesters, biogas recovery systems are prudent financially as well, with single-digit payback periods, double-digit simple rates of return, approximately $1 million (USD) in net present value, double-digit internal rates of return, and relatively large benefit-cost ratios associated with the savings over time. |
| Keywords: | Agribusiness, |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:wera10:93418&r=ene |
| By: | van Eijkel, Remco (University of Groningen); Moraga-González, Jose L. (IESE Business School) |
| Abstract: | Building on a model of the interaction of risk-averse firms that compete in forward and spot markets, we develop an empirical strategy to test whether oligopolistic firms use forward contracts for strategic motives, for risk-hedging, or for both. An increase in the number of players weakens the incentives to sell forward for risk-hedging reasons. However, if strategic motives are also relevant, then an increase in the number of players strengthens the incentives to sell forward. This difference provides the analyst with a way to identify whether strategic considerations are important at motivating firms to sell forward. Using data from the Dutch wholesale market for natural gas, where we observe the number of players, spot and forward sales, and churn rates, we find evidence that strategic reasons play an important role in explaining the observed firms' (inverse) hedge ratios. The data also lend support to the existence of a learning effect by wholesalers. |
| Keywords: | market power; risk-hedging; forward contracts; spot market; over-thecounter trade; market transparency; churn rates; |
| JEL: | D43 G13 L13 L95 |
| Date: | 2010–06–05 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:iesewp:d-0864&r=ene |
| By: | Skribans, Valerijs |
| Abstract: | One of the most pressing problems in the Latvian economy is related to the energy sector. The most characteristic feature is coupled with the low efficiency of thermal energy consumption of households as a result of poor insulation of existing buildings in Latvia. Solving energy sector problems requires a comprehensive decision, both in energy production and consumption. It is therefore necessary to develop energy sector model to be able to evaluate not only the energy consumption growth and the factors affecting it directly, but also the feedback caused by the increase of the efficiency growth. The model shown in the article has been developed using system dynamic method. Latvian energy sector model consists of resources, production and consumption blocks. A separate place is taken by electricity generation hydroelectric power plants (HPP), net imports of electricity and so on. Resource blocks consist of primary energy resource blocks: petroleum products, solid fuel, wood and gas blocks. Primary energy resources are used for production of other energy forms, i.e. heat or electricity production, they are shown in the production blocks. Both the primary energy and produced energy (and electricity generated by HPP) are passed on to final consumers, who make consumer unit blocks. It consists of: transport, agriculture, households and other (industrial and services sectors) blocks. The model key role is to forecast energy consumption by separate groups, both consumers and energy resources groups; to estimate energy sector impact on environment. The model has been developed to estimate the impact of buildings thermo insulation program on Latvian economy. |
| Keywords: | energy efficiency; consumption; system dynamic; modelling and simulation; building warming and renovation; the CO2 emissions and quotas |
| JEL: | Q00 C68 Q41 C00 Q01 C60 Q30 C53 Q52 C50 Q40 C30 Q20 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25067&r=ene |
| By: | Felipe Aldunate; Jaime Casassus |
| Abstract: | We study the consumption and hedging strategy of an oil-importing developing country that faces multiple crude oil shocks. In our model, developing countries have two particular characteristics: their economies are mainly driven by natural resources and their technologies are less e cient in energy usage. The natural resource exports can be correlated with the crude oil shocks. The country can hedge against the crude oil uncertainty by taking long/short positions in existing crude oil futures contracts. We find that both, ine ciencies in energy usage and shocks to the crude oil price, lower the productivity of capital. This generates a negative income e ect and a positive substitution e ect, because today's consumption is relatively cheaper than tomorrow's consumption. Optimal consumption of the country depends on the magnitudes of these e ects and on its risk-aversion degree. Shocks to other crude oil factors, such as the convenience yield, are also studied. We nd that the persistence of the shocks magni es the income and substitution e ects on consumption, thus a ecting also the hedging strategy of the country. The demand for futures contracts is decomposed in a myopic demand, a pure hedging term and productive hedging demands. These hedging demands arise to hedge against changes in the productivity of capital due to changes in crude oil spot prices. We calibrate the model for Chile and study up to what extent the country's copper exports can be used to hedge the crude oil risk. |
| Keywords: | Crude oil prices, convenience yields, risk management, emerging markets, government policy, two-sector economies |
| JEL: | G11 Q43 Q48 D92 O41 C60 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:376&r=ene |
| By: | Francesco Ravazzolo (Norges Bank (Central Bank of Norway)); Philip Rothman (East Carolina University) |
| Abstract: | We study the real-time Granger-causal relationship between crude oil prices and US GDP growth through a simulated out-of-sample (OOS) forecasting exercise; we also provide strong evidence of in-sample predictability from oil prices to GDP. Comparing our benchmark model "without oil" against alternatives "with oil," we strongly reject the null hypothesis of no OOS predictability from oil prices to GDP via our point forecast comparisons from the mid-1980s through the Great Recession. Further analysis shows that these results may be due to our oil price measures serving as proxies for a recently developed measure of global real economic activity omitted from the alternatives to the benchmark forecasting models in which we only use lags of GDP growth. By way of density forecast OOS comparisons, we find evidence of such oil price predictability for GDP for our full 1970-2009 OOS period. Examination of the density forecasts reveals a massive increase in forecast uncertainty following the 1973 post-Yom Kippur War crude oil price increases. |
| Date: | 2010–09–15 |
| URL: | http://d.repec.org/n?u=RePEc:bno:worpap:2010_18&r=ene |
| By: | Jaime Casassus; Diego Ceballos |
| Abstract: | We use a general equilibrium model of a monetary economy to understand the economics behind the correlation between in nation and oil futures returns. Oil is used as both, an input to the production of capital and as a consumption good. We estimate our model using maximum likelihood with the following datasets: crude oil futures prices, nominal interest rates, in nation rates and money supply growth rates. We nd that some of the positive correlation found in empirical studies is due to the fact that oil is in the consumption basket; however, this accounts only for a minor part of it. There exist other important sources of correlation related to monetary shocks and output shocks. In particular, we nd that the correlation is extremely sensitive to the reaction of the central bank to output shocks, while the reaction to in nation changes is less signi cant. Our estimates suggest that the monetary authority overreacts to output shocks by increasing the money supply in a more than necessary amount, generating a signi cant source of positive correlation. From a practical perspective, We nd that it is a good strategy to use as a hedge, the futures whose maturity is closer to the hedging horizon. This is particularly true for short-term hedging. |
| Keywords: | Correlation structure, inflation, futures, hedging, oil, monetary policy |
| JEL: | E31 G13 Q31 E44 E52 E23 D51 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:373&r=ene |
| By: | Fukuya Iino; Alva Lim (Asian Development Bank Institute) |
| Abstract: | Right now, governments around the world are spending record amounts of money to kick- start their economies in response to the financial crisis. Fortunately, a great opportunity exists for this fiscal stimulus to be directed towards “green” economic growth, which can not only provide the new markets and jobs needed immediately for alleviating poverty, but also address the challenges of global warming. Working models already exist, proving that sustainable growth is possible. To achieve this will require social, technical and structural changes, as well as appropriate policies conducive to eco-innovation. For developing countries, there are lessons that can be learned from countries that have already gone through that process. The aim of this paper is to show what lessons can be learnt from the Japanese case. As the world's second largest economy, Japan is not only one of the most energy-efficient economies in the world; it also produces some of the world's leading green technologies. This paper focuses on current trends in the green product market and consumer behavior in Japan, which have been influenced by recent government policies, particularly the ¥15.4 trillion (more than US$100 billion) stimulus package. The aim of this paper is to provide some insight on, and present a repository of selected government policies promoting sustainable development. The scope of this paper will cover areas such as hybrid vehicles, renewable energy, energy efficient home appliances, and green certification schemes. It also provides a brief discussion on the environmental policies of the new Japanese government that came into power on 16 September 2009. The paper attempts to use the most recent data, from June to August 2009, however given the quickly- evolving global environment, these statistics may change drastically by the time this paper is presented. |
| Keywords: | green economic growth, sustainable growth, fiscal stimulus, Japan |
| JEL: | Q53 Q54 Q58 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:eab:energy:2283&r=ene |
| By: | Jin, Yanhong; Wang, Hua; Wheeler, David |
| Abstract: | Environmental performance rating and disclosure has emerged as an alternative or complementary approach to conventional pollution regulation, especially in developing countries. However, little systematic research has been conducted on the effectiveness of this emerging policy instrument. This paper investigates the impact of a Chinese performance rating and disclosure program, Green Watch, which has been operating for 10 years. To assess the impact of Green Watch, the authors use panel data on pollution emissions from rated and unrated firms, before and after implementation of the program. Controlling for the characteristics of firms and locations, time trend, and initial level of environmental performance, the analysis finds that firms covered by Green Watch improve their environmental performance more than non-covered firms. Bad performers improve more than good performers, and moderately non-compliant firms improve more than firms that are significantly out of compliance. The reasons for these different responses seem to be that the strengths of incentives that the disclosure program provides to the polluters at different levels of compliance are different and the abatement costs of achieving desired levels of ratings are different for different firms. |
| Keywords: | Water and Industry,Brown Issues and Health,Green Issues,Pollution Management&Control,Energy Production and Transportation |
| Date: | 2010–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5420&r=ene |
| By: | Michael , Delgado; Neha , Khanna |
| Abstract: | We present a model in which firms voluntarily abate emissions in a market that values environmental quality such that firms can charge a premium for goods that are environmentally friendly. Our results establish conditions under which mandatory abatement crowds out voluntary abatement, or, alternatively, provides an incentive for firms to increase their level of voluntary abatement in order to maintain product differentiation. In addition, we identify cases under which firms that do not abate voluntarily would support mandatory abatement if they are able to collectively pass off (at least part of) the costs of abatement to consumers. Our model predicts that regulatory policies that ignore voluntary abatement are likely to over-regulate non-abating firms compared to the level of regulation that accounts for voluntary abatement if consumer income levels in the green market are relatively high. If consumer income levels in the green market are relatively low, regulation may be ineffective in improving overall environmental quality. |
| Keywords: | Voluntary Pollution Abatement; Regulation; Markup |
| JEL: | K32 Q52 Q58 |
| Date: | 2010–07–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:25026&r=ene |
| By: | Lokshin, Boris (Maastricht University, and UNU-MERIT); Mohnen, Pierre (UNU-MERIT, Maastricht University, and CIRANO) |
| Abstract: | This paper examines the impact of the R&D fiscal incentive program on R&D by Dutch firms. Taking a factor-demand approach we measure the elasticity of firm R&D capital accumulation to its user cost. Econometric models are estimated using a rich unbalanced panel of firm data covering the period 1996-2004 with firm-specific R&D user costs varying with tax incentives. Using the estimated user cost elasticity, we perform a cost-benefit analysis of the R&D incentive program. We find some evidence of additionality suggesting that the level-based program of R&D incentives in the Netherlands is effective in stimulating firms' investment in R&D. However, the hypothesis of crowding out can be rejected only for small firms. The analysis also indicates that the level-based nature of the fiscal incentive scheme leads to a substantial social dead-weight loss. |
| Keywords: | R&D tax credits; panel data; crowding out; user-cost elasticity |
| JEL: | O32 O38 H25 H50 C23 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010040&r=ene |
| By: | Hall, Bronwyn (University of California at Berkeley, UNU-MERIT, and Maastricht University); Helmers, Christian (CEP, London School of Economics and Political Science, and CSAE, University of Oxford) |
| 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 "gdouble 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: | O19 O33 O34 Q54 Q55 Q58 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:unumer:2010046&r=ene |
| By: | Steve Newbold; Charles Griffiths; Christopher C. Moore; Ann Wolverton; Elizabeth Kopits |
| Abstract: | The “social cost of carbon” (SCC) is the present value of the future stream of damages from one additional ton of carbon emissions in a particular year. This paper develops a simple model for calculating the SCC and compares estimates of the SCC under certainty and uncertainty. Our model includes the key ingredients shared by several of the more complex integrated assessment models in the climate economics literature, but is designed to be more transparent and easier to use by decision-makers and non-specialists. We conduct a series of sensitivity analyses to examine the influences of several key parameters in the deterministic case. We also conduct a formal uncertainty analysis using Monte Carlo simulation, which shows that the certainty-equivalent SCC can be substantially larger than the expected value of the SCC. We explain that this difference arises due to the combined effects of uncertainty and risk aversion. Finally, we compare the present value of benefits estimated using the SCC to the compensating variation of consumption in the initial period for a wide range of hypothetical emission reduction policies. |
| Keywords: | climate change, social cost of carbon, integrated assessment model |
| JEL: | Q54 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201007&r=ene |
| By: | Rohling, Moritz |
| Abstract: | Regulating inter-country externalities, like climate change, raises various enforcement problems. It is often argued that international pricebased regulations (e.g. emission taxes) are more difficult to enforce than quantity-based regulations (e.g. tradable pollution permits). In this paper, we analyze the relative performance of price-based and quantity-based instruments for cases where costs and benefits are uncertain and enforcement of quantity regimes is stricter than for price-based regimes. We show that under these conditions, instrument choice solely based on the relative slopes of the marginal costs can be inefficient. If enforcement probabilities differ, rational policy choice should also take into account the level of the marginal benefit curve, as well as institutional parameters. In contrast to earlier analyses on Prices vs. Quantities, we find that the difference in welfare for both policy instruments also depends on the variance of the marginal abatement costs. Furthermore, numerical simulations of our stylized model suggest that, for climate policies, quantity-regulations might well be preferable to price-based approaches after all. -- |
| Keywords: | market-based instruments,incomplete enforcement,environmental regulation,uncertainty |
| JEL: | D8 L51 K42 Q58 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:gdec10:24&r=ene |
| By: | Baker, Justin S.; McCarl, Bruce A.; Murray, Brian C.; Rose, Steven K.; Alig, Ralph J.; Adams, Darius; Latta, Greg; Beach, Robert; Daigneault, Adam |
| Keywords: | Environmental Economics and Policy, Land Economics/Use, Q15, Q18, Q54, |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaeapi:93683&r=ene |
| By: | Nzuma, Jonathan Makau; Waithaka, Michael; Mulwa, Richard Mbithi; Kyotalimye, Miriam; Nelson, Gerald |
| Abstract: | The ten ASARECA member countries (Burundi, Democratic Republic of Congo, Eritrea, Ethiopia, Kenya, Madagascar, Rwanda, Sudan, Tanzania, and Uganda) have adopted, or are planning to adopt, a range of climate change adaptation strategies in agriculture (see Table 1 for a summary). Of the 26 strategies mentioned, only two are common to all 10 countries, while five more are common to five or more. The strategies common to all member countries include the development and promotion of drought-tolerant and early-maturing crop species and exploitation of new and renewable energy sources. Most countries have areas that are classifiable as arid or semiarid, hence the need to develop drought-tolerant and early-maturing crops. Strangely, only one country recognizes the conservation of genetic resources as an important strategy although this is also potentially important for dealing with drought. Biomass energy resources account for more than 70 percent of total energy consumption in ASARECA member countries. To mitigate the potential adverse effects of biomass energy depletion, ASARECA countries plan to harness new and renewable energy sources, including solar power, wind power, hydro and geothermal sources, and biofuels. Eight of the 10 countries cite the promotion of rainwater harvesting as an important adaptation strategy, either small scale with small check dams or large scale with large dam projects. The five measures that are common to more than five countries are (a) the conservation and restoration of vegetative cover in degraded and mountain areas; (b) reduction of overall livestock numbers through sale or slaughter; (c) cross-breeding, zero-grazing, and acquisition of smaller livestock (for example, sheep or goats); (d) adoption of traditional methods of natural forest conservation and food use; and (e) community-based management programs for forests, rangelands, and national parks. The promotion of environmentally friendly investments and Clean Development Mechanism (CDM) projects that can be funded through carbon trading is a feature of only one country. Three examples of strategies that warrant greater region wide collaboration are the conservation of genetic materials, development and promotion of drought-tolerant species, and soil conservation. To date, the national adaptation policies of only three countries have indicated that they carry out these strategies. |
| Keywords: | Adaptation, ASARECA, Climate change, NAPA, Natural resource management, PRSP, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1013&r=ene |
| By: | Yu, Bingxin; Zhu, Tingju; Breisinger, Clemens; Hai, Nguyen Manh |
| Abstract: | Vietnam is likely to be among the countries hardest hit by climate change, mainly through rising sea levels and changes in rainfall and temperatures. Agriculture can be extensively affected by climate change, and designing effective adaptation strategies will be critical for maintaining food security, rural employment, and foreign exchange earnings. This paper examines these critical issues and thereby makes two contributions to the literature. First, we estimate the impacts of climate change on agricultural and water systems in Vietnam based on crop simulation, hydrological simulation, and river basin models. We then present a yield function approach that models technology advances and policy interventions to improve rice productivity and mitigate the impact of climate change, using a multilevel mixed effects model. This two-pronged approach allows rice yield changes to be linked with both biophysical and socioeconomic conditions. The results indicate that rice production is likely to be severely compromised by climate change. However, investment in rural infrastructure, such as irrigation and road, and human capital can mitigate the negative impacts of climate change. Due to substantial regional variations in impacts and responses, localized policy packages will be key for effective mitigation. Government policies targeting ethnic-minority and poor communities will be especially important components of climate change adaptation strategies. |
| Keywords: | Climate change, productivity, rice, |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1015&r=ene |
| By: | Grün, Carola; Grunewald, Nicole |
| Abstract: | We analyze the relationship between subjective well-being as a non-income welfare measure and climate variables such as temperature, precipitation rates or cloud covered days. Therewith, we estimate the effects from events related to climate change on subjective well-being and point out possible welfare losses and gains due to climate change. Even though that there is a growing number of research done on well-being in terms of income measures and climate change, there is only little research done on the effect of climate change and non-income measures such as subjective well-being. Further those studies lack some comparison. Except Rehdanz and Maddison (2005) all studies turn to national analyses when analyzing the influence of climate on subjective well-being. So far there are very few studies on middle- and none on low-income countries done, but at the same time extreme weather events may especially affect people in poorer countries. Therefore, we test this relationship for low and middle-income countries in Latin America and put the results in comparison to earlier studies. We apply survey data from the World Value Survey and Latinobarometro which cover the years 1985- 2008. In a panel study we estimate subjective well-being in Latin America and control for gender, age, marital status and income. Further we introduce climate variables such as the deviation from the mean temperature and precipitation rates as to analyze how the rising variance in climate affects subjective well being. -- |
| Keywords: | Subjective Well Being,Climate Change |
| JEL: | I30 Q54 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:gdec10:61&r=ene |
| By: | Susmita Roy (University of Canterbury) |
| Abstract: | This study addresses the following questions in the context of a developing coun- try. Do crimes increase following natural disasters? Does an upcoming election or the presence of a strong local media, which potentially increases the incentive of the gov- ernment to provide disaster relief, mitigate the eect of disasters on crime rates? I nd that crime rates tend to increase following moderate to big disasters. Furthermore, a higher pre-disaster growth of newspapers has a mitigating eect on the crime response to disasters. Elections also in uence the crime response to disasters. Crimes are more likely to rise following disasters in the years that are close to an election year. |
| Keywords: | crime rate; natural disaster; role of media and elections; developing country |
| JEL: | Q54 K42 |
| Date: | 2010–09–14 |
| URL: | http://d.repec.org/n?u=RePEc:cbt:econwp:10/57&r=ene |
| By: | Spencer Banzhaf |
| Abstract: | Finding an appropriate way to incorporate environmental justice considerations into policy-making has been a procedural challenge since President Clinton issued Executive Order 12,898 over 15 years ago. Moreover, environmental justice continues to be overshadowed by efficiency considerations as embodied in benefit-cost analysis. This article argues that the environmental justice and benefit-cost policies and procedures in EPA's rule-making can both be improved by bringing them closer together, ultimately improving environmental regulations as well. In particular, environmental justice consideration should be incorporated into Regulatory Impact Analyses (RIAs) by drawing on the much older tradition of incorporating distributional effects into benefit-cost analysis. By providing information on the distribution of benefits and costs of its regulatory actions, EPA would further its environmental justice objectives by providing the information that all groups—including the poor, minorities, and environmental justice communities—need to understand the impacts of a regulatory action. By incorporating such information into its RIAs, EPA would integrate environmental justice considerations into its development of regulations. Finally, by actually allowing the new information to inform the design and selection of regulations so as to better protect disadvantaged groups, adding distributional impacts to RIAs would improve the distributive justice associated with EPA's actions as well as the procedural justice. |
| Keywords: | benefit-cost analysis, environmental justice, disperse pollutants |
| JEL: | Q56 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201008&r=ene |
| By: | Galina Ivanova (Faculty of Arts, Business, Informatics and Education at CQ University); John Rolfe (Faculty of Business and Informatics at Central Queensland University); Gail Tucker (Centre for Environmental Management at CQ University) |
| Abstract: | This paper presents the results of a choice modeling survey of households in Queensland to assess values for reductions in national greenhouse emissions by 2020. The study is novel in two main ways. First, labeled alternatives were used to assess whether the types of broad management options for reducing net emissions (green power, alternative technologies or carbon capture) are significant in understanding preferences for reducing emissions. Second, the importance of the level and type of uncertainty involved in reductions is tested. They include (1) the uncertainty of achieving emissions reduction and (2) the uncertainty of international participation as the percentage of total global emissions covered by international agreements. The results of this survey identified how choice responses vary when the level of uncertainty associated with emissions reduction options are included within choice alternatives. |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:1067&r=ene |
| By: | Peter C. B. Phillips (Cowles Foundation, Yale University) |
| Abstract: | Trends are ubiquitous in economic discourse, play a role in much economic theory, and have been intensively studied in econometrics over the last three decades. Yet the empirical economist, forecaster, and policy maker have little guidance from theory about the source and nature of trend behavior, even less guidance about practical formulations, and are heavily reliant on a limited class of stochastic trend, deterministic drift, and structural break models to use in applications. A vast econometric literature has emerged but the nature of trend remains elusive. In spite of being the dominant characteristic in much economic data, having a role in policy assessment that is often vital, and attracting intense academic and popular interest that extends well beyond the subject of economics, trends are little understood. This essay discusses some implications of these limitations, mentions some research opportunities, and briefly illustrates the extent of the difficulties in learning about trend phenomena even when the time series are far longer than those that are available in economics. |
| Keywords: | Climate change, Etymology of trend, Paleoclimatology, Policy, Stochastic trend |
| JEL: | C22 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:1771&r=ene |