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on Energy Economics |
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Issue of 2010‒11‒13
forty-two papers chosen by Roger Fouquet Basque Climate Change Centre, Bilbao, Spain |
| By: | Kurt Kratena (WIFO); Michael Wüger (WIFO) |
| Abstract: | This paper deals with the total CO2 impact of households in a simple dynamic E3 model (economy/energy/environment), comprising a model block of private consumption and an input-output model. The consumption model describes the demand for different durables and nondurables, derived from intertemporal optimisation and has been estimated econometrically with Austrian time series data. Energy demand of households in addition to economic variables also depends on the energy-efficiency as well as the level of energy-using durables (electrical and non-electrical appliances, vehicles, video, audio, computer goods). Higher energy-efficiency also leads to the well known "rebound effect", as the "service" of energy becomes cheaper. Investment in new and potentially more energy-efficient durables is guided by intertemporal optimisation. Policies with incentives to switch towards a more energy-efficient durable stock have an impact on energy consumption, as well as on the demand for other nondurables and – due to the investment – on durables and therefore cause multiple effects on energy demand and emissions. Indirect energy demand and CO2 emissions of production for households is also taken into account. An exemplary simulation of a scrappage policy scheme for private cars reveals that – though the direct "rebound effect" lies within the range found in the literature – the direct and indirect feedback mechanisms on energy demand of the total economy might be completely different. |
| Keywords: | energy demand and environmental impact, durable goods, intertemporal optimisation with liquidity constraints, input-output modelling |
| Date: | 2010–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2010:i:382&r=ene |
| By: | Khandker, Shahidur R.; Barnes, Douglas F.; Samad, Hussain A. |
| Abstract: | Energy poverty is a frequently used term among energy specialists, but unfortunately the concept is rather loosely defined. Several existing approaches measure energy poverty by defining an energy poverty line as the minimum quantity of physical energy neededto perform such basic tasks as cooking and lighting. This paper proposes an alternative measure that is based on energy demand. The energy poverty line is defined as the threshold point at which energy consumption begins to rise with increases in household income. This approach was applied to cross-sectional data from a comprehensive 2005 household survey representative of both urban and rural India. The findings suggest that in rural areas some 57 percent of households are energy poor, versus 22 percent that are income poor. For urban areas the energy poverty rate is 28 percent compared with 20 percent that are income poor. Policies to reduce energy poverty would include support for rural electrification, the promotion of more modern cooking fuels, and encouraging greater adoption of improved biomass stoves. A combination of these programs would play a significant role in reducing energy poverty in rural India. |
| Keywords: | Energy Production and Transportation,Rural Poverty Reduction,Energy and Environment,Environment and Energy Efficiency,Energy Demand |
| Date: | 2010–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5463&r=ene |
| By: | Noel, Pierre |
| Abstract: | We welcome the European Commission's proposal for a Regulation on the security of gas supply which, it is hoped, will be agreed at the Energy Council in May. The Regulation aims to help member states improve their gas security policies as ECFR argued the EU should do in a Policy Brief published before the gas crisis of January 20091. However, there remain some problems with the proposed Regulation, in particular the mechanism through which member states will be required to devise and implement gas security policies. This note aims to outline how these problems can be resolved. |
| Date: | 2010–02 |
| URL: | http://d.repec.org/n?u=RePEc:reg:wpaper:34&r=ene |
| By: | Michiel Nijboer |
| Abstract: | The transport sector is currently responsible for 23% of energy-related CO2 emissions, and transport associated CO2 emissions will more than double by 2050. This working paper evaluates the potential costs and benefits of using natural gas as a vehicle fuel for road transportation, as well as the policy related to its market development. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ieaaaa:2010/11-en&r=ene |
| By: | Yang, Hao; Yuan, Daji; Jin, W L; Saphores, Jean-Daniel M |
| Abstract: | Transportation system produces a large percentage of local pollutants including hydrocarbons (HC), carbon monoxide (CO), carbon dioxide from switching to alternative fuels, one measure would be to apply information and communication technologies to help us drive more smoothly so as to decrease pollutants emissions. This paper studies potential benefits of two green driving strategies based on inter-vehicle communication (IVC). Here green driving strategies are similar to intelligent speed adaptation , but we assume that an IVC-equipped vehicle is able to receive detailed trajectory information from other such vehicles with the help of IVC. For the purpose of evaluation, we integrate Newell’s car-following model and VT-Micro to establish a simulation platform. Market penetration rates of IVC-equipped vehicles and delivery delays of messages are two prominent features of IVC systems. We simulate stop-and-go traffic to calculate potential reductions in air pollutant emissions and fuel consumption under different market penetration rates and delivery delays. Results show that significant savings under frequent stop-and-go traffic conditions may be obtained with our strategies (HC: -88.3%, CO: -95.8%, NOx: -91.5%, CO2: -36.3%, Fuel Consumption: -71.3%) for the same travel time and almost the same overall travel distance. It is also shown that relatively large savings can be achieved even for a market penetration rate as low as 1% and communication delays larger than 2 minutes. In the future we will investigate environmental benefits of green driving strategies for more traffic scenarios and realistic communication scenarios. |
| Keywords: | Green Driving, Emissions, Fuel Consumption, VT-micro Emission Model |
| Date: | 2010–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:uctcwp:1602121&r=ene |
| By: | Jin, Wen-Long; Yuan, Daji; Yang, Hao |
| Abstract: | The main purpose of this paper is to examine potential environmental benefits of green driving strategies with NGSim data on Interstate-80 near Berkeley, California. We calculate vehicles emissions before and after applying green driving strategies with the VT-Micro emission model. For each vehicle, its trajectory before applying green driving strategies is observed and given in the dataset. We assume that, with the help of green driving strategies, the vehicle could drive at a constant speed over the whole road section with the same travel distance and time as before. After examining impacts of speed-acceleration adjustment on calculated emissions and fuel consumptions, we choose 5127 out of 9951 cars and estimate potential savings in HC, CO, NOx, CO2, and fuel consumptions. With a new model of the relationships between emissions/fuel consumptions and average speeds, we can fit the data with R-squares close to or greater than 0.9 and find that green driving strategies are most effective for traffic flows with average speeds around 50 km/h and potential savings can be from 20% to 60% for different pollutants. In the future, we will continue our studies with more realistic information on vehicle types and other emission models. |
| Date: | 2010–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:uctcwp:1601973&r=ene |
| By: | Stern, David I. |
| Abstract: | This study uses a stochastic production frontier to model energy efficiency trends, in 85 countries over a 37 year period. No structure is imposed on technological change over time, although differences in technology level across the countries are modelled as a stochastic function of explanatory variables. These variables are selected by a literature survey and a theoretical model of energy-efficient technology choice. An improvement in a countryâs energy efficiency is measured as a reduction in energy intensity, while holding constant that economyâs mix of inputs and outputs. All other things remaining constant, the country using the least energy per unit output is on the global best-practice frontier. The model is used to derive decompositions of energy intensity and carbon emissions. It also examines whether there is a convergence across countries. The study shows that energy efficiency rises with increasing general total factor productivity. Energy efficiency is also higher in countries with undervalued currencies. Higher fossil fuel reserves are associated with lower energy efficiency. Energy efficiency converges over time across countries. Technological change was the most important factor counteracting the effect of economic growth in increasing global energy- use increase and carbon emissions. |
| Keywords: | Energy, efficiency, carbon, emissions, technological change, between estimator, Environmental Economics and Policy, Resource /Energy Economics and Policy, O13, O33, O47, Q43, Q54, Q55, Q56, |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:94950&r=ene |
| By: | Luis Mari Abadie; Ramon Arigoni Ortiz; Ibon Galarraga |
| Abstract: | This paper analyses decisions on energy efficiency (EE) investments by small and medium manufacturing enterprises in the U.S. which have received assessment from the Department of Energy (DoE). The results confirm the importance of payback time and investment costs as the main determining factors in deciding whether to invest in energy efficiency. This behaviour is kept through time. Such investment recommendations are frequently not implemented even though they apparently entail major advantages and give rise to considerable energy savings. The data show results which are compatible with a series of elementary valuation processes (limited by the availability of information), far removed from other, more academically ambitious methods such as Net Present Value (NPV) and the Real Options (RO) method. The paper analyses the impact of the physical situation of firms in line with their geographical locations in different US states, and changes over time from 1984 to 2008, i.e. 25 years of information. Finally, the paper examines the different levels of effectiveness of participating centres in getting firms to decide to make the investments proposed. EE investment decisions are analysed here using Logit models whose parameters are calibrated on the basis of the information held in the Industrial Assessment Centres (IAC) database. The results shed some light on impact assessment and suggest various policies for promoting investment in EE. <br /> |
| Keywords: | Energy efficiency, energy assessments, energy policies |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2010-17&r=ene |
| By: | Paul Waide |
| Abstract: | Since early 2007 almost all OECD and many non-OECD governments have announced policies aimed at phasing-out incandescent lighting within their jurisdictions. This study considers the implications of these policy developments in terms of demand for regulatory compliant lamps and the capacity and motivation of the lamp industry to produce efficient lighting products in sufficient volume to meet future demand. To assess these issues, it reviews the historic international screw-based lamp market, describes the status of international phase-out policies and presents projections of anticipated market responses to regulatory requirements to determine future demand for CFLs. |
| Date: | 2010–04 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ieaaaa:2010/5-en&r=ene |
| By: | Aurelio Volpe (CSIL Centre for Industrial Studies); Mauro Spinelli (CSIL Centre for Industrial Studies) |
| Abstract: | This report offers a full analysis of the outdoor lighting fixtures market worldwide. This study provides outdoor lighting fixtures industry statistics (production and consumption), sales data and market shares of the top manufacturers (globally and by country/areas: China, United States, Japan, Europe, Turkey, Russia, India, Latin America, Middle East, Australia). Outdoor lighting fixtures industry production is broken down by kind of product (residential, urban landscape, Christmas lighting, large areas) and by light source (LED, gas discharge, incandescence traditional, fluorescence, fiber optics). Trend of employment and turnover per employee in a sample of companies is also included. Addresses of about 430 lighting fixture companies mentioned in this research are also given. |
| JEL: | L11 L68 L81 |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:mst:csilre:w19&r=ene |
| By: | Zenon, Eric; Rosellon, Juan |
| Abstract: | We present a hybrid mechanism application for the electrical system network expansion in Mexico, United States and Canada. The application is based on redefining the transmission output in terms of "point-to-point" transactions or financial transmission rights (FTRs); rebalancing the fixed and variable parts of a two-part tariff; as well as in the use of nodal pricing. The expansion of the transmission is carried out through the sale of FTRs for the congested electrical lines. The mechanism was tested in the national electric system of Mexico (SEN) with 24 nodes and 35 power line, in the Pennsylvania-New Jersey-Maryland (PJM) grid with 17 nodes and 31 lines, and finally in the Ontario network with 10 nodes and 10 lines. The results thereof indicate that prices converge to the marginal generation cost, congestion decreases and the social benefit increases in the three systems, regardless of the organization of the electrical system, the network topology or the type of installed generation capacity |
| Keywords: | Electricity transmission; financial transmission rights (FTRs); incentive regulation; loop-flow problem; nodal prices |
| JEL: | L51 L91 L94 Q40 |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:26470&r=ene |
| By: | Rosellon, Juan; Tregear, Juan; Zenon, Eric |
| Abstract: | This paper presents an application of a mechanism that provides incentives to promote transmission network expansion in the electricity system of the Ontario province. Such a mechanism combines a merchant approach with a regulatory approach. It is based on the rebalancing of a two-part tariff within the framework of a wholesale electricity market with nodal pricing. The expansion of the network is carried out through auctions of financial transmission rights for congested links. The mechanism is tested for a simplified transmission grid with ten interconnected zones, ten nodes, eleven lines and seventy eight generators in the Ontario province. The simulation is carried out for both peak and non-peak scenarios. Considering Laspeyres weights, the results show that that prices converge to the marginal cost of generation, the congestion rent decreases, and the total social welfare increases. |
| Keywords: | Keywords: Electricity transmission; financial transmission rights (FTRs); incentive regulation; loop-flow problem; nodal prices; Ontario |
| JEL: | L51 L91 L94 Q40 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:26471&r=ene |
| By: | Papler, Drago; Bojnec, Å tefan |
| Abstract: | This paper investigates the question of promotion of more efficient use of energy and for an increase in supply and use of energy from the renewable sources of energy in rural areas. The empirical research is based on the analysis of the survey evidence that is obtained by the written questionnaire. The 516 in-depth surveys were conducted among the scholars, students, and employees from social sciences, natural sciences, electrical energy supply, and energy management in the six different towns in Slovenia. The surveys data are analysed by using descriptive statistics, comparisons of average values, correlation, and multivariate factor analysis. The needs for more efficient energy use between different users and the significance of production of renewable sources of energy from different sources have been confirmed. This has implications for rationalization of energy supply, efficient energy use and use of the renewable sources of energy for more underlined environmental protection and the sustainable development. |
| Keywords: | renewable sources of energy, rural development, promotion, Slovenia, Community/Rural/Urban Development, L94, O13, Q42, M39, |
| Date: | 2010–08 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaa118:95307&r=ene |
| By: | Holburn, Guy L. F.; Lui, Kerri; Morand, Charles |
| Abstract: | Even though governments may adopt favourable regulatory policies for renewable power generation, their ability to encourage private sector investment depends also on the presence of regulatory governance institutions that provide credible long-term commitments to potential investors. In the case of Ontario we contend that, despite large market potential and comparatively strong regulatory incentive policies, weak regulatory governance is one factor that has accounted for the challenges in attracting and implementing large scale private investment in power generation at a reasonable cost. We find empirical support for our arguments in a unique survey of 63 wind power firms that assessed private sector opinions about the investment environment for renewable energy in Ontario. Compared to a range of factors, firms rated the stability of regulatory policy among the weakest aspects of Ontario?s business environment. However, policy stability ranked among the most important factors in firms? assessments of the attractiveness of alternative jurisdictions in their location decisions. Subsequent interviews revealed that firms have responded to this risk in Ontario by explicitly pricing it into wind project financial models – implying higher wind power prices for ratepayers – and by directing investment funds to other jurisdictions. We argue that policy stability in Ontario may be improved by devolving greater decision-making authority to regulatory agencies in the energy sector and by strengthening their institutional independence. |
| Date: | 2010–07 |
| URL: | http://d.repec.org/n?u=RePEc:reg:wpaper:596&r=ene |
| By: | Samantha Ölz; Milou Beerepoot |
| Abstract: | This paper is part of the IEA ongoing analysis of global renewable energy markets and policies. It focuses on six Southeast Asian countries: Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam. The report investigates the potentials and barriers for scaling up market penetration of renewable energy technologies in the electricity, heating and transport sectors in the six countries. In addition to analysing the implications of effective policies on renewable energy market growth, it examines how to overcome economic and non-economic barriers that slow investment in renewable energy, and offers policy recommendations to encourage effective and efficient exploitation of renewable energy in Southeast Asia. |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ieaaaa:2010/6-en&r=ene |
| By: | Heinzel, Christoph; Winkler, Thomas |
| Abstract: | Quota obligation schemes based on tradable green certicates have become a popular policy instrument to expand power generation from renewable energy sources (RES). Their application, however, can neither be justied as a rst-best response to a market failure, nor, in a second-best sense, as an instrument mitigating distortionary eects of the emissions externality, if an emissions trading system exists that fully covers the energy industry. We study how ancillary reasons, in form of overcoming various barriers for RES use and establishing benecial side-eects, such as industry development, energy security, and abatement of pollutants not covered under the ETS, apply to the scheme recently introduced in Poland. While setting substantial expansion incentives, an advantage for local industry or job-market development or energy security can hardly be seen. With rising power prices for end consumers and awareness that the extra rents from the schemes mostly accrue to foreign investors and renewable and polluting generators, we expect a negative impact on social acceptance for RES and RES deployment support policies. |
| Keywords: | tradable green certicates, environmental policy, Poland, Resource /Energy Economics and Policy, |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:95068&r=ene |
| By: | Pierre-Noel Giraud (CERNA - Centre d'économie industrielle - Mines ParisTech); Aline Sutter (chercheur indépendant - Casa de Velázquez); Timothée Denis (chercheur indépendant - Casa de Velázquez); Cédric Léonard (chercheur indépendant - Casa de Velázquez) |
| Abstract: | As conventional oil reserves are declining, the debate on the oil production peak has become a burning issue. An increasing number of papers refer to Hubbert's peak oil theory to forecast the date of the production peak, both at regional and world levels. However, in our views, this theory lacks microeconomic foundations. Notably, it does not assume that exploration and production decisions in the oil industry depend on market prices. In an attempt to overcome these shortcomings, we have built an adaptative model, accounting for the behavior of one agent, standing for the competitive exploration-production industry, subjected to incomplete but improving information on the remaining reserves. Our work yields challenging results on the reasons for an Hubbert type peak oil, lying mainly "above the ground", both at regional and world levels, and on the shape of the production and marginal cost trajectories. |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00530077_v1&r=ene |
| By: | Kieran Clarke; Dagmar Graczyk |
| Abstract: | This study provides a holistic examination of pricing and investment dynamics in India’s downstream petroleum sector. It analyses the current pricing practices, highlights the tremendous fiscal cost of current pricing and regulatory arrangements, and examines the sectoral investment dynamics. It also looks at potential paths towards market-based reform along which the Indian government may move, while at the same time protecting energy market access for India’s large poor population. |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ieaaaa:2010/4-en&r=ene |
| By: | Aline Chiabai; Dirk Rübbelke; Lisa Maurer |
| Abstract: | Whether Information and Communication Technology (ICT) constitutes a threat or a cure to environment´s deterioration is controversially discussed. Empirical evidence on the impacts of ICT is rare, so that generalisable lessons can be drawn is sparse. This study addresses exactly this critique by providing empirical results on the role of ICT in research for environmental sustainability. Application of ICT in research is generally regarded as a way to exploit such technology in favour of the environment. Our analysis shows that the use of ICT in environmental research is of great importance in the scientific community, but it can also play a crucial role in the policy context, as well as in the business sector.<br /> |
| Keywords: | Information and Communication Technology (ICT), biodiversity, climate change, energy efficiency, environmental research, natural resources, sustainability |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2010-18&r=ene |
| By: | Stern, David I.; Jotzo, Frank |
| Abstract: | As part of the negotiating process for a post-Kyoto climate policy regime, several developing economies have announced carbon emission targets for 2020. China and Indiaâs commitments are framed as emissions intensity reductions by 40 to 45 per cent and 20 to 25 per cent respectively between 2005 and 2020. But how feasible are these proposed emissions intensity reductions, and how do they compare with the targeted reductions in the United States and the European Union? In this research report we use a stochastic frontier model to explain the variation in countriesâ energy intensities. We use the model to produce emissions projections for China and India under a number of scenarios that consider various rates of technological change and changes in the share of non-fossil energy. We find that China is likely to need to adopt ambitious carbon mitigation policies in order to achieve its stated target, and that its targeted reductions in emissions intensity are on par with those implicit in the United States and European Union targets. Indiaâs target is less ambitious and might be met with only limited or even no dedicated mitigation policies. |
| Keywords: | carbon emissions, climate change, developing countries, projections, Environmental Economics and Policy, Resource /Energy Economics and Policy, O13, Q54, Q56, Q58, |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:94947&r=ene |
| By: | Pan, Hansheng; Bartolome, Christian; Princevac, Marko; Edwards, Rufus; Boarnet, Marlon |
| Abstract: | Vehicular emissions from arterials may present a risk to public health considering the type of surrounding built environments that can trap pollutants. In order to study the influence of urban morphometry on flow and dispersion of vehicular emissions, field measurements were performed in major arterials in 5 Southern Californian cities with different building geometries. Local mean wind, turbulence, virtual temperature, roadside fine particulate matter (PM2.5) concentration, and traffic flow data were collected in summer 2008. In each city, data were collected for three days, covering two hours during the morning and evening commute and lighter mid-day traffic. First, the observation shows the influence of building geometry on street level concentration of particulates. Tall buildings cause a strong downdraft which upon impinging the street level flushes street canyon from pollutants. Second, field experiments help us understand the influence of local meteorological variables and their interaction with urban canopy to particle concentration. Concentrations at the windward side of buildings within urban canopy are extremely sensitive to wind direction. In addition to wind direction, turbulent flux, sensible heat flux and turbulent velocity are also affecting concentrations by enhancing vertical transport. |
| Date: | 2010–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:uctcwp:1603382&r=ene |
| By: | Sophie Legras |
| Abstract: | This paper analyses the consequences of environmental myopia on pol- icy design in a multi-pollutants framework. Focusing on the correlations between aerosols and greenhouse gases, the paper compares abatement and stock targets setting for various cases of environmental myopia. Both cases of lax and stringent regulation, compared to what is socially opti- mum, may arise. Furthermore, the lax/stringent nature of the policies may evolve over time, so that the time horizon of policy design matters in assessing the impact of environmental myopia. |
| Keywords: | Atmospheric pollution, Global warming, Policy design, Incomplete environmental model, Multiple stocks |
| JEL: | Q53 Q54 Q58 |
| Date: | 2010–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:ceo:wpaper:26&r=ene |
| By: | Stern, David I.; Lambie, N. Ross |
| Abstract: | The relative cost of carbon emissions reductions across regions depends on whether we measure cost by marginal or total cost, private or economy-wide cost, and using market or purchasing power parity exchange rates. If all countries are on the same marginal carbon abatement cost curve then lower marginal costs of abatement are associated with higher energy intensities and higher total costs of abatement in achieving proportional cuts in emissions, equal emissions per capita, or common global carbon price targets. We test this conjecture using the results of the GTEM computable general equilibrium model as presented in the climate change economics review conducted by the Australian Treasury Department. Rankings of countries by costs do differ depending on whether marginal or total cost is used. But some regions, including OPEC and the former USSR, have high marginal costs and high emissions intensities and, therefore, high total costs and others like the EU relatively low marginal and total costs. Under a global emissions trading regime real economy-wide costs of abatement are higher in developing economies with currencies valued below purchasing power parity and large differences between private and economy-wide costs such as India contributing to the high GDP losses experienced in those countries. |
| Keywords: | Climate change, costs, developing countries, computable general equilibrium, Environmental Economics and Policy, Q52, Q54, |
| Date: | 2010–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:95058&r=ene |
| By: | Twomey, Paul; Betz, Regina; MacGill, Iain; Passey, Robert |
| Abstract: | An additional action reserve (AAR) is proposed as a mechanism that allows government and voluntary private interests to make additional emission reductions beyond a national cap. A proportion of Australian emission units (AEUs) is set aside each year. The units can then be retired if state or local government, businesses or individuals take specific emission reduction measures that go beyond those expected from the Carbon Pollution Reduction Scheme (CPRS). AEUs allocated to the reserve that are not retired through additional activities would be made available to CPRS participants. By providing an upper bound to such actions, the scheme would limit uncertainty about how many permits are available for emitters. The scheme would also provide a limit to the potential losses of auctioning revenue from AEU retirements. Compared with some other additional options (such as buying-and-retiring of permits or future national cap reductions) the scheme combines an open process with favourable accounting features for tangible, psychologically satisfying actions (such as installing a home solar PV system). These actions assure participants there is an immediate reduction in national emissions. Elements of this approach have already been seen in the Regional Greenhouse Gas Initiative (RGGI), an interstate emissions trading scheme that began in the United States in 2009. |
| Keywords: | Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:94944&r=ene |
| By: | Hahn, Robert W.; Stavins, Robert N. |
| Abstract: | We examine an implication of the “Coase Theorem” which has had an important impact both on environmental economics and on public policy in the environmental domain. Under certain conditions, the market equilibrium in a cap-and-trade system will be cost-effective and independent of the initial allocation of tradable rights. That is, the overall cost of achieving a given aggregate emission reduction will be minimized, and the final allocation of permits will be independent of the initial allocation. We call this the independence property. This property is very important because it allows equity and efficiency concerns to be separated in a relatively straightforward manner. In particular, the property means that the government can establish the overall pollution-reduction goal for a cap-and-trade system by setting the cap, and leave it up to the legislature – such as the U.S. Congress – to construct a constituency in support of the program by allocating the allowances to various interests without affecting either the environmental performance of the system or its aggregate social costs. Our primary objective in this paper is to examine the conditions under which the independence property is likely to hold – both in theory and in practice. A number of factors can call the independence property into question theoretically, including market power, transaction costs, non-cost-minimizing behavior, and conditional allowance allocations. We find that, in practice, there is support for the independence property in some, but not all cap-and-trade applications. |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:reg:wpaper:47&r=ene |
| By: | Calford, Evan M.; Heinzel, Christoph; Betz, Regina |
| Abstract: | We analyse the eciency eects of the initial permit allocation given to rms with market power in both permit and output market. We examine two models: a long- run model with endogenous technology and capacity choice, and a short-run model with xed technology and capacity. In the long run, quantity pre-commitment with Bertrand competition can yield Cournot outcomes also under emissions trading. In the short run, Bertrand output competition reproduces the eects derived under Cournot competition, but displays higher pass-through prots. In a second-best setting of overallocation, a tighter emissions target tends to improve permit-market eciency in the short run. |
| Keywords: | Emissions trading, Initial permit allocation, Bertrand competition, EU ETS, Endogenous technology choice, Kreps and Scheinkman, Resource /Energy Economics and Policy, L13, Q28, D43, |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:95066&r=ene |
| By: | Pezzey, John C.V.; Jotzo, Frank |
| Abstract: | We give empirical welfare results for global greenhouse gas emission control, using the first multiparty model to combine tax-versus-trading under uncertainties with revenue recycling. Including multiple parties greatly reduces the welfare advantage of an emissions tax over emissions (permit) trading in handling abatement-cost uncertainties, from that shown by existing, single-party literature. But a tax has a different, much bigger advantage, from better handling uncertainties in business-as-usual emissions. Either mechanism's free emissions share, from tax thresholds or free permits, which lowers its possible welfare gain from revenue recycling, may however dominate any tax-versus-trading advantage. Moreover, political and practical constraints, such as the political unacceptability of no free emissions, the institutional unavailability of efficient emissions tax thresholds, and the unpopularity of recycling revenue as conventional tax cuts, make ideal welfare maximisation a poor guide for mechanism choice; and at optimal prices, trading currently tends to outperform taxation. |
| Keywords: | climate policy, emission pricing, tax vs. trading, uncertainties, revenue recycling, political economy, Environmental Economics and Policy, D810, H230, Q580, |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:95049&r=ene |
| By: | Benjamin Bureau (CERNA - Centre d'économie industrielle - Mines ParisTech) |
| Abstract: | This paper analyses the distributional effects of alternative scenarios of carbon taxes on car fuels using disaggregated French panel data from 2003 to 2006. It incorporates household price responsiveness that differs across income groups into a consumer surplus measure of tax burden. Carbon taxation is regressive before revenue recycling. However, taking into account the benefits from congestion reduction induced by the tax mitigates regressivity. We show also that recycling additional revenues from the carbon tax either in equal amounts to each household or according to household size makes poorest households better off. |
| Keywords: | carbon tax; distributional effects |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00530054_v1&r=ene |
| By: | Stavins, Robert N. |
| Abstract: | The straightforward way to slow climate change is to reduce the quantity of greenhouse gases (in particular, carbon dioxide) dumped into the atmosphere, giving the planet more time to recycle the offending chemicals. But in light of our late start, chances are we’re going to need all the help we can get to prevent brutal changes in weather, widespread coastal fl ooding and perhaps even the spread of diseases now confi ned to the tropics. Hence the logic in giving nature a helping hand in sequestering atmospheric carbon. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:reg:wpaper:13&r=ene |
| By: | Jotzo, Frank |
| Abstract: | There is demand for qualitative and quantitative economic analysis on the optimum degree of climate change mitigation and adaptation, the optimal timing of such actions, and their optimum distribution between countries and sectors. This paper discusses what is, as well as what is not, possible for economic modelling in this field. Specific reference is made to the paper by Bosello, Carraro and de Cian (2009), as well as Tol (2009). Integrated assessment modelling can provide powerful qualitative insights (for example, about the need for both mitigation and adaptation and the interactions between the two, or the need for both individual and policy-driven adaptation). However, the more detailed quantitative results from such studies are subject are extremely limited. In many cases, they are virtually irrelevant as a policy guide. For these models to be useful representations of reality, economic climate change models need three important features: representation of uncertainty about impacts (in particular, the risk of abrupt climate change); fuller representation of economic impacts from climate change and inclusion of non-market impacts; and finally, modelling of equity dimensions. These features are absent in many models currently used. This leads to a tendency for quantitative results to be biased against mitigation as an option to address climate change and in favour of other adaptation. |
| Keywords: | Environmental Economics and Policy, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, |
| Date: | 2010–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:94951&r=ene |
| By: | Margherita Grasso; Matteo Manera; Aline Chiabai; Anil Markandya |
| Abstract: | In recent years there has been a large scientific and public debate on climate change and its direct as well as indirect effects on human health. According to World Health Organization (WHO, 2006), some 2.5 million people die every year from non-infectious diseases directly attributable to environmental factors such as air pollution, stressful conditions in the workplace, exposure to chemicals such as lead, and exposure to environmental tobacco smoke. Changes in climatic conditions and climate variability can also affect human health both directly and indirectly, via changes in biological and ecological processes that influence the transmission of several infectious diseases (WHO, 2003). In the past fifteen years a large amount of research on the effects of climate changes on human health has addressed two fundamental questions (WHO, 2003). First, can historical data be of some help in revealing how short-run or long-run climate variations affect the occurrence of infectious diseases? Second, is it possible to build more accurate statistical models which are capable of predicting the future effects of different climate conditions on the transmissibility of particularly dangerous infectious diseases? The primary goal of this paper is to review the most relevant contributions which have directly tackled those questions, both with respect to the effects of climate changes on the diffusion of non-infectious and infectious diseases. Specific attention will be drawn on the methodological aspects of each study, which will be classified according to the type of statistical model considered. Additional aspects such as characteristics of the dependent and independent variables, number and type of countries investigated, data frequency, temporal period spanned by the analysis, and robustness of the empirical findings are examined. <br /> |
| Keywords: | Climate change; Health; Statistical models; Non-infectious diseases; Infectious diseases; Malaria; Cardiovascular diseases |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2010-16&r=ene |
| By: | Alpízar, Francisco; Carlsson, Fredrik; Naranjo, Maria A. |
| Abstract: | The risk of losing income and productive means due to adverse weather can differ significantly among farmers sharing a productive landscape and is, of course, hard to estimate or even “guesstimate” empirically. Moreover, the costs associated with investments in adaptation to climate are likely to exhibit economies of scope. We explore the implications of these characteristics on Costa Rican coffee farmers’ decisions to adapt to climate change, using a framed field experiment. Despite having a baseline of high levels of risk aversion, we still found that farmers more frequently chose the safe options when the setting is characterized by unknown risk (that is, poor or unreliable risk information). Second, we found that farmers, to a large extent, coordinated their decisions to secure a lower adaptation cost and that communication among farmers strongly facilitated coordination. |
| Keywords: | risk, ambiguity, technology adoption, climate change, field experiment |
| JEL: | C93 D81 H41 Q16 Q54 |
| Date: | 2010–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-09-18-rev-efd&r=ene |
| By: | Hertel, Thomas W.; Rosch, Stephanie D. |
| Abstract: | Although much has been written about climate change and poverty as distinct and complex problems, the link between them has received little attention. Understanding this link is vital for the formulation of effective policy responses to climate change. This paper focuses on agriculture as a primary means by which the impacts of climate change are transmitted to the poor, and as a sector at the forefront of climate change mitigation efforts in developing countries. In so doing, the paper offers some important insights that mayhelp shape future policies as well as ongoing research in this area. |
| Keywords: | Wetlands,Climate Change Mitigation and Green House Gases,Climate Change Economics,Environmental Economics&Policies,Science of Climate Change |
| Date: | 2010–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5468&r=ene |
| By: | Osberghaus, Daniel; Finkel, Elyssa; Pohl, Max |
| Abstract: | Given that many of the predicted effects of climate change are considered imminent and unavoidable, the need to mainstream adaptation as a viable coping measure among private households is becoming a topic of increasing importance. However, little research to date has assessed the factors influencing the motivation to autonomously adapt, nor any successful measures for instigating this behavioural change. This study investigates whether providing locally-focused vs. globally-focused information about the effects of climate change influences the personal perceived risk (PPR) of individual people. Based on a socio-psychological model, Protection Motivation Theory (PMT), it is hypothesized that a higher PPR will lead to a higher motivation to adapt. While this hypothesis has been empirically confirmed by the study, it has been found that providing information on climate change effects that is more personally relevant to the individual and is concerned with his local surroundings does not significantly increase PPR. This may be due to a trade-off between spatial-temporal distance and the comparably low severity of predicted effects in the study region. Interestingly, providing any kind of information, irrespective of having a global or local focus, also did not increase PPR as compared to receiving no information. These results suggest that the sole provision of information about expected climate change impacts, even if tailored to one's individual context, does not significantly increase PPR and consequently the motivation to adapt. Another necessary factor might be increasing the knowledge about concrete coping options to allow people to weigh up their personal options. -- |
| JEL: | Q54 Q58 D83 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10061&r=ene |
| By: | Löschel, Andreas; Sturm, Bodo; Vogt, Carsten |
| Abstract: | In this paper, we investigate the real demand for climate protection. For this purpose we conducted a framed field experiment with a sample of the residential population in Mannheim, Germany. Participants were endowed with € 40 and given the opportunity to contribute to climate protection by purchasing European Union Allowances. Purchased allowances were withdrawn from the European Emissions Trading Scheme (EU ETS). While the median willingness to pay (WTP) for climate protection is zero the mean WTP is approximately € 12/tCO2. We analyse determinants of the observed individual demand behaviour and discuss the potential consequences, which result from the remarkably low WTP and its distribution for German climate policy. -- |
| Keywords: | experimental economics,demand for climate protection,climate change,willingness to pay |
| JEL: | Q51 Q54 C93 |
| Date: | 2010 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:10068&r=ene |
| By: | Ivanova, Galina; Rolfe, John; Tucker, Gail |
| 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. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:95051&r=ene |
| By: | Ricardo Fuentes-Nieva (Regional Bureau for Africa at UNDP); Isabel Pereira (Human Development Report Office ay UNDP) |
| Abstract: | This paper presents an initial review of the theoretical and measurement discussions of sustainability and its relation to human development. As we show in this paper, there is an overall consensus about the importance of sustaining development and well-being over time, but in reality different development paradigms lead to different definitions and measures of sustainability. We review some of those measures, among which the Adjusted Net Savings (a green national accounting measure calculated by the World Bank and rooted in a weak concept of sustainability), the Ecological Footprint (calculated by the Global Footprint Network and rooted in a strong concept of sustainability, where environment is considered a critical resource), and the carbon dioxide emissions (a simple environmental indicator, used in international debate of climate change). Our analysis shows conflicting conclusions when studying the correlations between these indicators of sustainability and existing human development indicators, namely HDI, which emphasizes the need for further analysis to understand what “sustainable human development” means. Nevertheless, as we show here, over time there has been a close link between higher economic performance and energy consumption, which has been mostly based in the use of fossil fuels. |
| Keywords: | sustainability, human development, measurement, energy. |
| JEL: | O13 Q56 Q59 |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:hdr:papers:hdrp-2010-34&r=ene |
| By: | Karen Pittel; Dirk Rübbelke |
| Abstract: | The paper analyzes the implications of local and global pollution when two types of abatement activities can be undertaken. One type reduces solely local pollution (e.g., use of particulate matter filters) while the other mitigates global pollution as well (e.g., application of fuel saving technologies). In the framework of a 2-country endogenous growth model, the implications of different assumptions about the degree to which global externalities are internalized are analyzed. Subsequently, we derive policy rules adapted to the different scenarios. Special attention is paid to pollution, growth and optimal policy in the case of asymmetric internalization.<br /> |
| Keywords: | economic growth, global and local externalities, government policies |
| Date: | 2010–10 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2010-15&r=ene |
| By: | Jotzo, Frank; Mazouz, Salim; Pezzey, John C.V. |
| Abstract: | We analyse the long-term efficiency of the emissions target and of the provisions to reduce carbon leakage in the Australian Government's Carbon Pollution Reduction Scheme, as proposed in March 2009, and the nature and likely cause of changes to these features in the previous year. The target range of 5-15% cuts in national emission entitlements during 2000-2020 was weak, in that on balance it is too low to minimise Australia's long-term mitigation costs. The free allocation of outputlinked, tradable emission permits to Emissions-Intensive, Trade-Exposed (EITE) sectors was much higher than proposed earlier, or shown to be needed to deal with carbon leakage. It plausibly means that EITE emissions can rise by 13% during 2010-2020, while non-EITE sectors must cut emissions by 34-51% (or make equivalent permit imports) to meet the national targets proposed, far from a cost-effective outcome. The weak targets and excessive EITE assistance illustrate the efficiencydamaging power of collective action by the 'carbon lobby'. Resisting this requires new national or international institutions to assess lobby claims impartially, and more government publicity about the true economic importance of carbon-intensive sectors. Published in the Australian Journal of Agricultural and Resource Economics, volume 54, pages 185-202. |
| Date: | 2010–01 |
| URL: | http://d.repec.org/n?u=RePEc:reg:wpaper:601&r=ene |
| By: | Wood, Peter John |
| Abstract: | This survey paper examines the problem of achieving global cooperation to reduce greenhouse gas emissions. Contributions to this problem are reviewed from non-cooperative game theory, cooperative game theory, and implementation theory. Solutions to games where players have a continuous choice about how much to pollute, games where players make decisions about treaty participation, and games where players make decisions about treaty ratication, are examined. The implications of linking cooperation on climate change with cooperation on other issues, such as trade, is examined. Cooperative and non-cooperative approaches to coalition formation are investigated in order to examine the behaviour of coalitions cooperating on climate change. One way to achieve cooperation is to design a game, known as a mechanism, whose equilibrium corresponds to an optimal outcome. This paper examines some mechanisms that are based on conditional commitments, and could lead to substantial cooperation. |
| Keywords: | Climate change negotiations, game theory, implementation theory, coalition formation, subgame perfect equilibrium, Environmental Economics and Policy, |
| Date: | 2010–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eerhrr:95061&r=ene |
| By: | Christoph Böhringer, Carolyn Fischer and Knut Einar Rosendahl (Statistics Norway) |
| Abstract: | Individual countries are in the process of legislating responses to the challenges posed by climate change. The prospect of rising carbon prices raises concerns in these nations about the effects on the competitiveness of their own energy-intensive industries and the potential for carbon leakage, particularly leakage to emerging economies that lack comparable regulation. In response, certain developed countries are proposing controversial trade-related measures and allowance allocation designs to complement their climate policies. Missing from much of the debate on trade-related measures is a broader understanding of how climate policies implemented unilaterally (or subglobally) affect all countries in the global trading system. Arguably, the largest impacts are from the targeted carbon pricing itself, which generates macroeconomic effects, terms-of-trade changes, and shifts in global energy demand and prices; it also changes the relative prices of certain energy-intensive goods. This paper studies how climate policies implemented in certain major economies (the European Union and the United States) affect the global distribution of economic and environmental outcomes, and how these outcomes may be altered by complementary policies aimed at addressing carbon leakage. |
| Keywords: | cap-and-trade; emissions leakage; border carbon adjustments; output-based allocation; general equilibrium model |
| JEL: | Q2 Q43 H2 D61 |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:634&r=ene |
| By: | Frederik Carlsson (Department of Economics, University of Gothenburg); Mitesh Kataria (Max Planck Institute of Economics, Jena); Alan Krupnick (Resources for the Future); Elina Lampi (Department of Economics, University of Gothenburg); Åsa Löfgren (Department of Economics, University of Gothenburg); Ping Qin (Peking University, College of Environmental Sciences and Engineering); Thomas Sterner (Department of Economics, University of Gothenburg); S. Chung (Resources for the Future) |
| Abstract: | Using a choice experiment, we investigated preferences for distributing the economic burden of decreasing CO2 emissions in the two largest CO2-emitting countries: the United States and China. We asked respondents about their preferences for four burden-sharing rules to reduce CO2 emissions according to their country's 1) historical emissions, 2) income level, 3) equal right to emit per person, and 4) current emissions. We found that U.S. respondents preferred the rule based on current emissions, while the equal right to emit rule was clearly least preferred. The Chinese respondents, on the other hand, preferred the historical rule, while the current emissions rule was the least preferred. Respondents overall favored the rule that was least costly for their country. These marked differences may explain the difficulties countries face in agreeing how to share costs, presenting a tough hurdle to overcome in future negotiations. We also found that the strength of the preferences was much stronger in China, suggesting that how mitigation costs are shared across countries is more important there. |
| Keywords: | Climate, burden-sharing, fairness, China, United States |
| JEL: | Q51 Q52 Q54 |
| Date: | 2010–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:jrp:jrpwrp:2010-074&r=ene |