nep-ene New Economics Papers
on Energy Economics
Issue of 2011‒02‒19
twenty-six papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao, Spain

  1. The effect of energy consumption on countries’ economic efficiency: a conditional robust non parametric approach By Halkos, George; Tzeremes, Nickolaos
  2. Assessing the American Power Act: The Economic, Employment, Energy Security, and Environmental Impact of Senator Kerry and Senator Lieberman's Discussion Draft By Trevor Houser; Shashank Mohan; Ian Hoffman
  3. The Cost of Equity of Network Operators - Empirical Evidence and Regulatory Practice By Stephan Schaeffler; Christoph Weber
  4. The Electric energy-water nexus: Managing the seasonal linkages of fresh water use in energy sector for sustainable future By Perini Praveena Sri
  5. Econometric Approach to Water Use Estimation in Power Plants By Perini Praveena Sri
  6. Zum Verhältnis von Markt- und Gemeinwohlorientierung: Die Auswirkungen der EU-Liberalisierungsinitiativen auf die Sektoren Elektrizität und Eisenbahn in Österreich By Michael Joos
  7. The Dilemma of Minerals Dependent Economy: The case of Foreign Direct Investment and Pollution in Nigeria By Kingston, Kato Gogo
  8. Shell Oil Company in Nigeria: Impediment or Catalyst of Socio-Economic Development? By Kingston, Kato Gogo
  9. Oil Price Shocks, Income, and Democracy By Markus Bruckner; Antonio Ciccone; Andrea Tesei
  10. Dynamics of urban mobility: A Comparative analysis of megacities of India By B. Sudhakara Reddy; P. Balachandra
  11. Trade union structure with environmental concern and firms' technological choice By Asproudis, Elias
  12. New Jobs — Cleaner Air: Employment Effects Under Planned Changes to the EPA’s Air Pollution Rules By James Heintz; Heidi Garrett-Peltier; Ben Zipperer
  13. Economic Determinants for China's Industrial SO2 Emission: Reduced vs. Structural form and the role of international trade By Jie He
  14. Environmental impacts of international trade: the case of industrial emission of Sulfur Dioxide (SO2) in Chinese provinces By Jie He
  15. Un analisis de la relacion entre economía, energía y medio ambiente By Andrade, André luiz
  16. O trinômio economia, energia e meio ambiente By Andrade, André Luiz; MATTEI, LM
  17. The impacts of air-pollution motivated automobile consumption tax adjustments of China By Xiao, Junji; Ju, Heng
  18. The Effects of Environmental Regulation on the Competiveness of U.S. Manufacturing By Michael Greenstone; John A. List; Chad Syverson
  19. Re-examining Emissions. Is Assessing Convergence Meaningless? By Mariam Camarero; Yurena Mendoza; Javier Ordoñez
  20. Using Auctions for Pollution Rights as Indirect Incentives for Investments in Green Technologies By M. Fadaee; L. Lambertini
  21. Taxe carbone globale, effet taille de marché et mobilité des firmes By Nelly Exbrayat; Carl Gaigné; Stéphane Riou
  22. Climate Change, Risk and Grain Production in China By Rainer Holst; Xiaohua Yu; Carola Grün
  23. The Italian Position in the Energy and Climate Change Negotiations By Viviani, Carlo
  24. Thematic Review on Risk Management: Australia By Shingo Kimura; Jesús Antón
  25. Revisiting the NAFTA Agenda on Climate Change By Jeffrey J. Schott; Meera Fickling
  26. The Road to a Climate Change Agreement Runs Through Montreal By Richard J. Smith

  1. By: Halkos, George; Tzeremes, Nickolaos
    Abstract: This paper investigates the effect of energy consumption on countries’ economic efficiency. By using a sample of 18 EU countries for three census years (1980, 1990 and 2000) the paper employs conditional and unconditional robust nonparametric frontiers in order to establish such a relationship. By using probabilistic approaches it conditions the effect of energy consumption on the obtained countries’ economic efficiencies. With the use of nonparametric regressions the paper calculates the effect of energy consumption. The results reveal that lower levels of energy consumption increase countries’ economic efficiencies to a point where the effect of energy consumption on countries’ economic efficiency is neutral.
    Keywords: Energy consumption; economic growth; robust efficiency estimators; conditional nonparametric techniques
    JEL: O13 Q40 C67 C60
    Date: 2011
  2. By: Trevor Houser (Peterson Institute for International Economics); Shashank Mohan (Rhodium Group); Ian Hoffman (Rhodium Group)
    Abstract: On May 12, 2010, Senators John Kerry (D-MA) and Joseph Lieberman (I-CT) released details of their proposed American Power Act, a comprehensive energy and climate change bill developed over the preceding nine months by the two senators, chairmen of the Senate Foreign Relations and Homeland Security Committees respectively, along with Senator Lindsey Graham (R-SC).1 With US unemployment just below 10 percent and the sunken Deepwater Horizon drilling rig's ruptured well pouring thousands of barrels of oil into the Gulf of Mexico each day, the senators promised that if passed the bill will: (1) reduce US oil consumption and dependence on oil imports; (2) cut US carbon pollution 17 percent below 2005 levels by 2020 and over 80 percent by 2050; and (3) create jobs and restore US global economic leadership. In this policy brief the authors evaluate the effectiveness of the proposed American Power Act in achieving those goals.
    Date: 2010–05
  3. By: Stephan Schaeffler; Christoph Weber (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen)
    Abstract: Since the events of liberalization of energy markets leading to the introduction of unbundling and incentive regulation for electricity and gas network operators in many countries, the long-lasting discussion between regulation authorities and regulated firms about adequate equity costs has gained in intensity. Heavy criticism has been formulated by the affected network operators, suggesting that the methodology is not adequate, that data sets of companies used for computation of equity returns are not comparable or that other parameters of the formula, such as the market risk premium and the risk-free interest rate, are not appropriate. One aim of this paper consequently is to give an overview of results obtained in the field of empirical research, the focus lying on utilities, network operators and specific industry betas. As such, this paper may serve as a hub to research papers and give numerous sources for practitioners and researchers. Secondly, this paper presents and discusses the most important drivers of systematic risk which is an indispensable groundwork for determining adequate betas. Thirdly, an overview of the handling of equity return by regulation authorities will be provided. Fourthly, a recent data set with more than 20 network operators will be used to compute the required equity return with different methodologies (CAPM, Fama-French-TFM, Ross-APT). This provides evidence that regulatory practice ignores the Fama-French-TFM or the APT, even though these approaches prove to be valid to improve estimation quality. Consequently, this paper supports regulators and practitioners in search for the right approach to use concerning investment decisions and regulatory rule setting.
    Keywords: Network operator, cost of capital, asset pricing models, regulation, cost of equity
    JEL: G31 G38 L9
    Date: 2011–01
  4. By: Perini Praveena Sri (Indira Gandhi Institute of Development Research; Institute of Economic Growth)
    Abstract: The fast growing demand for fresh water-coupled with the need to protect the environment has made many areas of India and the rest of the World vulnerable to water shortages for various uses of the economy. As they interact with Electricity Industry, water availability is critical to power generation. With out access to adequate amounts of water for steam generation and cooling, power plants that rely on heat energy to generate electricity cannot operate. Seasonal anomalies in water systems and electricity production are inextricably linked. A change in one of these systems induces a change in the other. Therefore, there is an imperative need to better understand the interrelationship of Electric Energy- water for effective management of serious water related power generation issues. This paper gauges the effects of the some of overlaps and gaps between seasonal anomalies in water availability and growth of power generation in rainy, summer, winter and post monsoon season for power plants of different energy types (Both non-renewable and renewable sources.
    Keywords: Andhra Pradesh (AP), Electric -Energy Water Nexus, Water Withdrawals (WD), Loss of generation (LG), Water Shortage, Seasonal Variation Index, cooling effectiveness
    JEL: C Q Q40 Q Q Q54 Q
    Date: 2010–09
  5. By: Perini Praveena Sri (Indira Gandhi Institute of Development Research)
    Abstract: The purpose of this paper is to examine water use estimation in hydel and thermal electric power plants in selected regions i.e. Coastal, Rayalaseema and Telangana regions of Andhra Pradesh. The study primarily focuses on the realistic fundamental premise that thermal electric and hydro electric energy generation is responsible for the largest monthly volume of water withdrawals in four seasons (i.e. summer, rainy, winter and post monsoon season) of a year. These enormous water withdrawals by these hydel and thermal power plants can have significant influence on local surface water resources. However there are very few studies of determinants of water use in hydel and thermal electric generation. Analysis of hydel and thermal electric water use data in the existing power plants clearly indicates that there is wide variability in unitary hydel and thermal electric water use within the system. The multivariate regression procedures were used to identify the significant determinants of thermal and hydel water withdrawals in various power plants i.e. five hydel and four thermal power plants. The estimated regression coefficients indicate that the best explanatory variables for the total quantity of hydel water withdrawals are storage capacity, tail water level and actual generation and thermal water withdrawals are condenser cooling and ash disposal. The unit variability of unit water usage indicates that there is significant potential for water conservation in existing power plants. Apart from this as water is no longer available as a free good; it calculates the real value of water in selected power plants using Water Valuation Techniques such as Residual Value and Opportunity costs.
    Keywords: Thermal water withdrawals, hydel water withdrawals, storage capacity, tail water level, actual generation, condenser cooling and ash disposal
    JEL: C C C
    Date: 2010–09
  6. By: Michael Joos
    Abstract: Das Working Paper befasst sich mit dem Wandel des regulativen Modus in der österreichischen Elektrizitäts- und Eisenbahnwirtschaft unter dem Einfluss der Liberalisierung dieser Sektoren auf EU-Ebene. Analysiert wird der Wandel von hierarchisch – unter enger politischer Kontrolle stehenden – organisierten Sektoren hin zu marktwirtschaftlich organisierten Sektoren auf Basis von EU-Vorgaben. Beide Sektoren sind seit den 1990er Jahren Ziel einer Liberalisierungspolitik auf EU-Ebene, da diese Sektoren bis dahin als leitungsgebundene „Dienstleistungen von allgemeinem wirtschaftlichem Interesse“ (DAWI) bzw. „gemeinwirt-schaftliche Leistungen“ durch das EU-Wettbewerbsregime insbesondere Dienstleistungsfreiheit nicht erfasst waren. Der Fokus der Arbeit liegt dabei auf dem Wandel der Regulierung sogenannter gemeinwirtschaftlicher Verpflichtungen, die Dienstleistungen von allgemeinem wirtschaftlichem Interesse auferlegt werden können. Konzeptuelle Rahmen dabei sind die Analysen von Majone (1996b) zum „Regulatory State“ und der Integrationsansatz von Scharpf (2009). Die zentrale Forschungsfrage lautet: Wie hat sich das Verhältnis von Markt, Staat und Gemeinwohlorientierung durch die EU-Sektorliberalisierungsinitiativen im österreichischen Elektrizitäts- und im österreichischen Eisenbahnsektor verändert?
    Keywords: political science; Austria; regulatory politics; energy policy; electricity; liberalization; competition policy
    Date: 2010–05–15
  7. By: Kingston, Kato Gogo
    Abstract: This study empirically investigates the causal relationship between mineral exploration and environmental pollution in Nigeria with specific focus on natural gas and crude oil in Niger Delta region. The model of Granger causality tests was used. Quarterly data covering 2008 and 2009 were used in accordance with the Akaike (1976) minimum lag length for time-series analysis. The ADF unit root tests show that the null hypothesis of unit root is rejected and, the KPSS stationarity test result accepts the null hypothesis of "stationarity" implying that the variables are fit for the purpose of Granger causality analysis. The test for cointegration show that the variables are cointegrated at the trace level; this imply that gas flaring, environmental pollution and foreign direct investment are statistically linked. The regression on the ordinary least square illustrates that the impact of oil and natural gas exploration on the Nigerian environment is persistent in the long-run. The Granger-causality test result shows that there is one-way causality flowing from the flaring of gas by the foreign firms to the environmental pollution in Nigeria. The study finds a long-run uni-directional causal relationship flowing from mineral exploration to air, soil and water pollution.
    Keywords: Economy; Nigeria; Mineral; Pollution; Africa; Environment
    JEL: D0 K2 F18 K3 D12 F02 Q56 O13 K1 K4
    Date: 2011–01–02
  8. By: Kingston, Kato Gogo
    Abstract: The aim of this paper is to investigate whether the She oil company, through investment and crude oil exploration, benefits socio-economic growth in Nigeria in general and in the Niger Delta of Nigeria in particular. In 1998, the United Nations Special Rapporteur's report on Nigeria accused Nigeria and Shell of violating human rights and failing to protect the environment, and called for an investigation into Shell activities in Nigeria. The report condemned Shell for arming the security forces which it regularly deploy to use lethal force civilians that protest against the oil firm.” The paper explores the matrix within which the socio-economic rights (human rights, development rights and environment rights) have been significantly marginalised and the implications of the lack corporate social responsibility and the lack of accountability of Shell to the inhabitants of the Niger Delta of Nigeria. With respect to environmental obligations, the paper discusses how environmental degradation in the Niger Delta has infringed on human rights thereby impeding growth and economic development. The paper suggests possible future directions and initiatives for civil society in making corporations more accountable to states, citizens and the planet.
    Keywords: Shell; Crude oil; Nigeria; Development; Economy
    JEL: K2 K12 K21 K14 K11 K32 K33 K13 K22 K23 K1 K42
    Date: 2010–10–29
  9. By: Markus Bruckner (School of Economics, University of Adelaide); Antonio Ciccone (Universitat Pompeu Fabra); Andrea Tesei (Universitat Pompeu Fabra)
    Abstract: We examine the effect of oil price fluctuations on democratic institutions over the 1960-2007 period. We also exploit the very persistent response of income to oil price fluctuations to study the effect of persistent (oil price-driven) income shocks on democracy. Our results indicate that countries with greater net oil exports over GDP see improvements in democratic institutions following upturns in international oil prices. We estimate that a 1 percentage point increase in per capita GDP growth due to a positive oil price shock increases the Polity democracy score by around 0.2 percentage points on impact and by around 2 percentage points in the long run. The effect on the probability of a democratic transition is around 0.4 percentage points.
    Keywords: democracy, oil price shocks, persistent income shocks
    JEL: P16 O10
    Date: 2011–02
  10. By: B. Sudhakara Reddy (Indira Gandhi Institute of Development Research); P. Balachandra (Indian Institute of Science)
    Abstract: This paper aims to analyse urban mobility patterns and consequent impacts on energy and environment in India. We investigate the quantity of energy use in 23 metropolitan regions for the period 1981-2005 and present empirical results obtained using national and urban data sets. It explores the underlying relationship among three dependent variables-energy intensity, type of mode and passenger km. Patterns of energy consumption and CO2 emissions in private and public transport are examined. Some policy recommendations are outlined to reduce urban transport energy use and greenhouse gases and provide suggestions to achieve sustainable urban mobility.
    Keywords: Energy, Environment, Intensity, Transport, Urban
    JEL: Q4 L94 L95 L98
    Date: 2010–12
  11. By: Asproudis, Elias
    Abstract: I investigate the influence of the union structure on firms' environmental technological choice when the unions care for the environmental protection. Specifically, I compare the decentralised with the centralised structure under a Cournot duopoly. I show that the decentralised structure could always provide higher incentives to the firms for the adoption of a better (less polluting) technology. In addition, the firms prefer the decentralised unionisation than the centralised although the unions prefer the centralised structure. Furthermore, there is an inverse U-shape relation between the firm's emissions and the size of the market. Finally, the emissions could be less under the centralised case compared to the decentralised for relatively low market's size.
    Keywords: trade unions; environmental concern; emissions; technological choice
    JEL: O30 Q5 J51
    Date: 2011–01–24
  12. By: James Heintz; Heidi Garrett-Peltier; Ben Zipperer
    Abstract: In this study commissioned by Ceres, James Heintz, Heidi Garrett-Peltier, and Ben Zipperer examine the economic impacts of air pollution regulations forthcoming from the Environmental Protection Agency: the Clean Air Transport Rule governing sulfur dioxide and nitrogen oxide emissions, and the National Emissions Standards for Hazardous Air Pollutants for Utility Boilers rule, which will set limits for hazardous air pollutants. Focusing on 36 states, the study assesses the potential employment impacts of the transformation of the nation’s energy generation plants to a cleaner, more efficient fleet, through investments in pollution controls and the retirement of outdated plants.
    Date: 2011
  13. By: Jie He (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: In this paper, basing on panel data on Chinese provincial level from 1991-2000, we test, firstly, the existence of EKC for industrial SO2 emission density. Following, we decompose the economical determinants of this SO2 emission density into: income effect (GDPPC), scale effect (Industrial GDP per km2) and composition effect (industrial capitalistic ratio). And in the third step, we study the direct and indirect role of international trade intensity ((X+M)/GDP). Instead of a supposed EKC, we find ever-increasing trend in industrial SO2 emission density with respect to income growth for most Chinese provinces when the three largest cities (Beijing, Tianjin and Shanghai) directly under central government are taken off from our database. Following, confirming Grossman (1995), we succeed in decomposing industrial SO2 emission density into its three famous economic “effects”. However, different from our expectation, the composition effect, measured by industrial capitalistic ratio K/L in this paper, instead of being a pollution-increasing role as generally accepted idea, turns out to lead industrial SO2 density to reduce as a technology-reinforcing factor. For the role of trade, besides the positive direct impact on industrial SO2 density, we find equally some “pollution haven” evidences. In addition, our results show for most provinces, their comparative advantage stays still in labour-intensive sectors, increase in the capitalistic ratio is proven to be environment-friendly through its technological “pollution-abatement” effect until this ratio reach the level of 83333 yuan/person, which can be considered as the threshold to distinguish capital-intensive sector. Due to these different aspect's effects, corresponding to the conclusion of ACT (1998, 2001), the total effect of trade on industrial SO2 pollution does not turn out to be an important factor for industrial SO2 emission density. Including all these co-related economic determinants into a more general graphical analysis, we find that, for most provinces whose actual income and capitalistic ratio stay still at moderate level, further income growth and capital accumulation are generally environment-friendly factor in openness process. However, the further enlargement of openness degree will result in environment deterioration for the provinces that have relatively low income and too low or too high capitalistic ratio. The necessary policy to reduce this possible deterioration is to adopt besides the open policy, the complementary policies aiming at reinforcing public consciences on environment quality (through income effect) and encouraging R&D activities to increase technological efficiency in pollution abatement.
    Keywords: “pollution haven” hypothesis.;Decomposition;industrial SO2 emission;international trade;EKC;China
    Date: 2011–02–09
  14. By: Jie He (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: To get better understanding on trade's impact on environment, we construct a four-equation simultaneous system, in which emission is determined by the three economic determinants: scale, composition and technical effects and directly by trade. Supposing the three economic determinants are also endogenous to trade, we check in the following three functions the indirect impacts of trade on environment through the intermediation of the three effects. The model is then estimated by 29 Chinese provinces' panel data on industrial SO2 emission (1993-2001). Our estimation results reveal totally opposite role of export expansion and accumulation of manufactured goods import in industrial SO2 emission determination. The results do not support “pollution haven” hypothesis; the reinforced competition faced by exporters is a positive factor encouraging technology progress in pollution abatement. China's actual comparative advantage resides in labor-intensive industries, exporting to world market actually helps to reduce pollution increasing caused by its heavy-industry-oriented development strategy, which is traditionally supported by import activities.
    Keywords: cerdi
    Date: 2011–02–09
  15. By: Andrade, André luiz
    Abstract: This article aims to identify the debate on the triad economy, energy and environment, providing a greater focus to the issue of climate change. After historically contextualize the economic use of energy and expose the current global energy picture, describes the environmental issue in the light of economic science, stating the two main theoretical approaches of environmental economics. Finally, the article devoted to the important and urgent but controversial debate about the impact of energy model on climate change. Pointed out that, despite a current minority dissenting, the world has significant and reliable evidence that the economic system through several segments, especially the intensive use of energy, may be contributing to the changes in climatic conditions of planet. Energy use and the need to readjust it, both in terms of greater efficiency on the issue of replacing the current fossil energy sources to less carbon-intensive, was one of the main conclusions of the discussion about how to direct the economic system to a path of greater sustainability.
    Keywords: energía; medio ambiente; economía; cambio climático.
    JEL: Q5 O13 N5
    Date: 2010–11–19
  16. By: Andrade, André Luiz; MATTEI, LM
    Abstract: This article aims to identify the debate on the triad economy, energy and environment, providing a greater focus to the issue of climate change. After historically contextualize the economic use of energy and expose the current global energy picture, describes the environmental issue in the light of economic science, stating the two main theoretical approaches of environmental economics. Finally, the article devoted to the important and urgent but controversial debate about the impact of energy model on climate change. Pointed out that, despite a current minority dissenting, the world has significant and reliable evidence that the economic system through several segments, especially the intensive use of energy, may be contributing to the changes in climatic conditions of planet. Energy use and the need to readjust it, both in terms of greater efficiency on the issue of replacing the current fossil energy sources to less carbon-intensive, was one of the main conclusions of the discussion about how to direct the economic system to a path of greater sustainability.
    Keywords: energia; meio ambiente; mudanças climáticas.
    JEL: O1 Q5 N7
    Date: 2010–09–01
  17. By: Xiao, Junji; Ju, Heng
    Abstract: A concomitant of the rapid development of the automobile industry in China is the serious air pollution and carbon dioxide emission. There are various regulation instruments to reduce the air pollution from automobile sources. China government chooses a small-displacement oriented consumption tax as well as fuel tax to alleviate the worse air pollution. This paper evaluates the effects of both policy instruments on fuel consumption and social welfare. Our empirical results show that fuel tax decreases the total sale of new cars, which leads to a decline of total consumption of fuel from the new cars, but does not change the sale distribution over various fuel efficiency models; while consumption tax adjustment results in a skewed sale distribution toward more efficient new cars but increases the total consumption of fuel due to an enlarged sale. The effects of these two taxes on pollution depend on our assumption about the average fuel efficiency of outside goods. On the other hand, consumption tax leads to less social welfare loss; in particular, consumer surplus decreases in an order of magnitude less than that caused by fuel tax. Fuel tax actually transfers more welfare from private sector to the government.
    Keywords: China auto industry; welfare analysis; tax incidence; BLP model; tax progressivity
    JEL: A13 C35 H23
    Date: 2011–02–07
  18. By: Michael Greenstone; John A. List; Chad Syverson
    Abstract: Whether and to what extent environmental regulations influence the competitiveness of firms remains a hotly debated issue. Using detailed production data from tens of thousands of U.S. manufacturing plants drawn from Annual Survey of Manufactures, we estimate the effects of environmental regulations—captured by the Clean Air Act Amendments’ division of counties into pollutant-specific nonattainment and attainment categories—on manufacturing plants’ total factor productivity (TFP) levels. We find that among surviving polluting plants, a nonattainment designation is associated with a roughly 2.6 percent decline in TFP. The regulations governing ozone have particularly discernable effects on productivity, though effects are also seen among particulates and sulfur dioxide emitters. Carbon monoxide nonattainment, on the other hand, appears to increase measured TFP, though this appears to be concentrated among refineries. When we apply corrections for two likely sources of positive bias in these estimates (price mismeasurement and sample selection on survival), we estimate that the total TFP loss for polluting plants in nonattaining counties is 4.8 percent. This corresponds to an annual lost output in the manufacturing sector of roughly $14.7 billion in 1987 dollars ($24.4 billion in 2009 dollars). These costs have important implications for both the intensity and location of firm expansions.
    Date: 2011–01
  19. By: Mariam Camarero (cDepartamento de Economía. Universidad Jaume I. Campus del Riu Sec. Castellón, Spain); Yurena Mendoza (Departamento de Economía Aplicada II. Universidad de Valencia. Valencia, Spain); Javier Ordoñez (cDepartamento de Economía. Universidad Jaume I. Campus del Riu Sec. Castellón, Spain)
    Abstract: This paper sets out to re-examine CO2 emissions for 22 OECD countries over the period 1870–2006. The aim is to help explain mixed evidence regarding convergence in per capita emissions among countries. The paper revolves around two potential sources of inconclusive findings regarding CO2 emissions convergence: firstly, neglecting the step prior to convergence analysis could mislead researchers as the stationary nature of series negates the possibility of convergence; secondly, the nonlinear dynamics of CO2 have not been considered to date. The empirical evidence provided by our methodological strategy suggests that the original per capita CO2 emissions are non-stationary from 1950 onwards, allowing for further convergence study. By the novelty appeal of using nonlinear methods, we conclude that there is strong evidence of divergence among these 22 OECD countries.
    Keywords: CO2 emissions, convergence, non linear test, stationarity, smooth transition
    JEL: C22 Q5
    Date: 2011–02
  20. By: M. Fadaee; L. Lambertini
    Abstract: Acquired wisdom has it that the allocation of pollution rights to firms hinders their willingness to undertake uncertain R&D projects for environmental-friendly technologies. We revisit this issue in a model where firms strategically choose whether to participate in an auction to attain pollution permits, or instead invest in green R&D, to show that, somewhat counterintuitively, a side effect of the auction is in fact that of fostering environmental R&D in an admissible range of the model parameters.
    JEL: L13 Q55
    Date: 2011–02
  21. By: Nelly Exbrayat (CERDI - Centre d'études et de recherches sur le developpement international - CNRS : UMR6587 - Université d'Auvergne - Clermont-Ferrand I); Carl Gaigné (INRA-ESR - Unité d'économie et de sociologie rurales - INRA); Stéphane Riou (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - Ecole Normale Supérieure Lettres et Sciences Humaines)
    Abstract: Nous analysons l'impact et les déterminants d'une taxe carbone globale dans une économie imparfaitement intégrée composée de pays de différente taille. A l'aide d'un modèle de commerce et de localisation, nous montrons tout d'abord que la concentration de firmes dans le pays disposant d'un avantage de taille de marché accroît les émissions totales de C O2 . L'introduction d'une taxe carbone globale conduit alors à des délocalisations de firmes du grand pays vers le petit pays de sorte que même fixée à un taux unique, une fiscalité carbone ne serait pas neutre du point de vue de la géographie économique. Enfin, parce qu'elles conduisent à une réduction des émissions mondiales de C O2 , ces relocalisations améliorent l'effcacité environnementale de la taxe carbone.
    Keywords: fiscalité environnementale; mobilité des firmes; intégration économique
    Date: 2011
  22. By: Rainer Holst (Georg-August-University Göttingen); Xiaohua Yu (Georg-August-University Göttingen); Carola Grün (Georg-August-University Göttingen)
    Abstract: This paper employs the production function-based method proposed by Just and Pope (1978, 1979) to explicitly analyze production risk in the context of Chinese grain farming and climate change, and test for potential endogeneity of climate factors in Chinese grain production. Our results indicate that grain production in south China might, at least in the short run, could be a net beneficiary of global warming. In particular, we find that a 1 °C increase in annual average temperature in South China could entail an increase of grain output by 3.79 million tons or an economic benefit of around USD 798 million due to the increasing mean output. However the impact of global warming in north China is negative, small and insignificant. In addition, Hausman tests reveal no endogeneity of climate variables in Chinese grain production.
    Keywords: Agriculture; grain production; climate change; production risk; China
    JEL: Q1 Q54
    Date: 2011–02–08
  23. By: Viviani, Carlo
    Abstract: Climate change, security and cost of energy supplies, and the competitiveness of firms and economies have been focal points of the general political and economic policy debate in recent years. This article examines the choices in this field made at global level with the Kyoto Protocol and in Europe with the more recent “20-20-20” package from the standpoints of the Italian national interests and the negotiating stance adopted by our Government in European and international forums. The European negotiations on renewable energy sources, the reduction of emissions in the sectors with and without emissions trading schemes, automobile emissions, the auctioning of emission rights, and the identification of industries exposed to the risk of delocalization (carbon leakage) are described in detail, including background data not previously available, and the reasons for Italy’s positions set forth. The principle guiding Italian negotiators has been to balance the various policy aims, in an effort to ensure that the necessary action against climate change does not have excessive repercussions on growth and employment. The principle is all the more valid in the global talks on the regime that will succeed the Kyoto Protocol when it expires on 1 January 2013. Without a credible global agreement entailing an equivalent commitment, or sectoral agreements, instruments will be needed to prevent Europe’s climate commitment from producing an unfair competitive disadvantage, with potentially serious social and economic consequences but no appreciable environmental advantage.
    Keywords: Climate Change; Energy; UNFCCC; ETS; Emissions Trading Scheme; Auctioning; European Union; Italy; Carbon Leakage; Carbon pricing
    JEL: H77 D62 F23 D44 H23 L60 F42 K32 F18 F53 F21 D78 O52
    Date: 2010–11
  24. By: Shingo Kimura; Jesús Antón
    Abstract: This report analyzes the agricultural risk management system in Australia, applying a holistic approach that considers the interactions between all sources of risk, farmers. strategies and policies. The policy analysis is structured around three layers of risk that require a differentiated policy response: normal (frequent) risks that should be retained by the farmer, marketable intermediate risks that can be transferred through market tools, and catastrophic risk that requires government assistance. The main focus of risk management policy in Australia is drought risk and this paper assesses the objective and instruments of the country.s national drought policy framework.
    Keywords: climate change, risk-management, agricultural policy, catastrophic risk, drought policy, bio-security, cost sharing, index insurance
    JEL: Q18
    Date: 2011–02–10
  25. By: Jeffrey J. Schott (Peterson Institute for International Economics); Meera Fickling (Peterson Institute for International Economics)
    Abstract: The three NAFTA signatories have a shared interest in harmonizing climate change policy, and while they have made steps in that direction, there is still much that can be done to promote renewable energy development and other measures to reduce greenhouse gas emissions. Authors Jeffrey J. Schott and Meera Fickling examine channels for energy and environmental cooperation among the three North American countries in light of limited progress in international climate talks and scaled back energy legislation being vetted in the US Senate. Suggestions include: harmonizing renewable energy standards and trading of renewable electricity credits, improving cross-border transmission capacity between the United States and Mexico, and using NAFTA institutions for data collection and monitoring of regional climate policies and for capacity building in Mexico.
    Date: 2010–07
  26. By: Richard J. Smith
    Abstract: The 1987 Montreal Protocol to address ozone layer depletion was a pivotal agreement in the history of global environmental negotiations. It established a process that remains an important precedent for dealing with global environmental problems, including global warming. What made the negotiation of that agreement such an iconic event, and what useful lessons does it hold for climate change negotiators? Richard Smith cites a number offactors that were critical to the success of the Montreal Protocol. For example: (1) the United States played a leadership role from the beginning, including banning the use of chlorofluorocarbons (CFCs) in most aerosols and appointing a chief negotiator with responsibility for developing the U.S. position well before the negotiations began; (2) from the outset all countries that were parties to the agreement, both developed and developing countries, made specific commitments to reduce the production and use of ozone-depleting substances; and (3) the protocol set up a procedure for regularly reviewing and revising its provisions at follow-up meetings, thus accommodating new information rapidly and efficiently. A central lesson that climate change negotiators should learn from the Montreal Protocol is that it set a process in motion, which ultimately led to all parties to the agreement making the necessary commitments to arrest and eventually reverse the deterioration of the stratospheric ozone layer. Clearly, climate change negotiators face a more complex and far-reaching challenge today. The phaseout of ozone-depleting chemicals and related infrastructure involved major industries such as refrigeration, electronics, fire fighting, and aerosols and cost billions of dollars. But reducing greenhouse gas emissions will require fundamentally rethinking the present carbon-based societies and taking steps that will affect virtually every aspect of economic activity. Despite this significant difference in the impact on the economic structure of the countries concerned, however, there are similarities between the two challenges, and climate change negotiators would be well advised to reflect on the Montreal Protocol and the lessons that can be learned from it.
    Date: 2010–08

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