nep-ene New Economics Papers
on Energy Economics
Issue of 2011‒03‒19
23 papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao, Spain

  1. Energy-intensity developments for 19 OECD countries and 51 sectors By Henri de Groot
  2. Vulnerability and Bargaining Power in EU-Russia Gas Relations By Edward Hunter Christie; Pavel K. Bev; Volodymyr Golovko
  3. Introduction to Macroeconomic Dynamics Special Issue on Oil Price Shocks By Apostolos Serletis; John Elder
  4. "What Does Norway Get Out Of Its Oil Fund, if Not More Strategic Infrastructure Investment?" By Michael Hudson
  5. Resource Management and Transition in Central Asia, Azerbaijan, and Mongolia By Richard Pomfret
  6. Diagnostico de las Fuentes No convenionales de Energía en Colombia By Humberto Rodríguez Murcia, Eduardo Afanador Iriarte, Pedro Guevara, Fabio González Benítez; Ernesto Torres; José Maria Rincón; Edinson Lozano
  7. Energy, Agriculture, and GHG Emissions: The Role of Agriculture in Alternative Energy Production and GHG Emission Reduction in North Dakota By Aravindhakshan, Sijesh; Koo, Won W.
  8. Economic and Marketing Efficiency Among Corn Ethanol Plants By Sesmero, Juan S.; Perrik, Richard K.; Fulginiti, Lilyan E.
  9. Green Certificates and Market Power on the Nordic Power Market By Amundsen, Eirik Schrøder; Bergman, Lars
  10. Does foreign environmental policy influence domestic innovation ? Evidence from the wind industry By Antoine Dechezleprêtre; Matthieu Glachant
  11. Origins and efficiency of the electric industry regulation in Spain, 1910-1936 By Anna Aubanell
  12. Revisiting the relationship between electricity consumption, capital and economic growth: Cointegration and causality analysis in Romania By Mutascu, Mihai; Shahbaz, Muhammad; Tiwari, Aviral Kumar
  14. La voie étroite du « facteur 4 » dans le secteur des transports : quelles politiques publiques, pour quelles mobilités ? By Hector G. Lopez-Ruiz; Hector G. Lopez-Ruiz; Hector G. Lopez-Ruiz; Yves Crozet
  15. Are compact cities environmentally friendly? By Gaigné, Carl; Riou, Stéphane; Thisse, Jacques-François
  16. Embedding the drivers of emission efficiency at regional level Analyses of NAMEA data By Massimiliano Mazzanti; Anna Montini
  17. Incorporating jurisdiction issues into an analysis of carbon attributable to Welsh final consumption under different economic conditions: an integrated IO and CGE analysis By De Fence, Janine; McGregor, P. G. (Peter Gregor); Munday, Max; Swales, J. Kim; Turner, Karen
  18. Threshold cointegration and nonlinear adjustment between CO2 and income: the environmental Kuznets curve in Spain, 1857-2007 By Vicente Esteve; Cecilio Tamarit
  19. Income and time related effects in EKC By Massimiliano Mazzanti; Antonio Musolesi
  20. Elementos de política, riesgos ante el cambio climático, complementariedad entre las FNCE y el sin, y costos indicativos de las FNCE By Humberto Rodríguez Murcia, Eduardo Afanador Iriarte, Pedro Guevara, Fabio González Benítez; Ernesto Torres; José Maria Rincón; Edinson Lozano
  21. The Impact of Modified EU ETS Allocation Principles on the Economics of CHP-based District Heating Networks By Westner, Günther; Madlener, Reinhard
  23. How Should Environmental Policy Respond to Business Cycles? Optimal Policy under Persistent Productivity Shocks By Heutel, Garth

  1. By: Henri de Groot
    Abstract: This paper presents stylized facts on energy-intensity developments for 19 OECD countries and 51 sectors over the period 1980−2005.
    JEL: O13 O47 O5 Q43
    Date: 2011–03
  2. By: Edward Hunter Christie; Pavel K. Bev; Volodymyr Golovko
    Abstract: This report contains three separate papers, each addressing selected issues concerning natural gas policy and security of gas supply in Europe. The over-arching themes are vulnerability (to supply disruptions, to supplier pricing power) and fragmentation; and measures designed to overcome them, namely interconnection and consolidation of bargaining power. The first paper contains a review of some of the economic effects of, and subsequent policy reactions to, the January 2009 cut of Russian gas supplies through the Ukraine Corridor, with a particular focus on Bulgaria and on EU policy. The second paper provides an analysis of the current state of gas relations between Ukraine and the Russian Federation, with a focus on the Ukrainian perspective and on recent political developments in that country. The third paper provides an analysis of the case for consolidating buyer power in line with the concept of an EU Gas Purchasing Agency.
    Keywords: Natural gas, security of supply, supply disruption, interconnector, Russia, Ukraine, Bulgaria, European Union, energy policy, fragmentation, bargaining power, countervailing power, gas purchasing agency
    JEL: C78 L11 Q34 Q48
    Date: 2011–03
  3. By: Apostolos Serletis; John Elder
    Abstract: This special issue of Macroeconomic Dynamics is devoted to papers that use recent advances in macroeconometrics and Â…financial econometrics to investigate the effects of oil price shocks and uncertainty about the price of oil on the level of economic activity.
    JEL: G31 E32 C32
    Date: 2011–01–01
  4. By: Michael Hudson
    Abstract: For the past generation Norway has supplied Europe and other regions with oil, taking payment in euros or dollars. It then sends nearly all this foreign exchange abroad, sequestering its oil-export receipts—which are in foreign currency—in the "oil fund," to invest mainly in European and US stocks and bonds. The fund now exceeds $500 billion, second in the world to that of Abu Dhabi. It is claimed that treating these savings as a mutual fund invested in a wide array of US, European, and other stocks and bonds (and now real estate) avoids domestic inflation that would result from spending more than 4 percent of the returns to this fund at home. But the experience of sovereign wealth funds in China, Singapore, and other countries has been that investing in domestic infrastructure serves to lower the cost of living and doing business, making the domestic economy more competitive, not less. This paper cites the debate that extends from US 19th-century institutional doctrine to the approach of long-time Russian Chamber of Commerce and Industry President Yevgeny Primakov to illustrate the logic behind spending central bank and other sovereign foreign-exchange returns on modernizing and upgrading the domestic economy rather than simply recycling the earnings to US and European financial markets in what looks like an increasingly risky economic environment, as these economies confront debt deflation and increasing fiscal tightness.
    Keywords: Sovereign Wealth Funds; Norway; Oil Fund
    JEL: H27 H50 H54 H60
    Date: 2011–03
  5. By: Richard Pomfret (Institute for International Economics)
    Abstract: The paper presents a comparative analysis of the resource-rich transition economies of Mongolia and the southern republics of the former Soviet Union. For Uzbekistan and Turkmenistan, the ability to earn revenue from cotton exports allowed them to avoid reform. Oil in Azerbaijan and Kazakhstan was associated with large-scale corruption, but with soaring revenues in the 2000s their institutions evolved and to some extent improved. Kyrgyzstan and Mongolia illustrate the challenges facing small economies with large potential mineral resources, with the former suffering from competition for rents among the elite and the latter from lost opportunities. Overall the countries illustrate that a resource curse is not inevitable among transition economies, but a series of hurdles need to be surmounted to benefit from resource abundance. Neither the similar initial institutions nor those created in the 1990s are immutable.
    Keywords: Oil, Gas, Minerals, Central Asia, Resource Curse
    JEL: Q32 P35 O13
    Date: 2011–03
  6. By: Humberto Rodríguez Murcia, Eduardo Afanador Iriarte, Pedro Guevara, Fabio González Benítez; Ernesto Torres; José Maria Rincón; Edinson Lozano
    Abstract: El dicumento considera ejes transversales y ejes verticales. Los primeros están relacionados con aspectos que conciernen a todas las FNCE como son el marco legal y regulatorio, y los aspectos ambientales de las FNCE. A continuación se desarrollan ejes verticales, uno por cada fuente. El capítulo 2 hace una revisión y análisis del marco institucional, de política y regulatorio. Plantea la hipótesis básica del estudio, describe el marco institucional y realiza un análisis del marco de política de las FNCE en Colombia. Integra el marco legal y regulatorio aplicable a las FNCE partiendo desde sus orígenes hasta su estado actual. Considera las leyes y el rol de las FNCE en los planes energéticos (PEN) anteriores y en el actual en formulación. El capítulo 3 considera los aspectos ambientales de las FNCE. Considera el cambio climático, el estado actual del clima, la mitigación del cambio climático, el mercador de las CER y los aspectos ambientales particulares de las FNCE. Finalmente considera el MDL y los proyectos en Colombia. Los capítulos 4 a 9 se ocupan de las fuentes solar, eólica, PCHs, biomasa, geotermia y nuclear, respectivamente. Para cada una de ellas se ha realizado una revisión de las tendencias internacionales y posteriormente el desarrollo en el país, dando el estado actual de la evaluación del potencial de cada fuente, proyectos desarrollados en el país dando potencia instalada y energía generada. Cuando aplique, distribuidores y fabricantes de equipos, investigación y desarrollo, normas técnicas, entre otros aspectos. Es importante anotar que para todas las fuentes no existe la misma desagregación de información. La FNCE que mayor disponibilidad de información tiene en relación con las demás es la energía nuclear, buena parte de ella producida por la Agencia Internacional de Energía Atómica (AIEA) y corresponde a un sector que es responsable por el 2.8% de la energía del mundo. El capítulo 10 describe los proyectos realizados por instituciones del estado. En esta sección se destaca en la actualidad las actividades del IPSE y en el pasado, el proyecto de telecomunicaciones rurales de TELECOM y el proyecto PESENCA, proyecto de cooperación internacional realizado entre 1985 a 1995 sobre FENR. Finalmente, el capítulo 11 presenta el Balance del Estado de las FNCE en Colombia.
    Date: 2011–01–30
  7. By: Aravindhakshan, Sijesh; Koo, Won W.
    Abstract: Energy, agriculture, and GHG emissions are highly interrelated. Several agricultural commodities are currently used as feedstock for biofuel production to replace fossil fuels. As the largest consumer of energy, the U.S. has taken several initiatives to reduce the use of fossil fuels, achieve energy security, and reduce GHG emissions. The industrial community of the U.S. invested heavily in biofuel and wind energy production. North Dakota has highest potential in producing wind energy and biomass from dedicated energy crops. Unfortunately these resources are not fully utilized for producing renewable energy. North Dakota is an energy intensive economy and per capita energy consumption is higher than other states. This technical bulletin provides a comprehensive report on the energy production and related emissions in the United States with special emphasis on North Dakota. The bulletin also discusses various alternative methods to reduce GHG emissions to meet the regulatory standards with a special emphasis on North Dakota. The study found that North Dakota produces the cheapest electricity and a major share is consumed outside the state. The price of electricity does not include negative externalities associated with burning lignite coal. North Dakota uses its potential to produce wind and corn ethanol to a great extent. The state level policies and financial supports are directed to wind industry and energy efficiency measures. The current renewable portfolio standards and non-compliance adversely affect the renewable energy industry in North Dakota.
    Keywords: Renewable energy, Wind power, Ethanol, Greenhouse gas emissions, Agriculture, Agribusiness, Resource /Energy Economics and Policy,
    Date: 2011–02
  8. By: Sesmero, Juan S.; Perrik, Richard K.; Fulginiti, Lilyan E.
    Abstract: In the corn ethanol industry, the ability of plants to obtain favorable prices through marketing decisions is considered important for their overall economic performance. Based on a panel of surveyed of ethanol plants we extend data envelopment analysis (DEA) to decompose the economic efficiency of plants into conventional sources (technical and allocative efficiency) and a new component we call marketing efficiency. The latter measure allows us to evaluate plantsâ ability to contract favorable prices of corn and ethanol relative to spot market prices and its implications for their overall economic performance. Results show that plants are very efficient from a technical point of view. Dispersion in overall economic performance observed across units is mainly explained by differences in allocative and marketing sources. Our results are consistent with the view that plants with higher production volumes may perform better, in part, because they can secure more favorable prices through improved marketing performance. Plants also seem to achieve significant improvements in marketing performance through experience and learning-by-doing. These results are consistent with two facts; 1) economies of scale may not be the only reason behind the increase in the average size of plants in the ethanol industry and; 2) there might be incentives for horizontal consolidation across plants.
    Keywords: corn ethanol, data envelopment analysis, economic efficiency decomposition, marketing efficiency, mergers, Environmental Economics and Policy,
    Date: 2011
  9. By: Amundsen, Eirik Schrøder (University of Bergen); Bergman, Lars (Stockholm School of Economics,)
    Abstract: The purpose of this study is to elucidate under which circumstances, how, and to what extent market power on the TGC market can be used to affect the entire electricity market. There are basically two reasons for being concerned with market power in TGC markets. One is that a small number of companies may have exclusive access to first rate sites for wind power generation. The other is that withdrawal of a small number of TGCs implies a multiple reduction of electricity consumption, with corresponding increases of end user prices. For the purpose of investigating the principles by which market power may be exercised in this setting a simple analytical model is designed and analytical results are derived. To investigate matters further a numerical model, based on the analytical model, is constructed for the Nordic countries. Among the Nordic countries only Sweden has a TGC market but there is a common Nordic electricity market with free trade of electricity. The analysis shows that Swedish companies possessing capacity for green electricity generation, indeed, have the ability to exercise market power on the common Nordic power market by withholding TGCs. However, the analysis reveals that an opening of TGC trade between the the Nordic countries to a large extent achieves the objective of eliminating the use of marketpower that would otherwise be established. Also, this may have a cushioning effect on the volatility of TGC prices.
    Keywords: Renewable energy; electricity; green certificates; market power; Nordic power market.
    JEL: C70 Q28 Q42 Q48
    Date: 2010–12–01
  10. By: Antoine Dechezleprêtre (CERNA - Centre d'économie industrielle - Mines ParisTech, Grantham Research Institute on Climate Change and the Environment - London School of Economics and Political Science); Matthieu Glachant (CERNA - Centre d'économie industrielle - Mines ParisTech)
    Abstract: This paper examines the relative influence of domestic and foreign renewable energy policies on innovation activity in wind power using patent data from OECD countries from 1994 to 2005. We distinguish between the impact of demand-pull policies (e.g., guaranteed tariffs, investment and production tax credits), as reflected by wind power capacities installed annually, and technology-push policies (government support to R&D). We show that inventors respond to both domestic and foreign new capacities by increasing their innovation effort. However, the effect on innovation of the marginal wind turbine installed at home is 28 times stronger than that of the foreign marginal wind turbine. Unlike demandpull policies, public R&D expenditures only affect domestic inventors. A simple calculation suggests that the marginal million dollars spent on R&D support generates 0.82 new inventions, whereas the same amount spent on the deployment of wind turbines induces, at best, 0.06 new inventions (0.03 locally and 0.03 abroad).
    Keywords: innovation;public R&D;renewable energy policies;wind power
    Date: 2011
  11. By: Anna Aubanell (Departament d'Economia i d'Història Econòmica, Universitat Autònoma de Barcelona)
    Abstract: The aim of this paper is to discover the origins of utility regulation in Spain, and to analyse, from a microeconomic perspective, its characteristics and the impact of regulation on consumers and utilities. Madrid and the Madrilenian utilities are taken as a case study. The electric industry in the period studied was a natural monopoly2. Each of the three phases of production, generation, transmission and distribution, had natural monopoly characteristics. Therefore, the most efficient form to generate, transmit and distribute electricity was the monopoly because one firm can produce a quantity at a lower cost than the sum of costs incurred by two or more firms. A problem arises because when a firm is the single provider it can charge prices above the marginal cost, at monopoly prices. When a monopolist reduces the quantity produced, price increases, causing the consumer to demand less than the economic efficiency level, incurring a loss of consumer surplus. The loss of the consumer surplus is not completely gained by the monopolist, causing a loss of social surplus, a deadweight loss. The main objective of regulation is going to be to reduce to a minimum the deadweight loss. Regulation is also needed because when the monopolist fixes prices at marginal cost equal marginal revenue there would be an incentive for firms to enter the market creating inefficiency. The Madrilenian industry has been chosen because of the availability of statistical information on costs and production. The complex industry structure and the atomised demand add interest to the analysis. This study will also provide some light on the tariff regulation of the period which has been poorly studied and will complement the literature on the US electric utilities regulation where a different type of regulation was implemented.
    Date: 2011–02
  12. By: Mutascu, Mihai; Shahbaz, Muhammad; Tiwari, Aviral Kumar
    Abstract: The paper empirically analyzes, in the Romania’s case, the cointegration and causality between electricity consumption, capital and economic growth. The data set is covering the period 1980 - 2008. The results show the existence of bidirectional causality between electricity consumption and economic growth and between economic growth and capital use. In the same time, a unidirectional causal relation is also found from capital use to electricity consumption. The main finding suggests that electricity conservation policies may retard economic growth by reduction in electricity consumption. Moreover, in the opposite direction, from economic growth to electricity consumption, the fluctuations in economic growth may reduce demand for electricity.
    Keywords: Electricity Consumption; Growth; Cointegration
    JEL: F15 O16 B29
    Date: 2011–02–01
  13. By: Hector G. Lopez-Ruiz (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat); Hector G. Lopez-Ruiz (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat); Hector G. Lopez-Ruiz (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat)
    Abstract: Today, numerous works conclude that transport seems to be completely coupled to economic growth. Therefore, as a direct consequence of economic development, transport sits today as one of the major final energy consumers and one of the most important sources of carbon dioxide emissions. Furthermore, in the absence of major technological change, this unsustainable situation will most undoubtedly get worse in the future. In this paper we analyze what different types of public policies aiming at sharp reductions in GHG emissions imply on passenger transport and how they can be linked to new behavior patterns affecting time use and consumption. For this, we use the TILT (Transport Issues in the Long Term) model's core microeconomic choice model IT-UP (Integrated Tools for Utility-based Planning). Through this analysis, we explain the interest of adaptive strategies for GHG mitigation.
    Keywords: Greenhouse gas, long term, scenario, transport, sustainable development.
    Date: 2010–08–15
  14. By: Hector G. Lopez-Ruiz (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat); Hector G. Lopez-Ruiz (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat); Hector G. Lopez-Ruiz (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat); Yves Crozet (LET - Laboratoire d'économie des transports - CNRS : UMR5593 - Université Lumière - Lyon II - Ecole Nationale des Travaux Publics de l'Etat)
    Abstract: Afin de limiter les impacts du changement climatique sur la planète, les experts du Groupe Intergouvernemental d'experts sur l'Evolution du Climat (GIEC) préconisent une division par deux des émissions mondiales de gaz à effet de serre à l'horizon 2050. Cet objectif impose une division par quatre (i.e. facteur 4) des émissions de gaz à effet de serre des pays industrialisés comme la France. Le secteur des transports peut-il se plier à cette exigence ? A l'aide du modèle TILT (Transport Issues in the Long Term), centré sur les relations macroéconomiques et microéconomiques du système de transport, ce papier recherche les conditions à réunir pour que soit atteint, en France, le « facteur 4 ». Si les progrès techniques annoncés par les ingénieurs sont au rendez-vous, nous pouvons atteindre un facteur 2. L'autre moitié du chemin doit donc être réalisée par une modification des comportements des individus et des entreprises. Trois familles de scénarios sont proposées pour en illustrer le contenu de ces évolutions. Elles montrent que les estimations de trafic et d'émissions ne disent pas tout. Pour donner un contenu concret aux scénarios, il est nécessaire de cerner précisément les politiques publiques capables de conduire aux inflexions souhaitées et les changements de comportements qu'elles appellent.
    Keywords: Modélisation, Facteur 4, Gaz à effet de serre, Couplage, Scénarios, Horizon 2050
    Date: 2011–01–11
  15. By: Gaigné, Carl; Riou, Stéphane; Thisse, Jacques-François
    Abstract: There is a large consensus among international institutions and national governments to favor urban-containment policies - the compact city - as a way to improve the ecological performance of the urban system. This approach overlooks a fundamental fact: what matters for the ecological outcome of cities is the mix between the level of population density and the global pattern of activities. As expected, when both the intercity and intraurban distributions of activities are given, a higher population density makes cities more environmentally friendly. However, once we account for the fact that cities may be either monocentric or polycentric as well as for the possible relocation of activities between cities, the relationship between population density and the ecological performance of cities appears to be much more involved. Indeed, because changes in population density affect land rents and wages, firms and workers are incited to relocate, thus leading to new commuting and shipping patterns. We show that policies favoring the decentralization of jobs may be more environmentally desirable.
    Keywords: cities; commuting costs; greenhouse gas; transport costs; urban-containment policy
    JEL: D61 F12 Q54 Q58 R12
    Date: 2011–03
  16. By: Massimiliano Mazzanti; Anna Montini
    Abstract: This paper provides new empirical evidence on regional-national disparities in environmental efficiency, based on analyses of NAMEA data referring to Italy and the Lazio region, where Rome is the main city. Shift-share analyses provide evidence on the drivers of environmental efficiency and on sector specificity. This confirms the usefulness of this method, in order to investigate structural and efficiency factors at the level of within country environmental efficiency performance. Our evidence shows that although the region around Rome has achieved higher environmental performance compared to Italy mainly thank to its being less industry based, some critical points in the energy sector and in some services should be taken into account in shaping the future development of the region. In addition, the use of regional NAMEA for econometric investigations of emission efficiency drivers at national level shows that though north south disparities favour northern and richer regions, in accordance with development oriented dynamics, environmental hot spots driven by specialization and efficiency related issues also appear in some northern industrial regions. Further, the role of public ad private R&D is of main relevance in enhancing emission on economic value ratios.
    Date: 2010–07–01
  17. By: De Fence, Janine; McGregor, P. G. (Peter Gregor); Munday, Max; Swales, J. Kim; Turner, Karen
    Abstract: This paper considers the combined use of regional input-output (IO) and computable general equilibrium (CGE) methods to examine regional pollution problems from different consumption and production orientated perspectives. The first stage of the analysis involves using a regional input-output framework and data derived on direct CO2 (as carbon) generation by industry (and in household final consumption) to examine regional accountability for CO2 generation. In doing we consider an accounting method that permits greater accountability of regional private and public (household and government) final consumption as the main driver of regional carbon generation, while retaining focus on the local production, technology and consumption decisions that fall under the jurisdiction of regional policymakers. However, we go on to argue that a potential issue arising from the increasing focus on consumption-based „carbon footprint‟ type measures is that regional CO2 generation embodied in export production is attributed outside of the region, while regional consumers are likely to benefit from such production. We demonstrate our argument by using a regional CGE model to simulate the impacts of an increase in export demand for regional production on key macroeconomic variables, including GDP, employment and household consumption, as well as on different measures of CO2 attributable to regional consumption. In terms of the latter, we demonstrate how CGE model results may be used to create „post-shock‟ IO accounts to permit the calculation of CO2 generation under the various production and consumption accounting principles considered in the first part of the paper. Our empirical analyses focus on the case example of the Welsh regional economy and an anticipated increase in export demand for the output of one of the biggest polluting sectors, Iron and Steel production.
    Date: 2010–12
  18. By: Vicente Esteve (Universidad de Valencia and Universidad de La Laguna, Spain); Cecilio Tamarit (Universidad de Valencia, Spain)
    Abstract: In this paper we model the long-run relationship between per capita CO2 and per capita income for the Spanish economy over the period 1857-2007. According to the Environmental Kuznets Curve (ECK) the relationship between the two variables has an inverted-U shape. However, previous studies for the Spanish economy only considered the existence of linear relationships. Such an approach may lack flexibility to detect the true shape of the relationship. Our empirical methodology accounts for a possible non-linear relationship through the use of threshold cointegration techniques. Our results confirm the non-linearity of the link between the two above-mentioned variables pointing to the existence of an Environmental Kuznets Curve for the Spanish case.
    Keywords: Environmental Kuznets curve, CO2 emissions, nonlinear relationship, threshold cointegration
    JEL: C2 Q4
    Date: 2011–03
  19. By: Massimiliano Mazzanti; Antonio Musolesi
    Abstract: This paper documents the structural differences between climate change leading `actors' as Northern EU countries, and `lagging actors' - southern EU countries and the `Umbrella group' - with regard to their long run carbon-income relationships. We show that such categorization gives relevant policy and methodological insights. We investigate the issue of cross-country heterogeneity and the heterogeneity biases associated to standard panel data estimates but also disentangle time related and income effects. Parametric and semi parametric panel models allowing for time invariant unobserved heterogeneity robustly show that the groups of countries that were in the `Kyoto arena' less in favour of stringent climate policy, have yet to experience a turning point. Northern EU instead shows bell shapes. The key result is however obtained by estimating a semi-parametric random growth model. Country specific time related factors - that may represent latent innovation and policy features of countries - have been relatively more relevant than income effects in explaining the occurrence of such Kuznets curves. Overall, the countries differ more on their carbon-time relation than on the carbon-income relation which is in almost all cases monotonic positive. Just a few Nordic countries show a bell curve in both income and time related factors.
    Keywords: Carbon Kuznets Curves; heterogeneous panels; semi parametric models; random growth; income effect; time related effect
    JEL: C14 C22 C23 Q53
    Date: 2011–02–02
  20. By: Humberto Rodríguez Murcia, Eduardo Afanador Iriarte, Pedro Guevara, Fabio González Benítez; Ernesto Torres; José Maria Rincón; Edinson Lozano
    Abstract: En este documento se presentan y analizan las experiencias internacionales en políticas para el desarrollo de las FNCE en la Unión Europea y en varios países de la Unión (Alemania, España y Croacia). También se presentan y analizan estas experiencias en varios países de América Latina (Méjico, Perú y Brasil). En el capítulo tercero, se analizan elementos de política en FNCE para Colombia considerando las experiencias internacionales, el análisis de los factores determinantes de política para el caso colombiano a la luz de las experiencias internacionales y del taller realizado conjuntamente entre la UPME y Corpoema, y se establece un principio orientador de la política en FNCE y se dan ideas preliminares de política. Posteriormente, en el capítulo cuarto, se desarrollan las valoraciones básicas de los riesgos ante el cambio climático sobre sistema de generación hidroeléctrico del país. Se analiza en primera instancia el impacto del fenómeno del Niño sobre el régimen de precipitación en el país, especialmente sobre las zonas de embalses, y en segunda instancia el comportamiento del precio de generación en bolsa (en $/kWh) tomando como referencia el último Niño de 2009. Luego, partiendo del escenario construido por los modelos de alta resolución por el IDEAM para el período 2011 – 2040 se hacen los análisis preliminares para valorar los riesgos. En el capítulo quinto se discute la complementariedad entre las FNCE y el SIN, así como entre las FNCE y el suministro de energía en las ZNI. En cuanto a las FNCE y el SIN, se parte del hecho de que tanto la energía solar como la eólica por las características de la disponibilidad del recurso, la potencia generada debe ser inyectada de inmediato a la red. En estas condiciones la pregunta es si estas complementan la generación del sistema hidroeléctrico del país durante la estación de verano (diciembre a abril del año siguiente) y si esta complementariedad se da durante los eventos Niño. La complementariedad de las FNCE de energía en las ZNI requiere un enfoque diferente. Se trata entonces de complementar la generación existente convencional con FNCE o diseñar sistemas con una o varias FNCE. Actualmente existe la posibilidad de integrar en un sistema diferentes fuentes de energía (convencionales y renovables) en un sistema denominado híbrido de tal manera que ellas se complementen entre sí para el suministro de energía a nivel de sistemas individuales o mini-redes. El diseño de estos sistemas requiere de información sobre la disponibilidad de los recursos renovables en el sitio de la implementación poniendo de relieve la importancia de mejorar la calidad de la información sobre FNCE en las regiones comprendidas en las ZNI. En el capítulo sexto se desarrolla los costos indicativos para las diferentes tecnologías de las FNCE. Para ellos se consideran los costos de inversión para las tecnologías seleccionadas y sus capacidades propuestas, los costos de operación y mantenimiento, los costos de ingeniería y montaje, y los costos de imprevistos. De esta manera se tiene la totalidad de los costos de inversión. Los costos de generación se han calculado empleando la metodología de los costos nivelados, con una tasa de descuento de 10% anual y un periodo de evaluación (vida útil del proyecto) variable pero del orden de 20 años para la mayoría de las tecnologías. Se han estimado los costos de referencia para las diferentes tecnologías en diferentes capacidades, tanto para costos de capital, obras civiles, ingeniería, costos fijos y variables de O&M, tanto para 2010 como para 2015 y 2020. Más allá hasta 2030 se estiman iguales a los de 2020. En el caso de aplicaciones térmicas, como calentadores solares se estima el costo de producción de calor en forma de agua caliente. En este capítulo también se consideran los precios de la energía en el mercado actual colombiano y se comparan con los costos de generación estimados. En el capítulo de costos se presenta el análisis de las subastas de energía renovable del Perú y de Brasil para tener una referencia de precios de energía renovable en la región. La del Perú incluyó diferentes tecnologías como la solar fotovoltaica, la eólica, PCHs y biomasa. Se otorgaron 26 proyectos con un poco más d 1800 GWh/año. A partir de un precio base de la energía en bloque de cerca de 48.4 c US$/kWh, los topes estuvieron desde 74 cUS$/kWh para PCHs, hasta 110 cUS$/kWh para la eólica, 120 cUS$/kWh para la biomasa y 269 cUS$/kWh para la solar fotovoltaica. El éxito de esta subasta muestra que esta ha sido una alternativa válida para introducir proyectos de FNCE en el Perú, mecanismo que también fue adoptado en el Brasil para la energía eólica este 2010. Finalmente en el anexo se incluye una breve descripción del concepto de costo nivelado, el diseño de un sistema híbrido diesel-solar en la región del Chocó y la simulación de su desempeño así como los cálculos del costo presente neto de la generación teniendo en cuenta costos de equipos y de servicios de instalación basados en información de proveedores locales. También, partiendo de la simulación del desempeño técnico de un sistema eólico, se presenta de manera abreviada los resultados de los costos de generación del sistema. Como variante a la generación eólica, se adiciona un generador eólico y se dan los resultados de costos de generación. El objetivo es demostrar la posibilidad de diseñar sistemas en donde la generación se dé complementariamente entre diferentes fuentes de energía que es una opción válida para las ZNI.
    Date: 2011–01–30
  21. By: Westner, Günther (E.ON Energy Projects GmbH); Madlener, Reinhard (E.ON Energy Research Center, Institute for Future Energy Consumer Needs and Behavior (FCN), RWTH Aachen University)
    Abstract: The economics of large-scale combined heat and power (CHP) generation for district heating (DH) applications are strongly affected by the costs and allocation mechanism of CO2 emission allowances. In the next period of the European emission trading system (EU ETS), from 2013 onwards, the allocation rules for CHP generation will be modified according to the principles announced in EU Directive 2009/29/EC. By means of a discounted cash-flow model we first show that the implementation of the modified allocation mechanism significantly reduces the expected net present value of large-scale CHP plants for DH. In a next step, by applying a spread-based real options model we analyze the decision-making problem of an investor who intends to invest in CHP generation. Our results provide some evidence that the modified EU ETS principles contribute to reducing the attractiveness of investments in energy-efficient large-scale CHP plants that feed into DH networks. In contrast, decentralized small-scale CHP, which is not subject to the EU ETS, may benefit from this development and could, therefore increasingly replace large-scale CHP assets. In other words, European legislation is indirectly promoting the further diffusion of decentralized CHP generation units.
    Keywords: Combined heat & power; Emission trading system; Investment under uncertainty; Spread; Real options
    JEL: C61 D81 Q41 Q43
    Date: 2011–02
  22. By: Patrick Himmes; Christoph Weber (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen)
    Abstract: The stylized model presented in this paper extends the approach developed by Fischer and Newell (2008) by analysing the optimal policy design in a context with more than one externality while taking explicitly into account uncertainty surrounding future emission damage costs. In the presence of massive uncertainties and technology spillovers, well-designed sup-port mechanisms for renewables are found to play a major role, notably as a means for compensating for technology spillovers, yet also for reducing the investors’ risks. How-ever, the design of these support mechanisms needs to be target-aimed and well-focused. Besides uncertainty on the state of the world concerning actual marginal emission damage, we consider the technological progress through R&D as well as learning-by-doing. A portfolio of three policy instruments is then needed to cope with the existing externalities and optimal instrument choice is shown to be dependent on risk aversion of society as a whole as well as of entrepreneurs. To illustrate the role of uncertainty for the practical choice of policy instruments, an em-pirical application is considered. The application is calibrated to recent global data from IEA and thus allows identifying the main drivers for the optimal policy mix. In addition to assumptions on technology costs and uncertainty of emission damage cost, the impor-tance of technology spillover clearly plays a key role. Yet under some plausible parame-ter settings, direct subsidies to production are found to be of lower importance than very substantial R&D supports.
    Keywords: Externality, technology, learning, uncertainty, climate change, spillover, renewable energy, policy
    JEL: O38 Q21 Q28 Q48
    Date: 2011–03
  23. By: Heutel, Garth (University of North Carolina at Greensboro, Department of Economics)
    Abstract: How should environmental policy respond to economic fluctuations caused by persistent productivity shocks? This paper answers that question using a dynamic stochastic general equilibrium real business cycle model that includes a pollution externality. I first estimate the relationship between the cyclical components of carbon dioxide emissions and US GDP and find it to be inelastic. Using this result to calibrate the model, I find that optimal policy allows carbon emissions to be procyclical: increasing during expansions and decreasing during recessions. However, optimal policy dampens the procyclicality of emissions compared to the unregulated case. A price effect from costlier abatement during booms outweighs an income effect of greater demand for clean air. I also model a decentralized economy, where government chooses an emissions tax or quantity restriction and firms and consumers respond. The optimal emissions tax rate and the optimal emissions quota are both procyclical: during recessions, the tax rate and the emissions quota both decrease.
    Keywords: Climate change; Environmental policy
    JEL: E32 Q54 Q58
    Date: 2011–03–08

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