|
on Energy Economics |
|
Issue of 2011‒04‒30
nineteen papers chosen by Roger Fouquet Basque Climate Change Centre, Bilbao, Spain |
| By: | Talat S. Genc (Department of Economics,University of Guelph); Henry Thille (Department of Economics, University of Guelph) |
| Abstract: | We study competition between hydro and thermal electricity generators that face uncertainty over demand and water flows where the hydro generator is constrained by water flows and the thermal generator by capacity. We compute the Feedback equilibrium for the in?nite horizon game and show that there can be strategic withholding of water by the hydro generator. When water inflow is relatively low, however, the hydro generator may use more water than efficient as it faces an inefficiently low shadow price of water in this case. The inefficiency of the market outcome is tempered by the capacity constraints: for a large range of possible thermal production capacities and water flow levels, welfare loss under the duopoly market structure is much less than would occur in the absence of water and capacity constraints. |
| Keywords: | Electricity markets; Electricity markets; Hydroelectricity; Imperfect Competition |
| JEL: | L13 L94 C63 C73 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:gue:guelph:2011-04.&r=ene |
| By: | Talat S. Genc (Department of Economics,University of Guelph); Pierre-Olivier Pineau (Management Sciences, HEC-Montreal); Ege Yazgan (Department of Economics, Istanbul Bilgi University) |
| Abstract: | We investigate whether trade has any effect on the price formation process in a specific electricity market, and identify interconnected markets that have higher impacts on prices in that market. In particular, we study Ontario wholesale electricity market and its trade with 12 interconnected markets including New York, Michigan, and Minnesota markets. We find that imports are unambiguously related to prices, while exports are not. Furthermore, imports have a positive and significant relationship with prices. We argue that the results are associated with auction design, production constraints, and technological differences. Out of the 12 studied interties, only three have a significant impact on price, two of which are the largest ones. |
| Keywords: | electricity trade; simultaneous trade; transmission network; electricity prices; nonlinear Granger causality; Ontario, New York, Michigan, Manitoba, Quebec wholesale electricity markets. |
| JEL: | C5 F14 L94 Q4 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:gue:guelph:2011-02.&r=ene |
| By: | Caragea, Nicoleta; Alexandru, Ciprian Antoniade |
| Abstract: | Biodiversity is in decline globally and major ecosystems are placed under increasing pressure. Global poverty persists; the Millennium Development Goals would need major efforts to be achieved. This paper will explore the perspective for a new energy sector economy in relation to climate change and the sustainable development objectives. All renewable energy technologies are not appropriate to all applications or locations, however. This paper identifies some of the key environmental and economic benefits associated with renewable technologies. It is also analyzed in a comparative manner the current situation of energy from renewable sources in Romania and the EU Member States. |
| Keywords: | renewable energy; global warming; hydrogen economy; energy production |
| JEL: | C10 Q01 Q20 |
| Date: | 2010–09–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30306&r=ene |
| By: | Halkos, George; Tzeremes, Nickolaos |
| Abstract: | This paper applies a bootstrapped Data Envelopment Analysis (DEA) formulation aiming to evaluate the financial performance of the firms operating in the Greek renewable energy sector. With the use of financial ratios in a DEA setting, efficiency ratios are constructed in order to analyse firms’ financial performance. The results reveal that firms’ performances are positively influenced by the high levels of return on assets and equity and by lower levels of debt to equity. In addition it appears that there are not significant differences of firms’ efficiency levels indicating high competitiveness between firms. Finally, firms producing wind energy appear to perform better than firms producing hydropower energy. It emerges that the majority of firms are operating in the wind and hydropower energy production making the Greek market of solar energy production being an emerging segment of the Greek renewable energy sector. |
| Keywords: | Renewable energy market; Data Envelopment Analysis; Financial ratios; Greece |
| JEL: | L25 C14 C02 Q20 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30467&r=ene |
| By: | Haucap, Justus; Coenen, Michael |
| Abstract: | The Europeanization of energy policies is desirable because the three main objectives of energy policy (climate protection, security of supply and competitiveness) have cross-border impacts. Hence, it is good that the European Union has been granted a competence for energy policy in the article 194 of the Lisbon treaty. In addition, it is good that the European Commission has published its long-term strategy to stabilize expectations which is important for infrastructure investment. It is regrettable though that price signals, competition and market principles only play a minor role for the Commission while rather doubtful objectives such as fostering energy efficiency and promoting renewable dominate the agenda. The Commission's strategy is mainly characterized by bureaucratic dirigisme, intense regulation, state planning and public subsidies. The road to a centrally planned energy industry is being walked down fast. -- |
| JEL: | L94 Q48 Q58 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:diceop:11&r=ene |
| By: | Soren T. Anderson; Ryan Kellogg; James M. Sallee |
| Abstract: | Researchers estimating the demand for energy-using durable goods must specify consumers' beliefs about future energy prices. Policy-relevant inference hinges on this specification, yet there is little direct evidence on the nature of consumer beliefs. We provide such evidence by analyzing two decades of data on gasoline price expectations from the Michigan Survey of Consumers. We find that average consumer beliefs are indistinguishable from a no-change forecast. This finding has important implications for the literature on consumer valuation of energy efficiency, and it implies that researchers are likely justified in assuming a no-change forecast, as is common practice. |
| JEL: | D84 L62 Q40 Q41 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16974&r=ene |
| By: | Basher, Syed Abul; Haug, Alfred A.; Sadorsky, Perry |
| Abstract: | While two different streams of literature exist investigating 1) the relationship between oil prices and emerging market stock prices and 2) the relationship between oil prices and exchange rates, relatively little is known about the dynamic relationship between oil prices, exchange rates and emerging market stock prices. This paper proposes and estimates a structural vector autoregression model to investigate the dynamic relationship between these variables. Impulse responses are calculated in two ways (standard and projection based methods). The model supports stylized facts. In particular, positive shocks to oil prices tend to depress emerging market stock prices and US dollar exchange rates in the short run. The model also captures stylized facts regarding movements in oil prices. A positive oil production shock lowers oil prices while a positive shock to real economic activity increases oil prices. There is also evidence that increases in emerging market stock prices increases oil prices. |
| Keywords: | Emerging market stock prices; oil prices; exchange rates |
| JEL: | G15 Q43 |
| Date: | 2011–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30140&r=ene |
| By: | Breisinger, Clemens; Engelke, Wilfried; Ecker, Olivier |
| Abstract: | Petroleum subsidy reform is increasingly seen as an opportunity for consolidating public finances and fostering sustainable economic development. Yemen, as the country with the lowest per capita income in the group of countries with a high level of energy subsidies, started to reduce subsidies in 2010 and is discussing further options for reform. The results of this paper support a comprehensive petroleum subsidy reform in Yemen. Economic growth is projected to accelerate between 0.1 and 0.8 percentage points annually as a result of reform. Yet, the design of the reform is critically important, especially for the poor. Outcomes of alternative reform scenarios range from an increase in poverty of 2 to 6 percentage points. A promising strategy combines subsidy reduction with direct transfers of 13,800 to 19,700 Yemeni rials annually to the poorest 30 percent of households and enhanced public investments. Investments should focus on the utilities, transport, trade, and construction sectors to integrate economic spaces and create the platform for a restructuring of agricultural, industrial, and service value chains, which should encourage private sector led and job creating growth in the medium term. |
| Keywords: | Development strategies, Growth, petroleum subsidy, Poverty, Reform, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1071&r=ene |
| By: | Zenthöfer, A.F. (Tilburg University, Center for Economic Research) |
| Abstract: | This paper compares Mauritius and Trinidad and Tobago which have a very similar climate, history, institutional framework, ethnic composition, size, etc., but are different in the natural resources they possess. Trinidad and Tobago has achieved a higher per capita GDP based on its petrodollars, but Mauritius has achieved a more robust and stable growth path and a diversified economy based on an export-oriented economic strategy. Trinidad and Tobago is highly dependent on the world market prices for oil and gas and engages in a smaller variety of economic activities, giving it a worse perspective for its future economic development. It appears that this curse is mainly working through Dutch disease effects. |
| Keywords: | Resource Curse;Dutch Disease;Natural Experiment;Mauritius;Trinidad and Tobago. |
| JEL: | N56 N57 Q32 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2011028&r=ene |
| By: | Ramazan Sari (Department of Business Administration, Middle East Technical University); Shawkat Hammoudeh (Lebow College of Business, Drexel University); Chia-Lin Chang (Department of Applied Economics, National Chung Hsing University); Michael McAleer (Erasmus University Rotterdam, Tinbergen Institute, The Netherlands, and Institute of Economic Research, Kyoto University) |
| Abstract: | This paper examines the roles of futures prices of crude oil, gasoline, ethanol, corn, soybeans and sugar in the energy-grain nexus. It also investigates the own- and cross-market impacts for lagged grain trading volume and open interest in the energy and grain markets. According to the results, the conventional view, for which the impacts are from oil to gasoline to ethanol to grains in the energy-grain nexus, does not hold well in the long run because the oil price is influenced by gasoline, soybeans and oil. Moreover, gasoline is preceded by only the oil price and ethanol is not foreshadowed by any of the prices. However, in the short run, two-way feedback in both directions exists in all markets. The grain trading volume effect across oil and gasoline is more pronounced in the short run than the long run, satisfying both the overconfidence/disposition and new information hypotheses across markets. The results for the ethanol open interest shows that money flows out of this market in both the short and long run, but no results suggest across market inflows or outflows to the other grain markets. |
| Keywords: | Causality, market liquidity, depth, energy, grains. |
| JEL: | Q11 Q18 Q42 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:kyo:wpaper:769&r=ene |
| By: | Chuku, Agbai |
| Abstract: | This study utilizes standard- and nested-EKC models to investigate the income-environment relation for Nigeria, between 1960 and 2008. The results from the standard-EKC model provides weak evidence of an inverted-U shaped relationship with turning point (T.P) around $280.84, while the nested model presents strong evidence of an N-shaped relationship between income and emissions in Nigeria, with a T.P around $237.23. Tests for structural breaks caused by the 1973 oil price shocks and 1986 Structural Adjustment are not rejected, implying that these factors have not significantly affected the income-environment relationship in Nigeria. Further, results from the rolling interdecadal analysis shows that the observed relationship is stable and insensitive to the sample interval chosen. Overall, our findings imply that economic development is compatible with environmental improvements in Nigeria. However, tighter and concentrated environmental policy regimes will be required to ensure that the relationship is maintained around the first two-strands of the N-shape |
| Keywords: | Environmental Kuznets curve; development; CO2 emissions; nested-EKC model; Nigeria |
| JEL: | O20 Q01 |
| Date: | 2011–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30195&r=ene |
| By: | Asici, Ahmet Atıl |
| Abstract: | This paper aims to explore the relationship between the economic growth and the pressure on nature from the environmental sustainability perspective. We measure pressure on nature as the sum of energy, mineral, net forest depletions and carbon dioxide damage, all measured in US dollars. The data is taken from the Adjusted Net Savings data of World Bank. Our panel consists of 213 countries and spans the period between 1970 and 2008. To investigate the causal effect of economic growth on nature we employ two strategies; fixed-effects and fixed-effects instrumental-variables (IV) regressions. Cross-country analysis reveals that there is a positive relationship between income and pressure on nature. However, the relationship is not linear across countries; the effect is much stronger in middle-income countries than in low and high-income countries. Our results are robust to the inclusion of various covariates and moreover they do not support the Environmental Kuznets Curve hypothesis which foresees a reduction in environmental degradation once a certain level of development is reached. |
| Keywords: | Adjusted Net Saving; Genuine Saving; Sustainability; Panel data |
| JEL: | Q32 Q56 Q01 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:30238&r=ene |
| By: | Horbach, Jens; Rammer, Christian; Rennings, Klaus |
| Abstract: | Empirical analyses of the determinants of environmental innovations were rarely able to distinguish between different areas of environmental impacts. The paper tries to close this gap by employing a new and unique dataset based on the German Community Innovation Survey conducted in 2009. The main purpose of the paper is to test whether different types of eco-innovations (according to their environmental impacts) are driven by different factors. Besides a complex set of different supply, firm specific and demand factors, the literature on the determinants of environmental innovations accentuates the important role of regulation, cost savings and customer benefits. We find that current and expected government regulation is particularly important for pushing firms to reduce air (e.g. CO₂, SO₂ or NOₓ) as well as water or noise emissions, avoid hazardous substances and increase recyclability of products. Cost savings are an important motivation for reducing energy and material use, pointing to the role of energy and raw materials prices as well as taxation as drivers for eco-innovation. Customer requirements are another important source for eco-innovations, particularly with regard to products with improved environmental performance and process innovations that increase material efficiency, reduce energy consumption and waste and the use of dangerous substances. Firms confirm a high importance of expected future regulations for all environmental product innovations. -- |
| Keywords: | Environmental Innovation,Environmental Impacts,Discrete Choice Models,Regulation,Cost Savings,Demand Pull,Environmental Policy |
| JEL: | Q55 O33 O38 C25 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:11027&r=ene |
| By: | Julien Chevallier (EconomiX - CNRS : UMR7166 - Université de Paris X - Nanterre) |
| Abstract: | Since the creation of the European Union Emissions Trading Scheme (EU ETS) in 2005, a burgeoning academic literature has emerged to identify the factors that shape the price of carbon, where one European Union Allowance is equal to one ton of CO2-equivalent emitted in the atmosphere. Thus, there is a need for an updated and thorough literature review on the state-ofthe-art on topic that this paper aims to fulfill. Namely, we consider the main econometric studies that have been recently published in the academic literature, which feature the influence of the following determinants to explain the variation of the price of carbon: institutional decisions; energy prices and weather events; macroeconomic and financial market shocks. The paper concludes with some directions for future research in this area. |
| Keywords: | Carbon Price; Banking Borrowing; Energy Prices; Macroeconomy; Financial Markets; Econometrics |
| Date: | 2011–04–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-00586513&r=ene |
| By: | Alfredo Marvão Pereira (Department of Economics, The College of William and Mary); Rui M. Pereira (Department of Economics, University of the Algarve) |
| Abstract: | This paper explores the capacity for environmental reform to reduce CO2 emissions, stimulate economic performance, and promote fiscal sustainability. Simulation results suggest that reforms based on CO2 taxation stimulate GDP when tax revenues are used to promote private or public investment and employment when used to finance reductions in personal income taxation or firms' social security contributions. More generally, reforms allow for reductions in the costs of climate policy, a weaker realization of the second dividend. In addition, several reforms lead to reductions in public debt, the realization of a third dividend. When political constraints on reducing public spending are considered, however, this third dividend only materializes when revenues finance public investment or reductions in the firms' social security contributions. Overall, our results suggest that low growth and high public debt need not be regarded as hindrances for environmental fiscal reform but can actually be seen as catalysts. |
| Keywords: | Carbon Tax, Environmental Fiscal Reform, Economic Growth, Budgetary Consolidation,Dynamic General Equilibrium, Endogenous Growth |
| JEL: | D58 H54 H63 Q48 Q54 |
| Date: | 2011–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:cwm:wpaper:114&r=ene |
| By: | Rogge, Karoline S.; Schleich, Joachim; Haussmann, Philipp; Roser, Annette; Reitze, Felix |
| Abstract: | Based on a research framework which combines environmental economics and innovation studies, we explore the relevance of the regulatory framework for innovation activities in the German paper industry, with a focus on climate poli-cies. Innovation activities considered include research and development, adop-tion and organizational change. Empirically, we mainly rely on the survey data of paper producers and technology providers. Findings suggest that innovation activities are mainly governed by market factors and (as yet) are hardly affected by the European Emission Trading System and other climate policies. Also, the impact of these policies on innovation activities is lower for technology providers than for paper producers. However, the majority of companies expect the ef-fects of the regulatory climate policy framework on innovation to increase by 2020. -- |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s12011&r=ene |
| By: | Charles Mason; Andrew Plantinga |
| Abstract: | Governments contracting with private agents for the provision of an impure public good must contend with agents who would potentially supply the good absent any payments. This additionality problem is centrally important to the use of carbon offsets to mitigate climate change. We analyze optimal contracts for forest carbon, an important offset category. A novel national-scale simulation of the contracts is conducted that uses econometric results derived from micro data. For a 50 million acre increase in forest area, annual government expenditures with optimal contracts are found to be about $4 billion lower compared to costs with a uniform subsidy. |
| JEL: | D8 L15 Q2 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:16963&r=ene |
| By: | David Maddison; Katrin Rehdanz; Daiju Narita |
| Abstract: | According to household production function theory households combine marketed goods and nonmarket environmental goods to produce service flows of direct value to the household. This readily explains why, as an input to household production activities, households might have preferences over the climate. Using techniques more frequently employed to account for differences in the demographic composition of households we use household production function theory to estimate climate equivalence scales using household expenditure data drawn from 51 Japanese cities over the period 2000-2009. Our results indicate that warmer temperatures result in a small but statistically highly significant reduction in the cost of living. Combining these estimates with climate change scenarios associated with the IPCC A2, A1B, and B1 emissions scenarios other things being equal points to a slight reduction in Japanese households’ cost of living |
| Keywords: | Consumer Demand; Household Production Function; Climate; Japan |
| JEL: | D12 D13 Q51 Q54 |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1693&r=ene |
| By: | FURUSAWA Taiji; KONISHI Hideo |
| Abstract: | We study international free-riding-proof coalitions to solve trans-boundary environmental problems such as global warming. We show that the free-riding problem is rather serious so that a free-riding-proof coalition can consist of only a small number of countries. In the optimal coalitional structure, therefore, the world would be divided into many small groups. For each group, if countries are symmetric, their individual incentives to join a group are identical across the two regimes of environmental coalitions: the non-transferable utility (NTU) regime and transferable utility (TU) regime. If member countries are asymmetric, however, groups are more stable under the TU regime than under the NTU regime since the former regime enables the member countries to pool their incentives. International cooperation (within each group) on carbon taxes is shown to be equivalent to the NTU regime, while emission permit trading is shown to be equivalent to the TU regime. Therefore, the emission permit trading system can be considered to be superior in the world of asymmetric countries. |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:11043&r=ene |