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on Energy Economics |
| By: | Lecca, Patrizio; Swales, J. Kim; Turner, Karen |
| Abstract: | This paper examines the impact of imposing different separability assumptions in the specifications of the standard hierarchical KLEM production function in a computable general equilibrium (CGE) model. The appropriate means of introducing energy to sectoral production functions in CGE models has been a source of debate for a number of years. However, while modellers often subject their model results to sensitivy analysis with respect to the values associated with elasticities of substitution between inputs, it is rarely the case that the structure of the production function is subjected to testing. However, the chosen structure reflects the modeller's view about elasticity between different inputs and will have implications for model results wherever there are changes in relative prices. We illustrate our argument by introducing a simple demand shock to a CGE model of the Scottish economy (targetted at the energy supply sector) under different assumptions regarding the structure of the KLEM production function and separability assumptions therein. Specifically, we conduct both systematic and random parameter variation within alternative KLEM production structures, examining the impacts on a number of model outputs, though with primary focus on energy use in production. We find that if energy is introduced to the value-added rather than intermediates nest there is greater variation in energy use in production in response to the demand disturbance. |
| Keywords: | separability assumptions; KLEM production function; general equilibriu m |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2010-18&r=ene |
| By: | Holland, Stephen (University of North Carolina at Greensboro, Department of Economics) |
| Abstract: | “Peak oil” refers to the future decline in world production of crude oil and to the accompanying potentially calamitous effects. The peak oil literature typically rejects economic analysis. This chapter, following Holland (2008), argues that economic analysis is indeed appropriate for analyzing oil scarcity since standard economic models can replicate the observed peaks in oil production. Moreover, the emphasis on peak oil is misplaced since peaking is not a good indicator of scarcity, peak oil techniques are overly simplistic, the catastrophes predicted by the peak oil literature are unlikely, and the literature does not contribute to correcting identified market failures. Efficiency of oil markets could be improved by instead focusing on remedying market failures such as excessive private discount rates, environmental externalities, market power, insufficient innovation incentives, incomplete futures markets, and insecure property rights. |
| Keywords: | Depletable resources; Hotelling; peak oil |
| JEL: | Q30 Q40 |
| Date: | 2011–08–02 |
| URL: | http://d.repec.org/n?u=RePEc:ris:uncgec:2011_013&r=ene |
| By: | Leahy, Eimear; Devitt, Conor; Lyons, Seán; Tol, Richard S. J. |
| Abstract: | This paper investigates the economic implications of disruptions of one to ninety days to the supply of natural gas in Ireland. We assess the impact of a hypothetical gas supply disruption in both winter and summer in 2008 (with observed market characteristics) and in 2020 (with projected market characteristics). The cost of a natural gas outage includes the cost of natural gas being unavailable for heating and other purposes in the industrial and commercial sectors, lost consumer surplus in the residential sector, the cost of lost electricity in all sectors and lost VAT on the sale of gas and electricity. Ireland produces much of its electricity from natural gas and the loss of this electricity accounts for the majority of the cost of a natural gas outage. Losing gas-fired electricity would cost 0.1 to 1.0 billion euro per day, depending on the time of week, the time of year, and rationing of electricity. Industry should be rationed before households to minimize economic losses, but current emergency protocols favour industry. If gas-fired electricity is unavailable for three months, the economic loss could be up to 80 billion euro, about half of Gross Domestic Product. Losing gas for heating too would add up to approximately 8 billion euro in economic losses. We also discuss some options to increase Ireland's security of supply, and find that the cost is a small fraction of the avoided maximum damage. |
| Keywords: | Security of supply/natural gas,value of lost load,Ireland |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp397&r=ene |
| By: | Ferrara, Andreas; Lange, Ian |
| Abstract: | In the last decade, voluntary environmental programs have increased considerably in scope. A novel use of these programs is to di¤use new technology in industry as means to improving their environmental outcomes. This paper tests whether the US Environmental Protection Agency s Combined Heat-and-Power Partnership has encouraged the installation of CHP applications since its start in 2001. Two hypotheses are tested here, whether (i) the Partnership has encouraged the installation of CHP applications and (ii) if the partnership has encouraged utilization of CHP once installed. Using nearest neighbor matching on data for electricity plants in the US, results nd weak evidence that the program has helped CHP system spread, controlling for the selection of rms into the partnership. |
| Keywords: | Fossil Fuels; Combined Heat and Power; Voluntary Environmental Measure s |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2011-16&r=ene |
| By: | Michelsen, Carl Christian (E.ON Energy Research Center, Institute for Future Energy Consumer Needs and Behavior (FCN), RWTH Aachen University); Madlener, Reinhard (E.ON Energy Research Center, Institute for Future Energy Consumer Needs and Behavior (FCN), RWTH Aachen University) |
| Abstract: | Space heating accounts for a large fraction of the primary energy consumption and CO2 emissions of residential buildings. Besides targeting the insulation standard, residential heating systems (RHS) based on renewable energy sources offer the potential to reduce energy demand for space heating. Therefore, understanding the determinants of the homeowners’ adoption decisions in favor of RHS becomes increasingly important. In this paper, we analyze the influence of preferences about RHS-specific attributes on the adoption decision. Moreover, we control for the influence of socio-demographic, home and spatial characteristics. For this purpose, we specify the discrete appliance choice as a multinomial logit model. We apply the model to representative survey data for Germany. Our findings show that there are different drivers for the adoption of RHS in newly built and existing 1- and 2-family homes, and that the importance of key drivers also differs across groups of homeowners and RHS, respectively. First, we find that adopters of a gas- and oil-fired condensing boiler with solar thermal support have a strong preference for energy savings, while adopters of a heat pump or wood pellet-fired boiler prefer being more independent from fossil fuels. Second, we find preferences about RHS-specific attributes to be highly relevant for owners of newly built homes, while evidence for an influence of the control variables is scarce. Third, we find that socio-demographic, home and spatial characteristics have a higher and more differentiated impact in the case of existing homes. These variables predetermine the decision context and leave less leeway for the influence of preferences when replacing a RHS in an existing home. |
| Keywords: | Technology adoption; Consumer behavior; residential heating systems; space heating; discrete choice |
| JEL: | D12 O33 Q41 R22 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2011_009&r=ene |
| By: | Muhammad, Shahbaz; Tiwari, Aviral; Muhammad, Nasir |
| Abstract: | This paper explores the effects of financial development, economic growth, coal consumption and trade openness on environmental performance using annual data over the period of 1965-2008 for South African economy. ARDL bounds testing approach to cointegration has used to test the long run relationship among the variables while short run dynamics have been investigated by applying error correction method (ECM). Unit root problem is checked through Saikkonen and Lutkepohl [1] structural break unit root test. Our findings confirmed long run relationship among the variables. Results showed that a rise in economic growth increases energy emissions while financial development lowers it. Coal consumption has significant contribution to deteriorate environment significantly. Trade openness improves environmental quality by lowering the growth of energy pollutants. EKC is also existed. |
| Keywords: | Coal Consumption; Economic Growth; Environment |
| JEL: | F18 P28 |
| Date: | 2011–08–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:32723&r=ene |
| By: | Janczura, Joanna; Weron, Rafal |
| Abstract: | In this paper we propose a new goodness-of-fit testing scheme for the marginal distribution of regime-switching models. We consider models with an observable (like threshold autoregressions), as well as, a latent state process (like Markov regime-switching). The test is based on the Kolmogorov-Smirnov supremum-distance statistic and the concept of the weighted empirical distribution function. The motivation for this research comes from a recent stream of literature in energy economics concerning electricity spot price models. While the existence of distinct regimes in such data is generally unquestionable (due to the supply stack structure), the actual goodness-of-fit of the models requires statistical validation. We illustrate the proposed scheme by testing whether a commonly used Markov regime-switching model fits deseasonalized electricity prices from the NEPOOL (U.S.) day-ahead market. |
| Keywords: | Regime-switching; marginal distribution; goodness-of-fit; weighted empirical distribution function; Kolmogorov-Smirnov test |
| JEL: | C52 C12 Q40 |
| Date: | 2011–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:32532&r=ene |
| By: | Nabil I. Al-Najjar; Luciano De Castro |
| Abstract: | A preference is invariant with respect to a transformation tau if its ranking of acts is unaffected by a reshuffling of the states under tau. We show that any invariant preference must be parametric: there is a unique sufficient set of parameters such that the preference ranks acts according to their expected utility given the parameters. This property holds for all non-trivial preferences, provided only that they are reflexive, transitive, monotone, continuous and mixture linear. |
| Date: | 2010–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:nwu:cmsems:1529&r=ene |
| By: | Andrew D. Krueger (University of Delaware); George R. Parsons (Department of Economics, University of Delaware); Jeremy Firestone (University of Delaware) |
| Abstract: | Several offshore wind power projects are under consideration in the United States. A concern with any wind power project is the visual disamenity it may create. Using a stated preference choice model, we estimated the external costs to residents of the State of Delaware for offshore wind turbines located at different distances from the coast. The annual costs to inland residents was $19, $9, $1, and $0 (2006$) for turbines located at 1, 3.6, 6, and 9 miles offshore. The cost to residents living on the ocean was $80, $69, $35, and $27 for the same increments. |
| Keywords: | Windfarms, View Disamenity, Valuation |
| JEL: | Q51 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dlw:wpaper:11-04.&r=ene |
| By: | Michael K. Hidrue (Department of Agricultural Economics, Mississippi State University); George R. Parsons (Department of Economics, University of Delaware); Willett Kempton (Department of Electrical and Computer Engineering, University of Delaware); Meryl Gardner (Department of Business Administration, University of Delaware) |
| Abstract: | This article presents a stated preference study of electric vehicle choice using data from a national survey. We used a choice experiment wherein 3029 respondents were asked to choose between their preferred gasoline vehicle and two electric versions of that preferred vehicle. We estimated a latent class random utility model and used the results to estimate the willingness to pay for five electric vehicle attributes: driving range, charging time, fuel cost saving, pollution reduction, and performance. Driving range, fuel cost savings, and charging time led in importance to respondents. Individuals were willing to pay (wtp) from $35 to $75 for a mile of added driving range, with incremental wtp per mile decreasing at higher distances. They were willing to pay from $425 to $3250 per hour reduction in charging time (for a 50 mile charge). Respondents capitalized about 5 years of fuel saving into the purchase price of an electric vehicle. We simulated our model over a range of electric vehicle configurations and found that people with the highest values for electric vehicles were willing to pay a premium above their wtp for a gasoline vehicle that ranged from $6000 to $16,000 for electric vehicles with the most desirable attributes. At the same time, our results suggest that battery cost must drop significantly before electric vehicles will find a mass market without subsidy. |
| Keywords: | Electric Vehicles, Stated Preference, Discrete Choice |
| JEL: | Q42 Q51 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:dlw:wpaper:11-02.&r=ene |
| By: | Mogaka, Violet Moraa; Iiyama, Miyuki; Mbatia, O.L.E; Jonathan, Nzuma |
| Abstract: | This paper evaluates the potential of Jatropha curcas Linnaeus (Jatropha) as an alternative source of energy for rural households. The plant is said to have potential to diversify rural incomes, reclaim unproductive lands, reduce importation of fossil fuels, and consequently accumulation of green house gases in the atmosphere. A cost benefit analysis was employed to evaluate the feasibility of producing Jatropha as a biodiesel feedstock in relation to other crops in Kwale district. An IRR of 11 percent, BCR of 0.62 and a NPV of (28267.56) showed that production of Jatropha is not feasible at the moment. However we conclude that the plant has a potential to achieve its intended purpose if there is coordination in research and development along the Jatropha value chain and if technical and financial support is accorded to actors at the production level of the chain. |
| Keywords: | Crop Production/Industries, |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaae10:97056&r=ene |
| By: | Beyene, Abebe Damte |
| Abstract: | Replaced with revised version of paper 12/14/10. |
| Keywords: | property rights, institutions, fuel wood, rural, Ethiopia., Resource /Energy Economics and Policy, |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaae10:96171&r=ene |
| By: | Butler, Allan; Hobbs, Phil; Winter, Michael |
| Abstract: | Expanding Anaerobic Digestion (AD) in the UK will not only depend upon finding appropriate economic structures to support onâfarm developments but also an appreciation of environmental issues such as less Greenhouse Gas (GHG) emissions; reduced use of artificial fertilisers; and better management of farm wastes. At the core of this paper is the Anaerobic Digestion Analytical Model (ADAM) that examines the economic and environmental impacts of integrating AD into UK farming systems. However, the average dairy farm in the UK is not of sufficient size to enable profitable biogas production. Indeed, farm size, as represented by FBS/FAS data used in ADAM, needs to be scaled by three to four times for a biogas enterprise to breakâeven. To boost profitability, some farms may use additional energy (food and non food) crops as well as other high energy sources such as biodiesel residues etc. In some circumstances, possibilities may exist for neighbouring farmers to coâoperate and manage a biogas installation that processes manures and energy crops to increase the scale of an onâfarm plant. Despite issues of scale however, onâfarm AD plants do have the capacity to (i) reduce Carbon Dioxide equivalent (CO2e) emissions that a dairy farm produces; and (ii) the byâproduct of digestate provides farms with greater nutrient availability for crops. |
| Keywords: | Anaerobic digestion, biogas, dairy farming, carbon dioxide, nutrients, digestate, Environmental Economics and Policy, Farm Management, |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc11:108937&r=ene |
| By: | Sparks, G.D.; Ortmann, Gerald F.; Lagrange, L. |
| Abstract: | Global biofuel production has risen substantially in recent years, driven primarily by government support for biofuel industries. The stated motivations for these initiatives are numerous and have varied over time. Soybeans are the only field crop produced in sufficient quantities in KwaZulu-Natal (KZN) that the South African (SA) industrial biofuel strategy identifies as a potential biodiesel feedstock. Preliminary results from a mixed integer linear programming model support the notion of Funke et al. (2009), who contend that the incentives and commitments outlined by the industrial biofuel strategy are inadequate to both establish and sustain a domestic biodiesel industry. |
| Keywords: | Industrial biofuels strategy, soybeans, biodiesel, KwaZulu-Natal, mixed integer linear programming, Crop Production/Industries, Resource /Energy Economics and Policy, |
| Date: | 2010–09 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaae10:95980&r=ene |
| By: | Fewell, Jason E.; Bergtold, Jason; Williams, Jeffery |
| Abstract: | Farmersâ Willingness to Grow Switchgrass as a Cellulosic Bioenergy Crop: A Stated Choice Approach Agricultureâs role as a source of feedstocks in a potential lignocellulosic-based biofuel industry is a critical economic issue. Several studies have assessed the technical feasibility of producing bioenergy crops on agricultural lands. However, few of these studies have assessed farmersâ willingness to produce or supply bioenergy crops or crop residues. Biomass markets for bioenergy crops do not exist, and developing these markets may take several years. Therefore, an important, yet unaddressed question is under what contractual or pricing arrangements farmers will grow biomass for bioenergy in these nascent markets. The purpose of this paper is to examine farmersâ willingness to produce switchgrass under alternative contractual, pricing, and harvesting arrangements. Contracts are likely to be the preferred method to bring together producers and processors of biomass for bioenergy. Contract design may vary across farmers and crop type, and may include attributes specific to annual crops, contract length, quantity or acreage requirements, quality specifications, payment dates, and other important features. A stated choice survey was administered in three, six-county areas of Kansas by Kansas State University and the USDA, National Agricultural Statistics Service from November 2010 to January 2011 to assess farmersâ willingness to produce cellulosic biomass under different contractual arrangements. This paper focuses on the switchgrass stated choice experiment from the survey. The stated choice experiment asked farmers to rank their preferred contractual arrangement from two contract options and one âdo not adoptâ option. Contractual attributes included percentage net returns above the next best alternative (e.g. CRP or hay production), contract length, a custom harvest option, insurance availability, and a seed-cost share option. Respondents then ranked their preferred contract option. The survey also collected data on farm characteristics, bioenergy crop preferences, socio-economic demographics, risk preferences, and marketing behavior. The survey used a stratified sample of farmers who farm more than 260 acres and grow corn. A total of 460 surveys were administered with a 65 percent completion rate. The underlying theoretical model uses the random utility model (RUM) approach to assess farmersâ willingness to grow switchgrass for bioenergy and determine the contractual attributes most likely to increase the likelihood of adoption. This framework allows us to define the âprice,â or farmersâ mean willingness to accept, for harvested biomass sold to an intermediate processor. The estimated choice models follow the approach of Boxall and Adamowicz (2002) to capture heterogeneity across farmers and geographic regions due to management differences, conservation practices, and risk preferences. Using the percentage net return above CRP or hay production allows prices to float to levels that will entice farmers to adopt switchgrass. This will help determine a market price for bioenergy crops based on current market and production conditions without specifying an exact monetary value for the biomass. In addition, the survey results will facilitate contract designs between biorefineries and farmers while informing policymakers and the biofuel industry about farmersâ willingness to supply biomass for bioenergy production. Reference: Boxall, P.C. and W.L. Adamowicz, âUnderstanding Heterogeneous Preferences in Random Utility Models: A Latent Class Approach,â Environmental and Resource Economics 23(2002): 421 â 446. |
| Keywords: | Biofuels, Cellulosic, Biomass, Switchgrass, Farmers, Willingness to Pay, Crop Production/Industries, Production Economics, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:waea11:109776&r=ene |
| By: | Eric R. W. Knight (University of Oxford) |
| Abstract: | Private equity investment in technologies which deliver low carbon energy has grown as an area of both economic and social performance. This article offers a perspective on some of the challenges in the industry. It relies on case studies drawn from thirty five interviews with leading clean tech investment managers across Silicon Valley, New York and London. The findings suggest that despite the long-term growth opportunities, some investors have struggled to find attractive risk-reward premiums in early stage investments. |
| JEL: | G24 O32 Q55 Q40 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1110&r=ene |
| By: | Saamah Abdallah; Ian Gough; Victoria Johnson; Josh Ryan-Collins; Cindy Smith |
| Abstract: | This paper maps the distribution of total direct and embodied emissions of greenhouse gases by households in the UK and goes on to analyse their main drivers. Previous research has studied the distribution of direct emissions by households, notably from domestic fuel and electricity, but this is the first to cover the indirect emissions embodied in the consumption of food, consumer goods and services, including imports. To study total emissions by British households we link an input-output model of the UK economy to the UK Expenditure and Food Survey. Results are presented as descriptive statistics followed by regression analysis. All categories of per capita emission rise with income which is the main driver. Two other variables are always significant: household composition, partly reflecting economies of scale in consumption and emissions in larger households, and employment status. This 'standard' model explains 35% of variation in total emissions, reflecting further variation within income groups and household types. We also compute the distribution of emissions derived from the consumption of welfare state services: here, lower income and pensioner households 'emit' more due to their greater use of these services. To take further account of the social implications of these findings, we first estimate emissions per £ of income. This shows a reverse slope with emissions per £ rising as one descends the income scale. The decline with income is especially acute for domestic energy, housing and food emissions, 'necessary' expenditures with a lower income elasticity of demand. Next, we move away from per capita emissions by assuming children under 14 emit half that of adults, which reduces disparities between household types. To implement personal carbon allowances, further research will be needed into the carbon allowances of children and single person households. Current government policies to raise carbon prices mainly in domestic energy are found to be especially regressive, but tracking total carbon consumption within a country would require radical changes in monitoring carbon flows at national borders. In the meantime, poorly targeted policies to compensate 'fuel poor' families should give way to more radical 'eco-social' policies, such as house retrofitting, coupled with 'social' tariffs for domestic energy. |
| Keywords: | household income distribution, greenhouse gas emissions, carbon policies, social policies, direct and embodied emissions |
| JEL: | H23 I32 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:case152&r=ene |
| By: | Ian Gough; Sam Marden |
| Abstract: | This paper asks whether the policies and programmes enacted to reduce greenhouse gas emissions in the UK will compete with other goals of public policy, in particular social policy goals. The Climate Change Act 2008 has set the UK some of the most demanding targets in the world: to reduce GHG emissions (compared with 1990) by at least 80% by 2050 and by at least 34% by 2020 - just nine years away. A wide array of climate change mitigation policies (CCMPs) have been put in place to bring this about. Will these compete fiscally with the large public expenditures on the welfare state? We address this question by surveying and costing all UK government policies that have a climate change mitigation objective and which are expressed through taxation, government expenditures and government-mandated expenditures by energy suppliers and other businesses and which are directed toward the household sector. Our conclusion is that expenditures on CCMPs are tiny - around one quarter of one per cent of GDP - and will not rise significantly. Within this the share of direct spending by government will fall and that obligated on utility companies will rise. Green taxes are also planned to fall as a share of GDP. There is no evidence here of fiscal competition between the welfare state and the environmental state. However, the use of mandated electricity and gas markets will impose rising costs on the household sector, which will bear more heavily on lower income households and will increase 'fuel poverty'. Thus demands on traditional social policies are likely to rise. More radical policy reforms will be needed to integrate climate change and social policy goals. |
| Keywords: | carbon mitigation policy, social policy, fiscal competition |
| JEL: | Q58 I38 H53 |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:cep:sticas:case145&r=ene |
| By: | Budy P. Resosudarmo (Indonesia Project, The Arndt-Corden Department of Economics, Crawford School of Economics & Government, Australian National University, Canberra, ACT, Australia); Frank Jotzo (Crawford School of Economics & Government, Australian National University, Canberra, ACT, Australia); Arief A. Yusuf (Economics Department, Padjadjaran University Author-Name: Ditya A. Nurdianto; Indonesian Ministry of Foreign Affairs) |
| Abstract: | Indonesia is among the largest 25 carbon dioxide emitting countries when considering only fossil fuels, and among the top three or five when emissions due to deforestation and land use change are included. Emission per capita from fossil fuels are still low in comparison with other countries, but have been growing fast, and are likely to overtake those from deforestation and land use change in the future. This paper argues the importance for Indonesia to start developing strategies to mitigate its emissions from fossil fuel combustion. It analyses the main drivers of the increase in emissions, identifies the options and challenges in reducing the future growth in emissions. Policy options are reviewed that would enable the Indonesian economy to keep on growing, but with a much lower carbon output. |
| JEL: | Q54 Q40 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1108&r=ene |
| By: | David I. Stern (Crawford School of Economics and Government, The Australian National University); John C. V. Pezzey (Fenner School of the Environment and Society, The Australian National University); N. Ross Lambie (Crawford School of Economics and Government, The Australian National University) |
| Abstract: | Countries with low marginal costs of abating carbon emissions may have high total costs, and vice versa, for a given climate mitigation policy. This may help to explain different countries' policy stances on climate mitigation. We hypothesize that, under a common percentage cut in emissions intensity relative to business as usual (BAU), countries with higher BAU emissions intensities have lower marginal abatement costs, but total costs relative to output will be similar across countries; and under a common carbon price, relative total costs are higher in emissions-intensive countries. Using the results of the 22nd Energy Modeling Forum, we estimate marginal abatement cost curves for the US, EU, China, and India, which we use to estimate marginal and total costs of abatement under a number of policy options currently under international debate. The results of this analysis provide support for our hypotheses. |
| JEL: | Q52 Q54 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1111&r=ene |
| By: | Budy P. Resosudarmo (Indonesia Project, The Arndt-Corden Department of Economics, Crawford School of Economics & Government, Australian National University, Canberra, ACT, Australia); Abdurohman (The Arndt-Corden Department of Economics, Crawford School of Economics & Government, Australian National University, Canberra, ACT, Australia) |
| Abstract: | In common with other archipelagic countries, Indonesia is vulnerable to such impacts of climate change as prolonged droughts, increased frequency in extreme weather events, and heavy rainfall resulting in floods. These threats, coupled with the fact that Indonesia has been declared one of the three biggest greenhouse gases emitters, has induced the Indonesian government to place a high priority on climate change issues. In particular, the government considers its fiscal policy to be a key instrument in both mitigating against and adapting to climate change. This paper reviews Indonesia's implementation of green fiscal policies and discusses recent Indonesian fiscal policy responses to its commitment to reduce its emissions by 2020. In general, one can conclude that although progress has been made in the area of green fiscal policy in Indonesia, a more vigorous approach is needed to protect Indonesia's environment and to cope with the new challenges of controlling CO2 emission in the era of climate change. |
| JEL: | H30 H23 H61 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1109&r=ene |
| By: | Harry Clarke (School of Economics and Finance, La Trobe University, Melbourne); Robert Waschik (School of Economics and Finance, La Trobe University, Melbourne) |
| Abstract: | The impact of international carbon control measures Ð and the absence of such measures Ð on Australian carbon pricing policies are analyzed both at a theoretical and empirical level. While theory and interest group advocacy suggest a potential case for destination accounting of carbon emissions and border tax adjustments and/or export exemptions, this case is sometimes exaggerated. For example, in the ferrous metals sector, empirical analysis suggests that gains from such refinements are low since carbon leakages and adverse competitiveness effects are small. In other sectors Ð such as non-ferrous metals Ð the effects are more pronounced. Exaggerating the competitiveness costs of carbon pricing runs the risk of policy overreaction and unintended protectionism, dramatically increasing the costs of Australian carbon pricing policies. Providing free and tradable emission quotas to exporters and import competing sectors is a 'second best' policy but one with practicality in sectors where adverse competitiveness effects do need to be addressed. |
| JEL: | Q54 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1112&r=ene |
| By: | de Vries, Frans P.; Dijkstra, Bouwe R.; McGinty, Matthew |
| Abstract: | This paper examines the interdependence between imperfect competition and emis- sions trading in a two-sector (clean and dirty) economy. We compare the welfare implica- tions of an absolute cap-and-trade scheme (permit trading) with a relative intensity-based scheme (credit trading). We nd unambiguously more clean rms in the long run under credit trading. However, neither emissions trading con guration creates the rst-best out- come: there are too few (many) clean rms under permit (credit) trading. Permit trading dominates credit trading in terms of overall welfare at the long run equilibrium, except when policy is relatively lenient. It is also demonstrated that stricter policy does not necessarily induce the clean sector to grow relative to the dirty sector and we determine under what conditions this holds. |
| Keywords: | sectoral dynamics; pollution control; industrial change; imperfect competition; emissions trading |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2011-15&r=ene |
| By: | Saunders, Caroline M.; Saunders, John |
| Abstract: | New Zealand implemented an emissions trading scheme, the NZ ETS, to regulate the production of Greenhouse Gases. This ETS is the first of its kind to include the agricultural sector, as is expected to significantly raise costs to both producers and consumers. The aim of the paper is to assess the potential impact of the New Zealand ETS on the economy and the environment. The paper reports first on the development and nature of the legislation itself, and then continues by mapping the cost of the ETS on producers, and then furthermore the transfer of these costs as increased prices. Then by utilising the Lincoln Trade and Environment Model, or LTEM, a partial equilibrium model which forecasts international trade and domestic production and consumption of agricultural commodities, a number of scenarios revolving around the NZ ETS are projected. The paper finally presents the results gathered from the LTEM, showing the impact of the NZ ETS on both the production of agricultural commodities, and the production of GHGs by the industry. These results demonstrate the potential cost of the NZ ETS on the agricultural sector, and its ability to reduce emissions |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc11:108781&r=ene |
| By: | Minihan, Erin S.; Wu, Zipling |
| Abstract: | National greenhouse gas (GHG) mitigation strategy can benefit from information on the technical and economic viability of abatement options. The life-cycle-analysis (LCA) and marginal abatement cost curve (MACC) approaches provide a good, although partial, indication for the potential of existing technologies to mitigate GHG emissions. The input-output (IO) approach has advantages in capturing the indirect impacts of technology adoption from shifts in economic structure and linkages between sectors. It is therefore ideal to develop an integrated approach to more accurately assess the overall economic and environmental impacts of climate policy. In this study, we aim to develop such an approach that extends the assessment of viability to include indirect economic and environmental effects of resulting structural shifts in the economy. The new approach is applied to technological GHG mitigation measures in Northern Irelandâs cattle sectors. The main findings indicate there is a marked difference (even reversal under some conditions) in the overall impact of technical reductions in emission-intensity on national output and emissions when adjustments in economic structure are taken into account. |
| Keywords: | GHG mitigation, IO analysis, technical cost, Northern Ireland, Agricultural and Food Policy, Livestock Production/Industries, C67, Q52, Q56, Q58, |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc11:108779&r=ene |
| By: | Blandford, David; Gaasland, Ivar; Vardal, Erling |
| Abstract: | Despite the failure of the U.N. Copenhagen climate conference in December 2009 efforts are continuing to reach agreement on binding global commitments on greenhouse gas (GHG) emissions. At the same time, efforts are still underway to conclude the Doha Round of trade negotiations through the World Trade Organization (WTO). Both of these agreements could have a significant impact on the level of activity in agriculture and the GHG emissions that it generates. In this paper we explore strategies to comply with both trade liberalization and GHG emission reduction commitments. We examine the implications of trade liberalization and a carbon tax, both of which affect agricultural output, as means of achieving emission reductions. We emphasize two diametrically different responses to a carbon tax. One adaptation is to change the way agricultural commodities are produced, i.e., choosing less polluting techniques, which we argue will require more land per unit of output. The second response is to use agricultural land for carbon sequestration purposes (offsets), e.g., for perennial grasses or forestry. We show that when an offset option is introduced, production intensity tends to increase, such that emissions per unit of output rise. The theoretical results are illustrated by using a partial equilibrium model of the Norwegian agricultural sector. |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc11:108780&r=ene |
| By: | Heinrich, Barbara; von Cramon-Taubadel, Stephan |
| Abstract: | Greenhouse gas (GHG) emissions are an externality of the pork production process. To respond to climate change concerns and reduce GHG emissions, internalizing this external effect using a market-based economic instrument would be economically efficient. We calculate the welfare effects of GHG emissions using a partial equilibrium model of the German pork market. Sensitivity analysis is used to investigate the impacts of emission prices and emission rates on the welfare effects of reducing GHG emissions. Potential overall welfare gains amount to roughly ⬠360,000 in the base setting and increase to roughly ⬠3 million when emission prices are tripled. This sensitivity highlights the need for more dependable estimates of key parameters such as emission prices and emission rates. However, even the largest estimates of these welfare gains are relatively small. By contrast, the distributional effects of internalizing GHG externalities in pork production for producers, consumers and the state are large in all scenarios. The large redistribution effects that follow from even a small pork price increase as a result of internalizing GHG emissions indicate that attempts to tie German pork production into such policies would be highly controversial but may create incentives to invest in technologies which mitigate GHG emissions. |
| Keywords: | Welfare effects, greenhouse gas emissions, pork production, partial equilibrium model, Environmental Economics and Policy, Food Consumption/Nutrition/Food Safety, H23, Q18, Q54, |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc11:108793&r=ene |
| By: | Schaller, Lena; Drosler, Matthias; Kantelhardt, Jochen |
| Abstract: | Using a significant amount of public funding, large-scale nature-conservation projects in Germany aim to secure and develop ecologically valuable areas and endangered habitats and species. Due to the substantial land-use changes accompanying these projects, their implementation can also have relevant climate effects â one result which has not been explicitly focused upon previously. Our study analyses major cost positions in implementing such projects, particularly the expense of changing or abandoning agricultural land-use for conservation purposes. We link public funding to relevant climate effects and derive CO2 abatement costs. Therefore we conduct plot-specific ex-post analyses of agricultural land-use and greenhouse-gas (GHG) emissions. Our study takes place in regions where changes in agricultural land-use for conservation purposes have been fully implemented in the past and where climate effects are expected to be high. Our analysis is based on data provided by regional stakeholders and our project partners. First results show that land-use changes for conservation purposes can lead to positive climate effects. The efficiency as regards âabatement costsâ we derive on basis of the data set available lies within the range of costs for alternative measures of climate change mitigation. However it becomes clear that CO2 abatement cannot be seen as the only benefit of such measures; the high cost of agricultural compensation has to be contrasted with further effects such as biodiversity and water conservation |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc11:108797&r=ene |
| By: | Mandleni, B.; Anim, F.D.K. |
| Abstract: | The main objective of this study was to investigate the factors that affected the decision of small-scale farmers who kept cattle and sheep on whether to adapt or not to climate changes. The Binary Logistic Regression model was used to investigate farmersâ decision. The results implied that a large number of socio-economic variables affected the decision of farmers on adaptation to climate changes. The study concluded that the most significant factors affecting climate change and adaptation were non-farm income, type of weather perceived, livestock ownership, distance to weather stations, distance to input markets, adaptation choices and annual average temperature. |
| Keywords: | Climate change, small-scale cattle and sheep farming, Binary logistic model, Farm Management, |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc11:108962&r=ene |
| By: | Mandleni, B; Anim, F.D.K. |
| Abstract: | This paper investigated the extent of awareness of climate change by livestock farmers in the Eastern Cape Province of South Africa. It further explored the choice of adaptation measures that were followed and factors that affected adaption measures. The results indicated that marital status, level of education, formal extension, temperatures and the way in which land was acquired, significantly affected awareness of climate change. Variables that significantly affected adaptation selections were gender, formal extension, information received about climate change, temperatures and 2 the way in which land was acquired. The study suggested that the positive and significant variables that affected awareness and adaptation measures by livestock farmers be considered when awareness and adaptation strategies are implemented. |
| Keywords: | Climate change awareness, Heckmanâs two step probit model, decisions to adapt, Farm Management, |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc11:108794&r=ene |
| By: | Saunders, Caroline M.; Guenther, Meike; Tait, Peter; Kaye-Blake, William; Saunders, John; Miller, Sini; Abell, Walt |
| Abstract: | With current concerns about climate change and the general status of the environment, there is an increasing expectation that products have sustainability credentials, and that these can be verified. Labelling is a common method of communicating certain product attributes to consumers that may influence their choices. There are different types of labels with several functions. The aim of this study was to investigate consumersâ, attitudes, knowledge and preferences towards certain sustainability claims on food products across countries; particularly attitudes towards the display of the reduction of carbon emissions were examined in this research. A web-based consumer survey undertaken in the United Kingdom and Japan showed similarities between consumers in the UK and Japan regarding desired label claims of environmental product information. Differences across these countries were observed in terms of the knowledge about certain environmental and social issues such as carbon footprint and sustainability. This information on consumersâ attitudes will assist industries and firms to identify market opportunities, in particular assessing the methods by which carbon footprinting measures can be incorporated alongside information on other sustainability criteria in product ma |
| Keywords: | FOOD LABELLING, CARBON FOOTPRINT, SUSTAINABILITY, CROSS-COUNTRY COMPARISON, UNITED KINGDOM, JAPAN, Food Consumption/Nutrition/Food Safety, |
| Date: | 2011–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aesc11:108953&r=ene |
| By: | Alistair Ulph; David Ulph |
| Abstract: | We analyse the optimal design of climate change policies when a government wants to encourage the private sector to undertake significant immediate investment in developing cleaner technologies, but the relevant carbon taxes (or other environmental policies) that would incentivise such investment by firms will be set in the future. We assume that the current government cannot commit to long-term carbon taxes, and so both it and the private sector face the possibility that the government in power in the future may give different (relative) weight to environmental damage costs. We show that this lack of commitment has a significant asymmetric effect: it increases the incentive of the current government to have the investment undertaken, but reduces the incentive of the private sector to invest. Consequently the current government may need to use additional policy instruments – such as R&D subsidies – to stimulate the required investment. |
| Keywords: | Climate Change; Emissions Taxes; Impact on R&D; Timing and Commitment |
| JEL: | H23 Q54 Q55 Q58 |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:san:wpecon:1104&r=ene |
| By: | Stephen Howes (Crawford School of Economics & Government, Australian National University, Canberra, ACT, Australia); Frank Jotzo (Crawford School of Economics & Government, Australian National University, Canberra, ACT, Australia); Paul Wyrwoll (Crawford School of Economics & Government, Australian National University, Canberra, ACT, Australia) |
| Abstract: | Today the idea that climate change requires a gradual and moderate response no longer commands consensus support among economists. A more demanding approach is gaining ground. This paper traces the changes in economic thinking concerning the case for action on climate change, through an analysis of the work of three eminent economists: William Nordhaus, Nicholas Stern and Ross Garnaut. It shows how from Nordhaus to Stern to Garnaut the case for more urgent and radical mitigation has been strengthened as temperature targets have been lowered and business-as-usual emissions projections raised. It also shows that Stern and especially Nordhaus, who has been working on this subject the longest, have changed their own views in favour of more urgent and radical mitigation. Some disagreements remain between these three economists, and some other economists have more moderate views, but the old consensus has been shattered. |
| JEL: | Q54 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1107&r=ene |