|
on Energy Economics |
|
Issue of 2011‒10‒15
fifty-six papers chosen by Roger Fouquet Basque Climate Change Centre, Bilbao, Spain |
| By: | Richard Schmalensee |
| Abstract: | Focusing on the U.S. and the E.U., this essay seeks to advance four main propositions. First, the incidence of the short-run costs of programs to subsidize the generation of electricity from renewable sources varies with the organization of the electric power industry, and this variation is may be a significant contributor to their political attractiveness in U.S. states. Second, despite the greater popularity of feed-in-tariff schemes worldwide, renewable portfolio standard (RPS) programs may involve less long-run social risk under plausible conditions. Third, in contrast to the E.U.’s approach to reducing carbon dioxide emissions, its renewables program is almost certain not to minimize the cost of achieving its goals. Fourth, the array of state RPS programs in the U.S. are also almost certain to cost more than necessary, even though most employ market mechanisms. To support this last point I provide a fairly detailed description of actual markets for renewable energy credits (RECs) and their shortcomings. |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:1108&r=ene |
| By: | Michael Greenstone |
| Abstract: | Not Available |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:1110&r=ene |
| By: | C. Batlle; I.J. Pérez-Arriaga; P. Zambrano-Barragán |
| Abstract: | Drawing from relevant experiences in power systems around the world, this paper offers a critical review of existing policy support mechanisms for RES-E (renewable energy sources for electricity), with a detailed analysis of their regulatory implications. While recent studies provide an account of current RES-E support systems, in this paper we focus on the impacts these mechanisms have on the overall energy market structure and its performance in the short and long term. Given the rising importance of RES-E in systems everywhere, these impacts can no longer be overlooked. |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:1111&r=ene |
| By: | C. Batlle; L.A. Barroso |
| Abstract: | This article reviews the current experiences implemented to date in the South American region to promote non-conventional renewable energy sources. We briefly describe first the particular characteristics of the territory which make it so appealing for the RES deployment. Then we scour the continent examining the mechanisms implemented to date. We conclude by just pointing out what should be expected for the years to come. The authors aim to contribute to fill in the current lack of state of the art, not only for South American audience, but also for those seeking for new “green business” opportunities. |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:1101&r=ene |
| By: | De Silva, Dakshina G.; McComb, Robert P.; Schiller, Anita R. |
| Abstract: | Employment in electricity generation from renewable resources has expanded rapidly in the US and in Texas during the last decade. Availability of the Production Tax Credit has been an important driver of this growth. Using a fully-disclosed establishment-level employment and payroll data set for Texas at the NAICS-6 level, we analyze the differences in average wages between firms generating electricity from fossil fuels and those generating electricity from wind power. We compare relative average wages before and after the rapid expansion of wind power development that followed the ex ante renewal of the Production Tax Credit (PTC) in 2006. Using QCEW data, our main finding using both least squares and the nonparametric estimation technique proposed by Racine and Li (2004), is that average payrolls for wind power generators increased relative to fossil fuel-based electricity generators after 2006. As far as we know, this is the first paper that attempts to estimate the indirect impact of the PTC on wind energy industry wages. |
| Keywords: | Wages; Production Tax Credits; Wind energy; Clean Energy |
| JEL: | J31 Q28 Q20 |
| Date: | 2011–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33861&r=ene |
| By: | Mauritzen, Johannes (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration) |
| Abstract: | It is well established within both the economics and power system engineering literature that hydro power can act as a complement to large amounts of intermittent energy. In particular, hydro power can act as a "battery" where large amounts of wind power are installed. This paper attempts to extend that literature by describing the effects of cross-border wind and hydro power interaction in a day-ahead "spot" market. I use simple econometric distributed lag models with data from the Nordic electricity market and a sample of Norwegian hydro power plants with water storage magazines. I suggest that wind power mainly affects prices in the hydro power area by way of shifting the shadow value of water. The empirical results support this view. |
| Keywords: | Wind Power; Hydro Power; Nordic Electricity Market; Empirical |
| JEL: | Q00 |
| Date: | 2011–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2011_016&r=ene |
| By: | Mauritzen, Johannes (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration) |
| Abstract: | This paper attempts to empirically identify the key factors involved in the decision to scrap a wind turbine using data from Denmark. The importance of the opportunity cost of operating an older wind turbine is shown to be a prominent factor in the decision to scrap. I show the strong effect that renewable energy policy plays in the decision to scrap a turbine. Through the use of both non-parametric and semi-parametric duration models and an instrumental variables approach I identify a strong effect for scrapping schemes put in place by the Danish government. I also obtain the, initially, counter-intuitive result that more effective wind turbines have a higher hazard of being scrapped. |
| Keywords: | Wind Power; Denmark; Empirical; Duration Models; Scrapping |
| JEL: | Q00 |
| Date: | 2011–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2011_017&r=ene |
| By: | Shugo Yamamotoi (Graduate School of Economics, Kobe University) |
| Keywords: | Fukushima nuclear incident;, Electricity and the macroeconomy, Sign restriction VAR |
| JEL: | Q40 Q43 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1119&r=ene |
| By: | Olivier Durand-Lasserve; Axel Pierru; Yves Smeers |
| Abstract: | This paper examines the impact that uncertainty over economic growth may have on global energy transition and CO2 prices. We use a general-equilibrium model derived from MERGE, and define several stochastic scenarios for economic growth. Each scenario is characterized by the likelihood of a rapid global economic recovery. More precisely, during each decade, global economy may - with a given probability - shift from the EIA's (2010) low-economic-growth path to the EIA's (2010) high-economic-growth path. The climate policy considered corresponds in the medium term to the commitments announced after the Copenhagen conference, and in the long term to a reduction of 25% in global energy-related CO2 emissions (with respect to 2005). For the prices of CO2 and electricity, as well as for the implementation of CCS, the branches of the resulting stochastic trajectories appear to be heavily influenced by agents’ initial expectations of future economic growth and by the economic growth actually realized. Thus, in 2040, the global price of CO2 may range from $21 (when an initially-anticipated economic recovery never occurs) to $128 (in case of non-anticipated rapid economic recovery). In addition, we show that within each region, the model internalizes the constraints limiting the expansion of each power-generation technology through the price paid by the power utility for the acquisition of new production capacity. As a result, in China, the curves of endogenous investment costs for onshore and offshore wind are all bubble-shaped centered on 2025, a date which corresponds to the establishment of a global CO2 cap-and-trade market in the model. |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:1105&r=ene |
| By: | Henri de Groot |
| Abstract: | <p>This paper makes use of a new dataset to investigate energy intensity developments in the Netherlands over the period 1987–2005, in comparison with 18 other OECD countries. A key feature of our analysis is that we combine this cross-country perspective with a high level of sector detail, covering 51 sectors.</p><p><font size="2"><font size="2">Particularly innovative is our evaluation of energy intensity developments in a wide range of Service sectors. We find that between 1987 and 2005 energy intensity in the Netherlands decreased on average with 0.9% points per year at the aggregate economy level and with 0.2% points at the aggregate manufacturing sector level, whereas it increased with 0.4% points at the aggregate Service sector level. This performance is considerably below the OECD average, and has been especially poor between 1987 and 1995. In terms of energy intensity levels, performance of the Netherlands is close to the OECD average at the aggregate economy level and in Manufacturing. In Services, the energy intensity level in the Netherlands was about 50% lower than the OECD average in 1987, but this lead has almost disappeared by 2005. Finally, we find that in the Manufacturing sector, between 1987 and 2005, about half of the energy efficiency improvements were undone by a shift towards a more energy-intensive industry structure, most notably through growth of the Chemical sector. In the Service sector, on the contrary, shifts in the underlying sector structure helped in slowing down energy intensity increase by about one-third between 1987 and 2005. </font></font></p><p> </p> |
| JEL: | O13 O47 O5 Q43 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:190&r=ene |
| By: | Sergey Paltsev |
| Abstract: | Recent increases in natural gas reserve estimates and advances in shale gas technology make natural gas a fuel with good prospects to serve a bridge to a low-carbon world. Russia is an important energy supplier as it holds the world largest natural gas reserves and it is the world’s largest exporter of natural gas. Energy was one of the driving forces of Russia’s recent economic recovery from the economic collapse of 1990s. These prospects have changed drastically with a global recession and the collapse of oil and gas prices from their peaks of 2008. An additional factor is an ongoing surge in a liquefied natural gas (LNG) capacity and a development of Central Asia’s and the Middle East gas supplies that can compete with Russian gas in its traditional (European) and potential (Asian) markets. To study the long-term prospects for Russian natural gas, we employ the MIT Emissions Prediction and Policy Analysis (EPPA) model, a computable general equilibrium model of the world economy. While we consider the updated reserve estimates for all world regions, in this paper we focus on the results for Russian natural gas trade. The role of natural gas is explored in the context of several policy assumptions: with no greenhouse gas mitigation policy and scenarios of emissions targets in developed countries. Scenarios where Europe takes on an even more restrictive target of 80 percent reduction of greenhouse gas emissions relative to 2005 by 2050 and reduces its nuclearbased generation are also considered. Asian markets become increasingly important for natural gas exports and several scenarios about their potential development are considered. We found that over the next 20-40 years natural gas can still play a substantial role in Russian exports and there are substantial reserves to support a development of the gas-oriented energy system both in Russia and in its current and potential gas importers. In the Reference scenario, exports of natural gas grow from Russia’s current 7 Tcf to 10-12 Tcf in 2030 and 15-18 Tcf in 2050. Alternative scenarios provide a wider range of projections, with a share of Russian gas exports shipped to Asian markets rising to 30 percent by 2030 and more than 50 percent in 2050. Patterns of international gas trade show increased flows to the Asian region from the Middle East, Central Asia, Australia and Russia. Europe’s reliance on LNG imports increases, while it still maintains sizable imports from Russia. |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:1112&r=ene |
| By: | Satoshi Honma (Faculty of Economics, Kyushu Sangyo University); Jin-Li Hu (Institute of Business and Management, National Chiao Tung University) |
| Abstract: | This study computes and analyzes the total-factor energy efficiency (TFEE) of 11 industries in 14 developed countries during the period of 1995-2005 using the data envelopment analysis (DEA) approach. There are four inputs: labor, capital stock, intermediate inputs other than energy, and energy. The value added is the only output. The most inefficient industry is the metal industry, which has an average TFEE of 40.6%. Australia is the most inefficient country, with the lowest weighted TFEE in every year except for 1996 and 1998. The most efficient countries are the United States from 1995 to 1998, Denmark from 1999 to 2002, and Netherlands from 2003 to 2005. Given that the number of efficient industries decreases over time, it is clear that most industries have room to improve their energy efficiency as time goes by. Moreover, based on the total-factor framework, this study finds no support for the convergence of energy efficiency levels. |
| Keywords: | Data envelopment analysis (DEA); Total-factor energy efficiency; Industry-level analysis |
| JEL: | Q40 Q30 Q32 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:kyu:dpaper:51&r=ene |
| By: | Thomas Klier; Joshua Linn |
| Abstract: | This paper evaluates the effect of fuel prices on new vehicle fuel economy in the eight largest European markets. The analysis spans the years 2002–2007 and uses detailed vehicle registration and specification data to control for policies, consumer preferences, and other potentially confounding factors. Fuel prices have a statistically significant effect on new vehicle fuel economy in Europe, but this estimated effect is much smaller than that for the United States. Within Europe, fuel economy responds more in the United Kingdom and France than in the other large markets. Overall, substantial changes in fuel prices would have relatively small effects on the average fuel economy of new vehicles sold in Europe. We find no evidence that diesel fuel prices have a large effect on the market share of diesel vehicles. |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:1117&r=ene |
| By: | Ron Alquist; Lutz Kilian; Robert J. Vigfusson |
| Abstract: | We address some of the key questions that arise in forecasting the price of crude oil. What do applied forecasters need to know about the choice of sample period and about the tradeoffs between alternative oil price series and model specifications? Are real or nominal oil prices predictable based on macroeconomic aggregates? Does this predictability translate into gains in out-of-sample forecast accuracy compared with conventional no-change forecasts? How useful are oil futures markets in forecasting the price of oil? How useful are survey forecasts? How does one evaluate the sensitivity of a baseline oil price forecast to alternative assumptions about future demand and supply conditions? How does one quantify risks associated with oil price forecasts? Can joint forecasts of the price of oil and of U.S. real GDP growth be improved upon by allowing for asymmetries? |
| Keywords: | Econometric and statistical methods; International topics |
| JEL: | C53 Q43 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:11-15&r=ene |
| By: | Christiane Baumeister; Lutz Kilian |
| Abstract: | We construct a monthly real-time data set consisting of vintages for 1991.1-2010.12 that is suitable for generating forecasts of the real price of oil from a variety of models. We document that revisions of the data typically represent news, and we introduce backcasting and nowcasting techniques to fill gaps in the real-time data. We show that real-time forecasts of the real price of oil can be more accurate than the no-change forecast at horizons up to one year. In some cases real-time MSPE reductions may be as high as 25 percent one month ahead and 24 percent three months ahead. This result is in striking contrast to related results in the literature for asset prices. In particular, recursive vector autoregressive (VAR) forecasts based on global oil market variables tend to have lower MSPE at short horizons than forecasts based on oil futures prices, forecasts based on AR and ARMA models, and the no-change forecast. In addition, these VAR models have consistently higher directional accuracy. We demonstrate how with additional identifying assumptions such VAR models may be used not only to understand historical fluctuations in the real price of oil, but to construct conditional forecasts that reflect hypothetical scenarios about future demand and supply conditions in the market for crude oil. These tools are designed to allow forecasters to interpret their oil price forecast in light of economic models and to evaluate its sensitivity to alternative assumptions. |
| Keywords: | Econometric and statistical methods; International topics |
| JEL: | Q43 C53 E32 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:bca:bocawp:11-16&r=ene |
| By: | Zhang, Fan |
| Abstract: | A pricing reform in Turkey increased the residential electricity tariff by more than 50 percent in 2008. The reform, aimed at encouraging energy efficiency and private investment, sparked considerable policy debate about its potential impact on household welfare. This paper estimates a short-run residential electricity demand function for evaluating the distributional consequences of the tariff reform. The model allows heterogeneity in household price sensitivities and is estimated using a national sample of 18,671 Turkish households. The model also addresses the common problem of missing data in survey research. The study reveals a highly skewed distribution of price elasticities in the population, with rich households three times more responsive in adjusting consumption to price changes than the poor. This is most likely because the poor are close to their minimum electricity consumption levels and have fewer coping options. In addition, the welfare loss of the poorest quintile -- measured by the consumer surplus change as a percentage of income -- is 2.9 times of that of the wealthiest. |
| Keywords: | Energy Production and Transportation,Climate Change Economics,Markets and Market Access,Economic Theory&Research,Environment and Energy Efficiency |
| Date: | 2011–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:5831&r=ene |
| By: | Natanelov, Valeri; Alam, Mohammad J.; McKenzie, Andrew M.; Van Huylenbroeck, Guido |
| Keywords: | Demand and Price Analysis, Risk and Uncertainty, |
| Date: | 2011–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114626&r=ene |
| By: | Michael Greenstone |
| Abstract: | Not Available |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:1109&r=ene |
| By: | Anton Nakov (Banco Central Europeo); Galo Nuño (Banco de España) |
| Abstract: | We present a general equilibrium model of the global oil market, in which the oil price, oil production, and consumption, are jointly determined as outcomes of the optimizing decisions of oil importers and oil exporters. On the supply side the oil market is modelled as a dominant firm – Saudi Aramco – with competitive fringe. We establish that a dominant firm may exist as long as it enjoys a cost advantage over the fringe. We provide an expression for the optimal markup and compute the spare capacity maintained by such a firm. The model produces plausible dynamics in response to oil supply and oil demand shocks. In particular, it reproduces successfully the jump in oil output of Saudi Aramco following the output collapse of Iraq and Kuwait during the first Gulf War, explaining it as the profit-maximizing response of the dominant firm. Oil taxes and subsidies affect the oil price and welfare through their effect on the trade-off between oil production efficiency and oil market competition. |
| Keywords: | oil price, oil production, dominant firm, Saudi Aramco, oil tax |
| JEL: | E32 Q43 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:bde:wpaper:1125&r=ene |
| By: | Susana Assunção (Faculdade de Economia, Universidade do Porto); Aurora A. C. Teixeira (CEF.UP, Faculdade de Economia, Universidade do Porto; INESC Porto; OBEGEF); Rosa Forte (CEF.UP, Faculdade de Economia, Universidade do Porto) |
| Abstract: | The vast existing empirical literature on Foreign Direct Investment (FDI) puts forward an extensive list of determinants that may explain the investment of multinational firms in a particular location. However, only a small fraction of these studies concerns the importance of natural resources in attracting FDI. Despite their valuable scientific contribution, the few studies that deal with these two themes are limited in two regards: their focus on specific geographical regions (e.g., Central and Eastern Europe, Central Asia, Sub-Saharan Africa, Middle East and North African countries); and their neglect of Non-Renewable Energy Resources (NRER). In this context, this paper intends to add empirical evidence to this research area. Specifically, it analyzes the impact of countries’ endowments of NRER (introducing here a new measure - proven reserves of coal, gas and oil) in attracting FDI in a wide set of countries, controlling for other factors that are traditionally considered as influencing FDI (e.g., market size, human capital, openness of the economy, political stability). Examining 125 host countries (75 of which have proven reserves of NRER), the empirical results show that a country’s endowment of NRER does not matter for FDI attraction whereas some ‘traditional’ factors, most notably, human capital and openness of the economy emerge as critical determinants of FDI. These results have important and encouraging policy implications for countries’ development, in particular for less developed countries that are not endowed by nature with NRER. Indeed, our results firmly indicate that development, through FDI attraction, is possible as long as countries intentionally devote resources to the enhancement of their human capital and convincing efforts are made to open up their economies to international trade. |
| Keywords: | FDI, Eclectic Paradigm, determinants of FDI, Non-Renewable Energy Resources |
| JEL: | F21 F23 C4 O13 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:430&r=ene |
| By: | Kâ Diongue, Abdou (Saint Louis University, Senegal); Giraud, Gael (CNRS, Paris School of Economics, ESCP-Europe); Renouard, Cécile (ESSEC Business School) |
| Abstract: | Extractive industries face two main challenges in terms of CSR and poverty reduction: 1) recognize that societal activity is part of their core business; 2) take part in socio-economic projects that contribute to their stakeholders' empowerment and not only to their living conditions. Based on surveys achieved in Nigeria in 2008, the paper presents two societal performance indices meant to be complementary: the Poverty Exit Index (PEI) and the Relational Capability Index (RCI). We show that, while they have fostered the PEI of the local communities, the development projects of the oil companies had a rather negative impact on their RCI. We then identify key variables that can influence positively the RCI and on which a sensible development policy should focus. |
| Keywords: | development indices; capability approach; relational capability; development; poverty; impact assessment |
| JEL: | C43 D21 F21 L71 O12 O55 |
| Date: | 2011–10–05 |
| URL: | http://d.repec.org/n?u=RePEc:ebg:essewp:dr-11009&r=ene |
| By: | Hassouneh, Islam; Serra, Teresa; Gil, Jose Maria |
| Abstract: | Multivariate local linear regression and parametric error correction models are applied to assess price linkages and price transmission patterns between food and energy prices in Spain. Weekly biodiesel, sunflower and crude oil prices observed from November 2006 to October 2010 are used in the empirical analysis. Results suggest the existence of a long-run equilibrium relationship between the three prices studied. Biodiesel is the only variable that adjusts to deviations from this long-run parity. Local linear regression techniques show that the speed of adjustment of biodiesel prices is higher when biodiesel is cheap than when it is expensive. Energy prices are also found to influence sunflower oil prices through the short-run price dynamics. |
| Keywords: | Price transmission, local linear regression, biodiesel, Spain, Demand and Price Analysis, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114554&r=ene |
| By: | Alom, Fardous |
| Abstract: | This study investigates the economic effects of external oil and food price shocks in the context of selected Asia and Pacific countries including Australia, New Zealand, South Korea, Singapore, Hong Kong, Taiwan, India and Thailand. The study is conducted within the framework of SVAR model using quarterly data over the period 1980 to 2010 although start date varies based on availability of data. The study reveals that resource poor countries that specialize in heavy manufacturing industries like Korea and Taiwan are highly affected by international oil price shocks. Oil price shocks negatively affect industrial output growth and exchange rate and positively affect inflation and interest rates. On the other hand, oil poor nations such as Australia and New Zealand with diverse mineral resources other than oil are not affected by oil price shocks. Only exchange rates are affected by oil price shocks in these countries. Furthermore, countries that are oil poor but specialized in international financial services are also not affected by oil price increase. Similarly, developing country Like India with limited reserve of oil is not affected by oil price shock. However, Thailand possessing a number of natural resources other than oil is not accommodative of oil price shocks. Limited impact of food prices can be recorded for India, Korea and Thailand in terms of industrial output, inflation and interest rate. The major impact of food prices is that it helps depreciating real effective exchange rate for almost all countries except Singapore. As a whole, the effects of external oil and food prices depend on the economic characteristics of the countries. The empirical results of this study suggest that oil and food prices should be considered for policy and forecasting purposes especially for Korea, Taiwan and Thailand. |
| Keywords: | oil price, food price, shocks, economic effects, Asia, Pacific, SVAR, Agricultural and Food Policy, Demand and Price Analysis, Livestock Production/Industries, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nzar11:115346&r=ene |
| By: | Drabik, Dusan; de Gorter, Harry; Just, David R. |
| Abstract: | We show carbon leakage depends on the type of biofuel policy (tax credit versus mandate), the domestic and foreign gasoline supply and fuel demand elasticities, and on consumption and production shares of world oil markets for the country introducing the biofuel policy. The components of carbon leakage â market leakage and emissions savings â are counteracting: carbon leakage increases with market leakage but decreases with emissions savings. We also distinguish domestic and international leakage where the latter is always positive, but domestic leakage can be negative with a mandate. The IPCC definition of leakage omits domestic leakage, resulting in biased estimates. Leakage with a tax credit always exceeds that of a mandate, while the combination of a mandate and tax credit generates lower leakage than a tax credit alone. In general, a gallon of ethanol (energy equivalent) is found to replace 35 percent of a gallon of gasoline â not 100 percent as assumed by life-cycle accounting. This means ethanol emits 13 percent more carbon than a gallon of gasoline if indirect land use change (iLUC) is not included in the estimated emissions savings effect and 43 percent more when iLUC is included. |
| Keywords: | biofuels, tax credit, mandate, market leakage, carbon leakage, emissions savings, domestic leakage, Resource /Energy Economics and Policy, Q27, Q41, Q42, Q54, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114432&r=ene |
| By: | Serra, Teresa |
| Abstract: | Previous literature on volatility links between food and energy prices is scarce and mainly based on parametric approaches. We assess this issue by using a semiparametric GARCH model recently proposed by Long et al. (2009), which is essentially a nonparametric correction of the parametric conditional covariance function. We focus on price links between crude oil, ethanol and sugar prices in Brazil. Results suggest strong volatility links between the prices studied. They also suggest that parametric approximations of the conditional covariance matrix may lead to misleading results and can be improved using nonparametric techniques. |
| Keywords: | biofuels, feedstocks, price volatility interactions, semiparametric GARCH, Demand and Price Analysis, Resource /Energy Economics and Policy, Q11, Q42, C58, |
| Date: | 2011–09–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:115997&r=ene |
| By: | Yano, Yuki; Blandford, David; Surry, Yves R. |
| Abstract: | Although the United States has typically been in a position to import ethanol, cornbased ethanol exports are surging as the domestic market becomes saturated and world prices rise due to high prices for sugar, the competing global feedstock. The U.S. is now the worldâs leading ethanol producer but domestic demand is constrained because of technical limitations in the current vehicle fleet. Higher ethanol blends have been approved for use (15% rather than 10%) but a limited number of vehicles that can use such higher blends. Infrastructure constraints also affect the potential supply of higher ethanol blends. As a result of these factors, U.S. biofuel policies can have significant implications for the world ethanol market. Usage mandates under the Renewable Fuel Standard, blender tax credits, and the blend wall can interact to generate excess supplies of ethanol that are likely to be diverted to the world market. This paper examines how fluctuations in corn yield and gasoline prices affect the excess supply of U.S. corn-based ethanol in the presence of alternative assumptions about the maximum amount of ethanol that can be consumed domestically. Using stochastic simulations we also explore the impact of current policies on the mean and variance of export supply. The results highlight the complex interaction between technological constraints, economic incentives, and government policies in the U.S. biofuels sector, and point to the potentially destabilizing effect of such policies in international markets. |
| Keywords: | Ethanol Exports, Biofuel Policies, Variability, International Relations/Trade, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:115793&r=ene |
| By: | Rajcaniova, Miroslava; Drabik, Dusan; Ciaian, Pavel |
| Abstract: | Based on their theoretical predictions, Kliauga, de Gorter, and Just (2008) and de Gorter, Drabik, and Just (2010) argue that the United States and the European Union establish the world ethanol and biodiesel prices, respectively. We test these theories using cointegration analysis and the Vector Error Correction (VEC) model. Weekly price series are analyzed for the major global biofuel producers (European Union, United States, and Brazil) for the period 2002 â 2010. Polices in the United States and Brazil appear to play an equal role in determining ethanol prices in other countries, thus only partially confirming the theoretical predictions. For biodiesel, our results demonstrate that the EU mandate impacts the world biodiesel price and thus they confirm the European Unionâs price leadership established in theory. |
| Keywords: | biofuels, biofuel polices, price leadership, VEC, International Relations/Trade, Resource /Energy Economics and Policy, C32, Q16, Q17, Q47, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114786&r=ene |
| By: | Bernhard Stürmer (Institute for Sustainable Economic Development, Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna); Johannes Schmidt (Institute for Sustainable Economic Development, Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna); Erwin Schmid (Institute for Sustainable Economic Development, Department of Economics and Social Sciences, University of Natural Resources and Applied Life Sciences, Vienna); Franz Sinabell (Austrian Institute of Economic Research) |
| Abstract: | Ambitious renewable energy targets have been implemented in the EU that can only be attained if further measures are taken to boost biomass production for energy uses on agricultural land. The aim of this discussion paper is to explore consequences for land use and environment if biomass production will be expanded for non-food purposes in Austria. We assess the bio-physical and economic production potentials of energy crops and explore the trade-offs between bioenergy and food production on arable lands in Austria. In a policy experiment, we analyze how costly it is to expand domestic non-food biomass production by employing an integrated modeling framework using an elaborated set of bio-physical and economic data. The results indicate that an expansion of biomass production for first and second generation biofuels would imply significant adjustment costs for the agricultural sector. Furthermore, increasing feedstock production would have significant impacts on land use and fertilizer intensity levels. The economic analysis considers differences of regions and site conditions, which lead to higher opportunity costs, and hence, higher feedstock costs as assumed in previous studies. Subsidizing domestic biomass production likely leads to rising regional food and feed prices as well as factor prices (e.g. land renting) in a land constrained economy. |
| Keywords: | land use competition, bioenergy, non-food and food crops, integrated modeling |
| JEL: | Q1 Q4 |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:sed:wpaper:512011&r=ene |
| By: | Gracia, Azucena; Barreiro-Hurle, Jesus; Perez y Perez, Luis |
| Keywords: | Consumer/Household Economics, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114605&r=ene |
| By: | Doucha, Tomas; Jelinek, Ladislav; Medonos, Tomas |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114433&r=ene |
| By: | Ziegelback, Martin; Kastner, Gregor |
| Abstract: | For European operators of biofuels plants there are not many hedge vehicles available to hedge operational margins. Cross hedges for rapeoil (with the rapeseed futures contract) and RME (with the NYMEX diesel futures contract) could be useful instruments. We use recent developments on threshold cointegration approaches to investigate if asymmetric dynamic adjusting processes exist among rapeseed and diesel prices. The results suggest that a threeregime threshold cointegration model suitably explains the dynamics of the data. |
| Keywords: | Hedging, Rapeseed, Heating Oil, Threshold cointegration analysis, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Crop Production/Industries, Demand and Price Analysis, Environmental Economics and Policy, Farm Management, Financial Economics, Industrial Organization, Institutional and Behavioral Economics, Production Economics, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:gewi11:114741&r=ene |
| By: | Bamiere, Laure; Martinet, Vincent; Gouel, Christophe; Lecadre, Elodie |
| Abstract: | Within an overall project to assess the ability of the agricultural sector to contribute to bioenergy production, we set out here to examine the economic and technological viability of a bioenergy facility in an uncertain economic context, using the stochastic viability approach. We consider two viability constraints: the facility demand for lignocellulosic feedstock has to be satisfied each year and the associated supply cost has to be lower than de profitability threshold of the facility. We assess the viability probability of various supplying strategies consisting in contracting a given share of the feedstock demand with perennial dedicated crops at the initial time and then in making up each year with annual dedicated crops or wood. The demand constraints and agricultural prices scenarios over the time horizon are introduced in an agricultural and forest biomass supply model, which in turns determines the supply cost per MWh and computes the viability probabilities of the various contract strategies. A sensibility analysis to agricultural prices at initial time is performed. Results show that when they are around or under the median (of the 1993â2007 prices), the strategy consisting in contracting 100% of the feedstock supply with perennial dedicated crops is the best one. |
| Keywords: | Biofuel, Biomass production, Spatial economics, Stochastic viability, Monte Carlo simulation, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114238&r=ene |
| By: | Malakini, Memory; Maganga, Assa |
| Abstract: | Biomass, mainly firewood and charcoal contributes over 90% of Malawi’s total energy demand. As a result, deforestation is increasing at unprecedented rate and firewood is becoming scarce. Individual assessment of various cooking technologies has been widely done without comparison of various cooking technologies. Therefore, this study has been devoted to compare the performance, cooking time and fuelwood usage of the three-stone fireplace, Rocket and Chitetezo cooking technologies. The study used Specific Fuel consumption (SC) as a proxy for principal indicator of cooking technology efficiency. It measures the amount of wood used per kg of food. Rocket stove has been found to use less time, less fuelwood and produces less smoke. |
| Keywords: | Cooking Technology; Fuelwood; Stove Efficiency |
| JEL: | D10 |
| Date: | 2011–04–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:33866&r=ene |
| By: | Lange, Mareike |
| Abstract: | The contribution of biofuels to the saving of greenhouse gas (GHG) emissions has recently been questioned because of emissions resulting from land use change (LUC) for bioenergy feedstock production. We investigate how the inclusion of the carbon effect of LUC into the carbon accounting framework, as scheduled by the European Commission, impacts on land use choices for an expanding biofuel feedstock production. We first illustrate the change in the carbon balances of various biofuels, using methodology and data from the IPCC Guidelines for National Greenhouse Gas Inventories. It becomes apparent that the conversion of natural land, apart from grassy savannahs, impedes meeting the EUâs 35% minimum emissions reduction target for biofuels. We show that the current accounting method mainly promotes biofuel feedstock production on former cropland, thus increasing the competition between food and fuel production on the currently available cropland area. We further discuss whether it is profitable to use degraded land for commercial bioenergy production as requested by the European Commission to avoid undesirable LUC and conclude that the current regulation provides little incentive to use such land. The exclusive consideration of LUC for bioenergy production minimizes direct LUC at the expense of increasing indirect LUC. |
| Keywords: | land use change emissions, bioenergy, European policy, Land Economics/Use, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114406&r=ene |
| By: | Christopher R. Knittel; Douglas L. Miller; Nicholas J. Sanders |
| Abstract: | Since the Clean Air Act Amendments of 1990 (CAAA), atmospheric concentration of local pollutants has fallen drastically. A natural question is whether further reductions will yield additional health benefits. We further this research by addressing two related research questions: (1) what is the impact of automobile driving (and especially congestion) on ambient air pollution levels, and (2) what is the impact of modern air pollution levels on infant health? Our setting is California (with a focus on the Central Valley and Southern California) in the years 2002-2007. Using an instrumental variables approach that exploits the relationship between traffic, ambient weather conditions, and various pollutants, our findings suggest that ambient pollution levels, specifically particulate matter, still have large impacts on weekly infant mortality rates. Our results also illustrate the importance of weather controls in measuring pollution’s impact on infant mortality. |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:1113&r=ene |
| By: | Ford, Stuart |
| Abstract: | This is a summary of two projects that were designed to investigate the cost effectiveness associated with adoption of farm management practices designed to reduce discharges to water and greenhouse gas emissions. The first report had the purpose of expressing the results as the financial cost to the case study farm per kg of nutrient discharge reduction achieved, or per mm of water use saved (per year) i.e., the cost-effectiveness of the measures. This second extension of that work had the objectives to both; further scope the research context and parameters and refine and expand the modeling capability. The full range of 11 mitigation options were modeled over the 5 Dairy, 13 Sheep and Beef and 2 Deer Monitoring Models. The results in terms of Nitrogen discharges (kg N) were then incorporated into farm financial models to determine the impact of adoption of the management changes on farm financial performance. The results are reported as mitigation cost effectiveness of each option on each farm and as a reduction in the carbon cost to the farm. |
| Keywords: | Agribusiness, Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nzar11:115510&r=ene |
| By: | Christopher R. Knittel; Ryan Sandle |
| Abstract: | Efforts to reduce greenhouse gas emissions in the US have relied on Corporate Average Fuel Economy (CAFE) Standards and Renewable Fuel Standards (RFS). Economists often argue that these policies are inefficient relative to carbon pricing because they ignore existing vehicles and do not adequately reduce the incentive to drive. This paper presents evidence that the net social costs of carbon pricing are significantly less than previous thought. The bias arises from the fact that the demand elasticity for miles travelled varies systematically with vehicle emissions; dirtier vehicles are more responsive to changes in gasoline prices. This is true for all four emissions for which we have data—nitrogen oxides, carbon monoxide, hydrocarbon, and greenhouse gases—as well as weight. This reduces the net social costs associated with carbon pricing through increasing the co-benefits. Accounting for this heterogeneity implies that the welfare losses from $1.00 gas tax, or a $110 per ton of CO2 tax, are negative over the period of 1998 to 2008 even when we ignore the climate change benefits from the tax. Co-benefits increase by over 60 percent relative to ignoring the heterogeneity that we document. In addition, accounting for this heterogeneity raises the optimal gas tax associated with local pollution, as calculated by Parry and Small (2005), by as much as 57 percent. While our empirical setting is California, we present evidence that the effects may be larger for the rest of the US. |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:1115&r=ene |
| By: | Reza Farrahi Moghaddam; Fereydoun Farrahi Moghaddam; Mohamed Cheriet |
| Abstract: | In a global economy, fair and universal management of worldwide markets with a guarantee of sustainability of life on this planet is a key element. In this work, a universal measure of emissions to be applied at the international level is proposed, based on a modification of the Greenhouse Gas Intensity (GHG-INT) measure. It is hoped that the generality and low administrative cost of this measure, which we call the Modified Greenhouse Gas Intensity measure (MGHG-INT), will eliminate any need to classify nations, and provide a uniform approach to penalizing emissions. The core of the MGHG-INT is what we call the Modified Gross Domestic Product (MGDP), based on the Inequality-adjusted Human Development Index (IHDI). The MGDP enables us to normalize the status of all nations on a common scale, making it possible for us to propose universal measures, such as MGHG-INT. We also propose a carbon border tax, either as a direct tax or a tax adjustment, applicable at national borders, based on MGHG-INT and MGDP. This carbon tax is supported by a proposed global Emissions Trading System (ETS) applied at the international level. It is assumed that each country will implement its own equivalent carbon tax system to preserve the competitiveness of the marketplace; however, consideration of this aspect of our concept is beyond the scope of our work here. The proposed carbon tax is analyzed in a short-term scenario with interesting outcomes, such as the simultaneous lowering of emissions levels and the maintenance of reasonable growth in MGDP. The proposed carbon tax and ETS can also be implemented at the national level in a country, in provincial or corporate slices. In addition to annual GHG emissions, cumulative GHG emissions over a decade are considered for the big players in the world economy with almost the same results. |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1110.1567&r=ene |
| By: | Phillia Restiani (The School of Economics and Centre for Energy and Environmental Markets at UNSW); Regina Betz (Centre for Energy and Environmental Markets (CEEM), School of Economics, Australian School of Business, University of NSW) |
| Abstract: | This paper investigates the behavioural implications of penalty designs on market performance using an experimental method. Three penalty types and two penalty levels are enforced in a laboratory permit market with auctioning, including the Australian Carbon Pollution Reduction Scheme proposed design of tying the penalty rate to the auction price. Compliance strategies are limited to undertaking irreversible abatement investment decisions or buying permits. We aim to assess how penalty design under the presence of subjects‟ risk preferences might affect compliance incentives, permit price discovery, and efficiency. In contrast to theory, we find that penalty levels serve as a focal point that indicates compliance costs and affects compliance strategies. The make-good provision penalty provides stronger compliance incentives than the other penalty types. However, the theory holds with regard to permit price discovery, as we find no evidence of the effect of penalty design on auction price. Interestingly, risk preference does not directly affect compliance decision, but it does influence price discovery, which evidently is a significant factor in compliance decisions as well as efficiency. Most importantly, a trade-off between investment incentives and efficiency is observed. |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:1087&r=ene |
| By: | Asproudis, Elias; Weyman-Jones, Tom |
| Abstract: | This paper analyses the behaviour, influence and role of third parties in tradable permits markets. Following the literature, it focuses on a framework in order to understand how society and third parties react against the firms' emissions due to their participation in the tradable permits' market. Therefore the paper reveals the tradable permits mechanism as a new way for public direct action and highlights the possible benefits for the regulator. An important part of the third parties consists of the very active participation of the Environmental Non Governmental Organisations. Therefore, this paper argues that the third party's participation and specifically the environmental groups' participation in tradable permits' market could drive the market to the optimum equilibrium. In order to examine this "proposition" we use some data from the first phase of the permits' market in European Union and some available data for the environmental groups' income. We conclude that the environmental groups could purchase the exceeded, overallocated permits and could drive the market in the equilibrium point. Finally, for the regulator the environmental groups' participation could be desirable given that they could improve the efficiency of the tradable permits market. |
| Keywords: | emissions; permits; overallocation; third parties; environmental groups; equilibrium |
| JEL: | Q50 Q53 L31 |
| Date: | 2011–08–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:28766&r=ene |
| By: | Michael Greenstone; Elizabeth Kopits; Ann Wolverton |
| Abstract: | The United States Government recently concluded a year-long process to develop a range of values representing the monetized damages associated with an incremental increase in carbon dioxide (CO2) emissions, commonly referred to as the social cost of carbon (SCC). These values are currently used in benefit-cost analyses to assess potential federal regulations. For 2010, the central value of the SCC is $21 per ton of CO2 emissions and sensitivity analyses are to be conducted at $5, $35, and $65 (2007$). This paper summarizes the methodology and process used to develop the SCC values, complemented with our own commentary about how the SCC can be used to inform regulatory decisions and areas where further research would be particularly useful. |
| Date: | 2011–05 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:1106&r=ene |
| By: | Coderoni, Silvia; Esposti, Roberto |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114426&r=ene |
| By: | Daigneault, Adam J.; Sohngen, Brent |
| Keywords: | Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nzar11:115351&r=ene |
| By: | Daigneault, Adam J.; Greenhalgh, Suzie; Samarasinghe, Oshadhi |
| Abstract: | Agricultural and forestry greenhouse gas (GHG) emissions are a key feature of New Zealandâs emissions profile, and New Zealand is the only country, to date, to have indicated that agricultural and forestry emissions will be covered under their domestic climate policy â the New Zealand Emissions Trading Scheme (NZETS). Forestry entered the NZETS in 2008 while agricultural emissions are expected to enter in 2015. Coupled with climate policy development is the increasing scrutiny of agricultural impacts on water in New Zealand. Given the multiple forms of environmental regulation facing the agricultural and forestry industries we explore, at the catchment level, the impacts of climate policy on the agricultural and forestry industries, including those on farm returns, GHG emissions, carbon sequestration, water quality and induced land use change. We use the recently developed New Zealand Forest and Agriculture Regional Model (NZ-FARM) to assess potential economic and environmental impacts of a climate policy that imposes a series of carbon prices on GHG emissions of land-based production in the Manawatu and Hurunui/Waiau catchments in New Zealand. |
| Keywords: | Agriculture and Forestry Modelling, Land Use, Climate Policy, Greenhouse Gas Emissions, Nutrient Loadings, Environmental Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nzar11:115352&r=ene |
| By: | Stephen Vosti; Siwa Msangi; Eirivelthon Lima; Ricardo Quiroga; Miroslav Batka; Chad Zanocco |
| Abstract: | The following handout is a summary of the IDB Discussion Paper "Agriculture Greenhouse Emissions in Latin America and the Caribbean: Food Security and Deforestation". |
| Keywords: | Agriculture & Food Security, Environment & Natural Resources :: Climate Change, Environment & Natural Resources :: Forests & Forestry, Climate Change, Forestry, Agriculture |
| Date: | 2011–01 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:35618&r=ene |
| By: | McDonald, Hugh; Kerr, Suzi |
| Abstract: | The question of how to effectively address agricultural greenhouse gas emissions is of critical importance for New Zealand and the world. Ensuring that our responses are effective requires us to first consider what we aim to achieve: why do we care about agricultural emissions? This paper responds to this fundamental inquiry, and argues that New Zealandersâ diverse individual motivations can be grouped under three headings: one, concern about the direct impacts of climate change on New Zealand and the world; two, pressure from others based on their concern about climate change; three, complementary goals. This framework is useful in setting out how our underlying motivations should shape our responses, and highlights the importance of choosing responses that will be robust to future uncertainties. |
| Keywords: | Environmental Economics and Policy, Land Economics/Use, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:nzar11:115507&r=ene |
| By: | Inter-American Development Bank (IDB) |
| Abstract: | This document (Cancún COP-16) represents a coordinated effort among several institutions and organizations in the Latin America and the Caribbean region to present the results of a joint reflection on the issue of water-based adaptation to climate change as part of a Regional Policy Dialog process. The main purpose of this Dialog is to communicate to politicians and decision makers -both within the water community and from other public policy areas relevant to the topic- and other actors involved, a series of key messages and recommendations that enable them to define, in an informed manner, public policies and corresponding actions on climate change adaptation. The results of this dialog to date are reflected in this version of the document to be presented on December 3rd as part of the Dialogs for Water and Climate Change (D4WCC), an event associated with the COP16 to be held in Cancun, Mexico. |
| Keywords: | Environment & Natural Resources :: Climate Change, Environment & Natural Resources :: Environmental Policy, Energy & Mining :: Renewable Energy, Infrastructure & Transport :: Water Supply & Sanitation, Cancún COP-16, climate change, water supply and sanitation, LAC, RPD, regional policy dialogue, impact of climate change on water resources, water-based adaption, water resources infrastructure |
| Date: | 2010–12 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:39058&r=ene |
| By: | Moeller, Thordis; Grethe, Harald; Waha, Katharina; Muller, Christoph |
| Keywords: | Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114635&r=ene |
| By: | Gerard Alleng |
| Abstract: | This presentation discusses the cost of impacts of climate change on the Caribbean. The response of adaptation will need to be applied towards an integral strategy to build on disaster risk reduction best practices and climate risk management. The response of the IDB to the climate change needs of member countries will need to include the use of financial instruments, the development of knowledge products, and the mainstreaming of climate change into the operations of the Bank. |
| Keywords: | Environment & Natural Resources :: Climate Change, Energy & Mining :: Renewable Energy, Environment & Natural Resources :: Sustainable Tourism, climate change, sustainable tourism, disaster risk management, Caribbean, adaptation, mitigation technologies |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:39038&r=ene |
| By: | Bruno Lanz; Thomas F. Rutherford; John E. Tilton |
| Abstract: | Subglobal climate policies induce changes in international competitiveness and favor a relocation of carbon-emitting activities. We argue that many energy-intensive activities are also capital-intensive, so that carbon policies could affect rents rather than abatement or location. Taking copper as an example, we formulate a plant-level spatial equilibrium model of the industry, and we estimate a set of elasticities to calibrate the behavioral parameters of the model. Given 2007 market conditions, Monte Carlo simulations suggest that a $50/tCO2 tax in industrialized countries induces emissions reductions of less than one percent in the copper industry, with a mean emission leakage rate of 25%. Our results conform with empirical findings on the pollution haven effect but challenge projections from computable general equilibrium models. |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:1103&r=ene |
| By: | Mort Webster; Nidhi Santen; Panos Parpas |
| Abstract: | Analyses of global climate policy as a sequential decision under uncertainty have been severely restricted by dimensionality and computational burdens. Therefore, they have limited the number of decision stages, discrete actions, or number and type of uncertainties considered. In particular, other formulations have difficulty modeling endogenous or decision-dependent uncertainties, in which the shock at time t+1 depends on the decision made at time t. In this paper, we present a stochastic dynamic programming formulation of the Dynamic Integrated Model of Climate and the Economy (DICE), and the application of approximate dynamic programming techniques to numerically solve for the optimal policy under uncertain and decision-dependent technological change. We compare numerical results using two alternative value function approximation approaches, one parametric and one non-parametric. Using the framework of dynamic programming, we show that an additional benefit to near-term emissions reductions comes from a probabilistic lowering of the costs of emissions reductions in future stages, which increases the optimal level of near-term actions. |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:1118&r=ene |
| By: | Remoundou, Kyriaki; Drichoutis, Andreas C.; Koundouri, Phoebe |
| Keywords: | Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eaae11:114795&r=ene |
| By: | Diederich, Johannes; Goeschl, Timo |
| Abstract: | In the climate policy debate, a rhetoric has evolved that attributes a high potential to "voluntary climate action". We turn to the population of Germany, the fourth largest cumulative GHG emitter, to obtain an Internet-)representative estimate of the individual willingness to abate one ton of CO2, the equivalent of 10 percent of annual per-capita CO2 emissions. The estimate derives from a large-scale (n=2,440) framed field experiment in which subjects choose between a guaranteed reduction of one ton of EU CO2 emissions and a randomly drawn cash award between €2 and €100. At €6.30, estimated mean WTP is considerably lower than prior hypothetical or non-representative estimates. Median WTP is non-positive. The almost bimodal nature of WTP in the population has important policy implications. |
| Keywords: | climate change mitigation; field experiment; voluntary climate action; willingness to pay |
| Date: | 2011–10–06 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0517&r=ene |
| By: | Frank Jotzo (Centre for Climate Economics and Policy, and ANU Climate Change Institute, Crawford School of Economics and Government, The Australian National University) |
| Abstract: | Following the Copenhagen climate Accord, developed and developing countries have pledged to cut their greenhouse gas emissions, emissions intensity or emissions relative to baseline. This analysis puts the targets for the major countries on a common footing, and compares them across different metrics. Targeted changes in absolute emissions differ markedly between countries, with continued strong increases in some developing countries but significant decreases in others including Indonesia, Brazil and South Africa, provided reasonable baseline projections are used. Differences are smaller when emissions are expressed in per capita terms. Reductions in emissions intensity of economies implicit in the targets are remarkably similar across developed and developing countries, with China‟s emissions intensity target spanning almost the same range as the implicit intensity reductions in the United States, EU, Japan, Australia and Canada. Targeted deviations from business-as-usual are also remarkably similar across countries, and the majority of total global reductions relative to baselines may originate from China and other developing countries. The findings suggest that targets for most major countries are broadly compatible in important metrics, and that while the overall global ambition falls short of a two degree trajectory, the targets by key developing countries including China can be considered commensurate in the context of what developed countries have pledged. |
| Date: | 2010–11 |
| URL: | http://d.repec.org/n?u=RePEc:een:eenhrr:1078&r=ene |
| By: | Stephen P. Holland; Jonathan E. Hughes; Christopher R. Knittel; Nathan C. Parker |
| Abstract: | Instead of efficiently pricing greenhouse gases, policy makers have favored measures that implicitly or explicitly subsidize low carbon fuels. We simulate a transportation-sector cap & trade program (CAT) and three policies currently in use: ethanol subsidies, a renewable fuel standard (RFS), and a low carbon fuel standard (LCFS). Our simulations confirm that the alternatives to CAT are quite costly—2.5 to 4 times more expensive. We provide evidence that the persistence of these alternatives in spite of their higher costs lies in the political economy of carbon policy. The alternatives to CAT exhibit a feature that make them amenable to adoption|a right skewed distribution of gains and losses where many counties have small losses, but a smaller share of counties gain considerably—as much as $6,800 per capita, per year. We correlate our estimates of gains from CAT and the RFS with Congressional voting on the Waxman-Markey cap & trade bill, H.R. 2454. Because Waxman-Markey (WM) would weaken the RFS, House members likely viewed the two policies as competitors. Conditional on a district's CAT gains, increases in a district's RFS gains are associated with decreases in the likelihood of voting for WM. Furthermore, we show that campaign contributions are correlated with a district's gains under each policy and that these contributions are correlated with a Member's vote on WM. |
| Date: | 2011–08 |
| URL: | http://d.repec.org/n?u=RePEc:mee:wpaper:1116&r=ene |
| By: | Joseph E. Aldy; Robert N. Stavins |
| Abstract: | Emissions of greenhouse gases linked with global climate change are affected by diverse aspects of economic activity, including individual consumption, business investment, and government spending. An effective climate policy will have to modify the decision calculus for these activities in the direction of more efficient generation and use of energy, lower carbon intensity of energy, and – more broadly – a more carbon-lean economy. The only approach to doing this on a meaningful scale that would be technically feasible and cost-effective is carbon pricing, that is, market-based climate policies that place a shadow-price on carbon dioxide emissions. We examine alternative designs of three such instruments – carbon taxes, cap-and-trade, and clean energy standards. We note that the U.S. political response to possible market-based approaches to climate policy has been and will continue to be largely a function of issues and structural factors that transcend the scope of environmental and climate policy. |
| JEL: | Q40 Q48 Q54 Q58 |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17488&r=ene |