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on Energy Economics |
| By: | Spencer, Thomas; Marcey , Celine; Colombier , Michel; Guerin , Emmanuel |
| Abstract: | ASSESSMENT European climate policy is gradually shifting towards a long-term perspec- tive. The electricity sector has a crucial role to play in the long-term decar- bonization of the EU economy. It makes up a significant share of EU emis- sions and can contribute to the reduction of emissions in other sectors, particularly buildings and transport. The EU 2008 Climate and Energy Package (CEP) took a significant step towards a low-carbon future, initi- ating a very ambitious program of renewables expansion and strengthen- ing the ETS. However, the omissions and internal inconsistencies of the CEP are becoming more and more evident. This relates in particular to the absence of long-term, comprehensive signals for decarbonization and the imbalance between the ETS, energy efficiency and renewables objectives. This risks delaying and distorting investment in low-carbon infrastructure and ideas, raising the ultimate cost of climate policy. In view of the inertias within the electricity sector, it is imperative for the EU to set a long-term signal for the decarbonization of the sector by set- ting 2030 objectives for the ETS and complementary policies. The EU’s decarbonization strategy needs to be robust against future uncertainties; strengthening a technology neutral instrument like the ETS can provide a key part of a comprehensive signal to develop the full range of decarbon- ization options. The instrument imbalance also needs to be addressed. Demand side policies should be the point of departure for supply side interventions: ETS caps should be set so as to achieve carbon scarcity after energy efficiency and RES objectives have been taken into account. A short-term adjustment of scarcity in the ETS may create some incen- tives for low-carbon investment. However, it would not address the funda- mental concern, namely the lack of policy information regarding the post 2020 environment in which these investment will amortize. |
| Keywords: | European climate policy; 2050 decarbonization; European emissions trading scheme; renewables policy |
| JEL: | Q50 |
| Date: | 2011–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35009&r=ene |
| By: | Nyamdash, Batsaikhan; Denny, Eleanor |
| Abstract: | This paper analyzes the impact of electricity storage on the production cost of a power system and the marginal cost of electricity (electricity price) using a unit commitment model. Also real world data has been analyzed to verify the e®ect of storage operation on the electricity price using econometric techniques. The unit commitment model found that the deployment of a storage system reduces the fuel cost of the power system but increases the average electricity price through its e®ect on the power system operation. However, the reduction in the production cost was found to be less than the increase in the consumer's cost of electricity resulting in a net increase in costs due to storage. Di®erent storage and CO2 price scenarios were investigated to study the sensitivity of these results. The regression analysis supports the unit commitment results and ¯nds that the presence of storage increases average wholesale electricity prices for the case study system. |
| Keywords: | Electricity storage; Electricity price; Production cost |
| JEL: | P28 D4 Q4 |
| Date: | 2011–10–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34941&r=ene |
| By: | Szablewski, Andrzej T. |
| Abstract: | The question about an appropriate structure for the electricity industry has been extensively discussed in scientific literature and experts studies. Since the beginning of electricity liberalization, it was apparent for its promoters that such a structure (in this paper referred to as the model structure or ideal structural model) for the electricity sector should involve a separation of its four sub-sectors, i.e., generation, transmission, distribution, and supply. With the exception of transmission, each sub-sector should consist of many stand-alone type companies. Given the high degree of vertical and horizontal integration of the electricity sectors, their procompetitive restructuring (i.e., de-integration) became a standard component of electricity sector reform packages. This paper provides a concise review of the origins and justification of the initial model structure for electricity liberalization, as well as an overview of the restructuring developments in the early years of electricity liberalization. Some attention is also devoted to the EU’s unbundling initiatives. The core part of this paper discusses the first signs indicating the crisis of the initial structural canon. The paper concludes with some comments referring to the modified form for a model structure that is emerging. It involves vertical integration of generation and supply and allows a higher degree of horizontal concentration of the electricity competitive markets. |
| Keywords: | electricity liberalization; model structure; unbundling; internal electricity market; EU restructuring developments |
| JEL: | K21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34898&r=ene |
| By: | Skoczny, Tadeusz |
| Abstract: | This article deals first of all with the most important characteristics, in terms of volume and quality, of all of those decisions issued by the Polish competition authority that were the basis for vertical consolidation of the Polish electricity sector, for which the authority gave unconditional or special approval between 2003 and 2007. This article also deals to a limited extent with the decision issued by the Polish competition authority prohibiting unconditionally the concentration of PGE and ENERGA, and which was referred for judicial review. This article attempts to verify the theory that the legal institution of special (exceptional) approval of a concentration, in the form in which it is created in Polish merger legislation (i.e. based mostly on the public interest test, but issued by the competition authority), is not the best formula for assessing whether there are legitimate grounds for consolidation, in particular consolidation of the Polish electricity sector. |
| Keywords: | Polish electricity sector; concentrations between electricity undertakings; vertical consolidation; preventive concentration control; special approval |
| JEL: | K21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34893&r=ene |
| By: | Rodrigo Taborda; Julieth Santamaría |
| Abstract: | This paper offers a productivity growth estimate for electric energy commercialization firms in Colombia, using a non-parametric Malmquist bootstrap methodology. The estimation and methodology serve two main purposes. First, in Colombia commercialization firms are subject to a price-cap regulation scheme, a non-common arrangement in the international experience for this part of the industry. Therefore the paper’s result suggest an estimate of the productivity factor to be used by the regulator, not only in Colombia but in other countries where commercialization is a growing part of the industry (renewable energy, for instance). Second, because of poor data collection from regulators and firms themselves, regulation based on a single estimation of productivity seems inappropriate and error-prone. The nonparametric Malmquist bootstrap estimation allows an assessment of the result in contrast to a single one estimation. This would open an opportunity for the regulator to adopt a narrower and more accurate productivity estimation or override an implausible result and impose a productivity factor in the price-cap to foster the development of the industry. |
| Date: | 2011–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:col:000092:009152&r=ene |
| By: | Kranz, Johann; Picot, Arnold; Roemer, Benedikt |
| Abstract: | By integrating a communications system with the existing power grid, smart grids provide end-to-end connectivity. This enables all entities and components integrated in the electricity supply system to exchange information without knowing the network's structure. New services and applications such as demand response or virtual power plants that will aid to improve and optimize the use of electricity depend on the availability of a smart grid communication network. End-to-end communication networks require that the missing communications gap between consumers' premises and the remaining energy network is bridged by deploying an Advanced Metering Infrastructure (AMI). Given the current liberalized electricity markets' structure incumbent distribution system operators (DSOs) will control the AMI and the meter data. This gives rise to concerns about anti-competitiveness. We argue that leveraging the AMI in a social welfare maximizing way requires non-discriminatory access for all entitled parties to the (1) AMI and the (2) meter data through (3) interoperable standards. We discuss possible regulatory remedies to ensure a level playing-field for innovative services in smart grids and consider implications for research and regulation. -- |
| Keywords: | Regulation,Smart Grid,Smart Meter,Antitrust |
| JEL: | K21 O31 L51 L94 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse11:52183&r=ene |
| By: | Swora, Mariusz |
| Abstract: | The smart grid is a concept for the development of power distribution grids that offers great promise for the realization of the ambitious objectives of European Energy Policy. In its Third Energy Liberalization Package, European energy law has introduced the concept of intelligent grids and intelligent metering systems. A new directive of EPBD (energy performance of buildings) is to press ahead with this trend. At the same time work is underway at the European Commission and with European Regulators concerning standardization and the new shape of regulatory policy in the implementation stage. The EU legislation and regulatory policy of the National Regulatory Authorities will have to take into consideration the current trends in the modernization of the networks. Among other things, this means revising the existing regulatory model, and that will have to take into account the performance and output of industry networks. |
| Keywords: | smart grids; smart metering; energy regulation; output-based regulation |
| JEL: | K21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34897&r=ene |
| By: | Christine Brandstätt; Gert Brunekreeft; Nele Friedrichsen |
| Abstract: | Smart contracts based on voluntary participation and optionality can be a low transaction cost solution to implement locational signals in distribution networks and thereby avoid network investment. This paper examines the efficiency properties of smart contracts. Based on a three-node example network we show that cases exist in which smart contracts can achieve a pareto-improvement compared to the status-quo even with voluntary participation. With the pareto improvement at least one party is better of under a smart contract without worsening the situation for anyone else. We note that this requirement is very restrictive and leaves significant potential for efficiency improvements by smart contracts untapped. We then discuss the implementation of smart contracts with incentive regulation. There are two main tasks for the regulator: allowing network operators flexibility to offer such contracts and incentivizing network operators to do so. |
| Keywords: | network investment, distribution networks, locational pricing, smart contracts |
| JEL: | D23 D43 L14 L22 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:bei:00bewp:0010&r=ene |
| By: | Murray, Cameron K |
| Abstract: | Changing household behaviour is often encouraged as a means of reducing energy demand and subsequently greenhouse gas (GHG) emissions. The direct and indirect rebound effects from cost-saving ‘green’ household consumption choices were estimated using Australian data. Rebound effects from cost-saving 'green' consumption choices are modelled as income effects, allowing for variation with households income level. Cases examined are: reduced vehicle use, reduced electricity use, the adoption of energy efficient vehicles, and the adoption of energy efficient electrical lighting. Four econometric estimation models are utilised to estimate income effects, and the before and after expenditure patterns are matched with life-cycle assessment (LCA) estimates of the embodied GHG of each expenditure category. Direct and indirect rebound effects alone are estimated at around 10% for household electricity conservation, and for reduced vehicle fuel consumption around 20%, at the median household income level. Direct rebound effects are larger for low-income households; however, indirect effects are larger for higher income households. The scale of the effect estimated, and the variation with household incomes, is attributed to LCA methodologies. These results should be interpreted as the minimum rebound effect, with greater rebound effects, and decreased effectiveness of household ‘green’ consumption, expected in reality. |
| Keywords: | rebound effects; conservation; household consumption |
| JEL: | Q50 D11 Q48 D12 Q20 |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34973&r=ene |
| By: | Römer, Benedikt; Reichhart, Philipp; Kranz, Johann; Picot, Arnold |
| Abstract: | Since the beginning of the new century our electricity system is changing rapidly. Distributed energy resources, such as wind or solar energies are becoming more and more important. These energies are producing fluctuating electricity, which is fed into low voltage distribution grids. The resulting volatility complicates the exact balancing of demand and supply. These changes can lead to distribution grid instabilities, damages of electronic devices or even power outages and might therefore end in deadweight losses affecting all electricity users. A concept to tackle this challenge is matching demand with supply in real-time, which is known as smart grids. In this study, we focus on two smart grids' key components: decentralized electricity storages and smart meters. The aim of this study is to provide new insights concerning the low diffusion of smart meters and decentralized electricity storages and to examine whether we are facing situations of positive externalities. During our study we conducted eight in-depth expert interviews. Our findings show that the diffusion of smart meters as well as decentralized electricity storages is widely seen as beneficial to society. This study identifies the most important stakeholders and various related private costs and benefits. As private benefits are numerous but widely distributed among distinct players, we argue that we face situations of positive externalities and thus societal desirable actions are omitted. We identify and discuss measures to foster diffusion of the two studied smart grid key components. Surprisingly, we find that direct interventions like subsidies are mostly not seen as appropriate even by experts from industries that would directly benefit from them. As the most important point, we identified well-designed and clearly defined regulatory and legal frameworks that are free of contradictions. -- |
| Keywords: | smart meter,decentralized electricity storage,smart grid,externality |
| JEL: | O13 O33 Q21 Q41 H23 L50 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:itse11:52198&r=ene |
| By: | Bjarne Steffen (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen) |
| Abstract: | After a period of hibernation, the development of pumpedâ€hydro storage plants in Germany regains momentum. Motivated by an ever increasing share of intermittent renewable generation, a variety of energy players considers new projects, which could increase the available capacity by up to 60% until the end of the decade. This paper analyzes the current development and evaluates the revenue potential as well as possible barriers. Overall, the prospects for new pumpedâ€hydro storage plants have improved, even though profitability remains a major challenge. |
| Keywords: | pumped-hydro energy storage, power plant investment, Germany |
| JEL: | L94 Q42 Q48 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:dui:wpaper:1107&r=ene |
| By: | M. du Preez; G. Menzies; M.C. Sale; S.G. Hosking |
| Abstract: | Although a green energy source, the location of electrical generating windmills may cause a disamenity effect (negative externality). The establishment of a wind farm is known as a locally undesirable land use (LULU) and leads to the not-in-my-backyard syndrome (NIMBY). In an application of the contingent valuation method, a willingness-to-accept framework was used to estimate the aggregate annual compensation required to allow the construction of a wind farm near Jeffrey’s Bay, South Africa. This compensation amounted to R490 695. A binary choice logit analysis found that retirement status, concern about climate change, concern about view-shed impacts and the offer amount are important predictors of voting for or against the project. |
| Keywords: | Contingent Valuation Method, indirect cost, wind farm |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:rza:wpaper:258&r=ene |
| By: | Janda, Karel; Vylezik, Tomas |
| Abstract: | In this paper we describe the major issues in the weather risk management. We focus on the management of financial risks connected with weather. We first provide a general discussion of the impact of weather on the economy. Then we follow with the overview of the development of the weather risk management. The core of the paper in then devoted to the role of weather derivatives as financial tools for weather risk management. |
| Keywords: | Financial risk; Weather risk; Derivatives; Energy |
| JEL: | G12 G13 Q4 |
| Date: | 2011–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35037&r=ene |
| By: | Elżanowski, Filip M. |
| Abstract: | This article presents the duties and powers of the President of the Energy Regulatory Office as the national regulatory authority of Poland within the scope of implementing the Third Energy Package. The article closely examines the changes and omissions connected with implementing the regulations of the Third Liberalization Package. Such implementation has not been fully executed. The biggest shortages are visible in two fields: the realization of the aims of Articles 35 and 37 of Directive 2009/72/EC. Concerning Article 35 of the Directive, the changes to the legal position of the President of URE (i.e., loosening his ties with the sphere of governmental administration, something strongly advocated by negative developments which have taken place in the legal and constitutional status of the authority over the last six years) have not been implemented. |
| Keywords: | energy law; national regulatory authority; energy market; EU law; Third Energy Package; President of the Energy Regulatory Office |
| JEL: | K21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34887&r=ene |
| By: | Nowak, Bartłomiej; Grzejszczak, Paweł |
| Abstract: | The concept of energy security can be rather difficult to precisely define. In fact, the scope of energy security includes a somewhat different set of issues in the gas sector than in the electricity sector. After all, electricity can be produced in every country of the European Union, but gas extraction is possible only in some. Natural gas is a commodity which constitutes a significant component of the export policy of only a few countries. As a result, the scarcity of gas in the EU makes it a very desirable resource for many countries, some of which are taking important energy-related decisions without consulting or assessing their impact on other Member States. This hampers the coordination of energy policy and the setting of common objectives with regard to energy security for the EU as a whole. The lack of cooperation among Member States has a clearly more negative impact on Poland and the other new Member States (which depend on a single gas supplier) than on the old EU-15, whose gas supply is generally well diversified. Moreover, the lack of proper infrastructure and cross-border connections puts in question the creation of a solid energy policy at the EU level in the gas sector. |
| Keywords: | energy security; natural gas; common energy policy |
| JEL: | K21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34892&r=ene |
| By: | Czarnecka, Marzena; Ogłódek, Tomasz |
| Abstract: | This article presents problems associated with the development of competition on the Polish energy market in the context of tariffs and pricing. National standards are set against the background of European legislation and the activities of the Energy Regulatory Office. The thesis is that the tariffs concerning distribution should be approved by the President of this authority because it is a natural monopoly, something the authors demonstrate in the following part of the article. However, the tariffs concerning selling should be free from confirmation even for households because this is a typical market. The authors do not ignore legal analysis and practical issues. |
| Keywords: | energy law; tariff; energy market |
| JEL: | K21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34886&r=ene |
| By: | Elvan Arik (IUL - Institut d'urbanisme de Lyon - Université Lumière - Lyon II) |
| Abstract: | À partir de la thématique énergétique à Istanbul, ce mémoire apporte des éléments de réponse à la double interrogation suivante : comment les structures de gouvernance locale se sont-elles adaptées aux injonctions du développement urbain durable ? ; dans une métropole déjà fragmentée socio-spatialement, l'accès au confort énergétique ne devient-il pas une nouvelle clé de lecture des distinctions sociales ? L'analyse de l'accès au réseau de gaz naturel nous a servi d'angle d'approche pour répondre à cette dernière question. Actuellement, l'émergence des thématiques du développement durable n'introduit pas de changements majeurs dans les politiques urbaines. On assiste plutôt à une redéfinition opportuniste des missions et des statuts de certains acteurs. Ceci contribue à opacifier les structures décisionnelles locales. Concernant l'accès au gaz naturel, le déploiement large et rapide du réseau ne s'est pas traduit mécaniquement en une généralisation de l'usage de cette ressource énergétique par toutes les catégories sociales. Les difficultés d'accès à ce réseau s'expliquent par la situation socialement précaire d'une importante part des Stambouliotes. Par ailleurs, l'apparition de territoires énergétiquement favorisés n'est pas la traduction d'une désintégration néolibérale des réseaux traditionnels. Elle résulte de visions métropolitaines publiques encourageant les projets d'envergure internationale. Ces deux dernières affirmations remettent ainsi en cause la théorie du Splintering Urbanism. |
| Keywords: | services urbains en réseaux, politiques énergétiques, développement urbain durable, gaz naturel, splintering urbanism, fragmentation socio-spatiale, néo-libéralisme, privatisation, métropolisation, Istanbul, Turquie, urban network services, energy policy, sustainable urban development, natural gas, splintering urbanism, socio-spatial fragmentation, neoliberalism, privatization, Turkey |
| Date: | 2011–09–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:dumas-00648609&r=ene |
| By: | Mordwa, Maria |
| Abstract: | This paper presents the system for the strategic storage of gas imposed by the Act on Fuel Reserves and evaluates its compliance with the relevant provisions of EU law, in particular the so-called 2nd and 3rd Internal Energy Market Packages. Unlike the case of legislation on strategic oil stocks, EU legislation on gas does not impose on Member States any obligation to maintain strategic reserves of gas. Furthermore, Member States are obliged to implement common rules establishing an internal market in natural gas including Third Party Access (TPA) to storage facilities. However, Member States are allowed to impose on undertakings operating in the gas sector, in the general economic interest, public service obligations which may relate to supply security, and EU law recognizes the contribution of gas storage to the security of supply. Thus, the objective of this article is to evaluate whether the Act on Fuel Reserves as well as the amendments to it proposed by the Polish Ministry of the Economy are in line with the relevant provisions of EU law. The analysis includes the position of the Court of Justice presented in several judgements as regards the concept of public service obligations. |
| Keywords: | public services obligations; security of supply of natural gas; obligation of strategic gas storage; TPA to storage facilities |
| JEL: | K21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34891&r=ene |
| By: | Muhammad, Shahbaz; V G R , Chandran; Pervaiz, Azeem |
| Abstract: | This paper examines the relationship between natural gas consumption and economic growth in Pakistan using a multivariate model by including capital and labor as the control variables for the periods of 1972-2009. The results of the ARDL bounds testing indicate the presence of cointegration among the variables. The estimated long-run impact of gas consumption (0.49) on economic growth is greater than other factor inputs suggesting that energy is a critical driver of production and growth in Pakistan. Furthermore, the results of causality test and variance decomposition analysis suggest a unidirectional causality running from natural gas consumption to economic growth. Gas being the primary source of energy in Pakistan, the implications of this study is that natural gas conservation policies could harm growth and, therefore, requires the policy makers to improve the energy supply efficiency as well as formulate appropriate policy to attract investment and establish public-private partnership initiatives. |
| Keywords: | Natural Gas Consumption; Growth; Pakistan; Cointegration; Causality |
| JEL: | Q4 |
| Date: | 2011–11–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35103&r=ene |
| By: | Cut Dian R.D. Agustina; Wolfgang Fengler; Guenther G. Schulze (Department of International Economic Policy, University of Freiburg) |
| Abstract: | This paper analyzes the regional impact of Indonesia’s fuel policy. It discusses how the sharing of oil and gas revenue and taxes on oil and gas between the center and the regions affect sub-national fiscal position and what the regional incidence of the fuel subsidies is. It also analyzes the regional impact of president’s recent proposal to discontinue subsidizing vehicle fuel as well as the proposal to eliminate the fuel subsidies altogether and shows how the regions are affected by these suggestions. |
| Keywords: | Oil policy, fuel subsidies, regional transfers, regional incidence of intergovernmental fiscal transfers |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:fre:wpaper:18&r=ene |
| By: | Eskandar Elmarzougui; Bruno Larue |
| Abstract: | The relationship between corn and oil prices is not a stable one. We identified three breaks in the relationship between corn and oil prices. The first break coincides with the second oil crisis. The second break marks the end of the agricultural export subsidy war between the EU and the US in the mid 1980s while the third one occurred at the beginning of the ethanol boom at the very end of the 1990s. The relationship between corn and oil prices tends to be stronger when oil prices are highly volatile and when agricultural policies create less distortion. The ethanol boom strengthened the relation between corn and oil prices which are (were not) cointegrated in the fourth regime (first three) regime(s). Impulse response functions confirm that corn prices systematically respond to oil price shocks, but the converse is not observed. |
| Keywords: | Oil corn, structural changes, cointegration, ethanol, protectionism |
| JEL: | C32 Q11 Q17 Q40 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:creacr:2011-3&r=ene |
| By: | Polemis, Michail; Fotis, Panagiotis |
| Abstract: | This paper explores whether asymmetric pricing can be identified in the eleven euro zone countries (Austria, Belgium, Finland, Greece, France, Germany, Ireland, Italy, Netherlands, Portugal and Spain) by utilizing Error Correction Model on the weekly price changes in order to assess current and future potential. The sample spans from July 1996 to August 2011. We also try to analyze the effect of competition on the dynamic adjustment of gasoline price to which has been paid scant attention in the past. The results favor the common perception that retail gasoline prices respond asymmetrically to cost increases and decreases both in the long and the short-run. At the wholesale segment, there is a symmetric response of the spot prices of gasoline towards the adjustment to the short-run responses of the exchange rate. |
| Keywords: | asymmetric pricing; euro zone countries; dynamic ordinary least squares; error correction model; unit root; Cointegration techniques; gasoline prices; competition; oil industry |
| JEL: | C51 C32 L11 |
| Date: | 2011–11–29 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35097&r=ene |
| By: | Melhem Sadek; Diallo Abdul Salam; Terraza Michel |
| Abstract: | The decline in the value of US dollar and the emergence of other currencies has opened the debate within OPEC, of whether it is possible to resort to the pricing of crude oil in alternative currencies. The debate was limited because of the inadequate liquidity of most other currencies. In this paper, we focus on the implications of the shift in the pricing of Iran’s crude oil to other currencies than the US dollar. The results demonstrated that the pricing for Iranian oil in US dollar had high reaction potential and responded moderately to the change in the exchange rate, when compared to the pricing in Euro and in Yen. Consequently, it appeared that stability on the financial market led to partial stability in the oil market. |
| Keywords: | Crude Oil Pricing, Currency Basket, OPEC, Exchange Rate of Dollar, Euros, Yen. |
| Date: | 2011–06 |
| URL: | http://d.repec.org/n?u=RePEc:lam:wpaper:11-13&r=ene |
| By: | Ibrahim Ahmed Elbadawi; Raimundo Soto |
| Abstract: | The 1990s ushered the world not only into a democracy wave, following the collapse of the former Soviet Union, but also a wave of fiscal rules, where the number of countries adopting this fiscal regime steadily rose from only 10 in 1990 to reach 97 in 2009. Countries that depend on hydrocarbons tend to suffer from fiscal policies that are highly susceptible to energy price shocks. This provides incentives for implementing fiscal stabilization instruments in the form of “fiscal rules”. However, the resource-rich but largely democracy-deficit MENA region has been a fiscal rules-free region. Against this backdrop, this paper asks two fundamental questions: why has MENA chose not to adopt fiscal rules? And what role, if any, resources dependence and political institutions might have played in this outcome? We find that lack of democracy and weak systems of political checks and balances that characterize MENA countries appear to have outweighed the positive impacts of oil resources so that fiscal instability persists despite ample oil revenues. The nascent Arab 'democracy spring' might tip the scale in favor of the adoption of fiscal rules by emerging democratic governments in the region. However, stronger systems of political checks and balances are also needed and, unfortunately, not necessarily a certain outcome. A move toward inflation targeting regimes, as proposed for Tunisia and Egypt, might also provide additional impetus for adoption of fiscal rules as the evidence of Chile and other inflation targeters suggests. |
| Keywords: | Fiscal regimes, fiscal stabilization, discrete-choice panel-data models |
| JEL: | E61 E62 E63 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:398&r=ene |
| By: | Porter, Julie (Cardiff University) |
| Abstract: | The Deepwater Horizon oil spill dumped almost 5 million barrels of oil into the Gulf of Mexico over a three month period in 2010. This event had a significant economic impact (which compounded the recession effect) on the surrounding regions particularly those with a large marine industry presence. This paper seeks to address the issues that have arisen over the past year as a result of the oil spill, focusing on the capacity of the regional economy to respond to the exogenous shocks of mass pollution and global recession while highlighting any economic recovery efforts as well as any tensions created. To represent both the region and the industry, the coastal tourism and fishing clusters in Southern Louisiana will be used as case studies. Through the analysis of socioeconomic data and secondary source material, including historic economic recovery accounts in the region post-Hurricane Katrina, these issues will be assessed. Recommendations will be made regarding the recovery process which will take into account US government policy |
| Keywords: | Resilience; Maritime Cluster; Deepwater Horizon; Path Dependence |
| JEL: | O18 |
| Date: | 2011–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:cieodp:2011_012&r=ene |
| By: | Annelies J. Balkema; Henny A. Romijn |
| Abstract: | This paper focuses on the smallholder outgrower model for jatropha biofuel cultivation in Tanzania. This model is based on seed production by small farmers who sell to a processing company that presses the bio-oil from the seeds locally, either for the local market or for export. This model has been implemented by a foreign investor in Tanzania, the social business model combines profit making with social and environmental objectives. This paper describes the trends and developments of this innovative business model in a global cultivation, production and usage chain, exploring the trade-offs between the people, planet, profit objectives (triple P) and how the business model adapts to survive through the different stages of the innovation process. The three stages that are distinguished in the innovation process are: (1) learning to be effective, (2) learning to be efficient and (3) up-scaling and diffusion. The observed trend is that in the different stages different roles are played by the company as it aims at shifting from subsidy funds to profit making. In the process of becoming efficient and starting to upscale, it seems harder to ensure the implementation of the social and environmental objectives. Therefore, other actors will have to play a more active role in capacity building and market regulation and additional funding has to be made available to the company for the social benefits it is generating for society. |
| Keywords: | business models, sustainability, biofuel, innovation |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:tuecis:wpaper:1106&r=ene |
| By: | Westin, Jonas (KTH); Kågeson, Per (KTH) |
| Abstract: | The purpose of this paper is to analyze the climate benefit of investments in high speed rail-way lines given uncertainty in future transport demand, technology and power production. To capture the uncertainty of estimated parameters, distributions for the annual traffic emissions reduction required to compensate for the embedded emissions from the construction of infrastructure are calculated using Monte Carlo simulation. In order to balance the annualized emissions from the railway construction, traffic volumes of more than 10 million annual one-way trips are usually required. Most of the traffic diverted from other modes must come from aviation and the project cannot involve the extensive use of tunnels. In sparsely populated regions it may be, from a climate point of view, better to upgrade existing lines and to try to make people substitute air travel by modern telecommunications, rather than investing large amounts of resources in enabling people to travel faster and more often. |
| Keywords: | High-speed rail; CO2 emissions; Embedded emissions; Infrastructure investment; Monte Carlo simulation; Sensitivity analysis |
| JEL: | Q54 R42 |
| Date: | 2011–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2011_016&r=ene |
| By: | Joachim Fuenfgelt; Guenther G. Schulze (Department of International Economic Policy, University of Freiburg) |
| Abstract: | We analyze the formation of environmental policy to regulate transboundary pollution if governments are self-interested. In a common agency framework, we portray the environmental policy calculus of two political supportmaximizing governments that are in a situation of strategic interaction with respect to their environmental policies, but too small to affect world market prices. We show how governments systematically deviate from socially optimal environmental policies. Taxes may be too high if environmental interests and pollution-intensity of production are very strong; under different constellations they may be too low. Governments may actually subsidize the production of a polluting good. Politically motivated environmental policy thus may be more harmful to the environment as compared to the benevolent dictators’ solution. In other cases it may enhance environmental quality and welfare beyond what a benevolent government would achieve. |
| Keywords: | Political economy, environmental policy, transboundary pollution, common agency, strategic interaction |
| JEL: | Q58 F5 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:fre:wpaper:14&r=ene |
| By: | Joseph V. Spadaro |
| Abstract: | Throughout history, technological development and economic growth has led to greater prosperity and overall standard of living for many people in society. However, along with the benefits of economic development comes the social responsibility of minimizing the mortality and morbidity health impacts associated with human activities, safeguarding ecosystems, protecting world cultural heritage and preventing integrity and amenity losses of man-made environments. Effects are often irreversible, extend way beyond national borders and can occur over a long time lag. At current pollutant levels, the monetized impacts carry a significant burden to society, on the order of few percent of a country’s GDP, and upwards to 10% of GDP for countries in transition. A recent study for the European Union found that the aggregate damage burden from industrial air pollution alone costs every man, woman and child between 200 and 330 € a year, of which CO2 emissions contributed 40 to 60% (EEA 2011).<br /> <br /> In a sustainable world, an assessment of the environmental impacts (and damage costs) imposed by man\\\'s decisions on present and future generations is necessary when addressing the cost effectiveness of local and national policy options that aim at improving air quality and reducing greenhouse gas emissions. The aim of this paper is to present a methodology for calculating such adverse public health outcomes arising from exposure to routine atmospheric pollutant emissions using a simplified methodology, referred to as the Uniform World Model (UWM). The UWM clearly identifies the most relevant factors of the analysis, is easy to implement and requires only a few key input parameters that are easily obtained by the analyst, even to someone living in a developing country. The UWM is exact in the limit all parameters are uniformly distributed, due to mass conservation.<br /> <br /> The current approach can be applied to elevated and mobile sources. Its robustness has been validated (typical deviations are well within the ±50% range) by comparison with much more detailed air quality and environmental impact assessment models, such as ISC3, CALPUFF, EMEP and GAINS. Several comparisons illustrating the wide range of applicability of the UWM are presented in the paper, including estimation of mean concentrations at the local, country and continental level and calculation of local and country level intake factors and marginal damage costs of primary particulate matter and inorganic secondary aerosols. Relationships are also provided for computing spatial concentration profiles and cumulative impact or damage cost distributions. Assessments cover sources located in the USA, Europe, East Asia (China) and South Asia (India).<br /> |
| Keywords: | Air Pollution, Urban Air Quality, Particulate Matter, Air Quality Modeling, Health Impact Assessment, Loss of Life Expectancy, Damage Costs of Air Pollution |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2011-12&r=ene |
| By: | ZhongXiang Zhang (East-West Center); ; |
| Abstract: | China's capital-intensive, export-oriented, spectacular economic growth since launching its open-door policy and economic reforms in late 1978 not only has created jobs and has lifted millions of the Chinese people out of poverty, but also has given rise to unprecedented environmental pollution and CO2 emissions. While estimates of the embedded CO2 emissions in China's trade differ, both single country studies for China and global studies show a hefty chunk of China's CO2 emissions embedded in trade. This portion of CO2 emissions had helped to turn China into the world's largest carbon emitter, and is further widening its gap with the second largest emitter. This raises the issue of who should be responsible for this portion of emissions and bearing the carbon cost of exports. China certainly wants importers to cover some, if not all, of that costs. While China's stance is understandable, this paper has argued from a broad and balanced perspective that if this is pushed too far, it will not help to find solutions to this issue. On the contrary it can be to China's disadvantage for a number of reasons. However, aligning this responsibility with China does not necessarily suggest the sole reliance on domestic actions. In that context, the paper recommends specific actions that need to be taken internationally as well as domestically in order to effectively control the embedded CO2 emissions in China's trade. |
| JEL: | F18 P28 Q42 Q43 Q48 Q53 Q54 Q56 Q58 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:ewc:wpaper:wp122&r=ene |
| By: | Alessandro Antimiani; Valeria Costantini; Chiara Martini; Luca Salvatici |
| Abstract: | A modified version of the CGE GTAP-E model is developed for assessing the economic and carbon emissions effects related to alternative policy measures implemented with the aim of reducing carbon leakage. We explore a set of scenarios, comparing solutions where Annex I countries introduce exogenously or endogenously determined carbon border taxes in order to solve the carbon leakage problem unilaterally. Results provide evidence on the scarce effectiveness of carbon tariffs in reducing carbon leakage and enhancing economic competitiveness, while they have large negative welfare effects not only on the Non-Annex countries, but also on certain Annex I countries |
| Keywords: | Carbon Leakage, Carbon Border Tax, GTAP-E model |
| JEL: | Q43 Q47 Q54 |
| Date: | 2011–09 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0136&r=ene |
| By: | Mariam Camarero (Department of Economics, Universitat Jaume I (Castellón, Spain)); Yurena Mendoza (Departamento de Economía Aplicada II. Universidad de Valencia.); Javier Ordóñez (Department of Economics, Universitat Jaume I (Castellón, Spain)) |
| Abstract: | This paper re-examines CO2 emissions in 22 OECD countries over the period 1870–2006. It contributes to the field of environmental economics trying to clarify the possible sources of the mixed evidence on CO2 emissions convergence. To this end we employ a detailed methodological strategy. First we start with standard linear tests as the ones proposed by Ng and Perron (2001). Then, using the Lee and Strazicich (2003) tests, we take into account the possible existence of structural breaks in the series. Finally, we apply a non-linear test within a smooth transition autoregressive (STAR) framework proposed by Kapetanios et al. (2003). The empirical evidence provided by our methodological strategy suggests that the original per capita CO2 emissions for the largest span, from 1870 to 2006, are stationary, so that to continue with the assessment of convergence in this context would not be adequate. However if we consider instead the period 1950-2006, per capita CO2 emissions are in a non-stationary local regime. Thus, in this case we proceed with the study of convergence. Bearing in mind plausible nonlinearities, CO2 emissions convergence is assessed using two versions of the Kapetanios et al. (2003) test, and conclude that there is no robust convergence among these 22 OECD countries. |
| Keywords: | CO2 emissions, stationarity, non linear test, smooth transition, convergence. |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2011/6&r=ene |
| By: | Muhammad, Shahbaz; Lean, Hooi Hooi; Muhammad, Shahbaz Shabbir |
| Abstract: | The paper is an effort to fill the gap in the energy literature with a comprehensive country study for Pakistan. We investigate the relationship between CO2 emissions, energy consumption, economic growth and trade openness for Pakistan over the period of 1971-2009. Bounds test for cointegration and Granger causality test are employed for the empirical analysis. The result suggests that there exists long-run relationship among the variables and the Environmental Kuznets Curve (EKC) hypothesis is supported. The significant existence of EKC shows the country's effort to condense CO2 emissions and indicates a reasonable achievement of controlling environmental degradation in Pakistan. Furthermore, we find one-way causal relationship running from income to CO2 emissions. Energy consumption increases CO2 emissions both in the short and long runs. Trade openness reduces CO2 emissions in the long run but it is insignificant in the short run. In addition, the change in CO2 emissions from short run to the long span of time is corrected by about 10 percent each year. |
| Keywords: | CO2 emissions; energy consumption; trade openness |
| JEL: | P28 |
| Date: | 2011–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34929&r=ene |
| By: | Paolo Paruolo (Department of Economics, University of Insubria, Italy); Ben Murphy (European Commission, Joint Research Centre, Institute for Environment and Sustainability); Greet Janssens-Maenhout (European Commission, Joint Research Centre, Institute for Environment and Sustainability) |
| Abstract: | This paper uses Vector Autoregressions that allow for nonstationarity and cointegration to investigate the dynamic relation between income and emissions in the period 1970-2008, for all world countries. We consider three emissions compounds, namely CO2, SO2 and a composite global warming index (GWP100). These emissions include energy-related activities with a share varying from 60% (GWP100) to almost 90% (SO2). For all chemical compounds, it is found that for over two thirds of cases income and emissions are driven by unrelated random walks with drift, at 5% significance level. For one quarter of the cases the variables are found to be driven by a common random walk with drift. Finally, for the remaining 4.5% of cases the variables are trend-stationary. Tests of Granger-causality show evidence of both directions of causality. For the case of unrelated stochastic trends, one finds a predominance of emissions causing income (in growth rates), which accords with a production-function rather than with a consumption-function interpretation of the emissions-income relation. The evidence challenges the main implications of the Environmental Kuznets Curve hypothesis, namely that the dominant direction of causality should be from income to emissions, and that for increasing levels of income, emissions should tend to decrease. |
| Keywords: | Environmental Kuznets Curve; Emissions; Income; Cointegration; Common trends JEL Classification: Q53, Q54 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:ins:quaeco:qf1113&r=ene |
| By: | Eric Kemp-Benedict |
| Abstract: | Scaling relations, such as the IPAT equation and the Kaya identity, are useful for quickly gauging the scale of economic, technological, and demographic changes required to reduce environmental impacts and pressures; in the case of the Kaya identity, the environmental pressure is greenhouse gas emissions. However, when considering large-scale economic transformation, as with a shift to a low-carbon economy, the IPAT and Kaya identities and their cousins fail to capture the legacy of existing capital, on the one hand, and the need for new investment, on the other. While detailed models can capture these factors, they do not allow for rapid exploration of widely different alternatives, which is the appeal of the IPAT and Kaya identities. In this paper we present an extended Kaya identity that includes investment and capital stocks. The identity we propose is a sum of terms, rather than a simple scaling relation. Nevertheless, it allows for quick analysis and rapid exploration of a variety of different possible paths toward a low-carbon economy. |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1112.0758&r=ene |
| By: | Jaime Casassus; Peng Liu; Ke Tang |
| Abstract: | This paper finds that the long-term co-movement of commodity prices is driven by economic relationships, such as production, substitution, and complementary relationships. Such relationships imply that the convenience yield of a given commodity depends on its relative scarcity with respect to associated commodities. The economic linkage between two commodities creates a new source of positive correlation between the futures returns of both commodities. We build an empirical, multi-commodity maximal affine model that allows the convenience yield of a commodity to depend on its relative scarcity. We estimate the model using three commodity pairs: heating oil-crude oil, WTI-Brent crude oil and heating oil-gasoline. Our model allows for a flexible correlation term structure of futures returns that matches the upward-sloping patterns observed in the data. The high long-term correlation implied by an economic relationship reduces the volatility of the spread between commodities, which implies lower spread option prices. An out-of-sample test using short-maturity crack spread options data shows that our model considerably reduces the negative bias generated by traditional models. |
| Keywords: | Relative scarcity, correlation term structure, futures returns, long-term economic relation-ships, convenience yield, feedback effect, multi-commodity maximal affine,spread option |
| JEL: | C0 G12 G13 D51 D81 E2 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:404&r=ene |
| By: | Stephen Hammer; Lamia Kamal-Chaoui; Alexis Robert; Marissa Plouin |
| Abstract: | This report examines the current state of knowledge about green growth in cities and outlines the key research questions and protocols that will guide the OECD Green Cities programme. It builds the case for an urban green growth agenda by examining the economic and environmental conditions that have pushed the green growth agenda to the forefront of policy debate and assessing the critical role of cities in advancing green growth. Section 1 lays the context for the paper, examining why green growth is important and how it can be defined in an urban context. Section 2 focuses on policies and tools that enable the transition to green growth in cities. It concludes with a proposal for a policy framework for an urban green growth agenda that is based on a set of hypotheses of desirable economic scenarios. Section 3 examines the main challenges to advancing an urban green growth agenda. It explores the roles that multi-level governance, measuring and monitoring tools and finance must play in delivering green growth in cities. The report concludes with suggestions for future research, including recommendations on how national policymakers responsible for regional and urban policies can advance an urban green growth agenda. |
| Keywords: | sustainable development, government policy, planning, global warming, regional, regional economics, urban sustainability, territorial, cities, urban, green growth, climate |
| JEL: | O1 O3 Q1 Q2 Q3 Q4 Q5 R1 R4 R5 |
| Date: | 2011–12–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:govaab:2011/8-en&r=ene |
| By: | Amnon Levy (University of Wollongong) |
| Abstract: | The objective of this paper is to provide an introduction to the economics of controlling the stock of carbon-dioxide in the atmosphere. The paper starts with a brief summary of the arguments against a wait-and-see strategy and in favour of controlling carbon emissions. It then provides a basic analysis of the effect of carbon tax on net-cash flow maximising agents’ emissions and offers two possible ways for setting the tax rate. The first one computes an atmospheric carbon-dioxide stock-targeting tax rate with abstinence of some agents, whereas the second considers universal cooperation and computes a welfare-maximising carbon-tax rate. While these computations assume a fixed rate of depletion of the atmospheric stock of carbon dioxide, the last section takes the depletion rate to be dependent on the distribution of the usable land between plants and humans and the change in the usable land to be dependent on the change in the atmospheric carbon-dioxide stock. The usable land allocation required for achieving a target stock of atmospheric carbon dioxide is subsequently computed. |
| Keywords: | Emissions; Carbon-Cycle Imbalance; Atmospheric Carbon Stock; Global Warming; Usable land: Control Measures; Carbon Tax; Plants-Humans Land Allocation |
| JEL: | Q52 Q54 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:uow:depec1:wp11-07&r=ene |
| By: | Żmijewski, Krzysztof; Sokołowski, Maciej M. |
| Abstract: | European climate and energy policy will have a great impact on the European and Polish energy markets. Moreover, it will have an influence on broad realms of social and economic activity. This raises the necessity of taking concrete strategic measures, especially on the governmental level. EU climate and energy policy also entails sizeable investment requirements and places important demands on the modernization programme for the energy sector. This spells the need to develop broad dialogue between the government and society. The above gives the background behind the appointment of the biggest Polish think tank in 2009 – namely, the Public Board of the National Programme for the Reduction of Emissions. In the Polish context the authors herein analyze the European climate and energy package, European Union policy regarding the reduction of emissions, and the Polish efforts taken in this field. The authors also describe the role of the Public Board of the National Programme for the Reduction of Emissions and its tasks. In conclusion they present policy recommendations and results in the area of fulfilling European obligations and conducting an infrastructural modernization programme in Poland. |
| Keywords: | Emission Trading System; energy; reduction of emissions; energy market; energy policy; climate and energy package |
| JEL: | K21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34899&r=ene |
| By: | Lewandowski, Janusz |
| Abstract: | The generation of utilizable forms of energy, mainly electricity and heat, carries an environmental impact – as does any human industrial activity. In the case of the power industry based on fossil fuels, this impact is connected with the emission of technological by-products, not necessarily of a material character. It is obvious that the Polish point of view on this problem is connected with the unique degree of dependence of the national power industry on coal. Two aspects of the emission reduction problem are analyzed in this article: the technological, connected with the permanent development of flue-gas cleaning; and the administrative, connected with limiting the permissible polluter concentration in flue gases. It is shown that during the development of the power industry to date, those relations led to an effectiveness (efficiency) of flue-gas cleaning installations which seemed impossible at the moment of its implementation. The main goal of this work is to demonstrate that the regulations being introduced by the European Commission strongly disturb the present relations between technical capabilities and administrative requirements. |
| Keywords: | power industry; emission reduction; development of technology of flue-gas cleaning ; low regulation on industrial emission |
| JEL: | K21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34889&r=ene |
| By: | Trevor Houser (Peterson Institute for International Economics); Jason Selfe (Rhodium Group) |
| Abstract: | At the United Nations climate change conference in Copenhagen in 2009 and Cancun in 2010, the United States joined other developed countries in pledging to mobilize $100 billion in public and private sector funding to help developing countries reduce greenhouse gas emissions and adapt to a warmer world. With a challenging US fiscal outlook and the failure of cap-and-trade legislation in the US Congress, America's ability to meet this pledge is increasingly in doubt. This paper identifies, quantifies, and assesses the politics of a range of potential US sources of climate finance. It finds that raising new public funds for climate finance will be extremely challenging in the current fiscal environment and that many of the politically attractive alternatives are not realistically available absent a domestic cap-and-trade program or other regime for pricing carbon. Washington's best hope is to use limited public funds to leverage private sector investment through bilateral credit agencies and multilateral development banks. |
| Keywords: | climate change, carbon, climate finance, UNFCCC, Copenhagen Accord, Cancun Agreements, development assistance, adaptation, green fund, multilateral development banks, fossil fuel subsidies, emission offsets, bilateral credit agencies |
| JEL: | Q00 Q27 Q48 Q54 F18 F35 F50 F51 F52 F53 F55 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:iie:wpaper:wp11-19&r=ene |
| By: | Amnon Levy (University of Wollongong) |
| Abstract: | The responsibility for, and consequences of, greenhouse gas emissions are shared by all countries, but only a few are willing to tax emissions. The paper argues that the reactions of the abstaining countries are crucial for assessing the effectiveness of the tax. The paper analyzes an interaction between a tax-collecting and investing coalition of rich countries, abstaining rich countries and poor countries. The non-coalition countries might have loss of reputation and guilt and overstate the tax’s emission-moderating effect. As long as these three types of countries react to their counterparts’ emissions, taxing emissions does not necessarily reduce the global emissions. |
| Keywords: | Emission Tax; Abstinence; Understating Expectations; Guilt; Global Emissions |
| JEL: | Q52 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:uow:depec1:wp11-12&r=ene |
| By: | Andreas Türk (University of Graz, Wegener Center for Climate and Global Change) |
| Abstract: | After the climate conferences in Copenhagen and Cancun, it is likely that the EU remains more ambitious regarding greenhouse gas reduction targets than other countries. The possible problem of carbon leakage and instruments to tackle it therefore remains an important issue in the European climate policy debate. The reduction of competitive distortions and carbon leakage induced by different CO2 prices in the EU and important trading partners is one of several reasons for the EU to aim for the establishment of a trading link between the European Emission Trading Scheme (EU ETS) and other domestic or regional emissions trading systems in developed and developing countries. Main reasons for linking include higher cost efficiency to meet a given reduction target as well as improved market liquidity resulting in more robust and stable price signals. |
| Keywords: | Linking, Leakage, Carbon market, Emissions Trading |
| Date: | 2011–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2011:i:410&r=ene |
| By: | Claudia Kettner (WIFO); Daniela Kletzan-Slamanig (WIFO); Angela Köppl (WIFO); Thomas Schinko; Andreas Türk |
| Abstract: | The environmental effectiveness of an emission trading system depends on the one hand on the stringency of the cap and on the other hand on the scheme's ability to provide stable regulatory conditions and incentives for investment in emission saving technologies. However, in case of highly volatile CO2 prices no clear investment signal is provided and hence firms' decision making and planning is rendered difficult. Analyses of price developments in the European Emission Trading Scheme (EU ETS) indicate that in Phase 1 (2005-2007) fluctuations were mainly caused by incomplete information at the beginning, adjustments after the emergence of verified emission data and regulatory mechanisms. At the beginning of Phase 2 (2008-2012) in contrast a decline in carbon prices was observed as firms sold surplus allowances resulting from lower emissions due to economic recession. For Phase 3 of the EU ETS (2013-2020) hence the introduction of price stabilisation measures has been suggested by several member countries during the discussions on the EU energy and climate package. Various instruments can be integrated in a cap-and-trade scheme in order to reduce price volatility such as provisions for banking and borrowing, the approval of offsets for compliance purposes and hybrid systems, i.e., combinations of price and quantity mechanisms. Given the long-term nature of climate policy, the related uncertainties regarding technological change and political frameworks, and given a rising speculation in carbon markets, such price stabilisation approaches should be considered for the future design of emission trading schemes. |
| Date: | 2011–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2011:i:409&r=ene |
| By: | Claudia Kettner (WIFO); Daniela Kletzan-Slamanig (WIFO); Angela Köppl (WIFO) |
| Abstract: | The European Emission Trading Scheme (EU ETS) is a key instrument in European climate policy and covers emitters from the energy and manufacturing sector. The ETS pilot phase (2005-2007) was characterised by an oversupply of emission allowances mainly due to the "generous" allocation of allowances by member countries. For the second trading phase (2008-2012) the European Commission aimed at increasing the stringency of the overall emission cap and took a more active role in approving member countries' National Allocation Plans. Due to the decline in economic activity and emissions in the course of the economic crisis, the cap, however, was only stringent in 2008 whereas 2009 and 2010 both showed a long position for EU total. Differences in national and sectoral caps are found for all years. In this paper, we analyse differences in allocation patterns, i.e., in the stringency of the cap and in the spread between installations, until 2010. We focus on general sectoral allocation patterns and perform an in-depth analysis for three emission intensive sectors: "power and heat", "cement and lime" and "pulp and paper". Furthermore, we discuss the impact of the economic crisis on the emissions of these sectors in detail. |
| Date: | 2011–11–09 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2011:i:408&r=ene |
| By: | Stoczkiewicz, Marcin |
| Abstract: | The subject matter of this article is the implementation in Poland of Directive 2003/87/EC on the emissions trading scheme for greenhouse gases in the Community. The first part of the article focuses on the presentation of the legislation and institutional arrangements which transpose the obligations contained in Directive 2003/87/EC into Polish law. On the basis of this, the article then presents some problems regarding the implementation in Poland of important changes introduced into Directive 2003/87/EC by Directive 2009/29/EC. This part of the article contains an analysis of Article 50 of the new Act on the System of Greenhouse Emission Trading, which introduces specific rules for licensing bodies that undertake investment in terms of compliance with the provisions of Directive 2009/29/EC. Secondly, this paper also presents a preliminary assessment of the proposed free allocation of greenhouse gas emissions allowances in Poland to electricity production enterprises. This is examined from the viewpoint of the possibility of State aid in the meaning of Article 107(1) of the Treaty on the Functioning of the European Union. |
| Keywords: | environmental law; directive 2003/87/EC; emission trading; auctioning; free allocation; State aid |
| JEL: | K21 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34896&r=ene |
| By: | Anthoff, David; Rose, Steven; Tol, Richard S. J.; Waldhoff, Stephanie |
| Abstract: | The authors estimate the growth rate of the social cost of carbon. This is an indication of the optimal rate of acceleration of greenhouse gas emission reduction policy over time. The authors find that the social cost of carbon increases by 1.3% to 3.9% per year, with a central estimate of 2.2%. Previous studies found an average rate of 2.3% and a range of 0.9 to 4.1%. The rate of increase of the social carbon depends on a range of factors, including the pure rate of time preference, the rate of risk aversion, equity weighting, the socioeconomic and emission scenarios, the climate sensitivity, dynamic vulnerability, and the curvature of the impact functions. -- |
| Keywords: | social cost of carbon |
| JEL: | Q54 |
| Date: | 2011 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201144&r=ene |
| By: | Stéphane Hallegatte (CNRM-GAME - Groupe d'étude de l'atmosphère météorologique - CNRS : URA1357 - INSU - Météo France, CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD : UMR56 - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - AgroParisTech); Przyluski Valentin (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD : UMR56 - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - AgroParisTech); Adrien Vogt-Schilb (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD : UMR56 - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - AgroParisTech) |
| Abstract: | The impacts of climate change on human systems depend not only on the level of emissions but also on how inherently vulnerable these systems are to the changing climate. The large uncertainties over future development and structure of societies and economies mean that the assessment of climate change efects is complex. One way to deal with this complexity is by using scenario analysis that takes account of these socio-economic diferences. The challenge is to identify the dimensions along which societies and economies evolve over time in such a way as to cover sufciently diferent vulnerability patterns. This conceptual efort is critical for the development of informative scenarios. Here, we identify three dimensions that take into account the most relevant factors that defne the vulnerability of human systems to climate change and their ability to adapt to it. |
| Keywords: | impacts; vulnerability; adaptation; climate change; scenario; prospective; narratives |
| Date: | 2011–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-00618688&r=ene |
| By: | Carfì, David; Schilirò, Daniele |
| Abstract: | The paper proposes a coopetitive model for the Green Economy. It addresses the issue of the climate change policy and the creation and diffusion of low-carbon technologies. In the present paper the complex construct of coopetiton is applied at macroeconomic level. The model, based on Game Theory, enables us to offer a set of possible solutions in a coopetitive context, allowing to find a Pareto solution in a win-win scenario. The model, which is based on the assumption that each country produces a level of output which is determined in a non-cooperative game of Cournot-type and that considers at the same time a coopetitive strategy regarding the low carbon technologies, will suggest a solution that shows the convenience for each country to participate actively to a program of low carbon technologies within a coopetitive framework to address a policy of climate change, thus aiming at balancing the environmental imbalances. |
| Keywords: | coopetition; game theory; green economy; energy-saving technologies; policy of climate change |
| JEL: | Q50 C78 Q48 C71 Q55 Q42 C72 |
| Date: | 2011–11–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:35245&r=ene |
| By: | Khanna, Dr. Perminder; Aneja, Reenu |
| Abstract: | Abstract Climate has inherent variability manifesting in gradual changes in temperature, precipitation and sea-level rise. The paper entitled “Climate Change: A Primer” attempts to analyse the policy response and adaptation to the need to address climate change at the international and domestic level both. Intense variations in climate would increase the risk of abrupt and non-linear changes in the ecosystem, impacting their function, biodiversity and productivity. The policy initiations and implementation for mitigating climate change risks have been intricately discussed pertaining to the International Panel on Climate Change (IPCC) (1988) by the United Nations Environment Programme (UNEP) and World Meteorological Organisation (WMO); United Nations Framework Convention Climate Change (UNFCCC) (1994); Kyoto Protocol (2005); India’s Greenhouse Gas Emissions Report (2007), and the National Action Plan on Climate Change (NAPCC) (2008). |
| Keywords: | Climate Change |
| JEL: | Q5 Q54 |
| Date: | 2011–11–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:34867&r=ene |
| By: | Alain de Serres; Fabrice Murtin |
| Abstract: | This paper assesses some welfare consequences of climate change mitigation policies. In the same vein as Becker, Philipson and Soares (2005), a simple index of economic progress weighs in the monetary cost induced by mitigation policies as well as the health benefits arising from the reduction in local air pollution. The shadow price of pollution is calculated indirectly through its impact on life expectancy. Taking into account the health benefits of mitigation policies significantly reduces their monetary cost in China and India, as well as in countries with large fossil-based energy-producing sectors (Australia, Canada and the United States).<P>L'impact des politiques d'atténuation du changement climatique sur le bien-être économique<BR>Cette étude évalue certaines conséquences des politiques d’atténuation du changement climatique sur le bien-être économique. Suivant l’approche de Becker, Philipson et Soares (2005), un indice de progrès économique est proposé, combinant le coût monétaire des politiques d’abattement d’émissions de gaz à effet de serre ainsi que les bénéfices pour la santé de la réduction de la pollution de l’air qui en découle. Le prix implicite de la pollution est calculé indirectement à travers son impact sur l’espérance de vie. La prise en compte des bénéfices sur la santé des politiques d’atténuation réduit le coût monétaire de la lutte contre le changement climatique baisse de manière significative en Chine et en Inde, ainsi que dans le cas de pays à forte production d’énergie fossile (l’Australie, le Canada et les Etats-Unis). |
| Keywords: | health, climate change, value of statistical life, welfare measurement, santé, changement climatique, mesure de bien-être, valeur statistique d’une vie |
| JEL: | I31 Q51 Q54 |
| Date: | 2011–12–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:908-en&r=ene |
| By: | Gersbach, Hans; Hummel, Noemi |
| Abstract: | We suggest a development-compatible refunding system designed to mitigate climate change. Industrial countries pay an initial fee into a global fund. Each country chooses its national carbon tax. Part of the global fund is refunded to developing and industrial countries, in proportion to the relative emission reductions they achieve. Countries receive refunds net of tax revenues. We show that such a scheme can simultaneously achieve efficient emission reductions and equity objectives, as developing countries abate voluntarily, do not have to pay an initial fee, are net receivers of funds, and are net beneficiaries. Moreover, we explore the potential of simple refunding schemes that do not claim tax revenues and only rely on initial fees paid by industrial countries. |
| Keywords: | climate change mitigation; developing countries; international agreements; refunding scheme |
| JEL: | H23 H41 O10 O13 Q54 |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:8685&r=ene |
| By: | Mutsuyoshi Nishimura; Akinobu Yasumoto |
| Abstract: | Given the urgency and the magnitude of emission cuts required to arrest the global temperature rise at an acceptable level (like 2 degrees Celsius), it is imperative that action to mitigate climate change is taken at the lowest cost. This can be done if a cost effective set of policy tools with a focus on carbon pricing is applied as broadly as possible across all emission sources. In view of the emerging consensus on the temperature target like 2 degrees Celsius, it is imperative that climate scheme caps global emissions rather than allowing governments to arbitrarily pledge their intended cuts. Global emissions must be contained within the limit of carbon budget that achieves temperature objectives. Emission allowances must be issued in accordance with such limit and be sold to the global demand of emitters. Such sales of carbon budget give rise to both the most accurate carbon pricing as well as new revenue that can be used for much needed climate financing for developing countries. A new climate regime along those lines would stop global warming at an acceptable level, provide a new large climate funding that would integrate developing countries to a global low-carbon growth and transformation and keep all economies thriving, whether they are developing, emerging or developed. The post-2020 climate regime must be nimble and effective, not unwieldy and least burdensome. It must also be durable and fully congruent to the economic realities of the coming decades. |
| JEL: | Q54 F53 |
| Date: | 2011–11 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1117&r=ene |