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on Energy Economics |
| By: | Jessica Jewell |
| Abstract: | Ensuring energy security has been at the centre of the IEA mission since its inception, following the oil crises of the early 1970s. While the security of oil supplies remains important, contemporary energy security policies must address all energy sources and cover a a comprehensive range of natural, economic and political risks that affect energy sources, infrastructures and services. In response to this challenge, the IEA is currently developing a Model Of Short-term Energy Security (MOSES) to evaluate the energy security risks and resilience capacities of its member countries. The current version of MOSES covers short-term security of supply for primary energy sources and secondary fuels among IEA countries. It also lays the foundation for analysis of vulnerabilities of electricity and end-use energy sectors. MOSES contains a novel approach to analysing energy security, which can be used to identify energy security priorities, as a starting point for national energy security assessments and to track the evolution of a country's energy security profile. By grouping together countries with similar "energy security profiles", MOSES depicts the energy security landscape of IEA countries. By extending the MOSES methodology to electricity security and energy services in the future, the IEA aims to develop a comprehensive policy-relevant perspective on global energy security. |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ieaaaa:2011/17-en&r=ene |
| By: | Brennan, Timothy J. (Resources for the Future); Palmer, Karen (Resources for the Future) |
| Abstract: | Twenty states in the United States have adopted energy efficiency resource standards (EERS) that specify absolute or per¬centage reductions in energy use relative to business as usual. We examine how an EERS compares to policies oriented to meeting objectives, such as reducing greenhouse gas emissions, cor¬recting for consumer error in energy efficiency investment, or reducing peak de¬mand absent real-time prices. If reducing energy use is a policy goal, one could use energy taxes or cap-and-trade systems rather than an EERS. An EERS can be optimal under special conditions, but to achieve optimal goals following energy efficiency investments, the marginal external harm must fall with greater energy use. This could happen if inframarginal energy has greater negative externalities, particularly regarding emissions, than energy employed at the margin. |
| Keywords: | energy efficiency resource standards, energy efficiency, electricity, conservation |
| JEL: | L94 Q48 D02 |
| Date: | 2012–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-12-10&r=ene |
| By: | Palmer, Karen (Resources for the Future); Grausz, Samuel (Resources for the Future); Beasley, Blair (Resources for the Future); Brennan, Tim (Resources for the Future) |
| Abstract: | Energy efficiency resource standards (EERS) refer to policies that require utilities and other covered entities to achieve quantitative goals for reducing energy use by a certain year. EERS policies generally apply to electricity and natural gas sales and electricity peak demand, though they also cover other energy sources in Europe. Our study aggregates information about the requirements of existing EERS policies for electricity sales in the United States. We convert quantitative goals into comparable terms to compare the nominal stringency of EERS programs across states. EERS programs also differ in their nonquantitative requirements, including flexibility measures, measurement and verification programs, and penalties and positive incentives. We compare the U.S. policies to similar policies in the European Union and discuss important policy issues, including exogenous changes in fuel prices and issues with utility management of energy efficiency programs. |
| Keywords: | energy efficiency, electricity, energy efficiency resource standards, state regulation |
| JEL: | L94 L95 L51 |
| Date: | 2012–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-12-11&r=ene |
| By: | Takeshi Niizeki |
| Abstract: | The energy-dependence of Japan's economy declined considerably following the first oil crisis in 1973. This paper examines what caused the sharp drop in the use of energy per unit of gross national product (GNP) observed in the 1970s and 1980s, using a simple neo-classical growth model with energy as a third production input. Two possible candidates are investigated: (i) the substitution effect due to changes in the relative price of energy, and (ii) energy-saving technological progress. The findings are as follows. First, the substitution effect alone is weak and alone cannot account for the decline in the energy-GNP ratio. Second, the estimated level of energy-saving technology more than tripled between 1970 and the late 1980s, and the model with energy-saving technological progress is able to explain the drop in the energy-GNP ratio well. |
| Keywords: | Relative Energy Price, Energy-saving Technological Progress |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:hst:ghsdps:gd11-218&r=ene |
| By: | Roger Fouquet |
| Abstract: | The purpose of this paper is to estimate trends in income and price elasticities and to offer insights for the future growth in transport use, with particular emphasis on the impact of energy and technological transitions. The results indicate that income and price elasticities of passenger transport demand in the United Kingdom were very large (3.1 and -1.5, respectively) in the mid-nineteenth century, and declined since then. In 2010, long run income and price elasticity of aggregate land transport demand were estimated to be 0.8 and -0.6. These trends suggest that future elasticities related to transport demand in developed economies may decline very gradually and, in developing economies, where elasticities are often larger, they will probably decline more rapidly as the economies develop. Because of the declining trends in elasticities, future energy and technological transitions are not likely to generate the growth rates in energy consumption that occurred following transitions in the nineteenth century. Nevertheless, energy and technological transitions, such as the car and the airplane, appear to have delayed and probably will delay declining trends in income and price elasticity of aggregate land transport demand. |
| Keywords: | Energy Services, Demand, Transport, Economic Development, Rebound Effect. |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2012-01&r=ene |
| By: | Shanjun Li; Joshua Linn; Erich Muehlegger |
| Abstract: | Gasoline taxes can be employed to correct externalities associated with automobile use, to reduce dependency on foreign oil, and to raise government revenue. Our understanding of the optimal gasoline tax and the efficacy of existing taxes is largely based on empirical analysis of consumer responses to gasoline price changes. In this paper, we directly examine how gasoline taxes affect consumer behavior as distinct from tax-exclusive gasoline prices. Our analysis shows that a 5-cent tax increase reduces gasoline consumption by 1.3 percent in the short-run, much larger than that from a 5-cent increase in the tax-exclusive gasoline price. This difference suggests that traditional analysis could significantly underestimate policy impacts of tax changes. We further investigate the differential effect from gasoline taxes and tax-exclusive gasoline prices on both the intensive and extensive margins of gasoline consumption. We discuss implications of our findings for the estimation of the implicit discount rate for vehicle purchases and for the fiscal benefits of raising taxes. |
| JEL: | H3 Q4 Q5 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17891&r=ene |
| By: | Tao Wu; Michele Cavallo |
| Abstract: | We study the effects of oil-price shocks on the U.S. economy combining narrative and quantitative approaches. After examining daily oil-related events since 1984, we classify them into various event types. We then develop measures of exogenous shocks that avoid endogeneity and predictability concerns. Estimation results indicate that oil-price shocks have had substantial and statistically significant effects during the last 25 years. In contrast, traditional VAR approaches imply much weaker and insignificant effects for the same period. This discrepancy stems from the inability of VARs to separate exogenous oil-supply shocks from endogenous oil-price fluctuations driven by changes in oil demand. |
| Keywords: | Commodity price fluctuations , External shocks , Oil prices , Price increases , United States , |
| Date: | 2012–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:12/19&r=ene |
| By: | Asche, Frank (UiS); Ogland, Atle (UiS); Osmundsen, Petter (UiS) |
| Abstract: | . |
| Keywords: | . |
| JEL: | A10 |
| Date: | 2011–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:stavef:2011_006&r=ene |
| By: | Claudio Morana (Università di Milano Bicocca, CeRP-Collegio Carlo Alberto, Fondazione Eni Enrico Mattei and International Centre for Economic Research Abstract: What is the role of financial speculation in determining the real oil price? We find that while macroeconomic shocks have been the major upward driver of the real oil price since the mid 1980s, also financial shocks have sizably contributed since the early 2000s, and at a much larger extent since the mid 2000s: over the period 2004:1 through 2010:3, the real oil price increased 65%; of the latter, 33% is related to fundamental financial shocks, 11% to non fundamental financial shocks, with macroeconomic and oil market supply side shocks contributing with a 5% and 3% increase, respectively. Yet, it would be inaccurate describing the third oil price shock as a purely financial episode: macroeconomic shocks largely accounted for the 65% real oil price run up over the 2007(2)-2008 (2) period, and similarly for the -67% and -31% contractions in 2008(4) and 2009(1); only over the 2009(2) through 2009(4) period macroeconomic and financial shocks equally contributed to the 54% real oil price increase. Hence, while we find support to the demand side view of real oil price determination, we also find a much larger role for financial shocks than previously noted in the literature.) |
| Keywords: | Oil Price, Financial speculation, Macro-finance Interface, International Business Cycle, Factor Vector Autoregressive Models |
| JEL: | C22 E32 G12 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.07&r=ene |
| By: | Philip K. Verleger (Peterson Institute for International Economics) |
| Abstract: | The new, draconian sanctions introduced by the United States and the European Union to prevent Iran from earning money from its crude oil exports could pose a serious economic threat to oil-importing countries that also trade heavily with the US and EU economies. Nations such as China, South Korea, and Japan, which obtain significant amount of oil from Iran while enjoying large trade surpluses with the United States, are justifiably anxious. These countries and others worry that by pushing Iran from the global crude market, the new US and EU sanctions will disrupt oil markets, increase crude prices, and further slow global economic growth, which, at a minimum, would cut their export revenues. Saudi Arabia and other members of the Oil and Petroleum Exporting Countries (OPEC) have indicated they would replace oil previously purchased from Iran, but these offers have done little to allay the apprehensions. Verleger suggests a way to put real pressure on Iran while moderating or eliminating economic fallout for the US and EU economies and those of their trading partners: selling oil from the US Strategic Petroleum Reserve (SPR), which now holds far more oil than required by treaty obligations—more than 280 million surplus barrels. This strategic use of the SPR will increase the effectiveness of sanctions on Iran and ease the adjustment difficulties that confront US allies. The sales might also reduce any price pressure caused by removal of light Iranian crude from the market. |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb12-6&r=ene |
| By: | Dahl, Roy Endre (UiS); Ogland, Atle (UiS); Osmundsen, Petter (UiS); Sikveland, Marius (UiS) |
| Abstract: | . |
| Keywords: | . |
| JEL: | A10 |
| Date: | 2011–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:stavef:2011_005&r=ene |
| By: | Fuad Hasanov; Reda Cherif |
| Abstract: | Policymakers in oil-exporting countries confront the question of how to allocate oil revenues among consumption, saving, and investment in the face of high income volatility. We study this allocation problem in a precautionary saving and investment model under uncertainty. Consistent with data in the 2000s, precautionary saving is sizable and the marginal propensity to consume out of permanent shocks is below one, in stark contrast to the predictions of the perfect foresight model. The optimal investment rate is high if productivity in the tradable sector is high enough. |
| Keywords: | Oil exporting countries , Oil revenues , Public investment , Resource allocation , Savings , |
| Date: | 2012–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:12/4&r=ene |
| By: | Dizaji, S.F. |
| Abstract: | In this study, I investigate the short run and long run effects of government size and exports on the economic growth of Iran as a developing oil export based economy for the period of 1974 to 2008. For this purpose I use the bounds testing approach to cointegration and error correction models, developed within an autoregressive distributed lag (ARDL) framework. A modified form of Ram’s (1986) model has been applied to include both government size and exports as determinants of economic growth in addition to labor force and capital. I use total exports, oil exports and non-oil exports respectively in three different equations to assess their effects on economic growth. Moreover, according to Armey curve(1995) in each of the equations I test the existence of non-linear relationship between government size and economic growth. My findings show that in all of the equations both in long run and short run the Armey curve is valid for Iranian economy, indicating that both a very big size and a too small size of government are harmful for growth and Iranian government should adjust its size (to have smaller size, compared to the average size over the period of this study) for obtaining higher rates of growth. The results show that total exports, the amount of oil exports in terms of barrels and oil prices could affect the economic growth positively and significantly both in short run and long run. However because of the weaknesses of the Iranian non-oil sectors, the non-oil exports could not have significant effects on growth in the long run. As a result of this study in the short run, Iran should try to attract foreign technologies and investments to develop the capacity and ability of its oil production. In the short run this can be a reliable factor for having the stable economy in comparison with relying on uncertain oil prices. In the long run Iran should use the oil revenues to improve its economic structure and invest on some non-oil sectors to diversify its non-oil exports. This can create new resources for government revenues and will reduce the dependence of the economy on Oil exports. |
| Keywords: | oil prices;economic growth;Iran;oil exports;government size;non-oil exports |
| Date: | 2012–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:euriss:535&r=ene |
| By: | Hossein Mirshojaeian Hosseini; Shinji Kaneko (Graduate School for International Development and Cooperation, Hiroshima University) |
| Abstract: | Iran has suffered ever-increasing domestic energy consumption mostly due to its price controlling policy. If the trend continues, it will become a pure importer in the following decades. To avoid that unlucky fate, Iran started the energy subsidies reform on December 2010. It increased domestic energy and agricultural prices up to 20 times, making it the first major oil-exporting country to reduce substantially implicit energy subsidies. The paper studies the inflationary impact of the energy subsidies reform on different non-energy sectors and urban and rural households in Iran. For this purpose, the input-output price model of Iran is made and energy cross-price elasticities of non-energy sectors are derived. The results evidence the tremendous effects of the complete reform on the production and consumption prices. |
| Keywords: | Energy subsidies reform, Production and consumption prices, Iran, Input-output price model, Decomposition |
| JEL: | C67 E31 Q48 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:hir:idecdp:2-8&r=ene |
| By: | Alberto Cavaliere (Department of Economics and Quantitative Methods, University of Pavia); Valentina Giust (Sorgenia); Mario Maggi (Department of Economics and Quantitative Methods, University of Pavia) |
| Abstract: | Scarce storage capacity and distortions in access to gas storage are considered causes of market foreclosure in liberalized gas markets. We consider rules currently adopted in Europe for storage rationing and propose efficient rationing mechanism based on the value of storage, when other flexibility inputs are available. Firstly we analyse productive efficiency issues neglecting vertical restraints and strategic behaviour in the final market. Then we assume imperfect compettion in the downstream market for gas supplies, given the avaialbility of storage capacity upstream. We consider effciency issues in a two stage model comparing regulated storage tariffs – coupled with a centralizedrationing mechanism – with storage auctions. Finally we consider as an optimal mechanism the allocation of storage arising from welfare maximization by a social planner. We find that it is usually optimal to maximize the amount of storage capacity allocated to new entrants in the gas markets. Storage auctions deviates from the optimal mechanism, but still improve efficiency, with respect to current mechanisms, to the extent that they allocate storage according to its value. Furthermore storage allocation appear to be an extremeley powerful mechanism to improve competition and efficiency in gas markets. |
| Keywords: | Liberalization, Auctions, Essential Facilities |
| JEL: | L51 L95 D45 |
| Date: | 2011–07 |
| URL: | http://d.repec.org/n?u=RePEc:pav:wpaper:151&r=ene |
| By: | Keith Burnard; Sankar Bhattacharya |
| Abstract: | Coal is an important source of energy for the world, particularly for power generation. To meet the growth in demand for energy over the past decade, the contribution from coal has exceeded that of any other energy source. Additionally, coal has contributed almost half of total growth in electricity over the past decade. As a result, CO2 emissions from coal-fired power generation have increased markedly and continue to rise. More than 70% of CO2 emissions that arise from power generation are attributed to coal. To play its role in a sustainable energy future, its environmental footprint must be reduced; using coal more efficiently is an important first step. Beyond efficiency improvement, carbon capture and storage (CCS) must be deployed to make deep cuts in CO2 emissions. This report focuses mainly on developments to improve the performance of coal-based power generation technologies, which should be a priority – particularly if carbon capture and storage takes longer to become established than currently projected. A close look is taken of the major ongoing developments in process technology, plant equipment, instrumentation and control. The need for energy and the economics of producing and supplying it to the end-user are central considerations in power plant construction and operation. Economic and regulatory conditions must be made consistent with the ambition to achieve higher efficiencies and lower emissions. In essence, clean coal technologies must be more widely deployed. |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ieaaaa:2011/14-en&r=ene |
| By: | William Lilley (Saudi Aramco); Luke Reedman (Commonwealth Scientific and Industrial Research Organisation (CSIRO), Energy Transformed Flagship); Liam Wagner (School of Economics, The University of Queensland); Colin Alie (Environment Canada); Anthony Szatow (ToshEnterprises) |
| Abstract: | Australia’s Commonwealth Scientific and Industrial Research Organisation (CSIRO) recently completed a major study investigating the value of distributed energy (DE; collectively demand management, energy efficiency and distributed generation) technologies for reducing greenhouse gas emissions from Australia’s energy sector (CSIRO, 2009). This comprehensive report covered potential economic, environmental, technical, social, policy and regulatory impacts that could result from the wide scale adoption of these technologies. In this paper we highlight the economic findings from the study. Partial Equilibrium modeling of the stationary and transport sectors found that Australia could achieve a present value welfare gain of around $130 billion when operating under a 450 ppm carbon reduction trajectory through to 2050. Modeling also suggests that reduced volatility in the spot market could decrease average prices by up to 12% in 2030 and 65% in 2050 by using local resources to better cater for an evolving supply-demand imbalance. Further modeling suggests that even a small amount of distributed generation located within a distribution network has the potential to significantly alter electricity prices by changing the merit order of dispatch in an electricity spot market. Changes to the dispatch relative to a base case can have both positive and negative effects on network losses. |
| Keywords: | Distributed energy; Economic modeling; Carbon price; Electricity markets |
| JEL: | E17 Q40 Q42 Q47 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqeemg:16&r=ene |
| By: | Lynch, Muireann A.; O'Malley, Mark J.; Tol, Richard S. J. |
| Abstract: | We present a mixed-integer, linear programming model for determining optimal interconnection locations using a cost minimisation approach. Optimal interconnection and capacity investment decisions are determined under various targets for renewable penetration. The model is applied to a test system for eight countries in Northern Europe. It is found that considerations on the supply side dominate demand side considerations when determining optimal interconnection investment. Interconnection is found to be most valuable when targets for renewable electricity are set for the whole system, rather than for different regions within the system. |
| Keywords: | europe/Interconnection/cost/investment/Renewable electricity/electricity |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp416&r=ene |
| By: | Valentina Bosetti (Fondazione Eni Enrico Mattei and CMCC); Michela Catenacci (Fondazione Eni Enrico Mattei); Giulia Fiorese (Fondazione Eni Enrico Mattei and Dipartimento di Elettronica e Informazione, Politecnico di Milano); Elena Verdolini (Fondazione Eni Enrico Mattei and CMCC) |
| Abstract: | In this paper we present and discuss the results of an expert elicitation survey on solar technologies. Sixteen leading European experts from the academic world, the private sector and international institutions took part in this expert elicitation survey on Photovoltaic (PV) and Concentrated Solar Power (CSP) technologies. The survey collected probabilistic information on (1) how Research, Development and Demonstration (RD&D) investments will impact the future costs of solar technologies and (2) the potential for solar technology deployment both in OECD and non-OECD countries. Understanding the technological progress and the potential of solar PV and CPS technologies is crucial to draft appropriate energy policies. The results presented in this paper are thus relevant for the policy making process and can be used as better input data in integrated assessment and energy models. |
| Keywords: | Expert Elicitation, Research, Development and Demonstration, Solar Technologies |
| JEL: | Q42 Q55 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.01&r=ene |
| By: | Stergios Athanassoglou (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change); Valentina Bosetti (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change) |
| Abstract: | Optimal R&D investment is defined by deep uncertainty that can only partially be addressed through historical data. Thus, expert judgments expressed as subjective probability distributions are seen as an alternative way of assessing the potential of new technologies. In this paper we propose a simple decision-theoretic framework that takes into account ambiguity over expert opinion and helps decision makers visualize the full range of R&D outcomes given a particular level of ambiguity. Our model is intuitive, captures decision makers' ambiguity attitudes, and enables simple sensitivity analysis across levels of ambiguity. We apply our framework to original data from a recent expert elicitation survey on solar technology. The analysis suggests that ambiguity plays an important role in assessing the potential of a breakthrough in solar technology given different R&D investments. |
| Keywords: | Ambiguity, Expert Elicitation, Convex Optimization, Solar Energy |
| JEL: | C61 D81 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.04&r=ene |
| By: | Janosch Ondraczek (University of Hamburg, Research Unit Sustainability and Global Change) |
| Abstract: | This paper describes, compares and analyses the historical development and current status of Kenya's and Tanzania's emerging solar energy markets. The analysis is based on an extensive literature survey and 25 in-depth personal interviews with experts on the East African solar power market. Kenya's solar market is found to be one of the world's leading markets for off-grid solar uses, with a current installed capacity of over 10 MWp and more than 320,000 solar home systems. Having developed much later than the Kenyan market, Tanzania's market still remains smaller than its neighbour's, with an installed capacity of around 4 MWp and at least 40,000 solar home systems, but is in the process of catching up. In addition to solar home systems, other applications of solar energy technologies, such as in social institutions, telecoms and tourism, are covered. Major differences and similarities between the Kenyan and Tanzanian solar markets are identified and reasons for these are analysed. Initial policy i implications regarding the regulation and promotion of solar energy in East Africa suggest that awareness, availability and affordability are major drivers that all need to be present to enable the widespread uptake of off-grid solar technologies in emerging markets. |
| Keywords: | Solar energy, Photovoltaic energy, Market development, East Africa, Kenya, Tanzania |
| JEL: | Q42 Q48 Q49 |
| Date: | 2012–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:sgc:wpaper:197&r=ene |
| By: | Nadia Ameli (Fondazione Eni Enrico Mattei, Italy, and Energy and Resources Group, University of California, Berkeley, USA); Daniel M. Kammen (Energy and Resources Group, University of California, Berkeley, USA) |
| Abstract: | With a focus on alternative methods for accelerating clean energy policy adoption, this study introduces an innovative financing scheme for renewable and energy efficiency deployment. Financing barriers represent a notable obstacle for energy improvements and this is particularly the case for low-income households. Limited access to credit, due to socio-economic status and the lack of guarantees, are key issues related to financing barriers. Implementing a policy such as PACE – Property Assessed Clean Energy – allows for the provision of up-front funds for residential property owners to install electric and thermal solar systems and make energy-efficiency improvements to their buildings. This paper will inform the design of better policies tailored to the creation of the appropriate conditions for such investments to occur, especially when the lack of access to capital tends to stall them. |
| Keywords: | Financing Barriers, Energy Efficiency, Solar PV, Energy Investments |
| JEL: | Q42 Q55 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.10&r=ene |
| By: | Muehlenbachs, Lucija (Resources for the Future) |
| Abstract: | The environmental remediation required to permanently decommission most industrial projects is an expensive and irreversible investment. Real options literature shows that temporarily closing a project and postponing decommissioning has value when economic conditions are uncertain and future reactivation is possible. However, high decommissioning costs create an incentive to “temporarily” close a project, even when there is no intention to reactivate. This paper estimates a dynamic discrete choice model of closure to evaluate the likelihood of reactivation. The model reveals that the option to temporarily close is being widely used to avoid environmental remediation of oil and gas wells in Canada. |
| Keywords: | environmental remediation, real options, structural estimation |
| JEL: | Q30 Q47 Q58 C63 |
| Date: | 2012–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-12-12&r=ene |
| By: | Thomas, A.; Heffron, R. J. |
| Abstract: | The law surrounding third party nuclear liability is important to all parties in the nuclear supply chain whether they are providing decommissioning services, project management expertise or a new reactor. This paper examines third party nuclear liability, and in particular, in relation to a Supplier in the nuclear energy sector in the United Kingdom (UK). The term “Supplier” is used in this paper and, depending on the context, is intended to cover all parties in the supply chain providing services, equipment or technology (e.g. the EPC contractor, the reactor vender, the owner engineer, architect engineer, or the Parent Body Organisation responsible for decommissioning one the UK legacy nuclear installations). With a return to nuclear new build expected in the UK, the clarification of the position of a Supplier and their potential to be liable for nuclear damage is of vital importance for a functioning nuclear supply chain. The research explores the nuclear liability legislation in the UK and identifies the gaps and limitations in existence. The latter problems pose a risk for the Suppliers to operators in the nuclear energy industry, and consequently some approaches that can mitigate those risks are advanced and assessed. The nuclear liability regime in the UK is largely based on international conventions and hence, the risks posed to the Supplier in the UK also exist for Suppliers in other countries. There are resource shortages already in the nuclear energy industry, and currently the Supplier to the nuclear industry is over exposed. This situation needs to be resolved and a new legal definition of nuclear damage enacted. Further, the level of liability exposure for a UK Supplier involved in a nuclear project outside the UK needs to be reviewed as there remains too much ambiguity regarding liability in an international nuclear law context. |
| Keywords: | nuclear liability, nuclear energy, third party, supplier, nuclear accident, nuclear damage |
| JEL: | K0 K13 L94 Y80 |
| Date: | 2012–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1207&r=ene |
| By: | Douglas Cooke |
| Abstract: | Timely and effective deployment of demand response could greatly increase power system flexibility, electricity security and market efficiency. Considerable progress has been made in recent years to harness demand response. However, most of this potential remains to be developed. The paper draws from IEA experience to identify barriers to demand response, and possible enablers that can encourage more timely and effective demand response including cost reflective pricing, retail market reform, and improved load control and metering equipment. Governments have a key role to play in developing and implementing the policy, legal, regulatory and market frameworks needed to empower customer choice and accelerate the development and deployment of cost-effective demand response. |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ieaaaa:2011/13-en&r=ene |
| By: | Leahy, Eimear; Lyons, Seán; Walsh, Sharon |
| Abstract: | Past research into the determinants of appliance ownership has identified associations with socioeconomic characteristics of households. Few studies have examined the intensity with which different sorts of households use the appliances they have. This paper uses microdata to examine the factors influencing ownership and usage of electrical appliances in Irish households. We also consider the factors influencing the ownership of different cooker types, space and water heating systems and energy saving features. We find that appliance ownership and usage is related to the socio-economic characteristics of the household's chief income earner as well as household characteristics such as the type and age of accommodation, tenure and the number of bedrooms. The number of people living in the household has a positive association with both ownership and usage of electrical appliances. However, it does not increase ownership of energy saving features, with the exception of CFLs. The highest earning households are more likely to own electrical appliances but they do not necessarily use them more often, nor are they more likely to purchase energy saving features. |
| Keywords: | appliance ownership/Ireland |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp421&r=ene |
| By: | Blazquez Leticia (Department of Spanish and International Economics, Econometrics and Economic History and Institutions); Nina Boogen (Centre for Energy Policy and Economics (CEPE), Department of Management, Technology and Economics, ETH Zurich); Massimo Filippini (Centre for Energy Policy and Economics (CEPE), Department of Management, Technology and Economics, ETH Zurich and Department of Economics, University of Lugano, Switzerland) |
| Abstract: | This paper presents an empirical analysis on the residential demand for electricity. This analysis has been performed using aggregate panel data at the province level for 47 Spanish provinces for the period from 2000 to 2008. For this purpose, we estimated a log-log demand equation for electricity consumption using a dynamic partial adjustment approach. This dynamic demand function has been estimated using OLS, a fixed effect model, and a GMM estimator proposed by Blundell and Bond (1998). The purpose of this empirical analysis has been to highlight some of the characteristics of the Spanish residential electricity demand. Particular attention has been paid to the influence of price, income, and weather conditions on electricity demand. The estimated short and long-run own price elasticities are, as expected, negative, but lower than 1. Furthermore, weather variables have a significant impact on electricity demand. |
| Keywords: | residential electricity demand, panel data, partial adjustment model, aggregate data |
| JEL: | D D2 Q Q4 R2 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:cee:wpcepe:12-82&r=ene |
| By: | Andersen, Thomas Barnebeck (Department of Business and Economics); Dalgaard, Carl-Johan (Department of Economics) |
| Abstract: | This paper estimates the total effect of power outages on economic growth in Sub-Saharan Africa over the period 1995-2007. Outages are instrumented using a satellite-based measure of lightning density. As suggested by Henderson et al. (2011), we also combine Penn World Tables GDP data with satellite-based data on nightlights to arrive at a more accurate measure of economic growth. Our results suggest that the annual economic growth drag of a weak power infrastructure is about 2 percentage points. |
| Keywords: | Economic growth; public utilities; electricity; earthlights; Africa |
| JEL: | H40 O10 O40 |
| Date: | 2012–02–28 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:sdueko:2012_007&r=ene |
| By: | Eva Schmid (Potsdam Institute for Climate Impact Research); Brigitte Knopf (Potsdam Institute for Climate Impact Research); Nico Bauer (Potsdam Institute for Climate Impact Research) |
| Abstract: | This paper presents a detailed documentation of the hybrid energy-economy model REMIND-D. REMIND-D is a Ramsey-type growth model for Germany that integrates a detailed bottom-up energy system module, coupled by a hard link. The model provides a quantitative framework for analyzing long-term domestic CO2 emission reduction scenarios. Due to its hybrid nature, REMIND-D facilitates an integrated analysis of the interplay between technological mitigation options in the different sectors of the energy system as well as overall macroeconomic dynamics. REMIND-D is an intertemporal optimization model, featuring optimal annual mitigation effort and technology deployment as a model output. In order to provide transparency on model assumptions, this paper gives an overview of the model structure, the input data used to calibrate REMIND-D to the Federal Republic of Germany, as well as the techno-economic parameters of the technologies considered in the energy system module. |
| Keywords: | Hybrid Model, Germany, Energy System, Domestic Mitigation |
| JEL: | O41 O52 Q43 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.09&r=ene |
| By: | Hyland, Marie; Jennings, Anne; Tol, Richard S. J. |
| Abstract: | In this paper we use a subsystem input-output decomposition analysis to examine the drivers of greenhouse gas emissions in the Republic of Ireland and in Northern Ireland. We use a bi-regional input-output analysis to look at how greenhouse gases in one region can be emitted as a result of demand in an exporting region. Looking at emissions generated throughout the island of Ireland, we find that emissions driven by demand in Northern Ireland are larger than those it generates, and vice-versa for the Republic of Ireland. We then use the input-output tables to simulate the effect of imposing a ?15/tonne carbon tax in the Republic of Ireland. We find that this causes a decrease in final demand in the Republic of Ireland, and a decrease in output in both the Republic of Ireland and in Northern Ireland; the decrease is greater in the Republic as the domestically produced share of inputs is much larger than the imported share in all sectors. |
| Keywords: | decomposition/Greenhouse gas emissions,Bi-regional input-output analysis,Carbon tax,Northern Ireland/Republic of Ireland/taxes |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp420&r=ene |
| By: | Di Cosmo, Valeri; Hyland, Marie |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp424&r=ene |
| By: | Pradiptyo, Rimawan; Sahadewo, Gumilang Aryo |
| Abstract: | Fuel subsidy has been the biggest quandaries in Indonesian economy, as it has been creating a huge opportunity costs to the economy. The subsidy is implemented to a consumer good (i.e. fuels) as oppose to targeted recipients, creating distortion in the efficient resource allocation. It was estimated about 70% of the subsidy were received by 40% of top income households (World Bank, 2007). Although the budget plan for the subsidy in 2011 was Rp129.7 trillion or 10% of the GoI annual budget, the actual subsidy was Rp160.7 trillion (13.3% of the GoI annual budget). Indeed, no individual prefers to lose the subsidy that has been received for many years, however the Government of Indonesia (GoI) cannot maintain the subsidy policy on fuel price any longer without creating extra budgetary burden. This study use experimental approach to seek the most acceptable exit strategy of eliminating fuel subsidy scheme in Indonesia based on households’ perspective. 335 subjects participated in the experiment, ranging from those who do not own motor vehicle, those who have motor cycle(s) and those who have car(s). During the experiment, subjects were given several pair-wise choices and chose the most acceptable policy from each pair-wise policy choices. The results show that the combination of gradual elimination and earmarked reallocation scheme were the most desirable. Subject with very low and low-income background tend to be more receptive for sudden elimination of the subsidy in comparison to their counterpart from medium and high-income backgrounds. |
| Keywords: | Fuel subsidy; experimental economics; analytical hierarchy process (AHP); preference relation; reallocation of resources |
| JEL: | D03 D12 Q48 C91 |
| Date: | 2012–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:37073&r=ene |
| By: | Arazmuradov, Annageldy |
| Abstract: | The main source of convertible energy—fossil-fuel combustion—generates desirable means for production of national output (GDP) along with an undesirable by-product—carbon dioxide (CO2) emissions. This paper investigates the effect of this supply process for environmental quality. By introducing energy and non-energy production factors, we estimate economic and CO2 efficiency. We build an alternative environmental efficiency indicator with respect to CO2 emissions by applying non-parametric data-envelopment analysis (DEA)—window analysis under variable returns to scale (VRS)—to 15 former Soviet Union (FSU) economies for the period 1992–2008. There is a clear distinction between three FSU economies—Estonia, Latvia, and Lithuania (now EU member states)—and the rest of the sample in that they display better environmental performance. In these three countries, economic efficiency directly influences the environmental performance. Results also show that over time FSU economies improve their CO2 environmental efficiency and comply with the Kyoto Protocol directives. However, this positive gain comes with costs; it seems there is a tradeoff between positive output production (GDP) and controlling for carbon emission. On average, we observe a 15.9-percent drop in producing GDP, while there is a 1.59 -percent rise in positive environmental CO2 efficiency. |
| Keywords: | Eurasia; carbon dioxide emissions; environmental efficiency; DEA window analysis |
| JEL: | Q50 P28 P52 |
| Date: | 2011–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:36903&r=ene |
| By: | Molly K. SCHNELL; David E. WEINSTEIN |
| Abstract: | This paper compares the 1995 Kobe earthquake with the more recent one in Tohoku. The impact of the recent earthquake on industrial production was much larger and long-lasting than that of the 1995 earthquake. We find that very little of this can be explained by differences in government expenditures or private consumption. However, we find very substantial differences in energy production in the wake of the two earthquakes. The substantial and persistent drop in energy output is likely to have exacerbated supply disruptions and may continue to slow the pace of recovery. Moreover, we provide some evidence that Japan's increasing reliance on fossil fuel sources of energy is likely to result in a large number of deaths and increases in morbidity due to increased air pollution. These results highlight the difficulties that Japan is likely to face in its move away from nuclear power. |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:eti:polidp:12003&r=ene |
| By: | Lenin Balza; Carlos Sucre |
| Abstract: | An energy flow is an innovative graphical depiction of the energy matrix of a country or region. Using homogenous data provided by the International Energy Agency (IEA), which allows for cross-country comparisons, the flow shows the supply of primary energy, produced domestically and imported, along with exports of primary energy and imports of secondary energy. The flow then moves to the transformation and consumption of this supply, depicting inputs towards electricity generation and the final consumption of primary and secondary energy, by product and by sector of the economy. The different sources of energy are measured in thousand barrels of oil equivalent per day (kboe/day), in order to provide a method for comparing distinct energy sources. These flows are part of a larger project that also takes into account the institutional frameworks of the energy sector of each country in Latin America and are produced yearly since 2008 and by historical periods: 1971-1974, 1984-1987, 1999-2002 and 2005-2008. The project gives Bank officers a clear, more thorough understanding of a country's energy sector, in an easy-to-use fashion, allowing them to be better informed during lending and partnering processes. It similarly allows country policymakers to identify energy patterns and direct investments with more ease. |
| Keywords: | Energy & Mining :: Energy Markets, energy, Honduras, energy matrix, energy flow, energy market |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:63178&r=ene |
| By: | Tol, Richard S. J. |
| Abstract: | Trends in the emissions to air of sulphur dioxide, nitrogen oxides, carbon monoxide, volatile organic compounds, and ammonia in Ireland are analysed with a logarithmic mean Divisia index decomposition for the period of 1990-2009. Emissions fell for four of the five pollutants, with ammonia being stationary, despite rapid economic change. A fall in emissions per unit output was the main driver of this trend, except for ammonia where structural economic change was the main driver. Extrapolating these trends continue, Ireland will keep emissions below its National Emission Ceilings, except in the case of nitrogen oxides where the target will likely be met by 2015. |
| Keywords: | decomposition/Ireland |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp422&r=ene |
| By: | Donatella Baiardi (Department of Economics and Quantitative Methods, University of Pavia) |
| Abstract: | The paper explores the relationship between per capita income and three air pollutants, CO, NMVOCs and SOx, using a novel dataset based on the Italian regions. Given the central role of technological progress in long-term environmental problems, we empirically investigate the influence of innovation on the environmental Kuznets curve (EKC). The estimation results validate the EKC hypothesis for the three air pollutants considered. Furthermore, the influence of innovation on the inverted-U-shaped curve identified by the theoretical literature is empirically confirmed too. |
| Keywords: | Air pollutants, Environmental Kuznets Curve, Italian regions, Technological Progress. |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:pav:wpaper:156&r=ene |
| By: | Gabriel Chan (Harvard Kennedy School); Robert Stavins (Harvard Kennedy School); Robert Stowe (Harvard Kennedy School); Richard Sweeney (Harvard Kennedy School) |
| Abstract: | The introduction of the U.S. SO2 allowance-trading program to address the threat of acid rain as part of the Clean Air Act Amendments of 1990 is a landmark event in the history of environmental regulation. The program was a great success by almost all measures. This paper, which draws upon a research workshop and a policy roundtable held at Harvard in May 2011, investigates critically the design, enactment, implementation, performance, and implications of this path-breaking application of economic thinking to environmental regulation. Ironically, cap and trade seems especially well suited to addressing the problem of climate change, in that emitted greenhouse gases are evenly distributed throughout the world’s atmosphere. Recent hostility toward cap and trade in debates about U.S. climate legislation may reflect the broader political environment of the climate debate more than the substantive merits of market-based regulation. |
| Keywords: | Cap-and-Trade, Market-Based Environmental Policy, Acid Rain, Sulfur Dioxide, Clean Air Act Amendments |
| JEL: | Q52 Q55 Q58 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.06&r=ene |
| By: | Francesco Bosello (Fondazione Eni Enrico Mattei, University of Milan and Euro-Mediterranean Center for Climate Change); Fabio Eboli (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change); Roberta Pierfederici (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change) |
| Abstract: | The present research describes a climate change integrated impact assessment exercise, whose economic evaluation is based on a CGE approach and modeling effort. Input to the CGE model comes from a wide although still partial set of up-to-date bottom-up impact studies. Estimates indicate that a temperature increase of 1.92°C compared to pre-industrial levels in 2050 could lead to global GDP losses of approximately 0.5% compared to a hypothetical scenario where no climate change is assumed to occur. Northern Europe is expected to benefit from the evaluated temperature increase (+0.18%), while Southern and Eastern Europe are expected to suffer from the climate change scenario under analysis (-0.15% and -0.21% respectively). Most vulnerable countries are the less developed regions, such as South Asia, South-East Asia, North Africa and Sub-Saharan Africa. In these regions the most exposed sector is agriculture, and the impact on crop productivity is by far the most important source of damages. It is worth noting that the general equilibrium estimates tend to be lower, in absolute terms, than the bottom-up, partial equilibrium estimates. The difference is to be attributed to the effect of market-driven adaptation. This partly reduces the direct impacts of temperature increases, leading to lower damage estimates. Nonetheless these remain positive and substantive in some regions. Accordingly, market-driven adaptation cannot be the solution to the climate change problem. |
| Keywords: | Environmental Innovation, Industrial Sectors, ETS, Innovation Drivers, CIS Data |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.03&r=ene |
| By: | Harrison Fell; Ian A. MacKenzie; William A. Pizer |
| Abstract: | Quantity-based regulation with banking allows regulated firms to shift obligations across time in response to periods of unexpectedly high or low marginal costs. Despite its wide prevalence in existing and proposed emission trading programs, banking has received limited attention in past welfare analyses of policy choice under uncertainty. We address this gap with a model of banking behavior that captures two key constraints: uncertainty about the future from the firm’s perspective and a limit on negative bank values (e.g., borrowing). We show conditions where banking provisions reduce price volatility and lower expected costs compared to quantity policies without banking. For plausible parameter values related to U.S. climate change policy, we find that bankable quantities produce behavior quite similar to price policies for about two decades and, during this period, improve welfare by about a $1 billion per year over fixed quantities. |
| JEL: | Q52 Q54 Q58 |
| Date: | 2012–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:17878&r=ene |
| By: | Ibrahim Ahamada (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Djamel Kirat (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | This paper addresses the economic impact of the European Union Emission Trading Scheme (EU ETS) for carbon on wholesale electricity prices in France and Germany during the Kyoto commitment period (2008-2012). Specifically, we use first identify a structural break occurred on the carbon spot price series on October 2008, which is mainly resulting from the financial and economic crisis. Then, we model the prices of day-ahead electricity contracts. We look at the volatilities around their fundamentals and simultaneously evaluate the correlation between electricity prices in both countries. We find that the price of carbon does not matter for electricity prices in either countries before October 2008. After October 2008, electricity producers in both countries were constrained to include the carbon price in their cost functions. During that period, French electricity producers were more constrained than their German counterparts. Comparing the results with those reported in Kirat and Ahamada (2011) reveals improvements in the response of electricity generation sector to carbon constraints. The impact of carbon constraint increased significantly by 300% and 150% in France and Germany, respectively, between the pilot phase and the second phase of the EU ETS. This is a consequence of the possibility of "banking" for subsequent periods and the reduction of allowance caps introduced in the second phase. We also find evidence of a trade off between gas and coal in electricity generation in Germany. Furthermore, the conditional correlation of electricity prices in both countries is highly significant and greater than during the pilot phase of the EU ETS. |
| Keywords: | Carbon emission trading, multivariate GARCH models, structural breaks, energy prices. |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-00673918&r=ene |
| By: | Jaraite, Jurate (CERE, Centre for Environmental and Resource Economics); Kažukauskas, Andrius (CERE, Centre for Environmental and Resource Economics) |
| Abstract: | To the best of our knowledge, this study is one of the first to empirically analyse the trading behaviour of all ETS firms during the first phase of the EU’s Emissions Trading System. We use a unique dataset which allows investigating the importance of permit trading transaction costs, such as information costs and search costs. This paper shows that transaction costs can play an important role in the initial years of the programme. These costs are significant in explaining why a number of ETS firms did not sell their unused allowances on the market. This study also supports the concerns that transaction costs might be excessive for smaller participants. |
| Keywords: | emission trading; Europe; firm level data; transaction costs |
| JEL: | Q52 |
| Date: | 2012–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2012_009&r=ene |
| By: | Patrick Hamshere (Department of Economics, University of Queensland); Liam Wagner (Department of Economics, University of Queensland) |
| Abstract: | This paper examines the potential impacts of subprime carbon credits on the impending Australian carbon market. Subprime carbon could potentially be created in carbon offset markets that lack adequate regulation, as projects face risks that can overstate emissions abatement. Recent research suggests that subprime carbon credits will likely cause significant price instability in carbon markets, with some authors drawing parallels to the US market for mortgage backed securities during the subprime mortgage crisis (Chan, 2009). To assess the impacts of subprime carbon credits on the impending Australian carbon market, carbon price fundamentals are examined using a marginal abatement cost curve for the year 2020. The 2020 Australian marginal abatement cost curve is derived using a bottom-up model of the Australian electricity sector, as well as findings by the (DCC, 2009) and (McKinsey, 2008). Impacts are evaluated under several scenarios, which consider different trading scheme limits on the use of offsets; different proportions of offset credits that are subprime; and different emissions reduction targets. The results suggest that subprime carbon credits will always result in overall emissions reductions to be overstated, while sometimes increasing price volatility in the carbon market, depending on the steepness of the marginal abatement cost curve, the proportion of offset credits that are subprime, and the trading schemes limits on the use of offsets. We conclude that carbon markets could benefit significantly from a carbon offsets regulator, which would ensure the environmental and financial integrity of offset credits. |
| Keywords: | Carbon Offsets, Marginal Abatement Cost, Carbon Market Regulation, Subprime Carbon |
| JEL: | Q52 Q31 L51 G18 G01 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqeemg:14&r=ene |
| By: | Guy Meunier (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X, INRA - UR 1303 ALISS); Jean-Pierre Ponssard (Department of Economics, Ecole Polytechnique - CNRS : UMR7176 - Polytechnique - X); Philippe Quirion (CIRED - Centre international de recherches en environnement et en développement - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - CNRS : UMR8568 - AgroParisTech - ENPC) |
| Abstract: | Countries which currently are, or are in the process of, implementing a national or regional cap and trade CO2 scheme are following alternatives routes in a number of ways: coverage, cap/target, allocation of allowances, measures to manage price volatility, offsets, measures to address competitiveness and leakage. This last issue more specifically concerns "sensitive sectors", i.e. internationally traded carbon intensive sectors (aluminium, cement, steel, refined petroleum...). Three main approaches have been proposed: output based allocation (Aus- tralia, California, New Zealand), capacity based allocation (EU) and auctioning with border adjustment. This paper investigates what the best policy should be in this setting. The analysis suggests that, if a border adjustment is not available, a combination of output and capacity based allocation is socially optimal. Demand uncertainty and international competition play a key role in the analysis since the interaction between these two factors makes the difference. A calibration of the model is used to evaluate the EU scheme for the cement sector in the third phase of the EU-ETS (2013-2020). It is shown that (i) an output based scheme would perform better than the proposed scheme, that (ii) if output-based allocation is chosen, allocation should be much less generous than the current EU benchmark, and that (iii) full auctioning with border adjustment would perform even better. |
| Date: | 2012–02–22 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00672907&r=ene |
| By: | Adamos Adamou; Sofronis Clerides; Theodoros Zachariadis |
| Abstract: | Vehicle taxation based on CO2 emissions is increasingly being adopted worldwide in order to shift consumer purchases to low-carbon cars, yet little is known about the effectiveness and overall economic impact of these schemes. We focus on feebate schemes, which impose a fee on high-carbon vehicles and give a rebate to purchasers of low-carbon automobiles. We estimate a discrete choice model of demand for automobiles in Germany and simulate the impact of alternative feebate schemes on emissions, consumer welfare, public revenues and firm profits. The analysis shows that a well-designed scheme can lead to emission reductions without reducing overall welfare. |
| Keywords: | CO2 emissions, German automobile market, feebates, carbon taxation |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:ucy:cypeua:01-2012&r=ene |
| By: | Stuart McDonald (School of Economics, The University of Queensland); Joanna Poyago-Theotoky |
| Abstract: | This paper performs a comparison of two well known approaches for modelling R&D spillovers associated with investment in E-R&D, namely dAspremont-Jacquemin and Kamien-Muller-Zang. We show that there is little qualitative difference between the models in terms of total surplus delivered when selecting the optimal tax regime when there is precommitment under cooperative regimes in which firms coordinate expenditures to maximize joint profits. However, under non-cooperative regimes there is marked difference, with the model of Kamien- Muller-Zang leading to higher taxation rates when firms share information. Furthermore, we argue that the Kamien-Muller-Zang model is of questionable validity when modelling R&D on emissions reducing technology due to counter intuitive results showing a positive relationhip between R&D spillovers and emissions taxes. |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:455&r=ene |
| By: | Francesco Bosello (Fondazione Eni Enrico Mattei, University of Milan and Euro-Mediterranean Center for Climate Change); Fabio Eboli (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change); Roberta Pierfederici (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center for Climate Change) |
| Abstract: | The present research describes a climate change integrated impact assessment exercise, whose economic evaluation is based on a CGE approach and modeling effort. Input to the CGE model comes from a wide although still partial set of up-to-date bottom-up impact studies. Estimates indicate that a temperature increase of 1.92°C compared to pre-industrial levels in 2050 could lead to global GDP losses of approximately 0.5% compared to a hypothetical scenario where no climate change is assumed to occur. Northern Europe is expected to benefit from the evaluated temperature increase (+0.18%), while Southern and Eastern Europe are expected to suffer from the climate change scenario under analysis (-0.15% and -0.21% respectively). Most vulnerable countries are the less developed regions, such as South Asia, South-East Asia, North Africa and Sub-Saharan Africa. In these regions the most exposed sector is agriculture, and the impact on crop productivity is by far the most important source of damages. It is worth noting that the general equilibrium estimates tend to be lower, in absolute terms, than the bottom-up, partial equilibrium estimates. The difference is to be attributed to the effect of market-driven adaptation. This partly reduces the direct impacts of temperature increases, leading to lower damage estimates. Nonetheless these remain positive and substantive in some regions. Accordingly, market-driven adaptation cannot be the solution to the climate change problem. |
| Keywords: | Computable General Equilibrium Modeling, Impact Assessment, Climate Change |
| JEL: | C68 Q51 Q54 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.02&r=ene |
| By: | Ross McKitrick (Department of Economics,University of Guelph) |
| Abstract: | The debate over whether urbanization and related socioeconomic developments affect large-scale surface climate trends is stalemated with incommensurable arguments. Each side can appeal to supporting statistical evidence based on data sets that do not overlap, yielding inferences that merely conflict with but do not refute one another. I argue that such debates can only be resolved in an encompassing framework, in which both types of results can be demonstrated on the same data set, in such a way that apparent support for one conclusion occurs as a restricted case of a more general specification that supports the other, and where the restrictions can be tested. The issues under debate make such data sets challenging to construct, but I give two illustrative examples. First, insignificant differences in warming trends in urban temperature data between windy and calm conditions are shown in a restricted model whose general form shows temperature data to be strongly affected by local population growth. Second, an apparent equivalence between trends in a data set stratified by a static measure of urbanization is shown to be a restricted finding in a model whose general form indicates significant influence of local socioeconomic development on temperatures. |
| Keywords: | Urbanization; Socioeconomic growth patterns; climate data; spatial correlation |
| JEL: | Q24 Q54 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:gue:guelph:2012-02.&r=ene |
| By: | OECD |
| Abstract: | The International Energy Agency (IEA) estimates that 100 Carbon Capture and Storage (CCS) projects will be required by 2020 and over 3 000 by 2050 if CCS is to contribute fully to the least-cost technology portfolio for CO2 mitigation. For CCS to reach its emissions reduction potential, the 2009 IEA publication Technology Roadmap: Carbon Capture and Storage recommends that international legal obstacles associated with global CCS deployment be removed by 2012 – including the prohibition on transboundary CO2 transfer under the London Protocol. The London Protocol was amended by contracting parties in 2009 to allow for cross-border transportation of CO2 for sub-seabed storage, but the amendment must be ratified by two-thirds of contracting parties to enter into force. It is unlikely that this will occur in the near term; this working paper therefore outlines options that may be available to contracting parties under international law to address the barrier to deployment presented by Article 6, pending formal entry into force of the 2009 amendment. |
| Date: | 2011–10 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ieaaaa:2011/15-en&r=ene |
| By: | OECD |
| Abstract: | Bioenergy with Carbon Capture and Storage (BECCS) is a carbon reduction technology that offers permanent net removal of carbon dioxide (CO2) from the atmosphere. This has been termed 'negative carbon dioxide emissions', and offers a significant advantage over other mitigation alternatives, which only decrease the amount of emissions to the atmosphere. The benefits inherent within this technology are currently receiving increased attention from policy makers. To facilitate the development of appropriate policy incentives, this paper reviews the treatment of 'negative carbon dioxide emissions' under current and planned international carbon accounting frameworks. It finds that, while current frameworks provide limited guidance, proposed and revised guidelines could provide an environmentally sound reporting framework for BECCS. However, the paper also notes that, as they currently stand, new guidelines do not tackle a critical issue that has implications for all biomass energy systems, namely the overall carbon footprint of biomass production and use. It recommends that, to the best extent possible, all carbon impacts of BECCS are fully reflected in carbon reporting and accounting systems under the UNFCCC and Kyoto Protocol. |
| Date: | 2011–12 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ieaaaa:2011/16-en&r=ene |
| By: | Broberg, Thomas (National Institute of Economic Research); Forsfält, Tomas (National Institute of Economic Research); Östblom, Göran (National Institute of Economic Research) |
| Abstract: | From the perspective of climate policy, a target for energy efficiency could imply costly overlapping regulation. We estimate, using a computable general equilibrium model of the Swedish economy, the potential economic cost of attaining the national 2020 energy intensity target by means of tax policy instruments. Our analysis shows that the efforts to meet the energy intensity target will also reduce carbon dioxide emissions, but at excessive costs compared to alternative climate policy instruments. Moreover, attainment of the energy intensity target will call for policy instruments additional to those needed for fulfilling the national climate policy target. The results are sensitive to the development of the nuclear energy production as the definition of energy intensity includes conversion losses in electricity production |
| Keywords: | climate policy; energy efficiency; carbon tax; overlapping regulation; general equilibrium; Sweden |
| Date: | 2011–06–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nierwp:0123&r=ene |
| By: | Hansson, Sven Ove (National Institute of Economic Research); Edvardsson Björnberg, Karin (National Institute of Economic Research); Vredin Johansson, Maria (National Institute of Economic Research) |
| Abstract: | We propose a framework for studies of efficiency in environmental poli-cies in the form of an iterative “policy cycle”. The policy cycle’s six ma-jor elements are goal-setting, choice of policy instruments (informa-tion/communication, voluntary agreements, economic instruments and regulation), enforcement, changes in behaviour of public and private agents, effects of policy measures and, finally, evaluation. Through itera-tions of the policy cycle (or parts of it), efficiency in environmental poli-cies can be improved. The policy cycle is applied to climate policies, both mitigation and adaptation and we identify important areas for future research. |
| Keywords: | Policy cycle; environmental efficiency; mitigation; adaptation; goal-setting; voluntary agreements; regulation; behavioural change; evaluation |
| Date: | 2011–09–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nierwp:0125&r=ene |
| By: | William Brock (University of Wisconsin, Department of Economics); Gustav Engstrom (The Beijer Institute of Ecological Economics and University of Stockholm); Anastasios Xepapadeas (Athens University of Economics and Business) |
| Abstract: | We develop a one-dimensional energy balance climate model with heat transportation across locations. We introduce the concept of potential world GDP at time t, and we introduce, through the temperature function, spatial characteristics into the damage function which make damages latitude dependent. We solve the social planner’s problem and characterize the competitive equilibrium. We define optimal taxes on fossil fuels and profit taxes on firms that extract fossil fuels. Our results suggest that if the implementation of international transfers across latitudes is not possible, then optimal taxes are spatially non homogeneous and tend to be lower at the poor latitudes. The degree of spatial differentiation of optimal taxes depend on heat transportation. We also locate sufficient conditions for optimal mitigation policies to have rapid ramp-up initially and then decrease over time. By employing the properties of the spatial model and approximating solutions, we show how to study the impact of thermal transport across latitudes on welfare inequality. |
| Keywords: | Energy Balance Climate Models, Heat Diffusion, Temperature Distribution, Spatial Optimal Taxes |
| JEL: | Q54 Q58 |
| Date: | 2012–01 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2012.05&r=ene |
| By: | Felix Creutzig (Department of Economics of Climate Change, TU Berlin) |
| Abstract: | A major obstacle for the transformation to a low-carbon economy is the risk of a carbon lock-in: fossil fuel-based ('dirty') technologies dominate the market although their carbon-free ('clean') alternatives are dynamically more efficient. We study the interaction of learning-by-doing spillovers and the substitution elasticity between the clean and the dirty sector in an intertemporal general equilibrium model. We find that the substitution possibilities between the two sectors have an ambivalent effect: although a high substitution elasticity requires less aggressive mitigation policies than a low one, it creates a greater lock-in in the absence of regulation. The optimal policy response consists of a permanent carbon tax as well as a learning subsidy for clean technologies. A single policy instrument can also avoid high welfare losses, but a more stringent mitigation target can only be achieved at painful costs. We demonstrate that the policy implication of [Acemoglu et al. 2012] is limited in scope. Our numerical results also highlight that infrastructure provision is crucial to facilitate the low-carbon transformation. |
| Keywords: | urban form, mode choice, optimal public transit, fuel price |
| JEL: | R41 R42 R52 |
| Date: | 2012–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecc:wpaper:4&r=ene |
| By: | Nikolai Hoberg (Sustainability Economics Group, Leuphana University of Lüneburg, Germany); Stefan Baumgärtner (Sustainability Economics Group, Leuphana University of Lüneburg, Germany) |
| Abstract: | Two important policy goals in intergenerational problems are Pareto-efficiency and sustainability, i.e. intergenerational equity. We demonstrate that the pursuit of these goals is subject to an intergenerational equity-efficiency trade-off. Our analysis highlights two salient characteristics of sustainability problems and policy: (i) temporal irreversibility, i.e. the inability to revise one’s past actions; and (ii) unawareness of future consequences of present actions in human-environment systems (“unknown unknowns”). If initially unknown sustainability problems become apparent and policy is enacted after irreversible actions were taken, policy-making faces a fundamental trade-off between Pareto-efficiency and sustainability. |
| Keywords: | climate change, closed ignorance, intergenerational equity-efficiency tradeoff, irreversibility, Pareto-efficiency, sustainability, unawareness |
| JEL: | D3 H23 Q01 Q38 Q56 |
| Date: | 2011–02 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:198&r=ene |
| By: | Amigues, Jean-Pierre (Toulouse School of Economics (INRA, IDEI and LERNA)); Moreaux, Michel (Toulouse School of Economics (IDEI and LERNA)) |
| Abstract: | Pollution accumulation may result in more or less severe losses of natural self-cleaning capacities. We study a polluting resource management problem submitted to a potential shift from a high to a low pollution self-regeneration regime be crossed some critical pollution stock threshold. We rst describe the optimal resource exploitation policy absent the threshold. When at the threshold, the society has two options: either stabilizing the pollution level to avoid the loss of natural self-cleaning capacity or deliberately cross the threshold and switch to the low regeneration regime. We show under fairly general assumptions that there exists a unique critical pollution stock level such that thresholds located below this level will induce a switch from the high to the low regeneration regime while thresholds located above it will imply maintaining the high regime forever. We characterize the optimal policies in these two scenarios and show that triggering the low regeneration regime requires an upward jump of the resource consumption rate at the optimal switching time. |
| JEL: | Q15 Q17 |
| Date: | 2012–02–08 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:25511&r=ene |
| By: | Thureson, Disa (Department of Business, Economics, Statistics and Informatics); Hope, Chris (Judge Business School, University of Cambridge) |
| Abstract: | Since 1982 hundreds of estimates of the social costs of greenhouse gases (GHG) have been produced. It is known that uncertainty is of crucial importance when analyzing this problem. We explore some of the most important sources of the variation in outcomes uncertainty, focusing on discounting and climate sensitivity, using the PAGE2002 model. The five percent upper tail of the social cost of carbon distribution is demonstrated to contribute 28 percent to the expected cost. We show graphically how the social costs of GHG depend on different parameter values and how the global damage potential for methane and sulfur hexafluoride evolves over time. Also the introduction of unbound probability distributions and prolonged calculation period is examined. <p> We find that the social cost of carbon dioxide (SCCO2) distribution resembles at least one heavy-tailed standard distribution, is sensitive to the probability distribution of climate sensitivity; and that the “global-warming potential” concept is unsuitable for calculation of the social cost of other GHG than carbon dioxide. The analysis supports the Weitzman’s claim (2009) that structural uncertainty about the climate sensitivity may outweigh the effect of discounting. |
| Keywords: | Social cost of greenhouse gases; Heavy tail; Discounting; Sensitivity; Global warming potential |
| JEL: | Q54 |
| Date: | 2012–02–27 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:oruesi:2012_003&r=ene |