nep-ene New Economics Papers
on Energy Economics
Issue of 2012‒09‒03
thirty papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao, Spain

  1. Knowledge is (Less) Power: Experimental Evidence from Residential Energy Use By Katrina Jessoe; David Rapson
  2. The Heterogeneous Effects of Gasoline Taxes: Why Where We Live Matters By Spiller, Elisheba; Stephens, Heather M.
  3. A possible role for discriminatory fuel duty in reducing the emissions from road transport: Some UK evidence By David C Broadstock; Xun Chen
  4. Renewable energy deployment – do the benefits outweigh the costs? By Dr. Ulrike Lehr; Dr. Barbara Breitschopf; Dr. Jochen Diekmann; Juri Horst; Dr. Marian Klobasa; Dr. Frank Sensfuß; Jan Steinbach
  5. Real options approach to renewable energy investments in Mongolia By Neal Detert; Koji Kotani
  6. Modellregionen Elektromobilität: Umweltbegleitforschung Elektromobilität By Schallaböck, Karl Otto; Carpantier, Rike; Fischedick, Manfred; Ritthoff, Michael; Wilke, Georg; Bauhaus, Wencke; Schröder, Sebastian
  7. From Nodal to Zonal Pricing - A Bottom-Up Approach to the Second-Best By Burstedde, Barbara
  8. Assessing the profitability of intraday opening range breakout strategies By Holmberg, Ulf; Lönnbark, Carl; Lundström, Christian
  10. To raise or not to raise? Impact assessment of Russia's incremental gas price reform By Heyndrickx, Christophe; Alexeeva-Talebi, Victoria; Tourdyeva, Natalia
  11. Hedging Swing contract on gas markets By Xavier Warin
  12. Humps in the Volatility Structure of the Crude Oil Futures Market By Carl Chiarella; Boda Kang; Christina Nikitopoulos-Sklibosios; Thuy-Duong To
  13. Response to “Ethanol Production and Gasoline Prices: A Spurious Correlation†by Knittel and Smith By Dermot J. Hayes
  14. Is U.S. Economic Growth Over? Faltering Innovation Confronts the Six Headwinds By Robert J. Gordon
  15. Microfoundations for the Environmental Kuznets Curve: Invoking By-Production, Normality and Inferiority of Emissions By Sushama Murty
  16. On the Theory of By-Production of Emissions By Sushama Murty
  17. Aviation, Carbon, and the Clean Air Act By Richardson, Nathan
  18. Incitation à l’adoption de technologies propres. By Mourad Afif
  19. Sources of Comparative Advantage in Polluting Industries By Fernando Broner; Paula Bustos; Vasco M. Carvalho
  20. Incidencia de los impuestos a las emisiones en el sector industrial. By Gustavo Hernández
  21. Using Vehicle Taxes to Reduce Carbon Dioxide Emissions Rates of New Passenger Vehicles: Evidence from France, Germany, and Sweden By Klier, Thomas; Linn, Joshua
  22. Emissions Trading with Profit-Neutral Permit Allocations By Hepburn, C.J.; Quah, J.K.-H.; Ritz, R.A.
  23. Cap-and-Trade Programs under Continual Compliance By Hasegawa, Makoto; Salant, Stephen W.
  24. Cap-and-Trade Programs under Delayed Compliance By Hasegawa, Makoto; Salant, Stephen W.
  25. On fundamental performance of a marketable permits system in a trader setting: Double auction vs. uniform price auction By Koji Kotani; Kenta Tanaka; Shunsuke Managi
  26. Channeling the final Say in Politics By Peter S. Schmidt; Therese Werner
  27. The rate of change of the social cost of carbon and the social planner's hotelling rule By Kögel, Tomas
  28. Temperature, Human Health, and Adaptation: A Review of the Empirical Literature By Olivier Deschenes
  29. Optimal Learning on Climate Change: Why Climate Skeptics should reduce Emissions By Sweder van Wijnbergen; Tim Willems
  30. Targets for Global Climate Policy: An Overview By Richard S.J. Tol

  1. By: Katrina Jessoe; David Rapson
    Abstract: This paper presents experimental evidence that information feedback dramatically increases the price elasticity of demand in a setting where signals about quantity consumed are traditionally coarse and infrequent. In a randomized controlled trial, residential electricity customers are exposed to price increases, with some households also receiving displays that transmit high-frequency information about usage and prices. This substantially lowers information acquisition costs and allows us to identify the marginal information effect. Households only experiencing price increases reduce demand by 0 to 7 percent whereas those also exposed to information feedback exhibit a usage reduction of 8 to 22 percent, depending on the amount of advance notice. The differential response across treatments is significant and robust to the awareness of price changes. Conservation extends beyond the treatment window, providing evidence of habit formation, spillovers, and greenhouse gas abatement. Results suggest that information about the quantity consumed facilitates learning, which likely drives the treatment differential.
    JEL: L94
    Date: 2012–08
  2. By: Spiller, Elisheba (Resources for the Future); Stephens, Heather M.
    Abstract: Using disaggregated confidential household data, we estimate spatial variation in household-level gasoline price elasticities and the welfare effects of gasoline taxes. A novel approach allows us to model a discrete-continuous household choice of vehicle bundles, while disaggregating the choice set and including vehicle-specific fixed effects and unobserved consumer heterogeneity. The mean elasticity of demand for gasoline is -0.67, but with tremendous variation across location and income. We find that rural households have 30 percent more negative welfare impacts than urban households from gasoline taxes. Finally, we explore different policies that can help to mitigate welfare inequalities due to these taxes.
    Keywords: gasoline taxes, welfare, elasticity, rural, commuting, transportation
    JEL: Q0 R0 H0
    Date: 2012–07–18
  3. By: David C Broadstock (Research Institute of Economics and Management (RIEM), Southwestern University of Finance and Economics, Sichuan, China and Surrey Energy Economics Centre (SEEC), School of Economics, University of Surrey, UK.); Xun Chen (Research Institute of Economics and Management (RIEM), Southwestern University of Finance and Economics, Sichuan, China)
    Abstract: In this paper it is shown that the relative demands for UK Gasoline and Diesel fuels are price responsive. Given differing emissions based externalities from these two fuel types, it is contended that discriminatory fuel duty might be a means to reduce these externalities. Results are derived from an Almost Ideal Demand System with time varying technological progress, estimated using a bootstrap procedure given non-normalities and relative small sample sizes.
    Keywords: AIDS model, technology biases, time-varying parameter.
    JEL: Q40 R40
    Date: 2012–02
  4. By: Dr. Ulrike Lehr (GWS - Institute of Economic Structures Research); Dr. Barbara Breitschopf (GWS - Institute of Economic Structures Research); Dr. Jochen Diekmann (GWS - Institute of Economic Structures Research); Juri Horst (GWS - Institute of Economic Structures Research); Dr. Marian Klobasa (GWS - Institute of Economic Structures Research); Dr. Frank Sensfuß (GWS - Institute of Economic Structures Research); Jan Steinbach (GWS - Institute of Economic Structures Research)
    Abstract: The increasing use of energy from renewable sources (RE) for the generation of heat and electricity in Germany has also led to an increasingly intensive debate on its advantages and disadvantages. The discussion mostly centers on the cost effects, because beneficial effects often are harder to quantify. Benefits comprise indirect effects or effects which lie far in the future. Scientific studies also frequently focus on single aspects, which cannot be aggregated easily, because they occur in different sectors and comprise technology system-wide effects, distributional effects or overall macro-economic effects. This study intends to answer questions refering to clear definitions of effects when increasing renewable energy, methods of adding and balancing the effects, the choice of methodological approach, support mechanisms, suitable time span or spatial system border. After a brief sketch of the basic methods applied, the contribution will present estimates for a wide range of effects. It closes with suggestions on possibilities how to add and balance the effects.
    Keywords: renewable energy sources,estimation and evaluation of costs and benefits, distributional, price and macro-economic effects
    JEL: Q4 Q5
    Date: 2012
  5. By: Neal Detert (SusDev Solutions Pte Ltd.); Koji Kotani (International University of University)
    Abstract: Many developing nations are in transition from non-renewable to renewable energy in electricity generation. This research analyzes this type of changing investment environment for renewable energy projects such as wind farms and solar-thermal plants with the application of real options theory. The main intent is to explore the potential and to provide further insights for such a transition in developing economies through studying the case of Mongolia under coal price uncertainty. To evaluate the comparative attractiveness of either continuing to use non-renewable (coal-based) infrastructure or switching to renewable energy, we formulate social revenue functions for the two environments under the assumptions that coal-based operations generate negative externalities and renewable energy is externality-free. Framing the problem as a type of real options, we arrive at the optimal trigger prices of coal for switching technologies. With this analytical framework, we further pose some possible scenarios with respect to electricity price as well as negative externality valuation, and characterize when renewable energy investments become attractive. In sharp contrast to conventional wisdom in real options theory, we identify some situations where option values for switching technologies become negative in some price domains, and welfare losses are incurred. Overall, the result raises the possible risks in developing nations that waiting to switch energy sources yields huge losses under input price uncertainty. To avoid such a case in Mongolia, the government should remove coal subsidies and increase electricity prices or switch to renewable energy earlier rather than holding the option to wait, especially when people are willing to pay more for the removal of negative externalities.
    Keywords: Alternative energy investment, Real options in discrete time, Coal prices, Stochastic process
    JEL: C61 G11 O13 Q32 Q42
    Date: 2012–08
  6. By: Schallaböck, Karl Otto; Carpantier, Rike; Fischedick, Manfred; Ritthoff, Michael; Wilke, Georg; Bauhaus, Wencke; Schröder, Sebastian
    Abstract: Im Zentrum dieser Untersuchung steht die Aufbereitung der Erfahrungen mit den Elektrofahrzeugen in Einzelprojekten der Modellregionen Phase I hinsichtlich der energiebezogenen Parameter und der nach Fahrzeugsegmenten differenzierte Vergleich mit herkömmlichen Fahrzeugen. In der Literatur finden sich für die Klimabilanz von Elektrofahrzeugen unterschiedliche Bewertungsmethoden, deren Ergebnisse kurzfristig stark streuen und sich erst mittel- bis längerfristig perspektivisch annähern. In der vorliegenden Untersuchung werden drei Varianten zur Bilanzierung der klimarelevanten Emissionen gerechnet: a) Werden Elektrofahrzeuge mit Strom aus erneuerbaren Energien betrieben, ist ihre Klimabilanz deutlich besser als diejenige fossil betriebener Pkw. Wann, inwieweit und unter welchen Voraussetzungen (Herkunftsnachweis) eine direkte Zuordnung des Fahrstroms zu einer Stromerzeugung aus erneuerbaren Energien möglich ist, ist heute allerdings umstritten. b) Unter pragmatischen Gesichtspunkten bietet die Strommixmethode eine gute Orientierung für die klimabezogene Bewertung von Elektrofahrzeugen. Aufgrund der auf der Zeitachse planungsgemäß zunehmenden Anteile erneuerbarer Energien im Strommix führt dies für die Zeiten, in denen eine signifikante Durchdringung mit Elektrofahrzeugen zu erwarten ist, zu einer gegenüber heute deutlichen Verbesserung der spezifischen CO2-Emissionen und respektive Vorteilen gegenüber mit fossilen Kraftstoffen betriebenen Fahrzeugen. c) Legt man dem Kraftwerkseinsatz Merit Order als Regel des ökonomischen Betriebs zugrunde und betrachtet den Stromverbrauch von Elektrofahrzeugen als zusätzlichen Verbrauch gegenüber einem Zustand ohne Elektrofahrzeuge, stellt sich die Klimabilanz nicht so günstig dar. -- This study focuses on the analysis of experiences with electric vehicles within several single projects of the model regions programme, part 1. Main issues are terms of energy-related parameters and the comparison with conventional vehicles (differentiated according to vehicles segments). There are various methods of estimating the carbon footprint of electric vehicles in literature. In short-time considerations their results scatter, but perspectively at middle- and long-time considerations they converge. The present study respects three variations of calculating the climate-relevant emissions: a) If electric vehicles are operated from renewable energy sources, their carbon footprint is significant better than fossil fuel cars. When, how and on what conditions (proof of origin) a direct correlation of the driving-energy to a power generation from renewable energies is possible, is currently in discussion. b) Under pragmatic aspects the energy-mix-method offers a good guide to a climate-related assessment of electric vehicles. Due to the planned growth of the ratio of renewable energies in the electricity mix according to the time-axis, this leads, in times where a significant penetration supply of electric vehicles is expected, to a serious improvement of specific CO2-emissions compared to today. So electric vehicles might have benefits in contrast to vehicles with internal combustion engines. c) If one takes the merit order rule as a basis for the economic power plant operation and considers the power consumption of electric vehicles as an additional consumption compared to a state without electric vehicles, the carbon footprint is not that convenient anymore.
    Keywords: Elektromobilität,Klimabilanz,Elektro-Pkw,Strommix,CO2-Emissionen,Klimalasten,Energieverbrauch,LCA,Vergleichsfahrzeuge,electric mobility,carbon footprint,electric vehicles,electric passenger cars,electricity mix,CO2-emissions,climate loads,energy consumption,LCA,reference vehicles
    Date: 2012
  7. By: Burstedde, Barbara (Energiewirtschaftliches Institut an der Universitaet zu Koeln)
    Abstract: Congestion management schemes have taken a prominent place in current electricity market design discussions. In this paper, the implications of establishing zonal pricing in Europe are analyzed with regard to potential zonal delimitations and associated effects on total system costs. Thereby, a nodal model sets the benchmark for efficiency and provides high-resolution input data for a cluster analysis based on Ward’s minimum variance method. The proposed zonal configurations are tested for sensitivity to the number of zones and structural changes in the electricity market. Furthermore, dispatch and redispatch costs are computed to assess the costs of electricity generation and transmission. The results highlight that suitable bidding zones are not bound to national borders and that losses in static efficiency resulting from the aggregation of nodes into zones are relatively small.
    Keywords: Cluster Analysis; Electricity Market Modeling; Nodal Pricing; Redispatch; Zonal Pricing
    JEL: C38 C63 L51 Q41
    Date: 2012–07–21
  8. By: Holmberg, Ulf (Department of Economics, Umeå University); Lönnbark, Carl (Department of Economics, Umeå University); Lundström, Christian (Department of Economics, Umeå University)
    Abstract: Is it possible to beat the market by mechanical trading rules based on historical and publicly known information? Such rules have long been used by investors and in this paper, we test the success rate of trades and profitability of the Open Range Breakout (ORB) strategy. An investor that trades on the ORB strategy seeks to identify large intraday price movements and trades only when the price moves beyond some predetermined threshold. We present an ORB strategy based on normally distributed returns to identify such days and find that our ORB trading strategy result in significantly higher returns than zero as well as an increased success rate in relation to a fair game. The characteristics of such an approach over conventional statistical tests is that it involves the joint distribution of Low, High, Open and Close over a given time horizon.
    Keywords: Bootstrap; Crude oil futures; Contraction-Expansion principle; Efficient market hypothesis; Martingales; Technical Analysis
    JEL: C49 G11 G14 G17
    Date: 2012–08–23
  9. By: Glenn Jenkins (Queen's University, Canada and Eastern Mediterranean University, Cyprus); Andrey Klevchuk (Queen's University, Kingston, Canada)
    Abstract: The proposed El Kureimat Plant (module II) project is one of 19 new generation plants that the public electrical utility of Egypt plans to setup over its current planning horizon of 2005-2012. This paper reports on an integrated investment appraisal of the project. The project involves the construction of a 750 MW (2x250 MW gas turbine and 1x250 MW steam turbine) combine cycle power plant in the premises of the existing El Kureimat Power Station. The estimated total cost of the investment is 271.1 million Euros in nominal prices. The project, when completed, will provide 750 MW of additional capacity to the unified power system (UPS) in 2009. The proposed project is expected to save a substantial amount of natural gas for the state-controlled gas utility, which will be able to export the gas and earn foreign exchange for the Government.
    Keywords: thermal electricity, generation plants, combine cycle power plant, Egypt Integrated Appraisal.
    JEL: H43
  10. By: Heyndrickx, Christophe; Alexeeva-Talebi, Victoria; Tourdyeva, Natalia
    Abstract: The growing momentum for gas price liberalization in Russia is increasingly constrained by fears of potentially strong adverse impact that market-based price setting principle will have on the economy. Based on a novel multi-regional, multi-sector and multi-household computable general equilibrium (CGE) model of the Russian Federation, this paper presents a simple yet a flexible framework for evaluating gas price reform. We found that the reform is feasible at low economic cost, without greater disparities in terms of increased inequity within and between country's federal districts. Large redistributive impacts can arise from specific mechanisms to recycle revenues. In terms of global environmental credentials, gas price liberalization can bring Russia on a substantially more sustainable path. The potential to foster adoption of energy efficiency measures by exploiting the revenue-recycling effect is, however, limited. --
    Keywords: regional general equilibrium model,sustainable development,natural gas pricing,Russia
    JEL: D58 H21 H22 Q48
    Date: 2012
  11. By: Xavier Warin
    Abstract: Swing options on the gas market are american style option where daily quantities exercices are constrained and global quantities exerciced each year constrained too. The option holder has to decide each day how much he consumes of the quantities satisfying the constraints and tries to use a strategy in order to maximize its expected profit. The pay off fonction is a spread between the spot gas market and the value of an index composed of the past average of some commodities spot or future prices. We study the valorization and the effectiveness of the dynamic hedging of such a contract.
    Date: 2012–08
  12. By: Carl Chiarella (Finance Discipline Group, UTS Business School, University of Technology, Sydney); Boda Kang (Finance Discipline Group, UTS Business School, University of Technology, Sydney); Christina Nikitopoulos-Sklibosios (Finance Discipline Group, UTS Business School, University of Technology, Sydney); Thuy-Duong To (University of New South Wales)
    Abstract: This paper analyzes the volatility structure of commodity derivatives markets. The model encompasses stochastic volatility that may be unspanned by futures contracts. A generalized hump-shaped volatility specification is assumed that entails a finite-dimensional affine model for the commodity futures curve and quasi-analytical prices for options on commodity futures. An empirical study of the crude oil futures volatility structure is carried out using an extensive database of futures prices as well as futures option prices spanning 21 years. The study supports a hump-shaped, partially spanned stochastic volatility specification. Factor hedging, which takes into account shocks to both the volatility processes and the futures curve, depicts the presence of unspanned components in the volatility of commodity futures and the outperformance of the hump-shaped volatility in comparison to the more popular exponential decaying volatility. This hump shaped feature is more pronounced when the market is volatile.
    Keywords: commodity derivatives; crude oil derivatives; Unspanned stochastic volatility; hump-shaped volatility; pricing; hedging
    Date: 2012–06–01
  13. By: Dermot J. Hayes (Center for Agricultural and Rural Development (CARD); Food and Agricultural Policy Research Institute (FAPRI))
    Abstract: In a recent working paper, Christopher Knittel and Aaron Smith present an attack on a peer-reviewed paper “The Impact of Ethanol Production on US and Regional Gasoline Markets Relating Ethanol Production to Gasoline Prices" written by myself and Xiaodong Du, and published in 2009 in Energy Policy (Vol. 37 No.8), as well as two subsequent working papers in 2011 and 2012. Our work found that as ethanol production increased, the price of gasoline fell relative to the price of crude oil. Knittel and Smith claim to have refuted this result, and conclude that their “Empirical models that are most consistent with economic theory suggest effects that are near zero and statistically insignificant.â€
    Date: 2012–08
  14. By: Robert J. Gordon
    Abstract: This paper raises basic questions about the process of economic growth. It questions the assumption, nearly universal since Solow’s seminal contributions of the 1950s, that economic growth is a continuous process that will persist forever. There was virtually no growth before 1750, and thus there is no guarantee that growth will continue indefinitely. Rather, the paper suggests that the rapid progress made over the past 250 years could well turn out to be a unique episode in human history. The paper is only about the United States and views the future from 2007 while pretending that the financial crisis did not happen. Its point of departure is growth in per-capita real GDP in the frontier country since 1300, the U.K. until 1906 and the U.S. afterwards. Growth in this frontier gradually accelerated after 1750, reached a peak in the middle of the 20th century, and has been slowing down since. The paper is about “how much further could the frontier growth rate decline?” The analysis links periods of slow and rapid growth to the timing of the three industrial revolutions (IR’s), that is, IR #1 (steam, railroads) from 1750 to 1830; IR #2 (electricity, internal combustion engine, running water, indoor toilets, communications, entertainment, chemicals, petroleum) from 1870 to 1900; and IR #3 (computers, the web, mobile phones) from 1960 to present. It provides evidence that IR #2 was more important than the others and was largely responsible for 80 years of relatively rapid productivity growth between 1890 and 1972. Once the spin-off inventions from IR #2 (airplanes, air conditioning, interstate highways) had run their course, productivity growth during 1972-96 was much slower than before. In contrast, IR #3 created only a short-lived growth revival between 1996 and 2004. Many of the original and spin-off inventions of IR #2 could happen only once – urbanization, transportation speed, the freedom of females from the drudgery of carrying tons of water per year, and the role of central heating and air conditioning in achieving a year-round constant temperature. Even if innovation were to continue into the future at the rate of the two decades before 2007, the U.S. faces six headwinds that are in the process of dragging long-term growth to half or less of the 1.9 percent annual rate experienced between 1860 and 2007. These include demography, education, inequality, globalization, energy/environment, and the overhang of consumer and government debt. A provocative “exercise in subtraction” suggests that future growth in consumption per capita for the bottom 99 percent of the income distribution could fall below 0.5 percent per year for an extended period of decades.
    JEL: D24 E2 E66 J11 J15 O3 O31 O4 Q43
    Date: 2012–08
  15. By: Sushama Murty (Department of Economics, University of Exeter)
    Abstract: A by-production-cum-preference based approach is adopted to study the relation between national income and environmental quality under non-cooperative behaviour. While emission is an inferior good for richly endowed economies, it is a normal good for the developing economies. With increases in endowments, the marginal willingness to pay declines (respectively, increases) in the set of poorly (respectively, richly) endowed economies. Hence, for emissions, the income and substitution effects work in opposite directions. Abatement strategies include cleaning-up; decreases in and substitution between fuels of varying costs, emission, and energy intensities; and the diversion of capital from fuel-intensive to non-fuel intensive uses. Poorly (respectively, richly) endowed economies are characterized by weak (respectively, strong) environmental policies. Consequently, deteriorating abatement practices are adopted by the developing economies. The shape of the income-environmental quality graph depends on the relative strengths of income and substitution effects and the set of available abatement strategies. Both inverted U and N-shaped environmental Kuznets curves are possible. The latter arises due to stronger substitution effects and lower opportunity costs of fuel-intensive capital in the more richer of the richest economies.
    Keywords: environmental Kuznets curve, income and substitution effects, inferior good, normal good, by-production of emissions, returns to scale, abatement, inter-fuel substitution.
    JEL: Q50 Q56 O12 O13 D62 H23
    Date: 2012
  16. By: Sushama Murty (Department of Economics, University of Exeter)
    Abstract: We identify the disposability properties of a production technology resulting from the simultaneous play of nature's emission-generating mechanism and the firm's intended production activities. Our axioms define a "by-production" technology (BPT), which has a novel functional representation and can be decomposed into a standard neo-classical intended-production technology and a nature's emission generation set.
    Keywords: theory of production, emission-generating production technologies, free input and output disposability, weak disposability, costly disposability, functional representations of multi-output production technologies.
    JEL: D20 D24 Q50
    Date: 2012
  17. By: Richardson, Nathan (Resources for the Future)
    Abstract: This paper explores the policy options available to the United States for regulating greenhouse gas emissions from aircraft under existing law: the Clean Air Act (CAA). Europe has unilaterally and controversially moved to include aviation emissions in its Emissions Trading System. The United States can, however, allow its airlines to escape this requirement by imposing “equivalent” regulation. U.S. aviation emissions rules could also have significant environmental benefits and would limit domestic emissions beyond the reach of the European Union. With new legislation unlikely, the CAA is the only plausible vehicle for such regulation. Title II Part B of the CAA does grant EPA broad regulatory authority over aviation emissions, though this authority has not been used aggressively. EPA could impose meaningful aviation GHG limits and, by using performance standards, give airlines incentives to creatively comply. It might further be possible to allow some forms of emissions trading, though the law is unclear. Emissions by foreign airlines in the United States could be covered under the act, though international law might impose barriers.
    Keywords: Clean Air Act, aviation, aircraft, carbon, emissions, GHGs, European Union, trading, flexibility
    Date: 2012–07–24
  18. By: Mourad Afif
    Abstract: Dans un nouveau contexte économique dominé par la crise et la récession, la limitation directe des émissions des gaz à effet de serre (GES) à l'aide de la taxe ou des permis d'émission est plus que jamais difficile à mettre en place. Ainsi, on assiste à l'émergence des appels à l'encouragement des technologies et des procédés présentant un fort potentiel d'économie des émissions. Nous savons d'après Requate et Unold [2003] que si le régulateur est myope et connaît parfaitement les coûts de dépollution, alors la taxe fournit une incitation au changement technologique plus forte que l'échange de permis. Cependant, le régulateur est souvent appelé à concevoir la politique de régulation de pollution en situation d'incertitude sur le coût de dépollution. Dans une telle situation, Roberts et Spence [1976] montrent que l'instrument hybride taxe-permis est économiquement plus efficace à réduire les émissions de pollution que la taxe seule ou le permis seul. Nous étudions dans ce papier l'impact de l'incertitude concernant le coût de dépollution sur l'incitation au changement technologique. Nous nous intéresserons particulièrement aux incitations engendrées par la taxe, le permis et le système hybride taxe-permis en situation d'incertitude sur le coût de dépollution. Cette incitation est mesurée par les gains additionnels réalisés sur le prix et le volume d'émission occasionnés par l'adoption de la technologie propre.
    Keywords: Adoption de technologie; Coût de dépollution; Permis d'émission; Taxes d'émission; Incertitude.
    JEL: D82 H23 Q52 L51
    Date: 2012
  19. By: Fernando Broner; Paula Bustos; Vasco M. Carvalho
    Abstract: We study the determinants of comparative advantage in polluting industries. We combine data on environmental policy at the country level with data on pollution intensity at the industry level to show that countries with laxer environmental regulation have a comparative advantage in polluting industries. Further, we address the potential problem of reverse causality. We propose an instrument for environmental regulation based on meteorological determinants of pollution dispersion identified by the atmospheric pollution literature. We find that the effect of environmental regulation on the pattern of trade is causal and comparable in magnitude to the effect of physical and human capital.
    JEL: F11 F18 Q53 Q56
    Date: 2012–08
  20. By: Gustavo Hernández
    Abstract: Siguiendo el artículo de Fullerton y Heutel (2010) se construye un modelo de equilibrio general computable para una economía cerrada, el cual involucra polución. Esto con el objetivo de analizar los efectos que tiene un impuesto a las emisiones de carbono sobre los precios y cantidades de la producción y los factores productivos. Se procede a calibrar el modelo con los datos de la industria colombiana, con base en la Encuesta Anual Manufacturera y de emisiones de CO2 para el sector. Se encuentra que el imponer un impuesto a las emisiones reduce la polución, sin embargo, esto depende en gran parte de las complementariedades o sustituciones entre los factores de producción. Finalmente, se encuentra que la carga tributaria es soportada en gran parte por los consumidores, vía un mayor precio, y el mercado de trabajo, por la recomposición de los factores dentro del modelo.
    Date: 2012–07–02
  21. By: Klier, Thomas; Linn, Joshua (Resources for the Future)
    Abstract: France, Germany, and Sweden link vehicle taxes to the carbon dioxide (CO2) emissions rates of passenger vehicles. Based on new vehicle registration data from 2005–2010, a vehicle’s tax is negatively correlated with its registrations. The effect is somewhat stronger in France than in Germany and Sweden. Taking advantage of the theoretical equivalence between an emissions rate standard and a CO2-based emissions rate tax, we estimate the effect on manufacturers’ profits of reducing emissions rates. For France, a decrease of 5 grams of CO2 per kilometer reduces profits by 24 euros per vehicle. We find considerable heterogeneity across manufactures and countries.
    Keywords: feebate, fuel economy standards, emissions rate standards
    JEL: L62 Q54
    Date: 2012–08–13
  22. By: Hepburn, C.J.; Quah, J.K.-H.; Ritz, R.A.
    Abstract: This paper examines the impact of an emissions trading scheme (ETS) on equilibrium emissions, output, price, market concentration, and profits in a generalized Cournot model. We develop formulae for the number of emissions permits that have to be freely allocated to firms to neutralize the profit impact of the ETS. We show that its profit impact is usually limited: in a Cournot oligopoly with constant marginal costs, total industry profits are preserved so long as freely allocated permits cover a fraction of initial emissions that does not exceed the industry's Herfindahl index.
    Keywords: Cap-and-trade, permit allocation, profit-neutrality, cost pass-through, abatement, grandfathering
    JEL: D43 H23 Q58
    Date: 2012–08–17
  23. By: Hasegawa, Makoto; Salant, Stephen W. (University of Michigan and Resources for the Future)
    Abstract: Price collars have frequently been advocated to restrict the price of emissions permits. Consequently, collars were incorporated in the three bills languishing in Congress as well as in California?'s AB-32; Europeans are now considering price collars for EU ETS. In advocating collars, most analysts have assumed (1) collars will be implemented by government purchases and sales from bufferstocks, just like bands on foreign exchange rates or commodity prices; and (2) ?firms must surrender permits whenever they pollute. In fact, however, no actual emissions trading scheme has conformed to these assumptions. In the current paper, we maintain the second assumption (continual compliance) and show that while a price collar supported by a supported sufficiently large bufferstock can restrict permit prices, a price collar supported instead by auctions with reserve prices cannot. In a companion paper (Hasegawa and Salant 2012), we show that neither method works once account is taken of delayed compliance.
    Keywords: emissions trading, marketable permits, price collar, safety valve, price ceiling, price floor
    JEL: Q54 Q58
    Date: 2012–08–20
  24. By: Hasegawa, Makoto; Salant, Stephen W. (University of Michigan and Resources for the Future)
    Abstract: Previous analyses assumed that ?firms must surrender permits as they pollute. If so, then the price of permits may remain constant over measurable intervals if the government injects additional permits at a ceiling price or may even collapse if more permits are injected through an auction (Hasegawa and Salant 2012). However, no cap-and-trade program actually requires continual compliance. The three federal bills and California'?s AB-32, for example, instead require that ?firms surrender permits only periodically to cover their cumulative emissions since the last compliance period. Anticipated injections of additional permits during the compliance period should have different effects than under continual compliance. We develop a methodology for analyzing the effects of such permit injections. Using it, we explain why the sales provisions of one federal bill (Kerry-Lieberman) might generate a speculative attack in the permit market and why one provision of AB-32 may undermine the very existence of an equilibrium.
    Keywords: emissions trading, marketable permits, price collar, safety valve, price ceiling, price floor
    JEL: Q54 Q58
    Date: 2012–07–23
  25. By: Koji Kotani (International University of University); Kenta Tanaka (Tohoku University); Shunsuke Managi (Tohoku University)
    Abstract: The marketable permits systems have been widely suggested as a potential solution for environmental problems. A critical feature in the market is that an agent can be both sellers and buyers of permits, so-called "trader settings." Although properties 10 of the marketable permits in non-trader settings are well-documented, little is known in a trader setting, particularly about how different auction mechanisms perform and how much each of them achieves effiency. To answer the questions, we have designed and implemented two different auction mechanisms of trader settings for marketable permits in controlled laboratory experiments: (i) Double auction (DA), and (ii) Uniform price auction (UPA). To the best of our knowledge, this research is the first which designs and implements UPA for marketable permits in a trader setting, and makes a direct comparison with the performance of DA on the same ground. We obtain the following novel results: (1) UPA is more effcient than DA in a trader setting, which is in sharp contrast with the established result in non-trader settings, (2) UPA generates more stable price dynamics and (3) UPA induces subjects to reveal more truthfully about abatement costs for emissions through their trading behaviors. With these results, we conclude that UPA is more likely to work better than DA in a trader setting.
    Keywords: Marketable permits, Economic experiments, Double auction, Uniform price auction, Trader settings
    Date: 2012–08
  26. By: Peter S. Schmidt (University Zurich, Switzerland); Therese Werner (ETH Zurich, Switzerland)
    Abstract: This study examines the relation of stock returns and the announcements on verified emissions in the European Emission Trading Scheme (EU ETS). In a first step we employ event study methods to detect possibly abnormal returns on the respective announcement dates using a sample of quoted stock market firms from Austria, Denmark, Germany and the UK. In a second step we link the estimated abnormal returns to firm characteristics based on the EU ETS (such as verified emissions or over-allocation) as well as to financial firm level data in a cross-sectional analysis. Even though the overall cost from the new regulation on the individual firms was minor, we find evidence for the asset value hypothesis, which states that higher verified emissions induce a higher future permit allocation. This suggests that investors did not perceive the EU ETS in its first set-up as an efficient and effective environmental policy instrument.
    Keywords: Event study; European emission trading scheme; Regulation; Verified Emissions; Emission trade
    JEL: G14 Q48 Q52
    Date: 2012–08
  27. By: Kögel, Tomas
    Abstract: This paper derives the social cost of carbon (SCC) and its rate of change. It does so in a deterministic Ramsey model of optimal economic growth with carbon emissions from burning fossil fuels. It is shown that the determinants of the rate of change of the SCC are substantially almost identical to the determinants in the social planner's Hotelling rule if a unit of fossil fuel use leads to exactly one unit of carbon emission, while otherwise these formulas differ substantially. As is also shown in this paper, in the special case in which the two formulas are substantially almost identical, a Pigovian tax on fossil fuel use and a Pigovian tax on carbon emissions are both equal to the SCC, while otherwise only a Pigovian tax on carbon emissions equals the SCC. --
    Keywords: climate change,social cost of carbon
    JEL: D61 Q54
    Date: 2012
  28. By: Olivier Deschenes
    Abstract: This paper presents a survey of the empirical literature studying the relationship between health outcomes, temperature, and adaptation to temperature extremes. The objective of the paper is to highlight the many remaining gaps in the empirical literature and to provide guidelines for improving the current Integrated Assessment Model (IAM) literature that seeks to incorporate human health and adaptation in its framework. I begin by presenting the conceptual and methodological issues associated with the measurement of the effect of temperature extremes on health, and the role of adaptation in possibly muting these effects. The main conclusion that emerges from the literature is that despite the wide variety of data sets and settings most studies find that temperature extremes lead to significant reductions in health, generally measured with excess mortality. Regarding the role of adaptation in mitigating the effects of extreme temperature on health, the available knowledge is limited, in part due to the lack of real-world data on measures of adaptation behaviors. Finally, the paper discusses the implications of the currently available evidence for assessments of potential human health impacts of global climate change.
    JEL: I1 Q5 Q54
    Date: 2012–08
  29. By: Sweder van Wijnbergen (University of Amsterdam); Tim Willems (Oxford University)
    Abstract: Climate skeptics argue that the possibility that global warming is exogenous implies that we should not take additional action towards reducing greenhouse gas emissions until we know more. However this paper shows that even climate skeptics have an incentive to reduce emissions: such a change of direction facilitates their learning process on the causes of global warming. Since the optimal policy action depends on these causes, they are valuable to know. Although an increase in emissions would also ease learning, that option is shown to be inferior because emitting greenhouse gases is irreversible. Consequently the policy implications of the different positions in the global warming debate turn out to coincide - thereby diminishing the relevance of this debate from a policy perspective. Uncertainty is no reason for inaction.
    Keywords: climate policy; global warming; climate skepticism; active learning; irreversibilities
    JEL: D83 Q54 Q58
    Date: 2012–08–20
  30. By: Richard S.J. Tol (Department of Economics, University of Sussex, UK; Institute for Environmental Studies, Department of Spatial Economics, Vrije Universiteit, Amsterdam, The Netherlands)
    Abstract: A survey of the economic impact of climate change and the marginal damage costs shows that carbon dioxide emissions are a negative externality. The estimated Pigou tax and its growth rate are too low to justify the climate policy targets set by political leaders. A lower discount rate or greater concern for the global distribution of income would justify more stringent climate policy, but would imply an overhaul of other public policy. Catastrophic risk justifies more stringent climate policy, but only to a limited extent.
    Keywords: climate change; climate policy; first-best
    JEL: Q54 Q58
    Date: 2012–08

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