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on Energy Economics |
| By: | Gireesh Shrimali; Steffen Jenner; Felix Groba; Gabriel Chan; Joe Indvik |
| Abstract: | Renewable portfolio standards (RPS) are the most popular U.S. state-level policies for promoting deployment of renewable electricity (RES-E). While several econometric studies have estimated the effect of RPS on in-state RES-E deployment, results are contradictory. We reconcile these studies and move toward a definitive answer to the question of RPS effectiveness. We conduct an analysis using time series cross sectional regressions - including the most nuanced controls for policy design features to date - and nonparametric matching analysis. We find that higher RPS stringency does not necessarily drive more RES-E deployment. We examine several RPS design features and market characteristics (including REC unbundling, RPS in neighboring states, out-of-state renewable energy purchases) that may explain the gap between effective and ineffective policies. We also investigate other RES-E policies and technology-specific effects. Ultimately, we show that RPS effectiveness is largely explained by a combination of policy design, market context, and inter-state trading effects. |
| Keywords: | Renewable energy, Renewable portfolio standards, Panel data models, Matching analysis |
| JEL: | C23 H23 Q42 Q48 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1258&r=ene |
| By: | Hunt Allcott; Nathan Wozny |
| Abstract: | It is often asserted that consumers undervalue future gasoline costs relative to purchase prices when they choose between automobiles, or equivalently that they have high "implied discount rates" for these future energy costs. We show how this can be tested by measuring whether relative prices of vehicles with different fuel economy ratings fully adjust to time series variation in gasoline price forecasts. We then test the model using a detailed dataset based on 86 million transactions at auto dealerships and wholesale auctions between 1999 and 2008. Over our base sample, vehicle prices move as if consumers are indifferent between one dollar in discounted future gas costs and only 76 cents in vehicle purchase price. We document how endogenous market shares and utilization, measurement error, and different gasoline price forecasts can affect the results, and we show how to address these issues empirically. We also provide unique empirical evidence of sticky information: vehicle markets respond to changes in gasoline prices with up to a six month delay. |
| JEL: | D03 D12 L62 Q41 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18583&r=ene |
| By: | Andreas Breitenfellner; Jesús Crespo Cuaresma; Philipp Mayer |
| Abstract: | Using a dataset for 18 OECD economies spanning the last four decades, we identify periods of downward house price adjustment and estimate conditional logit models to measure the effect of energy inflation on the probability of these house price corrections after controlling for other relevant macroeconomic variables. Our results give strong evidence that increases in energy price inflation raise the probability of such corrective periods taking place. We discuss various channels that could explain this phenomenon as well as the implication of our results to the analysis of macro-financial risks. |
| JEL: | C33 G01 Q43 R21 R31 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:euf:ecopap:0471&r=ene |
| By: | Erwan Gautier (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - Université de Nantes : EA4272); Ronan Le Saout (ENSAE - École Nationale de la Statistique et de l'Administration Économique - ENSAE ParisTech) |
| Abstract: | Using millions of individual gasoline prices collected at a daily frequency, we examine the speed at which market refined oil prices are transmitted to consumer liquid fuel prices. We find that on average gasoline prices are modified once a week and the distribution of price changes displays a M-shape as predicted by an adjustment cost model. Using a reduced form statedependent pricing model with time-varying random thresholds, we find that the degree of pass through of wholesale prices to retail gasoline prices is on average 0:77 for diesel and 0:67 for petrol. The duration for a shock to be fully transmitted into prices is about 10 days. There is no significant asymmetry in the transmission of wholesale price to retail prices. |
| Keywords: | price stickiness ; adjustment costs ; (S,s) models ; gasoline price. |
| Date: | 2012–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00759095&r=ene |
| By: | Hélène Le Cadre (CMA - Centre de Mathématiques Appliquées - Mines ParisTech); David Mercier (CEA, LIST - CEA) |
| Abstract: | In this article, we consider houses belonging to an eco-neighborhood which inhabitants have the capacity to optimize dynamically the energy demand and the energy storage level so as to maximize their utility. The inhabitants' preferences are characterized by their sensitivity toward comfort versus price, the optimal expected temperature in the house, thermal loss and heating efficiency of their house. At his level, the eco-neighborhood manager shares the resource produced by the eco-neighborhood according to two schemes: an equal allocation between the houses and a priority based one. The problem is modeled as a stochastic game and solved using stochastic dynamic programming. We simulate the energy consumption of the eco-neighborhood under various pricing mechanisms: flat rate, peak and off-peak hour, blue/white/red day, peak day clearing and a dynamic update of the price based on the consumption of the eco-neighborhood. We observe that economic incentives for houses to store energy depends deeply on the implemented pricing mechanism and on the homogeneity in the houses' characteristics. Furthermore, when prices are based on the consumption of the eco-neighborhood, storage appears as a compensation for the errors made by the service provider in the prediction of the consumption of the eco-neighborhood. |
| Keywords: | Eco-Neighborhood; Planning; Stochastic game theory; Energy storage; Pricing |
| Date: | 2012–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00758916&r=ene |
| By: | Andreas A. Renz; Christoph Weber (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen) |
| Abstract: | This paper links Hotelling's theory, in recent literature applied to an emissionâ€constraint environment, with the classical capacity planning framework to describe portfolio timeâ€paths in electricity production. Emission targets are considered by a ceiling on the stock of pollution. We propose conditions for an efficient production portfolio as a subset of available technologies. We then derive potential production portfolio timeâ€paths for a renewable, a fossil and a carbon capturing technology that differ according to their fixed and variable costs, their efficiency and their polluting characteristics. We conclude that the share of the fossil technology will continuously decrease, the scarce resource will be fully exploited. On each constraint path, the stock of pollution will remain at the ceiling for a nonâ€zero time period. Emission targets push down scarcity rents, an option for carbon capturing would decrease societal costs and uphold scarcity rents. |
| Keywords: | Scarce resources, Optimal control theory, Hotelling, Valuation, Nonâ€renewable resource, Pollution target, Climate change, Peakâ€loadâ€pricing |
| JEL: | C61 Q23 Q41 L94 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:dui:wpaper:1206&r=ene |
| By: | von Grebmer, Klaus; Ringler, Claudia; Rosegrant, Mark W.; Olofinbiyi, Tolulope; Wiesmann, Doris; Fritschel, Heidi; Badiane, Ousmane; Torero, Maximo; Yohannes, Yisehac; Thompson, Jennifer; von Oppeln, Constanze; Rahall, Joseph |
| Keywords: | Children, Data, Developing countries, Energy, Food availability, food crises, food crisis, food security, Global Hunger Index (GHI), Gross income, Hunger, indicators, Land, Malnutrition, Mortality, Natural resources, OECD countries, Policies, Poverty, property rights, smallholders, Sustainable development, sustainable livelihoods, transition economies, Undernutrition, Underweight, Water, Nutrition, |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:resrep:2012ghienglish&r=ene |
| By: | Carlos Alberto Barreto Nieto; Jacobo Campo Robledo |
| Abstract: | Resumen El objetivo principal de esta investigación es evaluar la relación de largo plazo entre el consumo de energía y el PIB para algunos países de América Latina en el periodo 1980 – 2009. La estimación se realiza con la metodología de datos panel no estacionarios, usando como forma de especificación una función de producción, con el objeto de controlar otras fuentes de variación del PIB como trabajo y capital. Con este propósito, se utilizan pruebas de raíz unitaria para identificar la no estacionariedad de las variables y la prueba de cointegración en panel de Pedroni (2004) para evitar una regresión espuria (Entorf (1997) y Kao (1999)). _________ Abstract The main objetive of this research is to evaluate the long term relationship between energy consumption and GDP for Latin America Countries over the period 1980 - 2009. The estimation is through non stationary panel approach, using a function production specification in order to control for other sources of variation of GDP, such as capital and labor. For this purpose, a panel unit root tests are used in order to identify the non-stationarity of these variables, followed by the application of panel cointegration test proposed by Pedroni (2004) to avoid a spurious regression (Entorf (1997) and Kao (1999)). |
| Date: | 2012–11–11 |
| URL: | http://d.repec.org/n?u=RePEc:col:000444:010251&r=ene |
| By: | Astrid Martínez Ortiz; Fernando Barrera Rey; Eduardo Afanador Iriarte; Luis Ignacio Betancur |
| Abstract: | "Este informe tiene dos partes principales: (i) la primera versa sobre el modo que puede adoptar la política pública desde la perspectiva económica (sección 1) y legal (sección 6) y (ii) la manera de calcular un cargo por continuidad con un ejemplo hipotético pero cercano a la realidad del mercado colombiano realizado con la información pública disponible. El informe es ante todo práctico y dirigido a la toma de decisiones: identifica qué hacer y cómo hacerlo siguiendo la lógica económica de utilizar una metodología costo-beneficio para fijar costos de seguridad de suministro que tienen característica de bien público. Los números que resultan de la aplicación de la metodología en cuanto a disposición a pagar, costos y beneficios, son indicativos y pueden cambiar si cambian los supuestos del análisis o los datos de entrada. Nos hemos limitado al análisis de la terminal de la Costa Atlántica porque nuestro principal objetivo es ilustrar la metodología y porque en nuestro análisis previo esta terminal era la solución más eficiente para Colombia en varios escenarios de precios de combustibles líquidos. De esta manera, los cálculos son ilustrativos y se han hecho bajo la premisa que la demanda de esta terminal viene de todas las plantas térmicas a gas de la Costa Atlántica. Si en la realidad la demanda es diferente – porque algunos deciden utilizar otro combustible diferente al GNL –, o porque el terminal es más costoso que lo aquí asumido, los cálculos deben rehacerse." |
| Date: | 2012–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:col:000124:010256&r=ene |
| By: | Thomas H. Klier; Joshua Linn |
| Abstract: | France, Germany, and Sweden have recently linked vehicle taxes to the carbon dioxide (CO2) emissions rates of passenger vehicles. France has introduced a system of CO2-based purchase taxes and subsidies, whereas Germany and Sweden impose annual circulation (i.e., registration) taxes that are linear functions of CO2 emissions rates. This paper (a) compares the effects of vehicle taxes on registrations and average emissions rates across countries and (b) estimates the effect of reducing CO2 emissions rates on manufacturers’ profits. The taxes have had a significant negative short-run effect on new vehicle registrations in all three countries, although the effect is somewhat stronger in France than in Germany and Sweden. We find little evidence that the French tax caused manufacturers to change the emissions rates of individual vehicles, however. The second part of the paper takes advantage of the theoretical equivalence between an emissions rate standard and a CO2-based emissions rate tax. We use the results from the first part to estimate the effect on manufacturers’ profits of reducing emissions rates. Focusing on France, a decrease of 5 grams of CO2 per kilometer (about 3 percent) reduces short-run profits by 10–50 euros per vehicle, depending on the manufacturer. We find considerable heterogeneity across manufactures in these costs. |
| Keywords: | Carbon dioxide ; Emissions trading ; Euro |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedhwp:wp-2012-09&r=ene |
| By: | Philippe Aghion; Antoine Dechezleprêtre; David Hemous; Ralf Martin; John Van Reenen |
| Abstract: | Can directed technical change be used to combat climate change? We construct new firm-level panel data on auto industry innovation distinguishing between "dirty" (internal combustion engine) and "clean" (e.g. electric and hybrid) patents across 80 countries over several decades. We show that firms tend to innovate relatively more in clean technologies when they face higher tax-inclusive fuel prices. Furthermore, there is path dependence in the type of innovation both from aggregate spillovers and from the firm's own innovation history. Using our model we simulate the increases in carbon taxes needed to allow clean to overtake dirty technologies. |
| JEL: | L62 O13 O3 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18596&r=ene |
| By: | Marco Battaglini; Bård Harstad |
| Abstract: | We analyze participation in international environmental agreements (IEAs) in a dynamic game where countries pollute and invest in green technologies. If complete contracts are feasible, participants eliminate the hold-up problem associated with their investments; however, most countries prefer to free-ride rather than participate. If investments are non-contractible, countries face a hold-up problem every time they negotiate; but the free-rider problem can be mitigated and significant participation is feasible. Participation becomes attractive because only large coalitions commit to long-term agreements that circumvent the hold-up problem. Under well-specified conditions even the first-best outcome is possible when the contract is incomplete. Since real-world IEAs fit in the incomplete contracting environment, our theory may help explaining the rising importance of IEAs and how they should be designed. |
| JEL: | D86 F53 H87 Q54 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18585&r=ene |
| By: | Mads Greaker, Per Espen Stoknes, Knut H. Alfsen and Torgeir Ericson (Statistics Norway) |
| Abstract: | Agenda 21 required countries to develop and regularly update a national set of indicators for sustainable development. Several countries now have such sets also including separate indicators for climate change. Some of these indicators typically report global concentration of green house gases in the atmosphere or time series for global temperatures. While such indicators may give the public information about the state of the global climate, they do not provide a benchmark which makes it possible for the public to evaluate the climate policy of their government. With Kantian ethics as our point of departure, we propose a benchmark for national climate policy. The benchmark is that each nation state should act as if a global treaty on climate change were in place. This would require each nation state to carry out all green house gas mitigation projects below a certain cost. Furthermore, it would require each nation to keep their national green house gas emissions including acquisitions of emission permits from other countries within a certain limit. Both measures are relatively easy to track and can thus serve as indicators. |
| Keywords: | Sustainable development indicators; Climate Policy; Climate Agreements |
| JEL: | Q54 Q56 Q57 |
| Date: | 2012–11 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:718&r=ene |
| By: | Corrado Di Maria; Ian A. Lange; Edwin van der Werf |
| Abstract: | This paper presents the first empirical test of the green paradox hypothesis, according to which well-intended but imperfectly implemented policies may lead to detrimental environmental outcomes due to supply side responses. We use the introduction of the Acid Rain Program in the U.S. as a case study. The theory predicts that owners of coal deposits, expecting future sales to decline, would supply more of their resource between the announcement of the Acid Rain Program and its implementation; moreover, the incentive to increase supply would be stronger for owners of high-sulfur coal. This would, all else equal, induce an increase in sulfur dioxide emissions. Using data on prices, heat input and sulfur content of coal delivered to U.S. power plants, we find strong evidence of a price decrease, some indication that the amount of coal used might have increased, and no evidence that the announcement of the Acid Rain Program lead the use of higher sulfur coal. Overall, our evidence suggests that while the mechanism indicated by the theory might be at work, market conditions and concurrent regulation prevented a green paradox from arising. These results have implications for the design of climate policies. |
| Keywords: | Green Paradox, implementation lags, announcement effects, climate policy, acid rain policy |
| JEL: | Q31 Q38 Q53 Q54 Q58 |
| Date: | 2012 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_3829&r=ene |
| By: | Howard Kunreuther; Geoffrey Heal; Myles Allen; Ottmar Edenhofer; Christopher B. Field; Gary Yohe |
| Abstract: | The selection of climate policies should be an exercise in risk management reflecting the many relevant sources of uncertainty. Studies of climate change and its impacts rarely yield consensus on the distribution of exposure, vulnerability, or possible outcomes. Hence policy analysis cannot effectively evaluate alternatives using standard approaches such as expected utility theory and benefit-cost analysis. This Perspective highlights the value of robust decision-making tools designed for situations, such as evaluating climate policies, where generally agreed-upon probability distributions are not available and stakeholders differ in their degree of risk tolerance. This broader risk management approach enables one to examine a range of possible outcomes and the uncertainty surrounding their likelihoods. |
| JEL: | Q54 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:18607&r=ene |