nep-ene New Economics Papers
on Energy Economics
Issue of 2013‒02‒16
25 papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao

  1. The EU Emission Trading Scheme. Sectoral Allocation Patterns and Factors Determining Emission Changes By Claudia Kettner; Daniela Kletzan-Slamanig; Angela Köppl
  2. Global Security Challenges for Europe: Structural and strategic changes in energy markets and major implications By António José Costa Silva
  3. CO2 emissions in German, Swedish and Colombian manufacturing industries By Alexander Cotte Poveda - Clara Pardo Martínez
  4. Which Industry is Greener? Empirical Study for Nine Industries in OECD Countries By Fujii, Hidemichi; Managi, Shunsuke
  5. Energy Reform in Switzerland: A Quantification of Carbon Taxation and Nuclear Energy Substitution Effects By Peter Egger; Sergey Nigai
  6. On the Optimal Timing of Switching from non-Renewable to Renewable Resources: Dirty vs Clean Energy Sources and the Relative Efficiency of Generators By Elettra Agliardi; Luigi Sereno
  7. Patterns of induced diffusion of renewable energy capacity: The role of regulatory design and decentralization By Sergio Giaccaria; Silvana Dalmazzone
  8. Including Maritime Transport in the EU´s Climate Change Policy: Country-Based Allocation and Effects By Nadine Heitmann
  9. Stability versus Sustainability: Energy Policy in the Gulf Monarchies By Krane, Jim
  10. Measuring Energy Security By Winzer, Christian
  11. Commercial Building Electricity Consumption Dynamics: The Role of Structure Quality, Human Capital, and Contract Incentives By Matthew E. Kahn; Nils Kok; John M. Quigley
  12. Modeling the Effects of Oil Prices on Global Fertilizer Prices and Volatility By Ping-Yu Chen; Chia-Lin Chang; Chi-Chung Chen; Michael McAleer
  13. Modelling the Effects of Oil Prices on Global Fertilizer Prices and Volatility By Ping-Yu Chen; Chia-Lin Chang; Chi-Chung Chen; Michael McAleer
  14. Adopting Energy Saving Technology: Inertia or Incentives? By Peter A. Groothuis; Tanga McDaniel Mohr
  15. Private provision of public goods in a second-best workd: Cap-and-trade schemes limit green consumerism By Grischa Perino
  16. The Intergenerational Transfer of Solar Radiation Management Capabilities and Atmospheric Carbon Stocks By Goeschl, Timo; Heyen, Daniel; Moreno-Cruz, Juan
  17. A New Index of Environmental Quality Based on Greenhouse Gas Emissions By Elettra Agliardi; Mehmet Pinar; Thanasis Stengos
  18. The tug-of-war between resource depletion and technological change in the global oil industry 1981 - 2009 By Lars Lindholt
  19. Nuclear Energy policy in the United States 1990-2010: A Federal or State Responsibility? By Heffron, R.J.
  20. Environmental Macroeconomics: Environmental Policy, Business Cycles, and Directed Technical Change By Garth Heutel; Carolyn Fischer
  21. Food before Biodiesel Fuel? By Hao, Na; Colson, Gregory; Karali, Berna; Wetzstein, Michael E.
  22. How effective are policies to reduce gasoline consumption? Evaluating a quasi-natural experiment in Spain By Javier Asensio; Andrés Gómez-Lobo; Anna Matas
  23. The Impact of Oil Shocks on the South African Economy By Carolyn Chisadza; Janneke Dlamini; Rangan Gupta; Mampho P. Modise
  24. Ecological debt and historical responsibility revisited - The case of climate change By Olivier Godard
  25. Does Supporting Passenger Railways Reduce Road Traffic Externalities? By Rafael Lalive; Simon Luechinger; Armin Schmutzler

  1. By: Claudia Kettner (WIFO); Daniela Kletzan-Slamanig (WIFO); Angela Köppl (WIFO)
    Abstract: The EU Emission Trading Scheme (EU ETS) that covers emitters from industry and energy supply representing 40 percent of the EU's greenhouse gas emissions is the biggest implementation of a cap-and-trade scheme worldwide. In this paper, we analyse sectoral allocation caps focusing on three emission intensive sectors ("power and heat", "cement and lime", "pulp and paper"), assess the development of emissions and discuss the main drivers for emissions in these sectors since the start of the EU ETS. Our analysis of allocation patterns shows that "power and heat" is the only sector permanently facing a stringent cap. The disaggregated analysis of the development of CO2 emissions also reveals pronounced sectoral disparities, which points at differences in the availability of emission abatement options. The data for cement and lime production show changes in CO2 intensity pointing at an increased import of clinker. For paper and pulp production and for power and heat generation improvements in emission intensities and to a lesser extent energy intensities can be observed, reflecting the role of fuel shifts in short-term emission reductions.
    Keywords: EU Emission Trading Scheme, allocation caps, decomposition analysis
    Date: 2013–02–05
  2. By: António José Costa Silva
    Abstract: This paper covers the analysis of the energy markets, emerging trends, oil price evolution and oil shocks and focus on the identification of the major energy game changers. Furthermore the Numbers of the energy security in the XXI century are introduced and discussed within the framework of supply behavior, stability of prices and economic competitiveness. Special emphasis is given to the interaction between energy security, climate change and environment sustainability. Europe energy security challenges are addressed and discussed with a multidimensional analysis covering the current status, public policies, European energy market, European energy networks, emerging technologies and energy efficiency. Recommendations for future steps to be undertaken to reinforce European energy security will be made.
    Date: 2012–06–01
  3. By: Alexander Cotte Poveda - Clara Pardo Martínez
    Abstract: This study evaluates and compares the trends in CO2 emissions for the manufacturing industries of three countries: two developed countries (Germany and Sweden) that have applied several measures to promote a shift towards a low-carbon economy and one developing country (Colombia) that has shown substantial improvements in the reduction of CO2 emissions. This analysis is conducted using panel data cointegration techniques to infer causality between CO2 emissions, production factors and energy sources. The results indicate a trend of producing more output with less pollution. The trends for these countries’ CO2 emissions depend on investment levels, energy sources and economic factors. Furthermore, the trends in CO2 emissions indicate that there are emission level differences between the two developed countries and the developing country. Moreover, the study confirms that it is possible to achieve economic growth and sustainable development while reducing greenhouse gas emissions, as Germany and Sweden demonstrate. In the case of Colombia, it is important to encourage a reduction in CO2 emissions through policies that combine technical and economic instruments and incentivise the application of new technologies that promote clean and environmentally friendly processes.
    Date: 2013–02–05
  4. By: Fujii, Hidemichi; Managi, Shunsuke
    Abstract: This study analyzed the relationship between CO2 emissions of different industries and economic growth in OECD countries from 1970 to 2005. We tested an environmental Kuznets curve (EKC) hypothesis and found that total CO2 emissions from nine industries show an N-shaped trend instead of an inverted U or monotonic increasing trend with increasing income. The EKC hypothesis for sector-level CO2 emissions was supported in (1) paper, pulp and printing industry, (2) wood and wood products industry, and (3) construction industry. We also found that emissions from coal and oil increase with economic growth in steel and construction industries. Meanwhile, non-metallic minerals, machinery, and transport equipment industries tend to have increased emissions from oil and electricity with increased economic development. Finally, the EKC turning point and the relationship between GDP per capita and sectoral CO2 emissions differ among industries according to the fuel type used. Therefore, the environmental policies for CO2 reduction need to consider these differences in industrial characteristics.
    Keywords: environmental Kuznets curve; CO2 emission; industrial sector; OECD countries
    JEL: Q40 Q54
    Date: 2012
  5. By: Peter Egger (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Sergey Nigai (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: We develop a general equilibrium model of trade with multiple countries and industries in the spirit of Eaton and Kortum (2002) and Bernard, Eaton, Jensen, and Kortum (2003). We structurally estimate the parameters of the model and calibrate it to data on 33 OECD countries and one country that covers the rest of the world. Industries differ by their relative energy intensity and the level of pollution. Accordingly, the implementation of policy instruments to reduce pollution at the country level induces heterogeneous effects across industries within and across countries. We utilize the model to compare alternative environmental tax instruments and to evaluate their consequences for the level of carbon emissions, welfare costs, industry-specific prices and demand in various policy scenarios. Among the latter, we particularly distinguish between policies that are implemented in isolation (by single countries) or en bloc (in groups of countries or even world wide). This study pays specific attention to the implementation of various energy policies, in particular, in Switzerland. Beyond implementation of the Copenhagen Accord pledges, the study quantifies an implementation of extra taxes on carbon emissions at the amount of 1,140 Swiss Francs per ton of carbon and the substitution of nuclear energy production.
    Keywords: Carbon taxation, Energy policy, International trade
    JEL: F11 F14 Q43 Q48
    Date: 2013–01
  6. By: Elettra Agliardi (Department of Economics, University of Bologna, Italy; The Rimini Centre for Economic Analysis, Italy); Luigi Sereno (Department of Economics, University of Bologna, Italy)
    Abstract: We develop a model on the optimal timing of switching from non-renewable to renewable energy sources with endogenous extraction choices under emission taxes, subsidies on renewable resources and abatement costs. We assume that non-renewable resources are "dirty" inputs and create environmental degradation, while renewable resources are more environmentally friendly, although they may be more or less productive than the exhaustible resources. The value of the switching option from non-renewable to renewable resources is characterized. Numerical applications show that an increase in emission taxes, abatement costs or demand elasticity slows down the adoption of substitutable renewable resources, while an increase in the natural rate of resource regeneration, the stock of renewable resources or the relative productivity parameter speeds up the investment in the green technology.
    Keywords: Non-renewable resources; Renewable resources; Environmentally friendly technologies; Abatement costs; Subsidies; Taxes; Optimal switching time; Real options
    JEL: D81 H23 Q28 Q38 Q40 Q50
    Date: 2013–01
  7. By: Sergio Giaccaria; Silvana Dalmazzone
    Abstract: The paper adopts an epidemic model of innovation diffusion to investigate the influence of regulatory design on the market penetration of wind and photovoltaic energy production. In particular, we test whether the specificity of public incentives by technology and the level of decentralization of energy policy planning and of authorization procedures have influenced the pattern of diffusion of renewable energy technology. Data pertain to the Italian case between 1999 and 2010. Results confirm the existence of an S-shaped Bass diffusion process for RES technologies. We disentangle the contribution of several institutional factors to the diffusion of renewable energy innovations: liberalization of the electricity market, public subsidies, EU support to Objective 1 regions, decentralization of energy planning, complexity of authorization procedures, technology-specificity of incentive design. We also analyze the regional variability in diffusion patterns.
    Keywords: Renewable energy, Bass model, induced diffusion, feed-in tariff, decentralization, energy planning, authorization procedures.
    JEL: Q47 Q48 Q42
    Date: 2013
  8. By: Nadine Heitmann
    Abstract: The European Union (EU) is actively campaigning for the global regulation of carbon emissions generated by maritime bunker fuels because these emissions are presently barely regulated and are projected to increase significantly in the coming decades. However, since a global regulation has not been reached yet, the EU is seeking ways to include the shipping sector in its greenhouse gas reduction commitment for 2020. In this paper, we look at the effect of including the shipping sector’s emissions in the EU reduction commitment that is based on the nationality of a ship. Emissions that are generated by ships owned, operated or flagged by the 27 EU countries are allocated to the EU total GHG emissions. We first analyse the effects on the reduction commitment caused by the three allocations. We then use marginal abatement cost curves (MACCs) in order to determine how much the shipping sector of the 27 EU countries, defined by the three allocations, could contribute efficiently to a total given emission reduction target for all sectors in the EU. Moreover, we use MACCs in order to determine if some country fleets could reduce emissions in the shipping sector relatively more efficiently than other countries under a given emission reduction target for all sectors. Our findings indicate that the shipping sector could contribute efficiently to the EU’s emission reductions by up to 8.5%. Since the composition of the individual country fleets and applied measures are similar across countries, their individual reductions relative to their fleet-specific business-as-usual (BAU) emissions are on average the same
    Keywords: EU, climate change, shipping sector, CO2 emissions, marginal abatement cost curve
    JEL: Q52 Q54 Q58
    Date: 2013–01
  9. By: Krane, Jim
    Abstract: The six Persian Gulf monarchies are home to some of the world’s largest hydrocarbon reserves, and also some of the cheapest energy prices and highest per-capita consumption. Government subsidies based on socio-political objectives have contributed to regime longevity, but they have also stimulated demand for resources comprising the region’s chief export and biggest contributor to GDP. This paper finds that these monarchies – Qatar excepted – face an increasingly acute conflict between maintaining subsidies and sustaining exports. A shift to a higher-cost model of energy provision is underway. The era when primary energy was considered nearly free is being eclipsed by one where new sources of demand are met by more expensive resources. For now, governments have absorbed the increased costs. Consumers have been insulated from higher prices. This counterproductive practice only intensifies the call on exportable resources. The choice for regimes is one of short-term political stability versus longer term economic sustainability. As energy production reaches a plateau, domestic consumption will gradually displace exports. Politically difficult reforms that moderate consumption can therefore extend the longevity of exports, and perhaps, the regimes themselves.
    Keywords: Subsidies, energy policy, natural gas, electricity tariffs, Persian Gulf, GCC, OPEC, rentier state, monarchy, energy consumption, political economy.
    JEL: P16 H23 Q41 Q48
    Date: 2013–02–01
  10. By: Winzer, Christian
    Abstract: Continuity of energy supplies is a central aspect of concerns about energy security. Although the continuity of supplies can be influenced by a large number of risks, most models only analyse a small subset of risk sources and often neglect interdependencies between them. In this paper we introduce a probabilistic time-series model that quantifies the impact of inter-dependent natural, technical and human risk sources on energy supply continuity. Based on a case study of Italian gas and electricity markets we conclude that typical simplifications in time-series models and alternative approaches lead to a bias, which justifies the usage of detailed time-series models of interdependent risks such as the framework suggested in this paper, even though more detailed versions of this and other frameworks may quickly become very resource intensive.
    Keywords: Energy security, security of supply, reliability, Monte-Carlo simulation, measurement.
    Date: 2013–02–01
  11. By: Matthew E. Kahn; Nils Kok; John M. Quigley
    Abstract: Commercial real estate plays a key role in determining the urban sustainability of a metropolitan area. While the residential sector has been the primary focus of energy policies, commercial buildings are now responsible for most of the durable building stock’s total electricity consumption. This paper exploits a unique panel of commercial buildings to investigate the impact of building vintage, contract incentives, and human capital on electricity consumption across commercial structures. We document that electricity consumption and building quality are complements, not substitutes. Technological progress may reduce the energy demand from heating, cooling and ventilation, but the behavioral response of building tenants and the large-scale adoption of appliances more than offset these savings, leading to increases in energy consumption in more recently constructed, more efficient structures.
    JEL: H23 H41 Q54 Q55
    Date: 2013–02
  12. By: Ping-Yu Chen; Chia-Lin Chang; Chi-Chung Chen; Michael McAleer (University of Canterbury)
    Abstract: The main purpose of this paper is to evaluate the effect of crude oil price on global fertilizer prices in both the mean and volatility. The endogenous structural breakpoint unit root test, ARDL model, and alternative volatility models, including GARCH, EGARCH, and GJR models, are used to investigate the relationship between crude oil price and six global fertilizer prices. The empirical results from ARDL show that most fertilizer prices are significantly affected by the crude oil price while the volatility of global fertilizer prices and crude oil price from March to December 2008 are higher than in other periods.
    Keywords: Fertilizer Price; Oil Price; Volatility
    JEL: Q14 C22 C58
    Date: 2013–01–26
  13. By: Ping-Yu Chen (Department of Applied Economics, National Chung Hsing University, Taiwan); Chia-Lin Chang (Department of Applied Economics, Department of Finance, National Chung Hsing University, Taiwan); Chi-Chung Chen (Department of Applied Economics, National Chung Hsing University, Taiwan); Michael McAleer (Econometric Institute, Erasmus School of Economics, Erasmus University Rotterdam and Tinbergen Institute, The Netherlands, Department of Quantitative Economics, Complutense University of Madrid, and Institute of Economic Research, Kyoto University.)
    Abstract: The main purpose of this paper is to evaluate the effect of crude oil price on global fertilizer prices in both the mean and volatility. The endogenous structural breakpoint unit root test, ARDL model, and alternative volatility models, including GARCH, EGARCH, and GJR models, are used to investigate the relationship between crude oil price and six global fertilizer prices. The empirical results from ARDL show that most fertilizer prices are significantly affected by the crude oil price while the volatility of global fertilizer prices and crude oil price from March to December 2008 are higher than in other periods.
    Keywords: Fertilizer Price, Oil Price, Volatility.
    JEL: Q14 C22 C58
    Date: 2013
  14. By: Peter A. Groothuis; Tanga McDaniel Mohr
    Abstract: In an effort to improve efficiency of electrical markets the U.S. government hopes to encourage changing household use patterns, such as dishwasher and clothes dryer use, to off-peak times. One strategy has been to subsidize the installation of smart meters. In addition the government has encouraged electrical energy conservation by providing incentives for energy saving technologies such as the purchase of energy star appliances or increased insulation in the home. Households have sometimes been slow to respond. Using a survey of public opinion, we explore which individuals are more likely to adopt energy saving technologies and smart meters. We also explore the incentives required to adopt smart meters in the home. Key Words:
    Date: 2013
  15. By: Grischa Perino (University of East Anglia)
    Abstract: Private provision of public goods can only supplement government provision if individual actions affect the level of the public good. Cap-and-trade schemes reduce the overuse of common resources such as a stable climate or fish stocks by imposing a binding cap on total use by regulated agents. Any private contributions provided by means of e.g. green consumerism or life-style choices within such a scheme only impacts on who uses the resource but leaves total use unaffected. Perfect offsetting of marginal contributions is a key design element of cap-and-trade schemes. As real world cap-and-trade policies like the EU Emission Trading System have incomplete coverage, understanding what they cover is crucial for individuals aiming to contribute. Otherwise contribution efforts backfire.
    Keywords: cap-and-trade, green consumerism, emissions tax, crowding-out of private contributions, carbon labelling
    JEL: H23 H31 D64 H41 Q54 Q58
    Date: 2013–01–24
  16. By: Goeschl, Timo; Heyen, Daniel; Moreno-Cruz, Juan
    Abstract: Solar radiation management (SRM) technologies are considered one of the likeliest forms of geoengineering. If developed, a future generation could deploy them to limit the damages caused by the atmospheric carbon stock inherited from the current generation, despite their negative side effects. Should the current generation develop these geoengi-neering capabilities for a future generation? And how would a decision to develop SRM impact on the current generation's abatement efforts? Natural scientists, ethicists, and other scholars argue that future generations could be more sanguine about the side effects of SRM deployment than the current generation. In this paper, we add economic rigor to this important debate on the intergenerational transfer of technological capabilities and pollution stocks. We identify three conjectures that constitute potentially rational courses of action for current society, including a ban on the development of SRM. How-ever, the same premises that underpin these conjectures also allow for a novel possibility: If the development of SRM capabilities is sufficiently cheap, the current generation may for reasons of intergenerational strategy decide not just to develop SRM technologies, but also to abate more than in the absence of SRM.
    Keywords: Geoengineering; Climate Change; Intergenerational Issues; Strategic Behavior.
    Date: 2013–01–24
  17. By: Elettra Agliardi (University of Bologna, Italy); Mehmet Pinar (Edge Hill University, UK); Thanasis Stengos (University of Guelph, Canada)
    Abstract: A weighting scheme is proposed to construct a new index of environmental quality based on greenhouse gas (GHG) emissions for different countries using an approach that relies on consistent tests for stochastic dominance (SD) efficiency. The benchmark is an index that is based on the average actual contributions of the respective GHG emission types to the total. Our index stochastically dominates the chosen benchmark and allows us to gure out the “worst” and “best” case scenarios, where environmental degradation is at its maximum and minimum, respectively. If a common global action were to be taken by all countries involved, these scenarios would correspond to the most and least effective possible actions, respectively, that could be undertaken when compared to the benchmark. Then, countries are ranked and their rankings are compared with alternative rankings (e.g., the Kyoto Protocol, Annex I, and the Environmental Sustainability Index, ESI). The test statistics and the estimators are computed using mixed integer programming methods. Then, employing a complementary SD approach, pairwise SD tests are employed to examine the dynamic progress of each separate GHG emission (i.e.,CO2, methane, nitrous oxide, and other GHG emissions) over time, from 1990 to 2005, within 5-year horizons. Pairwise SD tests are used to examine the major industry contributors to the GHG emissions at any given time and to uncover the industry which contributes the most to total emissions.
    Keywords: Environmental Quality, Emissions, Nonparametric Stochastic Dominance, Mixed Integer Programming
    JEL: C4 C5 C14 Q01 Q5 Q51
    Date: 2013–01
  18. By: Lars Lindholt (Statistics Norway)
    Abstract: We perform an empirical analysis of the extent to which ongoing technological change through R&D activity has offset the effect of ongoing depletion on the cost of finding additional reserves of oil in eight global regions. We introduce a finding cost function that among other factors depends on the cumulative number of past R&D expenses and cumulative past production, measuring technological change and depletion, respectively. For all our regions we find significant effects of both depletion and technological change on oil finding costs from 1981 to 2009, barring cyclical variations in finding costs that could come from changes in factor prices. For almost all regions technology more than mitigated depletion until around the mid-nineties. However, we find that depletion outweighed technological progress over the last decade.
    Keywords: Oil; depletion; technological change; R&D; finding costs
    JEL: L71 Q31
    Date: 2013–01
  19. By: Heffron, R.J.
    Abstract: This paper examines from a policy perspective nuclear energy policy in the United States (US) from 1990 to 2010 and questions whether it is or has become a Federal or State responsibility. The present study, as befits policy research, engages with many disciplines (for example, in particular, law and politics) and hence the contributions move beyond that of nuclear energy policy literature and in particular to that on nuclear new build and other assessments of large infrastructure projects. Several examples at the Federal level are identified that demonstrate that the nuclear industry has evolved to a stage where it requires a focus on the power of actions at a more localised (state) level in order to re-ignite the industry. The research concludes that there remains a misunderstanding of the issue of project management for complex construction projects, and it is highly arguable whether many of its issues have been resolved. Further, the research asserts that the economics of nuclear energy are not the most nfluential reason for no nuclear new build in the US.
    Keywords: Nuclear energy, policy inaction, project management, public administration.
    JEL: K32 L94 Q48
    Date: 2013–02–01
  20. By: Garth Heutel; Carolyn Fischer
    Abstract: Environmental economics has traditionally fallen in the domain of microeconomics, but recently approaches from macroeconomics have been applied to studying environmental policy. We focus on two macroeconomic tools and their application to environmental economics. First, real business cycle models can incorporate pollution and pollution policy and be used to answer several questions. How can environmental policy adjust to business cycles? How do different types of policies fare in a context with business cycles? Second, endogenous technological growth is an important component of environmental policy. Several studies ask how policy can be designed to both tackle emissions directly and influence the adoption of clean technologies. We focus on these two aspects of environmental macroeconomics but emphasize that there are many other potential applications.
    JEL: E32 O44 Q50 Q55
    Date: 2013–02
  21. By: Hao, Na; Colson, Gregory; Karali, Berna; Wetzstein, Michael E.
    Abstract: Biodiesel has recently drawn attention because of its potential to make an important contribution to national energy security and the environment. However, the rapid growth of biodiesel has raised concerns about biodiesel’s impact on the price level and volatility of agricultural commodities. To address these concerns this research investigates the short- and long-run relationships between agricultural commodity and fuel markets, and finds interdependencies between the two. The causal linkage between biodiesel and soybean prices is very weak, indicating little likelihood of biodiesel triggering another food crisis. In contrast, oil price shocks have major influence on both fuel and agricultural commodity prices.
    Keywords: Biodiesel, Corn, Soybean, Vector error correction model(VECM), Agribusiness, Agricultural and Food Policy, Crop Production/Industries, Demand and Price Analysis, Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2013
  22. By: Javier Asensio (Department of Applied Economics, Universitat Autonoma de Barcelona (UAB) and Institut d'Economia de Barcelona (IEB)); Andrés Gómez-Lobo (Department of Economics, University of Chile); Anna Matas (Department of Applied Economics (UAB) and IEB)
    Abstract: Using a panel of 48 provinces for four years we empirically analyze a series of temporary policies aimed at curbing fuel consumption implemented in Spain between March and June 2011. The first policy was a reduction in the speed limit in highways. The second policy was an increase in the biofuel content of fuels used in the transport sector. The third measure was a reduction of 5% in commuting and regional train fares that resulted in two major metropolitan areas reducing their overall fare for public transit. The results indicate that the speed limit reduction in highways reduced gasoline consumption by between 2% and 3%, while an increase in the biofuel content of gasoline increased this consumption. This last result is consistent with experimental evidence that indicates that mileage per liter falls with an increase in the biofuel content in gasolines. As for the reduction in transit fares, we do not find a significant effect for this policy. However, in specifications including the urban transit fare for the major cities in each province the estimated cross-price elasticity of the demand for gasoline -used as a proxy for car use- with respect to the price of transit is within the range reported in the literature. This is important since one of the main eficiency justification for subsidizing public transit rests on the positive value of this parameter and most of the estimates reported in the literature are quite dated.
    Date: 2013–02
  23. By: Carolyn Chisadza (Department of Economics, University of Pretoria); Janneke Dlamini (Department of Economics, University of Pretoria); Rangan Gupta (Department of Economics, University of Pretoria); Mampho P. Modise (Department of Economics, University of Pretoria)
    Abstract: The recent increases in oil prices have raised the importance of studying the effects of oil supply and demand shocks on an economy. The purpose of this paper is to investigate the impact of the oil supply and demand shocks on the South African economy using a sign restriction-based structural Vector Aautoregressive (VAR) model. Our results show that an oil supply shock has a short-lived significant impact only on the inflation rate, while the impact on the other variables is statistically insignificant. Supply disruptions results in a short-term increase in the domestic inflation rate with no reaction from the monetary policy. An aggregate demand shock results in short- to medium-term improvements in domestic output and the real exchange rate. The effect is statistically insignificant for the inflation rate as well as the monetary policy instrument. The inflation rate and the real exchange rate react negatively to an oil-specific demand shock, while output is positively related to unanticipated changes in oil price due to speculations.
    Keywords: Oil price shocks, macroeconomic variables, vector autoregression, monetary policy
    JEL: E13 E63 E66
    Date: 2013–02
  24. By: Olivier Godard
    Abstract: In spite of its strong appeal to NGOs, to certain governments and to some scholars, the concept of an ecological debt accumulated by developed countries due to their historical responsibility deserve a serious critical assessment. The paper provides this assessment in the context of climate change. It first shows how the rhetoric of ecological debt exploits confusion between a pre-modern concept of social debt and the modern one based on the contract figure. Two components of the climate debt are examined: a presumed duty of compensation of the damage imposed by climate change and rules of sharing out of atmospheric services when developed countries are presumed to have emitted GHGs in the past in excess of their fair share. The discussion considers successively the legal and the moral viewpoint. A review of arguments shows that both concepts of ecological debt and historical responsibility disintegrate under scrutiny in the case of climate change, as ill-founded backward-looking reparative concepts as well as additional obstacles to a forward-looking agreement in which responsibilities could legitimately be differentiated according to various variables referring to current states (emissions levels, needs, capacities, etc.). The GHGs emissions that cause problems are those that have taken place since 1990.
    Date: 2012–09–05
  25. By: Rafael Lalive; Simon Luechinger; Armin Schmutzler
    Abstract: Many governments subsidize regional rail service as an alternative to road traffic. This paper assesses whether increases in service frequency reduce road traffic externalities. We exploit differences in service frequency growth by procurement mode following a railway reform in Germany to address endogeneity of service growth. Increases in service frequency reduce the number of severe road traffic accidents, carbon monoxide, nitrogen monoxide, nitrogen dioxide pollution and infant mortality. Placebo regressions with sulfur dioxide and ozone yield no effect. Service frequency growth between 1994 and 2004 improves environmental quality by an amount that is worth approximately 28-40 % of total subsidies. An analysis of household behavior shows that the effects of railway services on outcome variables are driven by substitution from road to rail.
    Keywords: Railways, pollution, procurement, accidents
    JEL: Q53 R41 R48
    Date: 2013–02

This nep-ene issue is ©2013 by Roger Fouquet. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.