nep-ene New Economics Papers
on Energy Economics
Issue of 2013‒03‒23
29 papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao

  1. Australian Renewable Energy Policy: Barriers and Challenges By Liam Byrnes; Colin Brown; John Foster; Liam Wagner
  2. Consumption-Based Approaches in International Climate Policy: An Analytical Evaluation of the Implications for Cost-Effectiveness, Carbon Leakage, and the International Income Distribution By Christian Lininger
  3. Designing an optimal 'tech fix' path to global climate stability: R&D in a multi-phase climate policy framework By Zon, Adriaan van; David, Paul
  4. Green Technologies and the Protracted End to the Age of Oil: A strategic analysis By Niko Jaakkola
  5. On the causality and determinants of energy and electricity demand in South Africa: A review By Anastassios Pouris
  6. Uranium and nuclear Power: The role of exploration information in framing public policy By Charles F Mason
  7. The Role of Natural Gas in a Low-Carbon Europe: Infrastructure and Regional Supply Security in the Global Gas Model By Franziska Holz; Philipp M. Richter; Ruud Egging
  8. The Impact of Renewable Energy Consumption to Economic Welfare: A Panel Data Application By Roula Inglesi-Lotz
  9. Directing Technical Change from Fossil-Fuel to Renewable Energy Innovation: An Empirical Application Using Firm-Level Patent Data By Joëlle Noailly; Roger Smeets
  10. Double moral hazard and the energy efficiency gap By Louis-Gaëtan Giraudet; S. Houde
  11. The high-frequency response of energy prices to monetary policy: understanding the empirical evidence By Carlo Rosa
  12. How Does the Oil Price Shock Affect Consumers? By Liping Gao; Hyeongwoo Kim; Richard Saba
  13. Empirical Analysis of Oil Price Determination Based on Market Quality Theory By Taghizadeh Hesary Farhad; Naoyuki Yoshino
  14. Can a Unilateral Carbon Tax Reduce Emissions Elsewhere? By Joshua Elliott; Don Fullerton
  15. The Price of Oil – Will it Start Rising Again? By Jean-Marc Fournier; Isabell Koske; Isabelle Wanner; Vera Zipperer
  16. Monopolistic Sequestration of European Carbon Emissions By Niko Jaakkola
  17. Is the eco-efficiency in greenhouse gas emissions converging among European Union countries? By Mariam Camarero; Juana Castillo Giménez; Andrés J. Picazo-Tadeo; Cecilio Tamarit
  18. Estimation of Productivity in Korean Electric Power Plants: A Semiparametric Smooth Coefficient Model By Heshmati, Almas; Kumbhakar, Subal C.; Sun, Kai
  19. Liquefied Natural Gas Exports: An Opportunity for America By Gary Clyde Hufbauer; Allie E. Bagnall; Julia Muir
  20. Why Do Emitters Trade Carbon Permits?: Firm-Level Evidence from the European Emission Trading Scheme By Aleksandar Zaklan
  21. An Empirical Market Microstructure Analysis of the Implied Spread Cost in the Japanese Day-Ahead Electricity Market By Shin S. Ikeda
  22. Optimal economic policy and oil prices shocks in Russia By Semko Roman
  23. What determines stock market behavior in Russia and other emerging countries? By Korhonen, Iikka; Peresetsky , Anatoly
  24. The Political Economics of the Arab Spring By Roland Hodler
  25. Food versus Fuel: Causality and Predictability in Distribution By Andrea Bastianin; Marzio Galeotti; Matteo Manera
  26. Les régulations asymétriques dans les marchés énergétiques : efficacité, collusion et financement des coûts échoués By Cédric Clastres
  27. Emprendimiento alrededor del Sector de la Minería y el Petróleo en Colombia By Guillermo Perry; Camilo Palacios
  28. Interactions entre stratégies de promotion et fusions By Laurent Granier
  29. The Implications of Natural Resource Exports for Non-Resource Trade By Torfinn Harding; Anthony J Venables

  1. By: Liam Byrnes (Department of Economics, University of Queensland); Colin Brown (School of Agriculture and Food Sciences); John Foster (Department of Economics, University of Queensland); Liam Wagner (Department of Economics, University of Queensland)
    Abstract: Australia’s renewable energy policy has taken significant steps towards encouraging the deployment of lower carbon emissions energy generation. Effective policy and regulatory frameworks are paramount to incentivising the deployment of renewable energy to achieve long term reductions in carbon emissions. However significant policy barriers still exist at the federal and state levels, which have reduced the effectiveness of a concerted national effort to deploy renewables. The current policy landscape has largely favoured mature technologies which present the lowest investment risk at the expense of emerging options which may present greater efficiency and emissions reduction gains. The lack of support for emerging technologies delays their effective deployment and the accumulation of highly skilled human capital, until the medium to long term. This paper outlines the key policy frameworks, incentives and regulatory environment which encompasses the renewable energy sector, and presents a critical analysis of the barriers faced by the industry.
    Keywords: Australia; Renewable Energy; Energy Policy
    JEL: Q42 Q28 Q50
    Date: 2013–03
  2. By: Christian Lininger (Wegener Center for Climate and Global Change, University of Graz, Austria)
    Abstract: As an agreement on an international climate treaty appears out of sight in the short run, many countries rely on unilateral greenhouse gas abatement strategies. The reach of such unilateral policies can be extended beyond the borders of the abating country by a switch to a consumption-based policy orientation. Such a policy does not target the emissions discharged on the territory of the country that abates, but the emissions embodied in the goods it consumes. If industrialized countries adopt this approach, they can bring the large and increasing amount of emissions embodied in imports from emerging economies into the scope of the policy. The policy switch could be implemented by means of border carbon adjustments; according to theoretic arguments such adjustments can improve the efficiency of unilateral policies. This paper develops a 2-region, 5-good analytical partial-equilibrium model to study the effects of a switch of the policy base. We especially focus on changes in production technology triggered by the policy. We find that a policy targeting consumption – when using a leakage definition appropriate for consumption-based approaches – does not cause leakage through the non-energy market leakage channel. In addition, the question whether a consumption-based policy is environmentally more effective is decided through policy transmission in non-energy markets, but not in energy markets. Still, despite the many arguments in favour of consumption-based approaches, we find that none of these arguments per se suffices to make a consumption-based policy the environmentally more effective or the more cost-effective option. Whether it is indeed more effective depends on (i) demand and production parameters and (ii) the precise design of the border tax (or any other appropriate policy instrument). In particular, the availability of “green” technology in emerging economies influences the results. Additionally, a switch of the policy base may also cause a substantial redistribution of the costs of the policy between abating and non-abating countries.
    Keywords: Unilateral climate policy, consumption-based accounting, carbon leakage, border carbon adjustments, trade and environment
    JEL: Q54 Q56 F18 H23
    Date: 2013–03
  3. By: Zon, Adriaan van (UNU-MERIT/MGSoG, and Maastricht University); David, Paul (SIEPR, and Economics Department, Standford University, and UNU-MERIT/MGSoG)
    Abstract: The research reported here gives priority to understanding the inter-temporal resource allocation requirements of a program of technological changes that could halt global warming by completing the transition to a "green" (zero net CO2- emission) production regime within the possibly brief finite interval that remains before Earth's climate is driven beyond a catastrophic tipping point. This paper formulates a multi-phase, just-in-time transition model incorporating carbon-based and carbon-free technical options requiring physical embodiment in durable production facilities, and having performance attributes that are amenable to enhancement by directed R&D expenditures. Transition paths that indicate the best ordering and durations of the phases in which intangible and tangible capital formation is taking place, and capital stocks of different types are being utilized in production, or scrapped when replaced types embodying socially more efficient technologies, are obtained from optimizing solutions for each of a trio of related models that couple the global macro-economy's dynamics with the dynamics of the climate system. They describe the flows of consumption, CO2 emissions and the changing atmospheric concentration of green-house gas (which drives global warming), along with the investment dynamics required for the timely transformation of the production regime. These paths are found as the welfare-optimizing solutions of three different "stacked Hamiltonians", each corresponding to one of our trio of integrated endogenous growth models that have been calibrated comparably to emulate the basic global setting for the "transition planning" framework of dynamic integrated requirements analysis modelling (DIRAM). As the paper's introductory section explains, this framework is proposed in preference to the (IAM) approach that environmental and energy economists have made familiar in integrated assessment models of climate policies that would rely on fiscal and regulatory instruments -- but eschew any analysis of the essential technological transformations that would be required for those policies to have the intended effect. Simulation exercises with our models explore the optimized transition paths' sensitivity to parameter variations, including alternative exogenous specifications of the location of a pair of successive climate "tipping points": the first of these initiates higher expected rates of damage to productive capacity by extreme weather events driven by the rising temperature of the Earth's surface; whereas the second, far more serious "climate catastrophe" tipping point occurs at a still higher temperature (corresponding to a higher atmospheric concentration of CO2). In effect, that sets the point before which the transition to a carbon-free global production regime must have been completed in order to secure the possibility of future sustainable development and continued global economic growth.
    Keywords: global warming, tipping point, catastrophic climate instability, extreme weather-related damages, R&D based technical change, embodied technical change, optimal sequencing, multi-phase optimal control, sustainable endogenous growth
    JEL: Q54 Q55 O31 O32 O33 O41 O44
    Date: 2013
  4. By: Niko Jaakkola
    Abstract: This paper considers competition between an oil exporter depleting and selling an exhaustible resource, and an oil importer able to gradually lower the cost of substitutes. R&D into clean fuels begins before the substitutes are competitive, in order to reduce overall development costs. The substitute constrains the oil exporter's market power: after an initial Hotelling-type stage, oil pricing becomes constrained by the ever-cheaper substitute technology. Suppy is thus non-monotonic, initially falling, then forced up by competition from substitute. Climate change slows down substitute development: rapid R&D forces the exporter to extract oil faster, aggravating near-term environmental impacts. If oil extraction becomes more expensive as supplies are depleted, the importer switches into clean fuels once these price oil out of the market; technological development will eventually be hastened to leave more of the oil locked underground. Novel numerical methods for solving PDEs are introduced into a differential game context.
    Keywords: exhaustible resources, oil, alternative fuels, limit pricing, climate change
    JEL: D42 O32 Q31 Q40 Q54
    Date: 2013
  5. By: Anastassios Pouris (Institute for Technological Innovation, University of Pretoria)
    Abstract: The purpose of this paper is to review, summarise and critically assess the academic studies that have dealt with either the causal relationship between energy consumption and growth or the determinants of energy demand in South Africa from 2007 and outline recent forecasts for electricity demand. The results of this review aim to identify gaps in the existing research. From a policy point of view, the findings of this effort have the potential to inform the relevant stakeholders to make appropriate interventions to improve the status quo of the energy sector. The results have indicated that studies examining the causality direction between energy (electricity) consumption and economic growth have failed to reach a consensus. The main differences identified were the time periods examined, the econometric approaches and the variables included in the estimations. Another potential reason for the results is the availability –or lack thereof– of data specific for the country. On the other side, the studies looking at the factor affecting energy (electricity) demand have agreed that economic growth or income or output are considered significant factors. The role of prices was debatable among different studies. This has become more apparent when reviewing the few forecasting efforts in the country that resulted in conflicting results.
    Keywords: Review, South Africa, energy sector, causality, determinants
    Date: 2013–03
  6. By: Charles F Mason
    Abstract: An addressing climate change becomes a high priority it seems likely that there will be a surge in interest in deploying nuclear power. Other fuel bases are too dirty (coal), too expensive (oil, natural gas) or too speculative (solar, wind) to completely supply the energy needs of the global economy. To the extent that the global society does in fact choose to expand nuclear power there will be a need for additional production. That increase in demand for nuclear power will inevitably lead to an increase in demand for uranium. While some of the increased demand for uranium will be satisfied by expanding production from existing deposits, there will undoubtedly be pressure to find and develop new deposits, perhaps quite rapidly. Looking forward, it is important that policies be put in place that encourage an optimal allocation of future resourcs towards exploration. In particular, I argue there is a valid concern that privately optial levels of industrial activity wilol fail to fully capture all potential social gains; these sub-optimal exploration levels are linked to a departure between the private and social values of exploration information.
    Keywords: Uranium and nuclear power, climate change, uranium, public policy
    JEL: E21 E62 F43 H63 O11 Q33
    Date: 2013
  7. By: Franziska Holz; Philipp M. Richter; Ruud Egging
    Abstract: In this paper, we use the Global Gas Model to analyze the perspectives and infrastructure needs of the European natural gas market until 2050. Three pathways of natural gas consumption in a future low-carbon energy system in Europe are envisaged: i) a decreasing natural gas consumption, along the results of the PRIMES model for the EMF decarbonization scenarios; ii) a moderate increase of natural gas consumption, along the lines of the IEA (2012) World Energy Outlook's New Policy Scenario; and iii) a temporary increase of natural gas use as a bridge technology, followed by a strong decrease after 2030. Our results show that import infrastructure and intra-European transit capacity currently in place or under construction are largely sufficient to accommodate the import needs of the EMF decarbonization scenarios, despite the reduction of domestic production and the increase of import dependency. However, due to strong demand in Asia which draws LNG and imports from Russia, Europe has to increasingly rely on pipeline exports from Africa and the Caspian region from where new pipelines are built. Moreover, pipeline investments open up new import and transit paths, including reverse flow capacity, which improves the diversification of supplies. In the high gas consumption scenario similar pipeline links are realized-though on a larger scale, doubling the costs of infrastructure expansion. In the bridge technology scenario, the utilization rates of (idle) LNG import capacity can be increased for the short period of temporary strong natural gas demand.
    Keywords: natural gas, climate change, infrastructure, equilibrium modeling
    JEL: Q31 Q47 Q54 C61 D43
    Date: 2013
  8. By: Roula Inglesi-Lotz (Department of Economics, University of Pretoria, South Africa)
    Abstract: Internationally, the importance of renewable energy in the energy mix has been increasingly appreciated. The advantages of the renewable energy usage for the world’s energy security and the environment are indisputable and much discussed in the literature. However, its effects on the economic welfare of the countries are yet to be examined fully and described properly. The purpose of this paper is to estimate the impact of the renewable energy consumption to economic welfare by employing panel data techniques. The results show that the influence of renewable energy consumption or its share to the total energy mix to economic growth is positive and statistically significant. From a policy point of view, promoting renewable energies bears benefits not only for the environment but also for the economic conditions of the countries.
    Keywords: Renewable energy, economic welfare, OECD countries, panel data analysis
    Date: 2013–03
  9. By: Joëlle Noailly; Roger Smeets
    Abstract: This paper investigates the determinants of directed technical change in the electricity generation sector. We use firm-level data on patents filed in renewable (REN) and fossil fuel (FF) technologies by about 7,000 European firms over the period 1978-2006. We separately study specialized firms, that innovate in only one type of technology during the sample period, and mixed firms, that innovate in both technologies. We find that for specialized firms the main drivers of innovation are fossil-fuel prices, market size, and firms' past knowledge stocks. Also, prices and market size drive the entry of new REN firms into innovation. By contrast, we find that innovation by mixed firms is mainly driven by strong path-dependencies since for these firms past knowledge stock is the major driver of the direction of innovation. These results imply that generic environmental policies that affect prices and energy demand are mainly effective in directing innovation by small specialized firms. In order to direct innovation efforts of large mixed corporations with a long history of FF innovation, targeted R&D policies are likely to be more effective.
    JEL: Q4 Q55
    Date: 2013–03
  10. By: Louis-Gaëtan Giraudet (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD : UMR56 - CNRS : UMR8568 - Ecole des Hautes Etudes en Sciences Sociales (EHESS) - Ecole des Ponts ParisTech - AgroParisTech); S. Houde (MS&E - Department of Management Science and Engineering [Stanford] - Stanford University)
    Abstract: Moral hazard issues can deter profitable investments in energy efficiency. Energy-savings insurance and quality standards can mitigate the problem - yet not eliminate it.
    Date: 2013
  11. By: Carlo Rosa
    Abstract: This paper examines the impact of conventional and unconventional monetary policy on energy prices, using an event study with intraday data. Three measures for monetary policy surprises are used: 1) the surprise change to the current federal funds target rate, 2) the surprise component to the future path of policy, and 3) the unanticipated announcements of future large-scale asset purchases (LSAPs). Estimation results show that monetary policy news has economically important and highly significant effects on the level and volatility of energy futures prices and their trading volumes. I find that, on average, a hypothetical unanticipated 100 basis point hike in the federal funds target rate is associated with roughly a 3 percent decrease in West Texas Intermediate oil prices. I also document that, in a narrow window around the Federal Open Market Committee meeting, the Federal Reserve’s LSAP1 and LSAP2 programs have a cumulative financial market impact on crude oil equivalent to an unanticipated cut in the federal funds target rate of 155 basis points. Monetary policy affects oil prices mostly by affecting the value of the U.S. dollar exchange rate. Intraday energy prices also respond to news announcements about the U.S. macroeconomy and inventories. The daily responses are never significant, except in the case of inventory news.
    Keywords: Petroleum products - Prices ; Monetary policy ; Federal funds rate ; Futures ; Open market operations ; Inventories
    Date: 2013
  12. By: Liping Gao; Hyeongwoo Kim; Richard Saba
    Abstract: Edelstein and Kilian (2009) point out that the oil price shock involves a reduction in consumer spending, which results in a decrease in the demand for goods and services. This paper empirically evaluates this argument by empirically investigating effects of the oil price shock on six CPI sub-indices in the US. We find substantial decreases in the relative price in less energy-intensive sectors, but not in energy-intensive sectors. Our findings are consistent with those of Edelstein and Kilian (2009) in the sense that spending adjustments play an important role in price dynamics.
    Keywords: Oil Price Shocks; Pass-Through Effect; Consumer Price Sub-Index; Consumption Expenditures; Income Effect
    JEL: E21 E31 Q43
    Date: 2013–03
  13. By: Taghizadeh Hesary Farhad (GCOE, Keio University); Naoyuki Yoshino (School of Economics KEIO University)
    Abstract: Since the first oil shock in 1973 oil prices began to increase drastically. The 1973 and 1979 oil price shocks can be explained by supply reasons, but since the 80's, oil prices came under another type of increasing pressure. We argue that this latter with the exception of first Gulf War (1990-1991) oil price shocks, had another reason which was not a supply reason, and we found it on the demand side. Between 1981-2011, the average oil prices accelerated from about $35/barrel in 1981 to beyond $111/barrel in 2011. At the same time average interest rates subsided from 16.7 percent per annum in 1981 to about 0.1 percent per annum in 2011. In this paper we will explain how this enduring price increase in most cases was caused by expansionary monetary policies that led to low interest rates, credit demand augmentation, and then aggregate demand which heightened crude oil prices. Simultaneously, this research looks at the time-series properties of crude oil and estimates a world demand-supply model and the determinants of crude oil prices along with price and income elasticities during 1960-2011 and compares findings with two sub-periods, 1960-1980 and 1980-2011. Results show that demand is price elastic and unlike some earlier literature, supply is also affected by changes in oil price; however, income elasticity was significant only during 1980-2011. World crude oil demand was significantly influenced by interest rate, but impact of exchange rate depreciations on oil demand was not significant. Aggressive monetary policies would stimulate oil demand, but it would be met with oil supply which is rigid to monetary policies and would blow up the crude oil prices which are troublesome to economic growth. In last section we will attempt to shed light on the hypothesis of equilibrium vs. disequilibrium in the oil market, showing results that crude oil prices adjust instantly, declaring the existence of equilibrium in oil market during 1960-2011.
    Date: 2013–03
  14. By: Joshua Elliott; Don Fullerton
    Abstract: One country that tries to reduce greenhouse gas emissions may fear that other countries get a competitive advantage and increase emissions (“leakage”). Estimates from computable general equilibrium (CGE) models such as Elliott et al (2010a,b) indicate that 15% to 25% of abatement might be offset by leakage. Yet the Fullerton et al (2012) analytical general equilibrium model shows an offsetting term with negative leakage. To derive analytical expressions, their model is quite simple, with only one good from each country or sector, a fixed stock of capital, competitive markets, and many identical consumers that purchase both goods. Their model is not intended to be realistic, but only to demonstrate the potential for negative leakage. Most CGE models do not allow for negative leakage. In this paper, we use a full CGE model with many countries and many goods to measure effects in a way that allows for negative leakage. We vary elasticities of substitution and confirm the analytical model’s prediction that negative leakage depends on the ability of consumers to substitute into the untaxed good and the ability of firms to substitute from carbon emissions into labor or capital.
    JEL: H23 Q56 Q58
    Date: 2013–03
  15. By: Jean-Marc Fournier; Isabell Koske; Isabelle Wanner; Vera Zipperer
    Abstract: Following a sharp drop amidst the global economic crisis and a subsequent recovery, the spot price of crude oil has been broadly stable for the past couple of years. This paper discusses the factors that drive oil demand and supply and, hence, the price of the resource. A set of oil demand equations is estimated for OECD and non-OECD countries, which is then combined with assumptions about the behaviour of supply to analyse the impact of a range of macroeconomic and policy scenarios on the future oil price path. The scenario analysis suggests that a return of world growth to slightly below pre-crisis rates would be consistent with an increase in the price of Brent crude to far above early-2012 levels by 2020. This increase would be mostly driven by higher demand from non-OECD economies – in particular China and India. The expected rise in the oil price is unlikely to be smooth. Sudden changes in the supply or demand of oil can have very large effects on the price in the short run.<P>Le prix du pétrole – va-t-il recommencer à augmenter ?<BR>Après une forte baisse lors de la crise économique mondiale et une reprise ultérieure, le prix du pétrole brut est resté globalement stable depuis quelques années. Ce document examine les déterminants de la demande et de l?offre de pétrole et, par conséquent, du prix de cette ressource. Un ensemble d?équations de demande estimées pour les pays membres et non membres de l?OCDE est combiné à des hypothèses sur le comportement de l?offre pour analyser l?effet d?un éventail de scénarios macroéconomiques et politiques sur la tendance future du prix du pétrole. Cette analyse suggère que le retour de la croissance mondiale à un niveau légèrement inférieur au taux observé avant la crise pourraient entrainer le prix du baril de Brent d?ici 2020 bien au-dessus du niveau observé début 2012. Cette hausse principalement tirée par une demande soutenue des pays non membres de l?OCDE, notamment la Chine et l?Inde. Cette hausse du prix du pétrole a peu de chance d?être régulière. Des modifications soudaines de l?offre ou de la demande de pétrole peuvent avoir des effets importants sur les prix du pétrole à court terme.
    Keywords: oil demand, oil price, oil and the macroeconomy, oil price projection, demande de pétrole, prix du pétrole, pétrole et macroéconomie, projection du prix du pétrole
    JEL: Q41 Q43 Q47
    Date: 2013–03–08
  16. By: Niko Jaakkola
    Abstract: Mitigating climate change by carbon capture and storage (CCS) will require vast infrastructure investments. These investments include pipeline networks for transporting carbon dioxide (CO2) from industrial sites ('sources') to the storage sites ('sinks'). This paper considers the decentralised formation of trunk-line networks when geological storage space is exhaustible and demand is increasing. Monopolistic control of an exhaustible resource may lead to overinvestment and/or excessively early investment, as these allow the monopolist to increase her market power. The model is applied to CCS pipeline network formation in northwestern Europe. The features identified above are found to play a minor role. Should storage capacity be effectively inexhaustible, underinvestment due to the inability of the monopolist to capture the entire social surplus is likely to have substantial welfare impacts. Multilateral bargaining to coordinate international CCS policies is particularly important if storage capacity is plentiful.
    Keywords: carbon capture and storage, exhaustible resources, network formation, spatial networks
    JEL: L50 Q31 Q58
    Date: 2013
  17. By: Mariam Camarero (Universidad Jaume I); Juana Castillo Giménez (Universidad de Valencia); Andrés J. Picazo-Tadeo (Universidad de Valencia); Cecilio Tamarit (Universidad de Valencia)
    Abstract: Eco-efficiency refers to the ability to produce more goods and services with less impact on the environment and less consumption of natural resources. This issue has become a matter of concern that is receiving increasing attention by politicians, scientists and academics. Furthermore, greenhouse gases emitted as a result of production processes have a heavy impact in the environment and also are the foremost responsible of global warming and climate change. This paper assesses convergence in eco-efficiency from greenhouse gas emissions in the European Union (EU). Eco-efficiency is assessed at both country and greenhouse-gas-specific levels using Data Envelopment Analysis techniques and directional distance functions, as recently proposed by Picazo-Tadeo et al. (2012). Then, convergence is evaluated using the Phillips and Sul (2007) approach that allows testing for the existence of convergence groups. Although the results point to the existence of different convergence clubs depending on the specific pollutant considered, they signal the existence of, at least, four clear groups of countries. The first two groups are conformed of core EU high-income countries (Benelux, Germany, Italy, Austria, the United Kingdom and Scandinavian countries). A third club is made up of peripheral countries (Spain, Ireland, Portugal, Greece) together with some Eastern countries (Latvia, Slovenia) and the rest of clubs consists of groups containing Eastern European countries.
    Keywords: Eco-efficiency; convergence; clubs; greenhouse gases emissions; European Union; directional distance functions; Data Envelopment Analysis
    JEL: C15 C22 C61 F15 Q56
    Date: 2013–03
  18. By: Heshmati, Almas (Sogang University); Kumbhakar, Subal C. (Binghamton University, New York); Sun, Kai (Aston University)
    Abstract: This paper analyzes the impact of load factor, facility and generator types on the productivity of Korean electric power plants. In order to capture important differences in the effect of load policy on power output, we use a semiparametric smooth coefficient (SPSC) model that allows us to model heterogeneous performances across power plants and over time by allowing underlying technologies to be heterogeneous. The SPSC model accommodates both continuous and discrete covariates. Various specification tests are conducted to compare performance of the SPSC model. Using a unique generator level panel dataset spanning the period 1995-2006, we find that the impact of load factor, generator and facility types on power generation varies substantially in terms of magnitude and significance across different plant characteristics. The results have strong implication for generation policy in Korea as outlined in this study.
    Keywords: semiparametric estimation, smooth varying-coefficient model, electricity generation, generator level panel data
    JEL: C14 C23 C51 D24 L25 L94
    Date: 2013–03
  19. By: Gary Clyde Hufbauer (Peterson Institute for International Economics); Allie E. Bagnall (Peterson Institute for International Economics); Julia Muir (Peterson Institute for International Economics)
    Abstract: Prohibitions or restrictions on US exports of liquefied natural gas (LNG) are a bad idea. LNG exports will deliver economic benefits to the US economy. The US Department of Energy should approve pending LNG export applications for projects at an advanced planning stage, in conjunction with appropriate regulation to limit environmental dangers from wells to ports. Three strong considerations support this recommendation: (1) The United States regularly opposes export restraints on natural resources by other countries; (2) contrary action by the United States would violate World Trade Organization rules and lead foreign nations to ignore the rules as well; and (3) LNG export restrictions would contradict the Obama administration’s stated goal of growing US exports.
    Date: 2013–02
  20. By: Aleksandar Zaklan
    Abstract: The creation of the EU's Emission Trading Scheme (EU ETS) has turned the right to emit CO2 into a positively priced intermediate good for the affected firms. Firms thus face the decision whether to source compliance with the EU ETS within their boundaries or to acquire it through the permit trade. However, a combination of internal abatement, free permit allocation and exibility to shift the use of their allocation across time creates opportunities to achieve compliance with the EU ETS without entering the permit trade. This paper aims to identify firm-level determinants of participation in and the extent of the permit trade while recognizing the possibility of zero trade flows leading to selection bias if unaccounted-for. We construct a firm-level dataset incorporating transaction-level information from both EU ETS operator and person holding accounts, thus representing the entire system-wide permit trade by CO2 emitters. We cover the supply and demand sides of the permit trade, both inter- firm and intra-firm, and account for a wide set of firm-level characteristics using firms' balance sheet information. A detailed descriptive analysis documents salient features of the firm-level permit trade. We then jointly model firms' participation and amount decisions while allowing for possible self-selection into trading. Our results suggest that participation in the permit trade is driven by a combination of firm-specific factors existing independently of the EU ETS, such as size, sector and ownership structure, and market-specific characteristics resulting from the firms' inclusion in the EU ETS, such as the value of the firms' free permit endowment and their relative allowance position. We find that amounts traded are mostly driven by market-specific factors. In contrast to the literature on the firm-level determinants of the general goods trade we do not find self-selection into trading.
    Keywords: EU ETS, carbon emission permits, firm-level trade, inter-firm trade, intra-firm trade
    JEL: F14 F18 Q54 C34
    Date: 2013
  21. By: Shin S. Ikeda (National Graduate Institute for Policy Studies)
    Abstract: Historical data of system prices over 48 half-hour intra-daily intervals in the Japan Electric Power Exchange (JEPX) are analyzed. Given theoretical and graphical preliminary analysis, we extract measures of the spread between the efficient price and actual transaction price for each month from November 2006 to April 2012. The measures are based on the first-order serial covariance of transaction returns proposed by Roll (1984) and on the historical highs and lows with some bias correction proposed by Corwin and Schultz (2012). Viewed as measures of the marginal costs of trading in the JEPX, the estimated spreads are on average at least 50 times as large as the one in the well-functioning S&P500 index futures market. The traded amount of electricity does not explain the variation of spreads once the time-of-a-day fixed effects and month-specific time effect are explicitly accounted for in the panel regression.
    Date: 2013–03
  22. By: Semko Roman
    Abstract: The goal of the paper is to explain and analyze whether Central Bank of Russia should include commodity prices into the lists of variables they try to respond. We augmented New Keynesian DSGE small open economy model of Dib (2008) with the oil stabilization fund and new Taylortype monetary policy rule and estimated the model using Bayesian econometrics. The results show that Central Bank’s mild response to the oil price changes may be desired in terms of minimizing fluctuations of inflation and output only in the case when stabilization fund would be absent, while this response is redundant when “excess” oil revenues can be saved in the fund.
    JEL: E12 E52 E58 F41
    Date: 2013–03–15
  23. By: Korhonen, Iikka (BOFIT); Peresetsky , Anatoly (BOFIT)
    Abstract: We empirically test the dependence of the Russian stock market on the world stock market and world oil prices in the period 1997:10–2012:02. We also consider three Eastern European stock markets (Poland, the Czech Republic, and Hungary), as well as two markets outside Europe (Turkey and South Africa). We apply a rolling regression to identify periods when oil prices or stock indices in the US and Japan were important. Surprisingly, oil prices are not significant for the Russian stock market after 2006. A TGARCH-BEKK model is employed to assess the degree of correlation between markets, taking into account the global market stochastic trend. We find that correlation between markets increased between 2000 and 2012. Growth was especially high in Eastern European markets during 2004–2006, which is likely connected with the EU accession of these countries in 2004.
    Keywords: Russian stock market; oil; financial market integration; stock market returns; news; emerging markets; transition economies
    JEL: C58 G10 G14 G15
    Date: 2013–03–18
  24. By: Roland Hodler
    Abstract: The Arab Spring has led to very different outcomes across the Arab world. I present a highly stylized model of the Arab Spring to better understand these differences. In this model, dictators from the ethnic or religious majority group concede power if their country is oil-poor, but can stay in power by bribing the people if their country is oil-rich. Dictators from the minority group often rely on other members of their group to repress protests and to fight the majority group if necessary. These predictions are consistent with observed outcomes in Egypt, Libya, Saudi Arabia, Syria, Tunisia, and elsewhere.
    Keywords: Arab Spring, political transitions, repression, civil conflict, oil, divided societies
    JEL: D72 D74
    Date: 2013
  25. By: Andrea Bastianin; Marzio Galeotti; Matteo Manera
    Abstract: This paper examines the relationship between biofuels and commodity food prices in the U.S. from a new perspective. While a large body of literature has tried to explain the linkages between sample means and volatilities associated with ethanol and agricultural price returns, little is known about their whole distributions. We focus on predictability in distribution by asking whether ethanol returns can be used to forecast different parts of field crops returns distribution, or vice versa. Density forecasts are constructed using Conditional Autoregressive Expectile models estimated with Asymmetric Least Squares. Forecast evaluation relies on quantile-weighed scoring rules, which identify regions of the distribution of interest to the analyst. Results show that both the centre and the left tail of the ethanol returns distribution can be predicted by using field crops returns. On the contrary, there is no evidence that ethanol can be used to forecast any region of the field crops distribution.
    Keywords: Biofuels, Ethanol, Field Crops, Density Forecasting, Granger Causality, Quantiles
    JEL: C22 C53 Q13 Q42 Q47
    Date: 2013–03
  26. By: Cédric Clastres (PACTE - Politiques publiques, ACtion politique, TErritoires - Institut d'Études Politiques (IEP) - Grenoble - CNRS : UMR5194 - Université Pierre Mendès-France - Grenoble II - Université Joseph Fourier - Grenoble I)
    Abstract: Les régulateurs ou autorités de concurrence peuvent adopter des régulations asymétriques pour favoriser le développement de la concurrence. Ces régulations obligent l'Opérateur Historique (OH) à rétrocéder une partie de ses approvisionnements à ses concurrents pour favoriser la concurrence sur le marché final. Les régulateurs se doivent de déterminer le montant de capacités rétrocédées ainsi que le prix de rétrocession. Ce faisant, ils peuvent effectivement permettre l'émergence d'une concurrence forcée, en facilitant l'accès pour les concurrents aux capacités de production. Cependant, considérant les investissements lourds en infrastructures, des stranded costs peuvent apparaître. Les régulateurs se doivent d'adapter leur politique de régulation afin de maximiser le welfare et de réduire les pertes engendrées. Le succès de cette politique dépend de l'efficacité de l'OH.
    Date: 2013–03
  27. By: Guillermo Perry; Camilo Palacios
    Abstract: Esta investigación explora el emprendimiento alrededor del sector de la minería y el petróleo en Colombia, y en particular, busca determinar si el auge minero energético por el que atraviesa el país está creando capacidades emprendedoras que puedan ser transferidas o utilizadas en otras áreas. Los encadenamientos del sector con otros sectores económicos, los resultados de una encuesta realizada a una muestra de proveedores de empresas del sector minero energético en Colombia, y los resultados de los distintos programas de desarrollo regional y rural implementados por estas empresas, confirman que el auge minero energético ha tenido un impacto positivo sobre el emprendimiento en el país, pero que este podría ser considerablemente mayor si se refuerzan las incipientes políticas públicas de estimulo y los programas de las empresas.
    Date: 2013–02–26
  28. By: Laurent Granier (GATE Lyon Saint-Etienne - Groupe d'analyse et de théorie économique - CNRS : UMR5824 - Université Lumière - Lyon II - École Normale Supérieure - Lyon)
    Abstract: De nombreuses études analysent les phénomènes de fusion en prenant en compte les variables stratégiques des firmes telles que les prix ou les quantités de vente. Or, peu d'études font le lien entre les stratégies de promotion et les fusions. Pourtant, les dépenses mondiales de promotion se porteront à 525 milliards de dollars en 2013 (Zenithoptimedia, 2012). Ceci nous incite à établir un modèle théorique étudiant l'influence de la promotion sur les incitations à fusionner. A l'instar de Friedman (1983a et 1983b), nous introduisons deux types de promotions, l'une étant prédatrice et l'autre coopérative. Nous trouvons que les incitations à fusionner différent de celles existantes dans les modèles de concurrence en prix (Brito, 2003).
    Keywords: fusions et acquisitions; promotion coopérative; promotion prédatrice
    Date: 2013–03–15
  29. By: Torfinn Harding; Anthony J Venables
    Abstract: Foreign exchange windfalls such as those from natural resource revenues change non-resource exports, imports, and the capital account. We study the balance between these responses and, using data on 41 resource exporters for 1970-2006, show that the response to a dollar of resource revenue is, approximately, to decrease non-resource exports by 75 cents and increase imports by 25 cents, implying a negligible effect on foreign saving. The negative per dollar impact on exports is larger for countries which have good institutions and higher income levels. These countries have a higher share of manufacturing in their non-resource exports, and we show that manufactures are more susceptible than other products to being crowded out by resource exports.
    Keywords: natural resources, Dutch disease, resource curse, trade, exports, imports
    JEL: E21 E62 F43 H63 O11 Q33
    Date: 2013

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