nep-ene New Economics Papers
on Energy Economics
Issue of 2013‒04‒13
29 papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao

  1. Cap-and-Trade Climate Policy, Free Allowances, and Price-Regulated Firms By Bruno Lanz; Sebastian Rausch
  2. Brown Backstops Versus the Green Paradox By Thomas Michielsen
  3. New Automobile Regulations: Double the Fuel Economy, Half the CO2 Emissions, and Even Automakers Like It By Lutsey, Nic
  4. The transformative effect of unscheduled generation by solar PV and wind generation on net electricity demand By Bell, William Paul; Wild, Phillip; Foster, John
  5. The impact of financial development, income, energy and trade on carbon emissions: Evidence from the Indian economy By Mohamed Amine Boutabba
  6. Petroleum product pricing and complementary policies: experience of 65 developing countries since 2009 By Kojima, Masami
  7. The Long-run and Short-run Effects of Crude Oil Price on Methanol Market in Iran By Komijani, Akbar; Gandali Alikhani, Nadiya; Naderi, Esmaeil
  8. Estimating welfare aspects of changes in energy prices from preference heterogeneity By Panos Pashardes; Nicoletta Pashourtidou; Theodoros Zachariadis
  9. Econometric Modelling of World Oil Supplies: Terminal Price and the Time to Depletion By Mohaddes, Kamiar
  10. A low cost supercritical Nuclear + Coal 3.0 Gwe power plant By Pedro Cosme Costa Vieira
  11. Residential Energy Demand: a Multiple Discrete-Continuous Extreme Value Model using Italian Expenditure Data By Frontuto Vito
  12. On the comparative advantage of tradable emission permits in a setting of uncertain abatement costs and market power: A case against the invariably pessimistic view By Heuson, Clemens
  13. You'd better bet on the ETS By Georg Zachmann
  14. Oil price shocks and monetary policy in a data-rich environment By Knut Are Aastveit
  15. Is There Really Granger Casualty Between Energy Use and Output? By Stephan B. Bruns; Christian Gross; David I. Stern
  16. Appendix to "A Spatial Approach to Energy Economics" By M. Scott Taylor; Juan Moreno Cruz
  17. Incidence and Environmental Effects of Distortionary Subsidies By Heutel, Garth; Kelly, David L.
  18. Political economy aspects of fuel subsidies : a conceptual framework By Strand, Jon
  19. Trade, Transboundary Pollution and Market Size By Forslid, Rikard; Okubo, Toshihiro; Sanctuary, Mark
  20. Quantifying the Speculative Component in the Real Price of Oil: The Role of Global Oil Inventories By Kilian, Lutz; Lee, Thomas K
  21. Endogenous Market Power in an Emissions Trading Scheme with Auctioning By Corina Haita
  22. Does Supporting Passenger Railways Reduce Road Traffic Externalities? By Lalive, Rafael; Luechinger, Simon; Schmutzler, Armin
  23. Time-Varying Oil Price Volatility and Macroeconomic Aggregates By Nora Traum; Michael Plante
  24. How New Energy Investment Benefits Rural Communities (Power Point) By Elgohary, Nivin
  25. Bridging the Gap between Onshore and Offshore Innovations by the European Wind Power Supply Industry: A Survey-based Analysis By Wüstemeyer, Christoph; Bunn, Derek; Madlener, Reinhard
  26. Emprendimiento alrededor del Sector de la Minería y el Petróleo en Colombia By Perry, Guillermo; Palacios, Camilo
  27. Back to the Future of Green Powered Economies By M. Scott Taylor; Juan Moreno Cruz
  28. Will China's Vehicle Population Grow Even Faster than Forecasted? By Wang, Yunshi; Teter, Jacob; Sperling, Daniel
  29. International spillovers in a world of technology clubs By Roman Stöllinger

  1. By: Bruno Lanz (ETH Zurich, Switzerland); Sebastian Rausch (ETH Zurich, Switzerland)
    Abstract: Firms subject to cost-of-service regulation cannot withhold windfall profits associated with free emissions allowances. This paper examines the efficiency and distributional impacts of two approaches to transfer free allowances to consumers: output subsidies and lump-sum payments. We employ an empirically calibrated model of the U.S. economy that features regulated monopolies in the electricity sector and many heterogeneous households. Under a carbon dioxide cap-and-trade policy, we find that using free allowances to subsidize regulated electricity prices increases aggregate welfare costs by 40-80 percent relative to lump-sum transfers. These inefficiencies are disproportionately borne by households in the tails of the income distribution.
    Keywords: Climate policy; Cap-and-trade; Allowance allocation; Cost-of-service regulation; Electricity Generation.
    JEL: C61 C68 D58 Q43 Q54
    Date: 2013–04
  2. By: Thomas Michielsen
    Abstract: Anticipated climate policies are ineffective when fossil fuel owners respond by shifting supply intertemporally (the green paradox). This mechanism relies crucially on the exhaustibility of fossil fuels. We analyze the effect of anticipated climate policies on emissions in a simple model with two fossil fuels: one scarce and dirty (eg oil), the other abundant and dirtier (eg coal). We derive conditions for a 'green orthodox': anticipated climate policies may reduce current emissions. Calibrations suggest that intertemporal carbon leakage (from -22% to 13%) is a relatively minor concern.
    Keywords: Mineral Resources, Transport Infrastructure, Regional Trade Integration, Gravity Model, Economic Legacy of Colonialism
    Date: 2013
  3. By: Lutsey, Nic
    Keywords: Engineering, Natural Resources and Conservation, Social Sciences, fuel economy, co2 emissions, automobile, automakers
    Date: 2012–10–01
  4. By: Bell, William Paul; Wild, Phillip; Foster, John
    Abstract: This study investigates the transformative effect of unscheduled solar PV and wind generation on electricity demand. The motivations for the study are twofold, the poor medium term predictions of electricity demand in the Australian National Electricity Market and the continued rise in peak demand but reduction in overall demand. A number of factors contribute to these poor predictions, including the global financial crisis inducing a reduction in business activity, the Australian economy’s continued switch from industrial to service sector, the promotion of energy conservation, and particularly mild weather reducing the requirement for air conditioning. Additionally, there is growing unscheduled generation, which is meeting electricity demand. This growing source of generation necessitates the concepts of gross and net demand where gross demand is met by unscheduled and scheduled generation and net demand by scheduled generation. The methodology compares the difference between net and gross demand of the 50 nodes in the Australian National Electricity Market using half hourly data from 2007 to 2011. The unscheduled generation is calculated using the Australian Bureau of Meteorology half hourly solar intensity and wind speed data and the Australian Clean Energy Regulator’s database of small generation units’ renewable energy target certificates by postcode. The findings are that gross demand rather than net demand helps explain both the overall reduction in net demand and the continued increase in peak demand. The study has two main conclusions. Firstly, a requirement for policy to target the growth in peak demand via time of supply feed-in tariff for small generation units. Secondly, modellers of electricity demand consider both net and gross demand in their forecasts. The time of supply feed-in tariffs are intended to promote the adoption of storage technologies and demand side participation and management. Modellers considering both net and gross demand are required to model unscheduled generation. This requirement ensues that more comprehensive solar intensity data be provided by the Bureau of Meteorology and that the Australian National Electricity Market Operator provide data in GIS format of each demand node using the Australian Statistical Geography Standard developed by Australian Bureau of Statistics to enable easier integration of large quantities of geographic data from a number of sources. The applicability of these finding become more relevant to other countries as unscheduled generation becomes more wide spread. This study is instrumental to a range of further research. Other sources of unscheduled generations should be considered to form a more comprehensive concept of gross demand, for instance, solar hot water and small hydro. Replacing electrical hot water heaters with solar hot water reduces the overnight demand, which may provide a considerable transformative effect on net electricity demand. In addition, energy efficiency is meeting demand for electricity; incorporating energy efficiency would form an even more comprehensive concept of gross electricity demand and could help improve longer term electricity demand projections.
    Keywords: solar PV, wind generation, electricity demand, AEMO, electricity demand forecasting, renewable energy, transmission, climate change adaptation, Feed-in tariffs; non-scheduled generation; FiT; residential solar PV; Sustainable; DUOS; TUOS; smart meters
    JEL: O13 O3 O31 O33 Q01 Q2 Q28 Q31 Q4 R22 R38
    Date: 2013–04–03
  5. By: Mohamed Amine Boutabba (EPEE, University of Evry Val d’Essonne)
    Abstract: This paper examines the long-run equilibrium and the existence and direction of a causal relationship between carbon emissions, financial development, economic growth, energy consumption and trade openness for India in a multivariate framework. The results suggest that there is strong evidence on the long run and causal relationships between per capita carbon emissions, per capita real income, the square of per capita real income, per capita energy use, financial development and trade openness. The results also confirm the existence of EKC hypothesis in the Indian economy. Further, causality tests also indicate that there was a unidirectional Granger causality running from per capita real income, per capita energy consumption, and financial development to per capita carbon emissions, all without feedback. The evidence seems to suggest that financial system should take into account the environment aspect in their current operations. The findings of this study may be of great importance for policy and decision-makers in order to develop energy policies for India that contribute to curb carbon emissions while preserving economic growth.
    Keywords: Carbon emissions, Financial development, Growth, Energy consumption, Trade
    JEL: C32 O53 Q43 Q53 Q56
    Date: 2013
  6. By: Kojima, Masami
    Abstract: Unable to cope fully with steadily climbing world oil prices since mid-2009, many of the 65 countries reviewed in this paper have progressed slowly or even reversed course in reforming pricing of petroleum products. End-user prices in July 2012 varied by two orders of magnitude across the countries. More than two-fifths, including some that had only recently adopted automatic pricing mechanisms, froze the prices of gasoline, diesel, or both for months or even years on end during the study period. When the prices were finally adjusted, the increases were sometimes substantial, leading to large-scale protests, partial or full reversals of price adjustments, or softening of pricing reform policy. Governments'attempts to keep domestic prices artificially low -- through price control, export or quantity restrictions, or political pressure put on oil companies -- have helped curb inflation in the short term, but frequently with serious negative consequences: flourishing black markets, smuggling, fuel adulteration, illegal diversion of subsidy funds, large financial losses suffered by fuel suppliers, deteriorating refining and other infrastructure, and acute fuel shortages causing economy-wide damage. In several countries, subsidies, price controls, and other restrictions have helped protect inefficient refineries and oil marketers. Mitigation responses have included fuel conservation programs; fuel diversification, particularly liquid biofuels to substitute gasoline and diesel; and efforts to lower costs of supply, including strengthening infrastructure, promoting price competition, hedging, negotiating price discounts with exporters, and bulk procurement. Various forms of assistance to consumers have also been offered, especially to households, agriculture, transport, and fisheries.
    Keywords: Energy Production and Transportation,Markets and Market Access,Transport Economics Policy&Planning,Oil Refining&Gas Industry,Access to Markets
    Date: 2013–04–01
  7. By: Komijani, Akbar; Gandali Alikhani, Nadiya; Naderi, Esmaeil
    Abstract: Substituting crude oil exports with value-added petrochemical products is one of the main strategies for policy makers in oil-driven economies to isolating the real sectors of economy from oil price volatility. This policy inclination has led to a body of literature in energy economics in recent decades. As a case study, this paper investigates the short-run and long-run relationship between Iran’s oil price and methanol price which is one of the most important non-oil exports of the oil-exporting country. To do so, the weekly data from 18 Jan. 2009 to 18 Sep. 2011 in a VECM framework is applied. The results show that in the long-run, oil price hikes leads to proportional increase in methanol price while in the short-run, this impact is not significant.
    Keywords: Crude Oil, Methanol, VECM Model
    JEL: C13 C32 Q43
    Date: 2012–10–04
  8. By: Panos Pashardes; Nicoletta Pashourtidou; Theodoros Zachariadis
    Abstract: The European Union's energy and climate policy package will cause an increase in end-user prices of electricity and fuels. This paper assesses the distributional effects of these price increases in Cyprus by specifying and estimating a household energy demand system with price heterogeneity between households. This novel method allows obtaining robust parameter estimates even when household expenditure surveys are limited. The empirical analysis is conducted both conditional on energy-related household characteristics and unconditionally. We then use the estimated demand system to conduct welfare analysis. We find that the rise in energy prices results in welfare losses (in 2009 prices) of EUR 31 and EUR 101 per household for 2013 and 2020 respectively, or a nationwide welfare loss of more than EUR’2009 33 million in 2020. Price increases will be regressive and will affect small and urban households more strongly than the rest of the population. Furthermore, we find that the largest proportion of welfare loss is due to loss of household’s income purchasing power caused by higher energy prices, while the changes in relative prices induce deadweight loss which is a small part of welfare loss because of the limited substitutability of energy with other goods.
    Keywords: deadweight loss, demand system, distributional effect
    Date: 2013–03
  9. By: Mohaddes, Kamiar
    Abstract: This paper develops a novel approach by which to identify the price of oil at the time of depletion; the so-called "terminal price" of oil. It is shown that while the terminal price is independent of both GDP growth and the price elasticity of energy demand, it is dependent on the world real interest rate and the total life-time stock of oil resources, as well as on the marginal extraction and scarcity cost parameters. The theoretical predictions of this model are evaluated using data on the cost of extraction, cumulative production, and proven reserves. The predicted terminal prices seem sensible for a range of parameters and variables, as illustrated by the sensitivity analysis. Using the terminal price of oil, we calculate the time to depletion, and determine the extraction and price proles over the life-time of the resource. The extraction proles generated seem to be in line with the actual production and the predicted prices are generally in line with those currently observed.
    Keywords: Oil prices and extraction, terminal price of oil, time to depletion, nonrenewable resources, oil demand estimations, and oil extraction costs.
    JEL: C23 Q31 Q47
    Date: 2013–02–14
  10. By: Pedro Cosme Costa Vieira (Faculdade de Economia do Porto)
    Abstract: The rapid growth in the consumption of electricity in China and India has been covered at 80% by coal, which has the side effect of emitting CO2 to the atmosphere. The alternative is the use of nuclear energy that, to become unquestionably competitive, must use supercritical water as coolant. The problem is that the inflow temperature of a supercritical turbine must be at least 500 ºC that is impossible to attain using the mainstream PWR and it is uneconomical to accomplish in a pressure tubes similar to the CANDU and the RBMK reactors. In this paper, I propose a simple but important innovation that is the coupling of the nuclear reactor to a coal fired heater. With this apparently small improvement, it becomes feasible to build a multi-tube slightly supercritical pressure light water reactor where the outflow low temperature of the nuclear reactor, ≤ 400 ºC, results in a simple nuclear reactor. The design I propose will originate a 50% decrease in the cost of the electricity produced using nuclear energy.
    Keywords: Electricity production; Supercritical water reactor; Nuclear energy; Coal fired plant; Multi-tube reactor; SCWR
    JEL: O13 Q42 Q53
    Date: 2012–08
  11. By: Frontuto Vito (University of Turin)
    Abstract: The economic analysis of energy consumption is mostly focused on single components of total expenditure in energy-consuming services. The discrete-continuous models, following the formulation of Hanemann (1984), consider the case of perfect substitute goods: the maximization process leads to extreme corner solutions in which only one alternative is selected. According to this model the literature on energy consumption is limited to study some components of total energy consumption, i.e. space and water heating or transportation. Following the path opened by Pinjari and Bhat (2010), the goal of this paper is to build a multiple discrete-continuous model of residential energy demand based on Italian expenditure data. A non-linear utility structure, originally used in Kim et al. (2002) and extended in Bhat (2005), is implemented within the Kuhn-Tucker multiple-discrete economic model of consumer demand proposed by Wales and Woodland (1983). The paper here presented is the first application of this model to Italian expenditure data. The model predict parameters stability over time and low price elasticities for electricity (0.56) and natural gas (1.17). Considerble variations in natural gas expenditures (+54%) are predicted in case of climate changes measured of increases in Heating Degree Days (+15%).
    Date: 2012–02
  12. By: Heuson, Clemens
    Abstract: Recent work has shown that Weitzman's policy rule for choosing price- versus quantity-based pollution control instruments under uncertainty is biased when the polluting firms possess market power (Heuson 2010). However, this study is restricted to emission standards and taxes, while tradable emission permits are ruled out since market power gives rise to strategic permit trading, which requires some separate effort in investigation. This paper aims at closing this gap and, in doing so, makes three main contributions. First, it provides the first-time full comparative analysis of the three most common pollution control instruments stated above which takes into account two features that are frequently given in actual regulation settings, namely market power of polluting firms and uncertain abatement costs from the regulator's perspective. Second, the paper reveals a new form of strategic permit trading that may arise even though the permit market is perfectly competitive. Finally, the rather pessimistic view concerning the impact of market power on the comparative advantage of tradable emission permits, which dominates in the literature so far, is put into context. --
    Keywords: external diseconomies of pollution,emission standards,tradable emission permits,emission taxes,uncertainty,Cournot competition,market power,strategic behaviour
    JEL: D89 L13 Q58
    Date: 2013
  13. By: Georg Zachmann
    Abstract: The issue: The European Union's emissions trading system (ETS), introduced in 2005, is the centerpiece of EU decarbonisation efforts and the biggest emissions trading scheme in the world. After a peak in May 2008, the price of ETS carbon allowances started to collapse, and industry, civil society and policymakers began to think about how to â??repair the ETSâ??. However, the ETS is an effective and efficient tool to mitigate greenhouse gas emissions, and although prices have not been stable, it has evolved to cover more sectors and greenhouse gases, and to become more robust and less distorting. Prices are depressed because of an interplay of fundamental factors and a lack of confidence in the system. Policy challenge The ETS must be stabilised by reinforcing the credibility of the system so that the use of existing low-carbon alternatives (for example burning gas instead of coal) is incentivised and investment in low-carbon assets is ensured. Further-more, failure to reinvigorate the ETS might compromise the cost-effective synchronisation of European decarbonisation efforts across sectors and countries. To restore credibility and to ensure long-term commitment to the ETS, the European Investment Bank should auction guarantees on the future emission allowance price.This will reduce the risk for low-carbon investments and enable stabilisation of the ETS until a compromise is found on structural measures to reinforce it in order to achieve the EU's long-term decarbonisation targets.
    Date: 2013–04
  14. By: Knut Are Aastveit (Norges Bank (Central Bank of Norway) and the University of Oslo)
    Abstract: This paper examines the impact of different types of oil price shocks on the U.S. economy, using a factor-augmented VAR (FAVAR) approach. The results indicate that when examining the effects of oil price shocks, it is important to account for the interaction between the oil market and the macroeconomy. I find that oil demand shocks are more important than oil supply shocks in driving several macroeconomic variables, and that the origin of demand shocks matter. Specifically, the U.S. economy and monetary policy respond differently to global demand shocks that have the effect of raising the price of oil and to oil-specific demand shocks.
    Keywords: Oil demand shocks, Oil supply shocks, Business cycle, Monetary policy, Factor model, FAVAR
    JEL: C3 E31 E32 E4 E5 Q43
    Date: 2013–04–03
  15. By: Stephan B. Bruns (University of Jena and Max-Planck Institute of Economics); Christian Gross (RWTH Aachen University - Institute for Future Energy Consumer Needs and Behavior (FCN)); David I. Stern (Crawford School of Public Policy, The Australian National University Author-Email:
    Abstract: We carry out a meta-analysis of the very large literature on Granger causality tests between energy use and economic output to determine if there is a genuine effect in this literature or whether the large number of apparently significant results is due to publication and misspecification bias. Our model extends the standard meta-regression model for detecting genuine effects using the statistical power trace in the presence of publication biases by controlling for the tendency to over-fit vector auto regression models in small samples. These over-fitted models have inflated type 1 errors. We find that models that include energy prices as a control variable find a genuine effect from output to energy use in the long-run. A genuine causal effect also seems apparent from energy to output when employment is controlled for and the Johansen procedure is used.
    JEL: Q43 C32 C52
    Date: 2013–03–08
  16. By: M. Scott Taylor (University of Calgary); Juan Moreno Cruz
  17. By: Heutel, Garth (University of North Carolina at Greensboro, Department of Economics); Kelly, David L. (University of Miami)
    Abstract: Government policies that are not intended to address environmental concerns can nonetheless distort prices and affect firms' emissions. We present an analytical general equilibrium model to study the effect of distortionary subsidies on factor prices and on environmental outcomes. We model an output subsidy, a capital subsidy, relief from environmental regulation, and a direct cash subsidy. In exchange for receiving subsidies, firms must agree to a minimum level of labor employment. Each type of subsidy and the employment constraint create both output effects and substitution effects on input prices and emissions. We calibrate the model to the Chinese economy, where government involvement affects emissions from both state-owned enterprises and private firms. Variation in production substitution elasticities does not substantially affect input prices, but it does substantially affect emissions.
    Keywords: Pollution; China; Incidence; Perverse Subsidies
    JEL: H23 Q52 Q58
    Date: 2013–04–02
  18. By: Strand, Jon
    Abstract: While notoriously inefficient, fuel subsidies are widespread, and in many cases politically stable. This paper discusses and models various political economy aspects of fuel subsidies, focusing on gasoline and kerosene. Both economic and political are considered to explain differences in subsidies, with particular focus on democratic and autocratic governments. A political process is modeled whereby a promise of low fuel prices is used in democracies to attract voters, and in autocracies to mobilize support among key groups. Subsidies to fuels are viewed as either easier to observe, easier to commit to, easier to deliver, or better targeted at core groups, than other public goods or favors offered by rulers. Easier commitment and delivery than for regular public goods can explain the high prevalence of such policies in autocracies, and also in young democracies where the capacity to commit to or deliver complex public goods is not yet fully developed. The analysis provides a framework for empirical testing and verification.
    Keywords: Transport Economics Policy&Planning,Economic Theory&Research,Energy Production and Transportation,Transport and Environment,Public Sector Economics
    Date: 2013–03–01
  19. By: Forslid, Rikard; Okubo, Toshihiro; Sanctuary, Mark
    Abstract: This paper uses a monopolistic competitive framework with many sectors to study the impact of trade liberalization on local and global emissions. We focus on the interplay of the pollution haven effect and the home market effect and show how a large-market advantage can counterbalance a high emission tax, implying that trade liberalization leads to lower global emissions. Generally, our results suggest that relative market size, the level of trade costs, the ease of abatement, and the degree of product differentiation at the sector level are relevant variables for empirical studies on trade and pollution.
    Keywords: market size; trade liberalization; transboundary pollution
    JEL: F12 F15
    Date: 2013–03
  20. By: Kilian, Lutz; Lee, Thomas K
    Abstract: One of the central questions of policy interest in recent years has been how many dollars of the inflation-adjusted price of oil must be attributed to speculative demand for oil stocks at each point in time. We develop statistical tools that allow us to address this question, and we use these tools to explore how the use of two alternative proxies for global crude oil inventories affects the empirical evidence for speculation. Notwithstanding some differences, overall these inventory proxies yield similar results. While there is evidence of speculative demand raising the price in mid-2008 by between 5 and 14 dollars, depending on the inventory specification, there is no evidence of speculative demand pressures between early 2003 and early 2008. As a result, current policy efforts aimed at tightening the regulation of oil derivatives markets cannot be expected to lower the real price of oil in the physical market. We also provide evidence that the Libyan crisis in 2011 shifted expectations in oil markets, resulting in a price increase of between 3 and 13 dollars, depending on the inventory specification. With regard to tensions with Iran in 2012, the implied price premium ranges from 0 to 9 dollars.
    Keywords: Expectations; Global commodity markets; Inventories; Oil price; Speculation
    JEL: F02 G15 G28 Q43
    Date: 2013–01
  21. By: Corina Haita
    Abstract: This paper contributes to the literature in market power for emissions permits, modeling an emissions trading scheme in which polluters differ only in their business-as-usual emissions. They play a two-stage static complete information game in which their market power arises endogenously from the business-as-usual emissions. In the first stage the polluters bid in an auction for the distribution of the fixed supply of permits and in the second stage they trade these permits in a secondary market. For compliance, they can also engage in abatement activity at a quadratic cost. In equilibrium all polluters are successful in the auction. In the secondary market the low emitters are net sellers and the high emitters are net buyers. Moreover, the secondary market price is unambiguously above the auction clearing price. The welfare analysis shows that the aggregate compliance cost when polluters act strategically increases in the heterogeneity of their business-as-usual emissions. Furthermore, there exists a threshold of the fixed supply of permits above which strategic behavior is socially preferable. Finally, for certain distributions of the business-as-usual emissions, strategic behavior is cost-effective, regardless of the level of the available supply of permits.
    Date: 2013–03–18
  22. By: Lalive, Rafael; Luechinger, Simon; Schmutzler, Armin
    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: Pollution; Public Transport; Railways; Road Accidents
    JEL: Q53 R41 R48
    Date: 2013–02
  23. By: Nora Traum (North Carolina State University); Michael Plante (Research Department)
    Abstract: We illustrate the theoretical relation among output, consumption, investment, and oil price volatility in a real business cycle model. The model incorporates demand for oil by a firm, as an intermediate input, and by a household, used in conjunction with a durable good. We estimate a stochastic volatility process for the real price of oil over the period 1986-2011 and utilize the estimated process in a non-linear approximation of the model. For realistic calibrations, an increase in oil price volatility produces a temporary decrease in durable spending, while precautionary savings motives lead investment and real GDP to rise. Irreversible capital and durable investment decisions do not overturn this result.
    Date: 2012
  24. By: Elgohary, Nivin
    Keywords: Community/Rural/Urban Development,
    Date: 2013–02
  25. By: Wüstemeyer, Christoph (Massachusetts Institute of Technology); Bunn, Derek (London Business School); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: This paper provides an in-depth analysis of investment decisions and shifts related to onshore and offshore wind power supply chains. Insights about cost reductions are generated from analyzing project financing data, using a 'European learning curve' derived from a European learning system. In doing so, we take into account the limited number of leading technology suppliers in the global market. Experience curve analysis and insights from qualitative research are used to discuss the market entry barriers to the offshore wind power market. We also use data generated from a questionnaire survey circulated among the European wind power industry. From the analysis we conclude that the adoption of offshore technology has been evolving over time when companies from closely related industries, and not start-up companies, started to enter the offshore market. For policy-makers, it is essential to acknowledge that sophisticated industry structures need to be established, and that barriers to adoption among the players in the onshore supply industry, which seem to differ, can be effectively removed.
    Keywords: Wind power; supply chain; technology adoption; experience curve; learning; United Kingdom
    Date: 2012–12
  26. By: Perry, Guillermo; Palacios, Camilo
    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.
    Keywords: Emprendimiento, Desarrollo Económico, Petróleo y Minería, Desarrollo de Proveedores, Desarrollo Regional, Community/Rural/Urban Development, O13, O14, O18,
    Date: 2013–02
  27. By: M. Scott Taylor (University of Calgary); Juan Moreno Cruz
  28. By: Wang, Yunshi; Teter, Jacob; Sperling, Daniel
    Keywords: Engineering, Natural Resources and Conservation, Social Sciences, China, Vehicle Population, vehicle market
    Date: 2012–10–01
  29. By: Roman Stöllinger
    Abstract: Technology is a key element for long-term growth and economic development. Given the stark concentration of innovation activities in a few countries most countries have to rely on the international diffusion of newly developed technologies. Some countries may fail to successfully perform the task of technology adaption leading to a tripartite segmentation of countries into an innovation club, an imitation club whose members are capable of absorbing technologies developed by the former and a stagnation group that lack the capability to absorb foreign technologies. We test the role of the technology gap for growth as suggested by the technology club hypothesis in a threshold regression framework using human capital as the threshold variable. Using this approach, which is related to Benhabib-Spiegel type growth regressions, we are able to identify two distinct thresholds giving rise to three country groupings. As suggested by the theory of technology clubs we find the strongest effects from the catch-up term on economic growth for the intermediate group (imitation club).
    Keywords: technology clubs, threshold regressions, technology spillovers, Schumpeterian growth model, human capital
    JEL: O47 O41 I25 O33
    Date: 2013–03

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.