nep-ene New Economics Papers
on Energy Economics
Issue of 2013‒05‒05
27 papers chosen by
Roger Fouquet
Basque Climate Change Centre, Bilbao

  1. Des modes de capture du carbone et de la compétitivité relative des énergies primaires By Amigues, Jean-Pierre; Lafforgue, Gilles; Moreaux, Michel
  2. Macroeconomic Impacts of the EU 30% GHG Mitigation Target By Francesco Bosello; Lorenza Campagnolo; Carlo Carraro; Fabio Eboli; Ramiro Parrado; Elisa Portale
  3. Revisiting the Environmental Kuznets Curve in a Global Economy By Shahbaz, Muhammad; Ozturk, Ilhan; Afza, Talat; Ali, Amjad
  4. Heterogeneous Beliefs, Regret, and Uncertainty: The Role of Speculation in Energy Price Dynamics By Marc Joëts
  5. The EU decarbonisation roadmap 2050: What way to walk? By Hübler, Michael; Löschel, Andreas
  6. Carbon Prices and Incentives for Technological Development By Lundgren, Tommy; Marklund, Per-Olov; Samakovlis, Eva; Zhou, Wenchao
  7. Directing Technical Change from Fossil-Fuel to Renewable Energy Innovation: An Empirical Application Using Firm-Level Patent Data By Joëlle Noailly; Roger Smeets
  8. Supply Side Climate Policy and the Green Paradox By Hoel, Michael
  9. Four Changes to Trade Rules to Facilitate Climate Change Action By Aaditya Mattoo; Arvind Subramanian
  10. Technology Agreements with Heterogeneous Countries By Hoel, Michael; de Zeeuw, Aart
  11. Climate Change and Carbon Capture and Storage By Moreaux, Michel; Withagen, Cees
  12. Transparency and View Regarding Nuclear Energy Before and After the Fukushima Accident: Evidence on Micro-data By Yamamura, Eiji
  13. A game theoretical analysis of the design options of the real-time electricity market By Haikel Khalfallah; Vincent Rious
  14. Value-at-Risk: Risk assessment for the portfolio of oil and gas producers By Asche, Frank; Dahl, Roy Endre; Oglend, Atle
  15. Does One Design Fit All? On The Transferability Of The PJM Market Design To The German Electricity Market By Katrin Schmitz; Christoph Weber
  16. The long–run macroeconomic impacts of fuel subsidies By Michael Plante
  17. The Influence of Oil and Gas Revenues on Russia’s Monetary and Credit Policy By Alexei Kudrin
  18. Linking Price and Quantity Pollution Controls under Uncertainty By Peter J. Wood; Peter Heindl; Frank Jotzo; Andreas Löschel
  19. Energy Consumption, Financial Development and Growth: Evidence from Cointegration with unknown Structural breaks in Lebanon By Shahbaz, Muhammad; Abosedra, Salah; Sbia, Rashid
  20. Effect of soil heterogeneity on the welfare economics of biofuel policies By Vincent Martinet
  21. Geoengineering and Abatement: A “flat” Relationship under Uncertainty By Johannes Emmerling; Massimo Tavoni
  22. Measuring the Impact of the BP Deepwater Horizon Oil Spill on Consumer Behavior: Evidence from a Natural Experiment. By O. Ashton Morgan; John C. Whitehead; William L. Huth; Gregory S. Martin; Richard Sjolander
  23. Dutch Disease in the Post-Soviet Countries of Central and South-West Asia: How Contagious is it? By Balázs Égert
  24. World System Energetics By Ternyik, Stephen I.
  25. Cross-border constraints, institutional changes and integration of the Dutch - German gas market By Mulder, Machiel; Kuper, Gerard
  26. Coping with Fuelwood Scarcity: Household Responses in Rural Ethiopia By Damte, Abebe; Koch, Steven F.; Mekonnen, Alemu
  27. Market-implied inflation and growth rates adversely affected by the Brent. By Cette, G.; de Jong, M.

  1. By: Amigues, Jean-Pierre; Lafforgue, Gilles; Moreaux, Michel
    Abstract: We characterize the optimal exploitation paths of two perfect substitute primary energy resources, a non-renewable polluting resource and a carbon-free renewable one. Both resources can supply the energy needs of two sectors. Sector 1 is able to reduce its carbon footprint at a reasonable cost owing to a CCS device. Sector 2 has only access to the air capture technology, but at a significantly higher cost. We assume that the atmospheric carbon stock cannot exceed some given ceiling. We show that it is optimal to begin by fully capturing the sector 1's emissions before the ceiling is reached and next, to deploy the air capture in order to partially abate sector 2’s emissions. The optimal carbon tax is first increasing during the pre-ceiling phase and next, it declines in stages down to 0.
    Keywords: Climate change, carbon capture and storage, non-renewable resources
    JEL: Q32 Q42 Q54 Q58
    Date: 2013–04
  2. By: Francesco Bosello (University of Milan, Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Italy); Lorenza Campagnolo (Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Ca’ Foscari University of Venice, Italy); Carlo Carraro (Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Ca’ Foscari University of Venice, Italy); Fabio Eboli (Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Italy); Ramiro Parrado (Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Italy); Elisa Portale (Euro-Mediterranean Center on Climate Change, Fondazione Eni Enrico Mattei, Italy)
    Abstract: The reduction of GHG emissions is one of the most important policy objectives worldwide. Nonetheless, concrete and effective measures to reduce them are hardly implemented. One of the main reasons for this deadlock is the fear that unilateral actions will reduce a country’s competitiveness, and will benefit those countries where no GHG mitigation measures are implemented. This kind of argument is also often used to explain why some governments and many business leaders are not in favour of the EU 30% GHG mitigation target that has been proposed to replace the previous 20% GHG emission reduction objective approved by the EU within the well-known 20-20-20 climate and energy package. By developing and applying a recursive, dynamic, very detailed CGE model with energy generation from both fossil fuel and renewable sources, we address this issue by estimating the cost for different EU countries and industries of the EU climate and energy package under a set of alternative international scenarios on global GHG mitigation efforts. Results show that, thanks to the EU economic recession, achieving a 20% GHG emission reduction entails a moderate cost for the European Union - about 0.5% of EU GDP – even in the case of EU unilateral action. This cost could be reduced to almost zero if not only the European Union, but also the other major world economies, comply with the “low pledge” Copenhagen Accord. A 30% GHG emission reduction target would certainly be more costly: the total loss in the European Union would be 1.26% of EU GDP in the case of EU unilateral action, whereas the total cost would be 0.55% of EU GDP if all major economies reduce their own GHG emissions according to the “low pledge” Copenhagen Accord. Both border tax adjustments and free allocation of carbon permits are shown to be successful in reducing some adverse competitiveness effects of the EU GHG mitigation policy into energy intensive sectors, but at the expenses of the other economic sectors.
    Keywords: EU Climate Package, UNFCCC Conference of Parties, Kyoto Protocol, Computable General Equilibrium Analysis
    JEL: C68 Q43 Q48 Q54
    Date: 2013–03
  3. By: Shahbaz, Muhammad; Ozturk, Ilhan; Afza, Talat; Ali, Amjad
    Abstract: The present study deals with an empirical investigation between CO2 emissions, energy intensity, economic growth and globalization using annual data over the period of 1970-2010 for Turkish economy. We applied unit root test and cointegration approach in the presence of structural breaks. The direction of causality between the variables is investigated by applying the VECM Granger causality approach. Our results confirmed the existence of cointegration between the series. The empirical evidence reported that energy intensity, economic growth (globalization) increase (condense) CO2 emissions. The results also validated the presence of Environmental Kuznets curve (EKC). The causality analysis shows bidirectional causality between economic growth and CO2 emissions. This implies that economic growth can be boosted at the cost of environment.
    Keywords: Carbon dioxide emissions, EKC, economic growth
    JEL: Q5 Q56
    Date: 2013–04–05
  4. By: Marc Joëts (Ipag Business School and EconomiX-CNRS, University of Paris Ouest, France)
    Abstract: This paper proposes to investigate the impact of financialization on energy markets (oil, gas, coal and electricity European forward prices) during both normal times and extreme fluctuation periods through an original behavioral and emotional approach. To this aim, we propose a new theoretical and empirical framework based on a heterogeneous agents model in which fundamentalists and chartists co-exist and are subject to regret and uncertainty. We find significant evidence that energy markets are composed by heterogeneous traders which behave differently depending on the intensity of the price fluctuations and uncertainty context. In particular, energy prices are mainly governed by fundamental and chartist neutral agents during normal times whereas they face to irrational chartist averse investors during extreme fluctuations periods. In this context, the recent energy prices surge can be viewed as the consequence of irrational exhuberance. Our new theoretical model outperforms the random walk in out-of-sample predictive ability.
    Keywords: Energy Forward Prices, Financialization, Heterogeneous Agents, Uncertainty Aversion, Regret
    JEL: Q43 G15 D81
    Date: 2013–04
  5. By: Hübler, Michael; Löschel, Andreas
    Abstract: We carry out a detailed CGE (Computable General Equilibrium) analysis of the EU Decarbonisation Roadmap 2050 on a macroeconomic and on a sectoral level. Herein, we study a Reference scenario that implements existing EU policies as well as 3 unilateral and 3 global climate action scenarios. We identify global climate action with international emissions trading and the ful l equalization of CO2 prices across all (EU) sectors as a reasonable policy option to avoid additional costs of the Decarbonisation Roadmap to a large extent. This policy option may include CDM (Clean Development Mechanism in the sense of 'where'-flexibility) in an extended form if there are countries without emissions caps. Moreover, we identify diverse sectoral effects in terms of output, investment, emissions and international competitiveness. We conclude that the successful realization of the EU Decarbonisation Roadmap probably requires a wise and joint consideration of technology, policy design and sectoral aspects. --
    Keywords: EU,Decarbonisation Roadmap,Copenhagen Pledges,post Kyoto,energy-intensive sectors,competitiveness,leakage
    JEL: C68 F18 Q43 Q54
    Date: 2013
  6. By: Lundgren, Tommy (CERE, Centre for Environmental and Resource Economics); Marklund, Per-Olov (CERUM, Centre for Regional Science); Samakovlis, Eva (National Institute of Economic Research); Zhou, Wenchao (CERUM, Centre for Regional Science)
    Abstract: How to significantly decrease carbon dioxide emissions has become one of the largest challenges faced by modern society. The standard recipe prescribed by most economists is to put a price on carbon, either through a tax or through emissions trading. Such measures can reduce emissions cost-effectively and create incentives for technological development. There is, however, a growing concern that the carbon prices generated through the European Union emission trading system (EU ETS) have been too low to create the incentives necessary to stimulate technological development. This paper empirically analyzes how the Swedish carbon dioxide tax and the EU ETS have affected productivity development in the Swedish pulp and paper industry 1998-2008. A Luenberger total factor productivity (TFP) indicator is computed using data envelopment analysis. How the policy measures affect TFP is assessed using a system generalized method of moments estimator. The results show that climate policy had a modest impact on technological development in the pulp and paper industry, and if significant it has been negative. The price on fossil fuels, on the contrary, seems to have created important incentives for technological development. Hence, results suggest that the carbon prices faced by the industry through EU ETS and the carbon dioxide tax have been too low.
    Keywords: CO2 tax; EU ETS; Luenberger productivity indicator; GMM
    JEL: D22 D24 Q54 Q55 Q58
    Date: 2013–05–02
  7. By: Joëlle Noailly (CIES, Graduate Institute of International and Development Studies, Geneva, Switzerland and CPB Netherlands Bureau for Economic Policy Analysis, The Hague, The Netherlands); Roger Smeets (Rutgers Business School, Newark, USA)
    Abstract: This paper investigates the determinants of directed technical change in the electricity generation sector. We use firm-level data on patents led 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 e orts of large mixed corporations with a long history of FF innovation, targeted R&D policies are likely to be more effective.
    Keywords: Directed Technical Change, Energy, Patents, Firms' Dynamics
    JEL: Q4
    Date: 2013–04
  8. By: Hoel, Michael (Dept. of Economics, University of Oslo)
    Abstract: The focus of the green paradox literature has been either on demand-side climate policies or on effects of technological changes. The present paper addresses the question of whether there also might be some kind of green paradox related to supply-side policies, i.e. policies that permanently remove some of the carbon resources. The conclusion is that there will no green paradox if supply-side climate policies are aimed at high-cost carbon reserves. If instead low-cost reserves are removed, the possibility that both early and total emissions increase cannot be ruled out. Hence, "wrong" supply-side climate policies may give a supply-side green paradox.
    Keywords: Climate; Green paradox
    JEL: Q30 Q38 Q54 Q58
    Date: 2013–04–23
  9. By: Aaditya Mattoo (World Bank); Arvind Subramanian (Peterson Institute for International Economics)
    Abstract: Generating technological progress requires deploying the full range of policy instruments, including those related to trade policy. The authors consider four areas: subsidization of green goods and technologies; border-tax adjustments (BTAs) related to carbon content; restrictions on the export of fossil fuels, especially natural gas; and intellectual property protection of new technologies and products related to climate change. They propose changes to trade rules that would promote climate change goals. The proposed changes have an underlying political economy logic and consistency. Changes would allow global environmental "bads" to be penalized (by permitting border taxes on less clean imports), global environmental goods and technologies to be promoted (by relaxing the constraints on the use of production and export subsidies and strengthening IPR protection), and prevent global environmental "goods" being penalized (by eliminating the export restrictions on natural gas).
    Date: 2013–04
  10. By: Hoel, Michael (Dept. of Economics, University of Oslo); de Zeeuw, Aart (Tilburg University)
    Abstract: For sufficiently low abatement costs many countries might undertake significant emission reductions even without any international agreement on emission reductions. We consider a situation where a coalition of countries does not cooperate on emission reductions but cooperates on the development of new, climate friendly technologies that reduce the costs of abatement. The equilibrium size of such a coalition, as well as equilibrium emissions, depends on the distribution across countries of their willingness to pay for emission reductions. Increased willingness to pay for emissions reductions for any group of countries will reduce (or leave unchanged) the equilibrium coalition size. However, the effect of such an increase in aggregate willingness to pay on equilibrium emissions is ambiguous.
    Keywords: Technology agreement; Coalition stab ility; climate; International agreement
    JEL: C72 F42 O32 Q02
    Date: 2013–01–07
  11. By: Moreaux, Michel; Withagen, Cees
    Date: 2013–04
  12. By: Yamamura, Eiji
    Abstract: This paper examines the influence of government transparency on changing views regarding nuclear energy before and after Japan’s natural and nuclear disaster of 2011. Individual level data were used, covering 45 countries and containing 27,423 observations. It was observed in the majority of countries that the rate of favoring nuclear energy declined after the disaster. However, empirical results show that such a tendency is less likely to be observed in a more transparent country. This implies that views regarding nuclear energy were less elastic to the news of the Fukushima incident when people were more certain about nuclear energy prior to the Fukushima incident.
    Keywords: Nuclear energy, persuasion, information, transparency, learning, Fukushima accident.
    JEL: D73 D82 H12 Q54
    Date: 2013–04–23
  13. By: Haikel Khalfallah (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); Vincent Rious (Microeconomix - Microeconomix)
    Abstract: In this paper we study the economic consequences of two real-time electricity market designs (with or without penalties) taking into account the opportunistic behaviors of market players. We implement a two-stage dynamic model to consider the interaction between the forward market and the real-time market where market players compete in a Nash manner and rely on supply/demand function oligopoly competition. Dynamic programming is used to deal with the stochastic environment of the market and the mixed complementarity problem is employed to find a solution to the game. Numerical examples are presented to illustrate how the optimal competitor's strategies could change according to the adoption or no adoption of a balancing mechanism and to the level of the penalty imposed on imbalances, regarding a variety of producers' cost structures. The main finding of this study is that implementing balancing mechanisms would increase forward contracts while raising electricity prices. Moreover, possible use of market power would not be reduced when imbalances are penalized.
    Keywords: Electricity markets ; balancing mechanisms ; supply function equilibrium ; mixed complementarity problem
    Date: 2013–01
  14. By: Asche, Frank (UiS); Dahl, Roy Endre (UiS); Oglend, Atle (UiS)
    Abstract: During the last decade, Value-at-Risk (VaR) has become the most common tool to measure the exposure to short term financial risk for companies in the oil industry, in common with most other sectors. However, VaR has been criticized after the financial crisis for providing too optimistic risk estimates and allowing portfolio managers with inflated credit lines. The crisis hit companies extracting natural resources hard, and the oil and gas industry experienced a severe fall in prices, with Brent oil dropping from 40 to below 0 in just 6 months. During events like the financial crisis, companies need to rely on precise risk estimates to adjust their positions. We show that when asset prices are highly correlated, a typical feature in the oil and gas industry, companies are vulnerable to inaccurate estimates. The findings are also compared to a theoretical study using Monte Carlo.
    Keywords: Value-at-Risk; Correlation; Oil; Diversification; Gas; Subordination
    JEL: C10 C50 G10 G30
    Date: 2013–04–29
  15. By: Katrin Schmitz; Christoph Weber (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen)
    Abstract: Germany’s nuclear phase out and an increasing share of fluctuating RES production amplifies the North-South congestion problem in the German electricity grid. But congestion management becomes a serious issue not only in the German but in the whole European electricity system as German wind production does not only affect the German grid. In theory it is well established that nodal pricing is the most efficient congestion management method. In literature the PJM well-established nodal market design often serves as a reference and is viewed as benchmark. To benefit from experiences made in the U.S. the transfer of the PJM market design to Germany could be advantageous. This article compares key elements of the generation mix, the network structure, the cross-border interconnection as well as the congestion situation of both electricity markets to assess potentials and impediments for an implementation of the PJM nodal market design in Germany. We show that both markets are less different in structure than expected but that large differences in performance respectively in congestion frequency lead probably to much lower welfare gains. Transfer of the PJM market design to Germany is possible in principle, but adjustments to RES would be ad-vantageous.
    Keywords: Nodal Pricing, Market Design, Electricity Markets
    Date: 2013–04
  16. By: Michael Plante
    Abstract: Many developing and emerging market countries have subsidies on fuel products. Using a small open economy model with a non-traded sector I show how these subsidies impact the steady state levels of macroeconomic aggregates such as consumption, labor supply, and aggregate welfare. These subsidies can lead to crowding out of non-oil consumption, inefficient inter-sectoral allocations of labor, and other distortions in macroeconomic variables. Across steady states aggregate welfare is reduced by these subsidies. This result holds for a country with no oil production and for a net exporter of oil. The distortions in relative prices introduced by the subsidy create most of the welfare losses. How the subsidy is financed is of secondary importance. Aggregate welfare is significantly higher if the subsidies are replaced by lump-sum transfers of equal value.
    Keywords: Fiscal policy
    Date: 2013
  17. By: Alexei Kudrin (Gaidar Institute for Economic Policy)
    Abstract: This article examines the problems of implementing monetary and credit policy when there is significant flow of currency revenues from the export of raw materials. It argues that, given a strong balance of payments, the Central Bank has to accept either a strengthening of the rouble or inflation. Only the RF Government has the power to prevent an appreciation of the currency whilst at the same time controlling inflation. This dual task can be achieved by saving, when external economic conditions are favourable, a share of the revenues from oil and gas in reserve funds. Such a policy can create the foundations for macroeconomic stability and a favourable investment climate.
    Keywords: monetary and credit policy, oil and gas dependency “Dutch disease”, reserve fund, inflation
    JEL: E52 E58 E61
    Date: 2013
  18. By: Peter J. Wood; Peter Heindl; Frank Jotzo; Andreas Löschel
    Abstract: This paper examines the linking of price-based and quantity-based provision of a public good by two parties in the example of pollution control under a global quantity constraint, using a stochastic partial-equilibrium model. One country chooses a price-based instrument (tax) and trades with another that lets its emissions price adjust. The expected cost for the price-setting country and the combined expected cost is higher than if both countries choose a quantity-based instrument, and the country with the quantity instrument stands to benefit in terms of expected net costs. The effect increases when the relative size of the country with the pice-based constraint increases; and increases with respect to the degree of correlation in ex-ante uncertain abatement costs. While the quantity-setting country benefits from lower expected costs in most circumstances, the variance in cost can be much higher if its costs are correlated with the pricesetting country. The optimal ex-ante tax rate differs from that under quantity-quantity linking. These results have important implications for instrument choice for the regulation of greenhouse gases and other pollutants and for the design of international agreements when there are domestic preferences for price
    Keywords: Instrument Choice; Linking; Climate Policy; Prices vs. Quantities
    JEL: Q52 H23 K32
    Date: 2013–04
  19. By: Shahbaz, Muhammad; Abosedra, Salah; Sbia, Rashid
    Abstract: This paper investigates the dynamic causal relationship between financial development, energy consumption and economic growth in Lebanon over the period 1993M1-2010M12.Our findings confirm the existence of cointegration among the variables. The results indicate that financial development and energy consumption, contribute to economic growth in Lebanon. The impact of energy consumption on economic growth is positive showing the significance of energy as a main stimulant of economic growth. Financial development is also found to play a vital role in enhancing economic growth. Economic growth and financial development also add in energy consumption. The study, therefore, recommends that in short run, policy makers should put more emphasis in developing strategies that would result in achieving higher mobilization of savings in order to boost Lebanese investors’ confidence and to also attract more foreign investment in Lebanon. Furthermore, desired financial policy to encounter the rising demand for energy by enhancing the process of capitalization of the energy sector is also very desirable. Our results further cautions of the use of policy tools geared towards restricting energy consumption in short run, something that is called for as part of national energy policy, as these may result in lower economic growth. Such conservation policies should be taken gradually and carefully as to not negatively impact the growth of the economy. However, in long run, the Lebanese government should shift its focus towards achieving higher economic growth, in order to boost its financial development and to sustain a steady flow of needed energy. In this regards, policymakers should put emphasis on the development of domestic energy resources to protect the country from any undesirable external energy shock given its extensive dependence on energy imports.
    Keywords: Economic growth, financial development, energy consumption
    JEL: C5 O1 O11
    Date: 2013–04–20
  20. By: Vincent Martinet
    Abstract: Biofuel policies (blend mandate or tax credit) have impacts on food and energy prices, and on land-use. The magnitude of these effects depends on the market response to price, and thus on the agricultural supply curve, which, in turn, depends on the land availability (quantity and agronomic quality). To understand these relationships, we develop a theoretical framework with an explicit representation of land heterogeneity. The elasticity of the supply curve is shown to be non-constant, depending on land heterogeneity and the availability of land for agricultural expansion. This influences the welfare economics of biofuels policies, and the possible carbon leakage in land and fuel markets. We emphasize that the impacts of biofuel policies on welfare and land-use change depend strongly on the potential development of the agricultural sector in terms of expansion and intensification, and not only on its current size.
    Keywords: Agricultural and energy market, Biofuels, Land use, Soil heterogeneity, Welfare
    Date: 2012–03–05
  21. By: Johannes Emmerling (Fondazione Eni Enrico Mattei (FEEM) and Centro-Euro Mediterraneo per i Cambiamenti Climatici (CMCC), Italy); Massimo Tavoni (Fondazione Eni Enrico Mattei (FEEM) and Centro-Euro Mediterraneo per i Cambiamenti Climatici (CMCC), Italy)
    Abstract: The potential of geoengineering as an alternative or complementary option to mitigation and adaptation has received increased interest in recent years. The scientific assessment of geoengineering is driven to a large extent by assumptions about its effectiveness, costs, and impacts, all of which are highly uncertain. This has led to a polarizing debate. This paper evaluates the role of Solar Radiation Management (SRM) on the optimal abatement path, focusing on the uncertainty about the effectiveness of SRM and the interaction with uncertain climate change response. Using standard economic models of dynamic decision theory under uncertainty, we show that abatement is decreasing in the probability of success of SRM, but that this relation is concave and thus that significant abatement reductions are optimal only if SRM is very likely to be effective. The results are confirmed even when considering positive correlation structures between the effectiveness of geoengineering and the magnitude of climate change. Using a stochastic version of an Integrated Assessment Model, the results are found to be robust for a wide range of parameters specification.
    Keywords: Geoengineering, Mitigation, Climate Policy, Uncertainty
    JEL: Q54 C63 D81
    Date: 2013–04
  22. By: O. Ashton Morgan; John C. Whitehead; William L. Huth; Gregory S. Martin; Richard Sjolander
    Abstract: A natural experiment setting is exploited to develop a unique dataset of oyster consumer actual and anticipated behavior immediately prior to and following the BP Deepwater Horizon oil spill. Using data from a repeat sample of oyster consumers, a pre and post-spill revealed and stated preference model allows both a short and longer-term response to the spill to be investigated. Findings indicate that, as expected, the BP spill had a negative impact on oyster demand in terms of short-run actual behavior, although spill effects show signs of dissipating several months following the spill. However, by accounting for unobserved heterogeneity in the sample, findings further indicate that short and longer-term spill responses differ across consumer groups. For the larger consumer groups, the negative spill effects continue over the longer-term horizon, while other groups are either non-responsive or increase consumption following news of the spill. Key Words: Consumer behavior, BP oil spill, revealed and stated preference, latent class analysis
    JEL: Q51 Q10 Q22
    Date: 2013
  23. By: Balázs Égert
    Abstract: This study seeks to determine the extent to which the former communist states of Central and South-West Asia are “infected” by the Dutch Disease. We take a detailed look at the functioning of the transmission mechanism of the Dutch Disease, i.e. the chains that run from commodity prices to real output in manufacturing. We complement this with two econometric exercises. First, we estimate nominal and real exchange rate models to see whether commodity prices are correlated with the exchange rate. Second, we run growth equations to analyse the possible effects of commodity prices and the dependency of economic growth on natural resources.
    Keywords: Oil price Dutch Disease; Real exchange rate Natural resource; Economic growth
    JEL: E31 F31 O11 P17
    Date: 2013
  24. By: Ternyik, Stephen I.
    Abstract: The Snooks/Panov curve is discussed, concerning the economic history of human societies as energy transduction systems. A first formalization and mathematization of world system energetics proposed.
    Keywords: transduction; energetics; economic history; quantization
    JEL: B41
    Date: 2013–04–26
  25. By: Mulder, Machiel; Kuper, Gerard (Groningen University)
    Abstract: We estimate the contribution of institutional changes in the Dutch and German gas markets to the integration of these markets. We measure this contribution through the impact of bottlenecks in the cross-border infrastructure on cross-border price differences. In the period 2007-2011, the differences in both price levels and price volatility between these two markets decreased. We find evidence that institutional changes in the Dutch market, in particular the abolishment of the obligation to book quality-conversion capacity, have reduced the impact of cross-border infrastructure bottlenecks on regional price differences. The integration of German regional networks into larger systems, however, appear to have had a negative effect on the integration with the Dutch market.
    Date: 2013
  26. By: Damte, Abebe; Koch, Steven F.; Mekonnen, Alemu
    Abstract: This study uses survey data from randomly selected rural households in Ethiopia to examine the coping mechanisms employed by rural households to deal with fuelwood scarcity. The determinants of collecting other biomass energy sources were also examined. The results of the empirical analysis show that rural households in forest-degraded areas respond to fuelwood shortages by increasing their labor input for fuelwood collection. However, for households in high forest cover regions, forest stock and forest access may be more important factors than scarcity of fuelwood in determining household’s labor input to collect it. The study also finds that there is limited evidence of substitution between fuelwood and dung, or fuelwood and crop residue. Therefore, supply-side strategies alone may not be effective in addressing the problem of forest degradation and biodiversity loss. Any policy on natural resource management, especially related to rural energy, should distinguish regions with different levels of forest degradation.
    Keywords: fuelwood, labor allocation, biomass, rural Ethiopia
    JEL: Q12 Q21 Q42
    Date: 2012–01–27
  27. By: Cette, G.; de Jong, M.
    Abstract: The inflation and the real yield component deduced from inflation-linked and nominal bond prices are adversely affected by two market effects: price distortions due to certain market-related events and oil price movements. Their underlying time-correlation without those effects is stable and positive. Market data analysis carried out on the world’s major bond markets gives valuable new insight into the long-debated relationship between inflation and growth prospects.
    Keywords: inflation-linked bonds, breakeven inflation, Fisher hypothesis, Brent.
    JEL: E43 G15
    Date: 2013

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