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on Energy Economics |
| By: | Solier, Boris |
| Keywords: | Supply and demand; Zephyr- Switch simulation model; electricity; EU ETS; European Union CO2 emissions trading scheme; |
| JEL: | L94 Q56 Q52 Q41 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/12031&r=ene |
| By: | Keppler, Jan Horst; Cometto, Marco |
| Keywords: | Technological Innovation; electricity system; nuclear power; renewable energy; |
| JEL: | Q55 Q53 Q27 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/11199&r=ene |
| By: | Hyland, Marie; Leahy, Eimear; Tol, Richard S. J. |
| Keywords: | electricity/Ireland |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb2013/3/1&r=ene |
| By: | Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Specht, Jan Martin (RWTH Aachen University) |
| Abstract: | In Germany, the mitigation of CO2 emissions as well as the nuclear power phase-out are important political goals in the course of the sustainable energy transformation process (so-called “Energiewende”). The reduction in fossil- and nuclear-based energy supply has to be compensated by new renewable energies, especially wind power and photovoltaics. Most of the existing studies find that such an increasing contribution from volatile renewables calls for an intensified use of massive energy storage [1]. Conventional technologies for this purpose are pumped-storage hydro power (PSHP) facilities. Typically, these require a storage reservoir on top of a mountain and another one at the bottom. In Germany, unfortunately, suitable sites are quite rare and the constructional measures often have a negative impact on the landscape and the ecosphere, which often induces public resistance. A possible future solution might be the use of underground PSHP (UPSHP) plants, for example, in closed-down mines. This study constitutes an early attempt to model such plants, in order to assess and better understand the economic viability of such underground UPSHP power plants in closed down coal mines. First, we examine the topic from a technical perspective, which is followed by an economic analysis. In the technical assessment, we analyze the feasibility of building an underground reservoir, installing the pressure pipes in the main shaft and equipping the machine cavern with turbines and pumps. In the economic examination, the expected costs for building a UPSHP are calculated. A rough comparison between the costs of a classic and a UPSHP plant is made that also includes the costs of redesigning and reconstructing the underground reservoir. Based on the techno-economic evaluation, we conclude that under favorable conditions the realization of UPSHP plants seems both technically feasible and economically reasonable. More specifically, an extension of a tube system seems the most promising option. We also find that a PSHP plant in a mine shaft is probably slightly more expensive than a conventional one, an outcome that depends strongly on the feasible head. Also, the significant reduction of the adverse impacts on the landscape and local residents could be an advantage. In addition, the number of potential sites might be quite large compared to those for conventional PSHP plants. |
| Keywords: | Hydro power; pumped storage; coal mining; reservoir engineering; massive energy storage |
| Date: | 2013–02 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2013_002&r=ene |
| By: | James Carroll (Department of Economics, Trinity College, Dublin); Seán Lyons (Economic and Social Research Institute); Eleanor Denny (Department of Economics, Trinity College, Dublin) |
| Abstract: | The international rollout of residential smart meters has increased considerably in recent years. The improved consumption feedback provided, and in particular, the installation of in-house displays, has been shown to significantly reduce residential electricity demand in some international trials. This paper attempts to uncover the underlying drivers of such information-led reductions by exploring two research questions. First, does feedback improve a household’s knowledge of energy reducing behaviors? And second, do knowledge improvements explain demand reductions? Data is from a randomized controlled smart metering trial (Ireland) which also collected extensive information on household attitudes towards and knowledge of electricity use. Results show that feedback significantly increases a household’s knowledge but improvements are not correlated with observed demand reductions. Increasing the level of knowledge ceteris paribus is therefore unlikely to bring short-run demand reductions in residential electricity markets. Given this result, it is possible that feedback acts mainly as a reminder and motivator, rather than an educational tool |
| Keywords: | Residential Electricity Demand; Smart Meters; Consumption Feedback; Household Knowledge; Conservation Motivations |
| JEL: | Q40 Q41 Q48 D83 D80 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep0313&r=ene |
| By: | Simon Hagemann |
| Abstract: | This paper presents a first investigation of hourly price determinants in the German intraday market for electricity. The influence of power plant outages, forecast errors of wind and solar power production, load forecast errors and foreign demand and supply on intraday prices are explained from a theoretical perspective. Furthermore the influences of the non-linear merit-order shape, ramping costs and strategic market behavior are discussed. The empirical results from different regression analysis with data from 2010 and 2011 show that most price determinants increase and decrease intraday prices as expected. Nevertheless, only a minor share of power plant outages and solar power forecast errors are traded on the electronic intraday trading platform, thus influencing prices not as strongly as expected. Furthermore the price determinants influence intraday prices differently over the course of the day which may be explained by an alternating liquidity provision. |
| Keywords: | Intraday market for electricity, price modeling, price determinants |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:dui:wpaper:1318&r=ene |
| By: | Anna Kowalska-Pyzalska; Katarzyna Maciejowska; Katarzyna Sznajd-Weron; Karol Suszczynski; Rafal Weron |
| Abstract: | Using an agent-based modeling approach we study the temporal dynamics of consumer opinions regarding switching to dynamic electricity tariffs and the actual decisions to switch. We assume that the decision to switch is based on the unanimity of $\tau$ past opinions. The resulting model explains why there is such a big discrepancy between consumer opinions, as measured by market surveys, and the actual participation in pilot programs and the adoption of dynamic tariffs. We argue that due to the high indifference level in today's retail electricity markets, customer opinions are very unstable and change frequently. The conducted simulation study shows that reducing the indifference level can result in narrowing the intention-behavior gap. A similar effect can be achieved by decreasing the decision time that a consumer takes to make a decision. |
| Keywords: | Dynamic pricing; Demand response; Consumer decisions; Intention-behavior gap; Innovation diffusion; Agent-based model |
| JEL: | C63 O33 Q48 Q55 |
| Date: | 2013–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:wuu:wpaper:hsc1310&r=ene |
| By: | Simona Bigerna; Carlo Andrea BOLLINO |
| Abstract: | In the existing literature only recently there has been attention to consumer demand for electricity in organized markets. In this paper we assume a theoretical model of demand behavior and we estimate a complete system for hourly electricity demand. We use individual demand bid data in the Italian Power Exchange (IPEX). The novel contribution of this paper is twofold. Firstly we construct a theory based behavioral model of hourly electricity demand for agents acting in the Italian market; secondly we measure empirically demand behavior at hourly level, i.e. expenditure and price elasticities directly from consumer behavior. Econometric estimation of a multi-stage demand system weakly separable allows us to identify three robust results, showing that: (i) own price elasticity varies significantly with time of the day as well as according to the level of equilibrium price, (ii) hourly electricity demand exhibits both complementarity and substitutability characteristics, (iii) unconditional elasticity values are different from conditional ones, thus confirming validity of multistage model. On the basis of econometric estimations we can ascertain that elasticity tends to be generally higher when hourly price peak. Considering price elasticity, electricity exhibits both substitutability and complementarity characteristic in different hours of the day, the former during the day and the latter during the night. Considering expenditure elasticity, electricity appears to be a normal good during night time and a luxury good during day time. Policy implications are interesting, because appropriate regulation can favor consumer behavior adjustment shaving consumption away from peak prices, thus yielding lower aggregate equilibrium expenditures because consumers can shift more easily their consumption from peak price hours to off peak price. So we advocate reforming the actual dual administered price structure to introduce real time pricing options for Italian consumers. |
| Date: | 2013–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:pia:wpaper:121/2013&r=ene |
| By: | Yoosoon Chang; Yongok Choi; Chang Sik Kim; Joon Y. Park; J. Isaac Miller (Department of Economics, University of Missouri-Columbia) |
| Abstract: | We introduce a panel model with a nonparametric functional coefficient of multiple arguments. The coefficient is a function both of time, allowing temporal changes in an otherwise linear model, and of the regressor itself, allowing nonlinearity. In contrast to a time series model, the effects of the two arguments can be identified using a panel model. We apply the model to the relationship between real GDP and electricity consumption. Our results suggest that the corresponding elasticities have decreased over time in developed countries, but that this decrease cannot be entirely explained by changes in GDP itself or by sectoral shifts. |
| Keywords: | semiparametric panel regression, partially linear functional coefficient model, elasticity of electricity demand |
| JEL: | C33 C51 C53 Q41 |
| Date: | 2013–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:umc:wpaper:1320&r=ene |
| By: | Antje-Mareike Dietrich (Institute of Transport Economics, Muenster); Gernot Sieg (Institute of Transport Economics, Muenster) |
| Keywords: | environmental externalities, network effects, private transport, technological change |
| JEL: | L92 Q55 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:mut:wpaper:20&r=ene |
| By: | Elcin Akcura (EBRD) |
| Abstract: | Consumers constantly make decisions about the goods and services they purchase, and in most cases they do this with incomplete information. Many products that are available in stores, in catalogues, or over the internet are not accompanied by a full list of attributes or technical specifications. Such a lack of information is most apparent in non-market goods, such as with regard to utility service attributes. This paper examines information effects on consumers’ willingness to pay (WTP) for a number of electricity and water attributes, using two contingent valuation surveys administered in the United Kingdom. The attributes considered include WTP for a carbon cleaner electricity fuel mixture, and increasing security of supply. The results indicate that the quantity and complexity of information can potentially lead to individuals ignoring the information presented. The relevance of the attribute to the respondent is found to be a significant motivator in the processing of the information presented. The survey data also reveal a number of socio-economic, attitudinal and behavioural factors that affect WTP for the attributes considered. |
| Keywords: | Contingent Valuation Method, Blackouts, Information Effect, Willingness to Pay, Zero Inflated Ordered Probit Model |
| JEL: | C35 D10 D12 D80 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ebd:wpaper:160&r=ene |
| By: | Jouvet, Pierre-André; Solier, Boris |
| Abstract: | This paper investigates the link between wholesale electricity prices in Europe and the CO2 cost, i.e. the price of European Union Allowances (EUAs), over the two first phases of the European Union Emissions Trading Scheme (EU ETS). We set up a theoretical framework and an empirical model to estimate to what extent daily fluctuations of CO2 costs may have impacted electricity prices. Regarding estimation results for the first phase of the EU ETS, about 42% of estimated pass-through rates appear to be statistically significant, while only one third of them are statistically different from zero in the second phase. We try to improve those results by proposing alternative estimates based on the EU ETS compliance periods. |
| Keywords: | European Union Emissions Trading Scheme; EU ETS; spot markets; |
| JEL: | L94 G1 C58 C22 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/7761&r=ene |
| By: | Natalia Fabra; Mar Reguant |
| Abstract: | We measure the pass-through of emissions costs to electricity prices and explore its determinants. We perform both reduced-form and structural estimations based on optimal bidding in this market. Using rich micro-level data, we estimate the channels affecting pass-through in a flexible manner, with minimal functional form assumptions. Contrary to many studies in the general pass-through literature, we find that emissions costs are almost fully passed-through to electricity prices. Since electricity is traded through high-frequency auctions for highly inelastic demand, firms have weak incentives to adjust markups after the cost shock. Furthermore, the costs of price adjustment are small. |
| JEL: | D44 L13 L94 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19613&r=ene |
| By: | Villeneuve, Bertrand |
| Abstract: | The paper models a program of high‐activity nuclear‐waste management. The physics of cooling incites to store hot waste for a while to spare scarce disposal volume: indeed, colder parcels may be put in tighter conditions. The optimal unconstrained duration of storage is characterized. Various constraints (on disposal capacity, on the length of storage, on storage capacity) are considered. They all lead to contrasted strategies depending on vintage. |
| Keywords: | déchets nucléaires; durée d’entreposage; stockage; contrainte de capacité; |
| JEL: | Q49 L94 R32 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/11179&r=ene |
| By: | Gillingham, Kenneth; Palmer, Karen (Resources for the Future) |
| Abstract: | Despite several decades of government policies to promote energy efficiency, estimates of the costs and benefits of such policies remain controversial. At the heart of the controversy is whether there is an "energy efficiency gap," whereby consumers and firms fail to make seemingly positive net present value energy saving investments. High implicit discount rates, undervaluation of future fuel savings, and negative cost energy efficiency measures have all been discussed as evidence of the existence of a gap. We review explanations for an energy efficiency gap, including reasons why the size of the gap may be overstated, neoclassical explanations for a gap, and recent evidence from behavioral economics that has potential to help us understand why a gap could exist. Our review raises fundamental questions about traditional welfare analysis, yet we find the alternatives offered in the literature to be far from ready for use in policy analysis. Nevertheless, we offer several suggestions for policymakers and for future economic research. |
| Keywords: | energy efficiency, market failures, behavioral failures, behavioral economics |
| JEL: | Q38 Q41 |
| Date: | 2013–10–17 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-13-02-rev&r=ene |
| By: | Manuel Frondel; Colin Vance |
| Abstract: | Using household travel diary data collected in Germany between 1997 and 2012, we employ an instrumental variable (IV) approach to estimate fuel price and efficiency elasticities. The aim is to gauge the relative impacts of fuel economy standards and fuel taxes on distance traveled. We find that the magnitudes of the elasticity estimates are statistically indistinguishable: higher fuel prices reduce driving by the same degree as higher fuel efficiency increases driving. This finding indicates an offsetting effect of fuel efficiency standards on the effectiveness of fuel taxation, calling into question the efficacy of the European Commission’s current efforts to legislate CO2 emissions limits for new cars given prevailing high fuel taxes. |
| Keywords: | Automobile travel; panel estimation models; rebound effect |
| JEL: | D13 Q41 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0445&r=ene |
| By: | Linn, Joshua (Resources for the Future) |
| Abstract: | The United States and many other countries are dramatically tightening fuel economy standards for passenger vehicles. Higher fuel economy reduces per-mile driving costs and may increase miles traveled, known as the rebound effect. The magnitude of the elasticity of miles traveled to fuel economy is an important parameter in welfare analysis of fuel economy standards, but all previous estimates impose at least one of three behavioral assumptions: (a) fuel economy is uncorrelated with other vehicle attributes; (b) fuel economy is uncorrelated with attributes of other vehicles owned by the household; and (c) the effect of gasoline prices on vehicle miles traveled is inversely proportional to the effect of fuel economy. Relaxing these assumptions yields a large effect; a one percent fuel economy increase raises driving 0.2 to 0.4 percent. |
| Keywords: | fuel economy standards, passenger vehicles, vehicle miles traveled, household driving demand |
| JEL: | Q52 R22 R41 |
| Date: | 2013–11–08 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-13-19-rev&r=ene |
| By: | Li, Xiaogu; Clark, Christopher D; Jensen, Kimberly L; Yen, Steven T |
| Abstract: | This study examines how a $50 mail-in rebate influences consumer willingness-to-pay for an ENERGY STAR-certified refrigerator. Data collected from a 2009 U.S. online survey containing a hypothetical choice experiment. Results suggest that a rebate induces uncertainty about the quality of ENERGY STAR-certified refrigerators and, thus, could actually reduce willingness-to-pay. |
| Keywords: | Choice Experiment, Eco-label, Energy Star, Generalized Multinomial Logit, Ordered Probit, Rebate, Refrigerator, Willingness-to-Pay, Environmental Economics and Policy, Q58, D12, |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea14:159795&r=ene |
| By: | Miklós Antal; Jeroen van den Bergh |
| Abstract: | Energy conservation is widely accepted as an important strategy to combat climate change. It can, nevertheless, stimulate new energy uses that partly offset the original savings. This is known as rebound. One particular rebound mechanism is re-spending of money savings associated with energy savings on energy intensive goods or services. We calculate the average magnitude of this “re-spending rebound” for different fuels and countries. We find that emerging economies, neglected in past studies, typically have substantially larger rebounds than OECD countries. The effect is generally stronger for gasoline than for natural gas and electricity. Paradoxically, strengthening financial incentives to conserve energy tends to increase rebound. This is expected to gain importance with climate regulation and peak oil. We discuss the policy implications of our findings. |
| Keywords: | Rebound effect, re-spending, emerging economies |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfeppr:y:2013:m:11:d:0:i:8&r=ene |
| By: | Flavio Menezes (School of Economics, The University of Queensland); Joisa Dutra; Xuemei Zheng |
| Abstract: | This paper examines the incentives embedded across different regulatory regimes – price cap, rate of return and mandated target regulation – for investment in energy efficiency programs at the supplier’ end of the network. In our model, s a monopolist chooses whether or not to undertake an investment in energy efficiency, which is not observable by the regulator. We explore how the monopolist’ s choice of effort changes under different regulatory regimes. We show that, in equilibrium, the monopolist chooses to exert positive effort more often under price cap regulation than under no regulation or mandated target regulation and that she exerts no effort under rate of return regulation. In terms of expected welfare, however, the results are ambiguous and complex. In particular, we provide a full characterisation of the optimal effort, optimal prices (regulated or unregulated) and expected welfare for the different regimes and show the trade-offs between rent extraction and incentives. |
| Date: | 2013–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uq2004:495&r=ene |
| By: | Amigues, Jean-Pierre; Ayong Le Kama, Alain; Chakravorty, Ujjayant; Moreaux, Michel |
| Abstract: | We study the transition between non renewable and renewable energy sources with adjustment costs over the production capacity of renewable energy. Assuming constant variable marginal costs for both energy sources, convex adjustment costs and a more expensive renewable energy, we show the following. With sufficiently abundant non renewable energy endowments, the dynamic equilibrium path is composed of a first time phase of only non renewable energy use followed by a transition phase substituting progressively renewable energy to non renewable energy and a last time phase of only renewable energy use. Before the complete transition towards renewable energy, the energy price follows a Hotelling like path. Depending upon the shape of adjustment costs, investment into renewable energy may either begin before production of renewable energy or be delayed until the energy price achieves a sufficient gap with respect to the renewable energy marginal production cost. In all cases, the renewable energy sector bears negative returns over its investments in its early stage of development. Investment into renewable energy production capacity building first increases before having to decrease strictly before the depletion time of the non renewable resource. Renewable energy capacity continues to expand afterwards but at a forever decreasing rate converging to zero in the very long run. The development path of renewable energy may be largely independent from the non renewable resource scarcity. In particular with initially abundant non renewable energy, the length of the transition phase between non renewable and renewable energy together with the accumulated renewable production capacity at the end of this phase do not depend upon the scarcity rent of the non renewable resource and of the initial size of the resource stock. |
| Keywords: | non renewable resource, renewable energy, adjustment costs, resources transition, capacity constraints. |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:27705&r=ene |
| By: | Chèze, Benoit; Chevallier, Julien; Gastineau, Pascal |
| Abstract: | The aim of this article is to investigate whether anticipated technological progress can be expected to be strong enough to offset carbon dioxide (CO2)emissions resulting from the rapid growth of air transport. Aviation CO2 emissions projections are provided at the worldwide level and for eight geographical zones until 2025. Total air traffic flows are first forecast using a dynamic panel-data econometric model and then converted into corresponding quantities of air traffic CO2 emissions, through jet fuel demand forecasts, using specific hypothesis and energy factors. None of our nine scenarios appears compatible with the objective of 450 ppm CO2-eq. (a.k.a. “scenario of type I”) recommended by the Intergovernmental Panel on Climate Change (IPCC). None is either compatible with the IPCC scenario of type III, which aims at limiting global warming to 3.2◦C. Thus, aviation CO2 emissions are unlikely to diminish over the next decade unless there is a radical shift in technology and/or travel demand is restricted. |
| Keywords: | Air transport; CO2 emissions; Forecasting; Climate change; |
| JEL: | C53 L93 Q47 Q54 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/9262&r=ene |
| By: | Anabela Botelho (NIMA, Universidade do Minho); Lígia M.Costa Pinto (NIMA, Universidade do Minho); Patricia Sousa (NIMA, Universidade do Minho) |
| Abstract: | Wind energy is currently one the most important energy sources in the production of electricity. In this study, we use the CVM to elicit the monetary value attached to wind power’s environmental impacts from three different groups of individuals: local residents, residents in a nearby town, and residents outside the area of a wind farm located in Portugal, one of the top 10 countries in the world with the highest cumulative wind power capacity to date. In each case, our empirical analysis employs a novel likelihood function that is constructed to be appropriate for the type of data collected. The main results are supportive of a NYMBY effect, but also indicate that the amount needed to compensate local residents for the negative impacts caused by the wind farm can be raised by the constitution of a compensation fund paid by non-residents, thereby overcoming the inefficiency caused by the NYMBY effect. |
| Keywords: | Contingent Valuation, uncertainty, renewable energy; Stochastic frontier models; Willingness to pay/accept; hypothetical bias |
| JEL: | Q50 Q51 C29 Q40 Q58 Q53 |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:nim:nimawp:52/2013&r=ene |
| By: | Elcin Akcura (EBRD) |
| Abstract: | Renewable energy sources have a critical role to play in contributing to the diversity, sustainability and security of energy supplies. The main objective of the paper is to gain an understanding of the support mechanism of renewable energy sources most preferred by households in the United Kingdom. This paper analyses households’ preferences and willingness to pay under a mandatory scheme where all households contribute compared to a voluntary scheme where only those who wish to pay to support renewables do so (such as the green tariffs offered by electricity suppliers in the UK). Two self-designed contingent valuation method (CVM) surveys are used to explore whether the type of payment option has an impact on households’ willingness to pay (WTP) for increasing share of renewable energy in electricity generation. The paper also investigates whether the type of payment mode affects respondents’ self-reported certainty of paying their stated valuations. The results indicate that the likelihood of paying a positive amount for supporting renewable energy is higher under a mandatory scheme compared to a voluntary payment option in the UK. Respondents have a higher level of certainty in paying their stated WTP under a mandatory payment scheme. |
| Keywords: | contingent valuation method, renewable energy, willingness to pay, zero inflated ordered probit model |
| JEL: | C35 D10 D12 D80 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:ebd:wpaper:161&r=ene |
| By: | Suyash Jolly; Rob Raven |
| Abstract: | With 19550 MW installed in 2013, India is considered a success story in terms of net installed capacity of wind power. Few existing studies on wind energy in India have highlighted the important role of institutions, and most lack a detailed account of how influential institutions came about through the work of advocacy groups, or tend to focus on short time periods. This paper uses the notion of collective institutional entrepreneurship to analyse institutionalisation of wind energy in India across three time periods (1985–1995, 1995-2003, and 2003-2013). The analysis shows that wind power development in India was driven by efforts of collective institutional entrepreneurs using two aggregated strategies, i.e. (1) creation of supportive techno-economic and socio-political networks; (2) creation of an indigenous innovation infrastructure. The paper highlights setbacks, controversies, contestations and tensions between various actor groups in collective institutional entrepreneurship and argues that actions must be taken for inclusion of actors who have been marginalized in the process. |
| Keywords: | wind energy, India, collective institutional entrepreneurship |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:tuecis:wpaper:1310&r=ene |
| By: | Hiroaki Sakamoto |
| Abstract: | In this paper, I investigate the implications of policy-induced technological change based on a multi-region variant of the directed technical change model developed by Acemoglu et al. (2012). On top of the pollution externality accompanied by carbon dioxide emission, different regions are connected through a global market where energy-related machine producing firms monopolistically compete with each other. One of the main findings of the analysis is that unilaterally introduced climate policies in developed regions might have only a slight short-term impact at a global level, but later will turn out to be a basis for low-carbon development in developing regions as well as developed regions. The simulation results indicate that an extension of the Kyoto protocol, if appropriately designed, can trigger a long-term shift in energy use at a global level even without active involvement of the United States. Moreover, if the United States decides to join the treaty and a fairly moderate abatement target is agreed upon among the member states, the similar level of long-term environmental consequence as in the universal climate regime can be replicated without explicit participation of developing regions. |
| Keywords: | Climate change, directed technical change, unilateral policy, innovation, Kyoto protocol |
| JEL: | O31 O33 Q54 Q55 Q58 |
| URL: | http://d.repec.org/n?u=RePEc:kue:dpaper:e-11-007&r=ene |
| By: | Oleksandra Betliy; Veronika Movchan; Mykola Pugachov |
| Abstract: | To date, prices of gas and other energy used by households in Ukraine have been generously subsidized by the Government. However, suppressed energy prices lead to excessive use of gas and an inefficient level of investment into energy savings. In addition, Ukraine’s dependence on imported gas contributes to trade imbalances and growing pressure on the devaluation of the national currency. Thus, the issue of raising gas prices remains critical for the population of Ukraine. In particular, this step was also envisaged in an ambitious reform agenda announced in mid-2010 aimed at restoring stable and high economic growth. However, this policy may have an unprecedented impact on the welfare of population. This paper presents the main findings from the simulation of gas price shocks, provides an overview of social support programs in Ukraine and analyses their efficiency. Based on the analyses, the paper draws two major conclusions. First, increases in gas prices result in welfare losses in all household categories, with a more profound impact on urban households. Second, the current social welfare programs are not very efficient in targeting the poorest households. Reform of the social welfare system is thus required to ensure a safety net for poor households in times of gas price hikes. In order to assist national decisionmakers in solving these issues the paper presents general policy recommendations. |
| Keywords: | gas price shock simulation, welfare programs, social support programs |
| JEL: | I38 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:lvl:pmmacr:2013-12&r=ene |
| By: | De Perthuis, Christian |
| Abstract: | Le « grand débat sur la transition énergétique » lancé par le gouvernement à la suite de la conférence environnementale déploie beaucoup d’énergies et accapare l’attention des médias. Ce qui mobilise désormais, ce n’est plus l’action face au changement climatique, mais la transition énergétique dont le climat ne semble constituer que l’une des composantes. La dérive sémantique, observée en France aussi bien qu’à l’étranger, n’est pas anodine : ce concept à géométrie variable peut en réalité justifier des orientations et stratégies politiques qui se tournent le dos. Il est urgent de définir avec plus de rigueur ce qu’on appelle une transition énergétique et le type de celle qu’on veut mettre en œuvre. Les implications en sont importantes pour la prise de décision comme le montre l’exemple du gaz de schiste pris ici en illustration. |
| Keywords: | Énergie; Stratégie politique; Climat; Changements; |
| JEL: | Q48 Q42 Q58 Q54 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/11144&r=ene |
| By: | Sévi, Benoît; Chevallier, Julien |
| Abstract: | This paper evaluates the predictability of WTI light sweet crude oil futures by using the variance risk premium, i.e. the difference between model-free measures of implied and realized volatilities. Additional regressors known for their ability to explain crude oil futures prices are also considered, capturing macroeconomic, financial and oil-specific influences. The results indicate that the explanatory power of the (negative) variance risk premium on oil excess returns is particularly strong (up to 25% for the adjusted Rsquared across our regressions). It complements other financial (e.g. default spread) and oil-specific (e.g. US oil stocks) factors highlighted in previous literature. |
| Keywords: | Oil Futures; Variance Risk Premium; Forecasting; |
| JEL: | C32 G17 Q47 |
| Date: | 2013–05 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/11714&r=ene |
| By: | Nugumanova, Lyazzat |
| Abstract: | During the last decades the topic of fossil fuel subsidies has been gaining importance in the policy discussion. International Energy Agency (IEA) (2011) estimates that the total global fossil fuel subsidies in 2010 amounted to $409 billion. Kazakhstan is energy-rich country with significantly high subsidies on fossil fuels. Fossil fuel subsidies are a distortion which causes inefficient use of energy and natural resources, high CO2 emissions, distort the energy markets, put pressure on the state budget, and hinder investments into energy sector and renewable energy and thus long-term sustainable development in Kazakhstan. Removing fossil fuel subsidies could be in the long-term beneficial for Kazakhstan. The main research question is to analyze macroeconomic effects of removing current distortions in the energy market using the computable general equilibrium model (CGE), GTAP. The specific objectives are to understand the issue and the extent of fossil fuel subsidies in Kazakhstan, analyze implications of these subsidies, and provide general policy suggestions on this topic. This paper first presents main data on fossil fuel subsidies, energy and environment in Kazakhstan, literature review, methodological approach suitable for this research and expected results. |
| Keywords: | fossil fuel subsidies, Kazakhstan, computable general equilibrium model (CGE), GTAP, Environmental Economics and Policy, International Development, International Relations/Trade, Research Methods/ Statistical Methods, R, Q, O, |
| Date: | 2013–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ugidic:159103&r=ene |
| By: | Kuwayama, Yusuke (Resources for the Future); Olmstead, Sheila; Krupnick, Alan (Resources for the Future) |
| Abstract: | The production of crude oil and natural gas from unconventional reservoirs has become a growth sector within the North American energy industry, and current projections indicate that the production of some of these unconventional fossil fuels will continue accelerating in the foreseeable future. This shift in the energy industry has been accompanied by rising concerns over potential impacts on water resources because producing these fuels is thought to require more water per unit of energy produced than conventional sources and may lead to greater degradation of water quality. In this paper, we address these emerging environmental issues by (a) providing a comprehensive overview of the existing literature on the water quantity and quality implications of producing the main unconventional fossil fuels in North America and (b) characterizing the differences in social costs that arise from the extraction and production of these fuels versus those from conventional fossil fuel production. |
| Date: | 2013–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-13-34&r=ene |
| By: | Stavros Degiannakis (Bank of Greece); George Filis (Bournemouth University); Renatas Kizys (University of Portsmouth) |
| Abstract: | The paper investigates the effects of oil price shocks on stock market volatility in Europe by focusing on three measures of volatility, i.e. the conditional, the realised and the implied volatility. The findings suggest that supply-side shocks and oil specific demand shocks do not affect volatility, whereas, oil price changes due to aggregate demand shocks lead to a reduction in stock market volatility. More specifically, aggregate demand oil price shocks have significant explanatory power on both current- and forward-looking volatilities. The results are qualitatively similar for aggregate stock market volatility and industrial sectors’ volatilities. Finally, a robustness exercise using short- and long-run volatility models supports the findings. |
| Keywords: | Conditional Volatility; Realised Volatility; Implied Volatility; Oil Price Shocks; SVAR |
| JEL: | C13 C32 G10 G15 Q40 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:bog:wpaper:161&r=ene |
| By: | Sévi, Benoît; Le Pen, Yannick; Chevallier, Julien; Bunn, Derek |
| Abstract: | As both speculative and hedging financial flows into commodity futures are expected to link commodity price formation more strongly to equity indices, we investigate whether these processes also create increased correlation amongst the commodities themselves. Considering U.S. oil and gas futures, using the large approximate factor models methodology we investigate whether common factors derived from a large international dataset of real and nominal macro variables are able to explain both returns and whether, beyond these fundamental common factors, the residuals remain correlated. We further investigate a possible explanation for this residual correlation by using some proxies for hedging and speculative activity, showing that speculation increases and hedging reduces the inter-commodity correlations. |
| Keywords: | Oil Futures; Gas Futures; Common Factors; Approximate Factor Models; Excess Comovement; |
| JEL: | C22 C32 G15 E17 |
| Date: | 2013–09 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/11692&r=ene |
| By: | Niels S. Hansen (Aarhus University and CREATES); Asger Lunde (Aarhus University and CREATES) |
| Abstract: | In this paper we are interested in the term structure of futures contracts on oil. The objective is to specify a relatively parsimonious model which explains data well and performs well in a real time out of sample forecasting. The dynamic Nelson-Siegel model is normally used to analyze and forecast interest rates of different maturities. The structure of oil futures resembles the structure of interest rates and this motivates the use of this model for our purposes. The data set is vast and the dynamic Nelson-Siegel model allows for a significant dimension reduction by introducing three factors. By performing a series of cross-section regressions we obtain time series for these factors and we focus on modeling their joint distribution. Using copula decomposition we can set up a model for each factor individually along with a model for their dependence structure. When a reasonable model for the factors has been specified it can be used to forecast prices of futures contracts with different maturities. The outcome of this exercise is a class of models which describes the observed futures contracts well and forecasts better than conventional benchmarks. We carry out a real time value at risk analysis and show that our class of models performs well. |
| Keywords: | Oil futures, Nelson-Siegel, Normal Inverse Gaussian, GARCH, Copula. |
| JEL: | G17 C32 C53 |
| Date: | 2013–10–25 |
| URL: | http://d.repec.org/n?u=RePEc:aah:create:2013-36&r=ene |
| By: | Anissa Chaibi; Mathieu Gomes |
| Abstract: | Frontier markets are increasingly sought by investors in search of higher returns and low correlation with traditional assets. As such, it is important for financial market participants to understand the volatility transmission mechanism across these markets in order to make better portfolio allocation decisions. This paper employs a bivariate BEKK-GARCH(1,1) model to simultaneously estimate the mean and conditional variance between equity stock markets (twenty-one national frontier stock indices and two broad indices – the MSCI Frontier Markets and the MSCI World) and oil prices. We examine weekly returns from February 8th, 2008 to February 1st, 2013 and find significant transmission of shocks and volatility between oil prices and some of the examined markets. Moreover, this spillover effect is sometimes bidirectional. |
| Keywords: | Volatility spillovers, Oil prices, Stock returns, Multivariate GARCH,Diversification, Frontier Markets. |
| Date: | 2013–10–15 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:34&r=ene |
| By: | Sedjo, Roger A. (Resources for the Future); Sohngen, Brent; Riddle, Anne |
| Abstract: | A concern of many environmentalists is that the use of biomass energy will decimate the forests. Searchinger et al. (2008, 2009) examined this issue related to corn ethanol and suggested that substituting corn ethanol for petroleum would increase carbon emissions associated with the land conversion abroad necessary to offset the decline in corn availability. Associated with these concerns is the overall issue of climate change (IPCC 2006). This issue is broader than simply corn. If agricultural croplands are drawn into the production of biofuel feedstocks, commodity prices are expected to rise, triggering land conversions overseas, releasing carbon emissions, and offsetting the carbon reductions expected from bioenergy. Using a general stylized forest sector management model, our study examines the economic potential of traditional industrial forests and supplemental dedicated fuelwood plantations to produce biomass on submarginal lands. It finds that these sources can economically produce large levels of biomass without compromising crop production, thereby mitigating the land conversion and carbon emissions effects posited by the Searchinger Hypothesis. |
| Keywords: | biomass, forests, fuelwood, land use, land conversion, wood biomass, bioenergy, carbon emissions, feedstock, Searchinger Hypothesis, climate change |
| JEL: | Q1 Q16 Q23 Q24 Q42 Q54 |
| Date: | 2013–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-13-33&r=ene |
| By: | Ansgar Belke; Christian Dreger |
| Abstract: | This paper investigates the effects of global oil and food price shocks to consumer prices in Middle East-North African (MENA) countries using threshold cointegration methods. Oil and food price shocks increase domestic prices in the long run, whereby the impact of food prices dominates. While global prices are weakly exogenous, consumer prices respond to deviations from the equilibrium relationship. The shortrun adjustment pattern exhibits asymmetries and is particularly strong after positive shocks. Downward rigidities on wages may play a crucial role in this regard, as the relatively weak reactions of consumer prices after negative shocks are related to labour market institutions and public subsidies. The more rigid the regulations the more pronounced are the asymmetries. Robustness checks show that international price shocks do not affect GDP growth. |
| Keywords: | Oil and food price transmission; asymmetric error correction; MENA region |
| JEL: | C22 E31 Q02 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:rwi:repape:0448&r=ene |
| By: | Ladislav Kristoufek (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); Karel Janda (Institute of Economic Studies, Faculty of Social Sciences, Charles University, Prague, Czech Republic); David Zilberman (University of California in Berkeley) |
| Abstract: | For the biofuel markets and related commodities, we study their price transmission, which is in fact equivalent to studying price cross-elasticities. Importantly, we focus on the price dependence of the price transmission mechanism. Several methodological caveats are discussed. Specifically, we combine the memory robust feasible generalized least squares estimation with two-stage least squares to control for endogeneity bias and inconsistency. We find that both ethanol and biodiesel prices are responsive to their production factors (ethanol to corn, and biodiesel to German diesel). The strength of transmission between both significant pairs increased remarkably during the food crisis of 2007/2008. |
| Keywords: | biofuels; price transmission; non-linearity |
| JEL: | C22 Q16 Q42 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2013_16&r=ene |
| By: | Liam Wagner (School of Economics, University of Queensland); Lynette Molyneaux (School of Economics, University of Queensland); John Foster (School of Economics, University of Queensland) |
| Abstract: | We seek to evaluate the extent of the pass through of increased fuel and carbon costs to wholesale prices with a shift of generation from coal-fired to gas-fired plants. Modelling of Australia's National Electricity Market in 2035 is undertaken using Australian Energy Market Operator assumptions for fuel costs, capital costs and demand forecasts. An electricity market simulation package (PLEXOS), which uses deterministic linear programming techniques and transmission and generating plant data, is used to optimise the power system and determine the least cost dispatch of generating resources to meet a given demand. We find that wholesale market prices increase due to the full pass through of the increased costs of gas over coal as an input fuel and the Carbon Price. In addition, we find that wholesale prices increase by more than the pass through of fuel and carbon costs because of the fact that generators can charge infra-marginal rents and engage in strategic behaviour to maximize their profits |
| Keywords: | Electricity, markets, infra-marginal rent |
| JEL: | L94 D40 Q48 |
| Date: | 2013–10 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqeemg:9-2013&r=ene |
| By: | Trotignon, Raphaël; De Perthuis, Christian |
| Keywords: | European Union Emission Trading Scheme; Energy policy; |
| JEL: | Q56 Q48 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/12035&r=ene |
| By: | Sabitova, Saltanat |
| Abstract: | Kazakhstan ratified the Kyoto Protocol on 26 March 2009. As part of measures aimed at implementing the Kyoto Protocol, Kazakhstan is preparing for launching its first domestic emissions trading scheme (ETS). National cap-and-trade system is expected to be a key climate-policy instrument for reaching general commitments of the country to mitigate climate change. Emitters which are subject to the Kazakh emissions trading scheme are allocated with emission caps, which can be traded within national cap-and-trade scheme. Such emitters can reduce their own emissions and then sell excess of cap allowances on the market. If emitting more than allowed, they can buy allowances if any available, otherwise are obliged to pay strict fines defined by the government. Domestic sectors, which are subject to Kazakh emissions trading scheme, were chosen with the intention to regulate key sectors and categories by one market-based tool. Kazakh ETS will cover companies emitting from twenty thousand tons of carbon dioxide equivalent per year. In the time when Kazakhstan is actively investigating other options for reducing emissions to comply with its present voluntary commitments and future commitments under the Kyoto Protocol, establishment of a domestic emissions trading scheme may be a good option. That is why Kazakh ETS is taking serious attention of the government. In this way, the government intends to raise the interest of operators to move gradually to energy efficiency and low-carbon policy by their own initiatives. GHG emissions can be reduced by several means such as establishing renewables,installing energy-saving technologies, and such others; however, GHGs can also be reduced through increasing GHG absorbing measures, provided within the land use, landuse change and forestry (LULUCF) sector of the Kyoto Protocol. Kazakh emissions trading scheme does not provide trading of carbon units in the LULUCF sector directly. Planting new forests to absorb carbon dioxide in the atmosphere is one viable option to employ forests to curb climate change. The idea of planting carbon offsets is now being implemented worldwide under the Kyoto Protocol and beyond it. There are three major frameworks for LULUCF projects. First, avoiding emissions by conservation of existing carbon stocks, second, increasing carbon storage by sequestration, and third, substituting carbon for fossil fuel and energy intensive products. The aim of the study is to analyze how the LULUCF sector can be employed under current Kazakh emissions trading scheme. |
| Keywords: | Kazakhstan, Kyoto Protocol, domestic emissions trading scheme (ETS), land use, landuse change and forestry (LULUCF), Community/Rural/Urban Development, Environmental Economics and Policy, International Development, Research Methods/ Statistical Methods, R, Q, O, |
| Date: | 2013–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ugidic:159097&r=ene |
| By: | Trotignon, Raphaël; De Perthuis, Christian |
| Keywords: | Permis de pollution négociables; Compensation carbone; Politique énergétique; Transition énergétique; AIMC; EU ETS; |
| JEL: | Q56 Q48 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/12048&r=ene |
| By: | Metcalf, Gilbert E. |
| Abstract: | This paper considers how tax reductions financed by a carbon tax could be designed to mitigate the need for specific relief for firms in select energy-intensive, trade-exposed (EITE) sectors. In particular, I consider impacts on manufacturing sectors at the six-digit North American Industry Classification System level, with a special focus on firms that would be presumptively eligible for competitiveness relief using the criteria in the Waxman–Markey bill (H.R. 2454). The paper has a number of findings. First, determination of eligibility for relief analogous to the free allowance allocation in H.R. 2454 is sensitive to energy intensity. Second, providing compensation to EITE sectors through the corporate income tax—analogous to the output-based allowance allocation in Waxman–Markey—is certainly feasible, but tax appetite within the EITE sectors is insufficient to fully use any credits that attempted to offset more than about one-quarter of their carbon tax liability. Third, certain reforms do better than others at providing disproportionate relief to EITE sectors. Finally, economic theory predicts a substantial cost to diverting carbon tax revenue toward compensation of specific sectors. Theory also suggests that firms should treat policy risk no differently from the way they treat the other risks they face as they do business. But politics may dictate otherwise; if so, the analysis here suggests that certain approaches may work better than others to ensure that relief is appropriately targeted at minimal cost. |
| Keywords: | carbon taxes, taxation, tax code, energy-intensive, trade-exposed industries |
| JEL: | H23 H25 Q54 Q58 |
| Date: | 2013–10–07 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-13-30&r=ene |
| By: | Goulder, Lawrence H.; Hafstead, Marc A.C. (Resources for the Future) |
| Abstract: | Carbon taxes are a potential revenue source that could play a key role in major tax reform. This paper employs a numerical general equilibrium model of the United States to evaluate alternative tax reductions that could be financed by the revenues from a carbon tax. We consider a carbon tax that begins at $10 per ton in 2013 and increases at 5 percent per year to the year 2040. The net revenue from the tax is substantial, and the GDP and welfare impacts of the tax depend significantly on how this revenue is recycled to the private sector. Under our central case simulations (which do not account for beneficial environmental impacts) over the period 2013–2040, the tax reduces GDP by .56 percent when revenues are returned through lump-sum rebates to households, as compared with .33 and .24 percent when the revenues are recycled through reductions in personal and corporate tax rates, respectively. Introducing tradable exemptions to the carbon tax reduces or eliminates the negative impacts on the profits of the most vulnerable carbon-supplying or carbon-using industries. The GDP and welfare impacts are somewhat larger when such exemptions are introduced. |
| Keywords: | carbon tax, tax reform, climate |
| JEL: | Q50 Q58 H23 |
| Date: | 2013–10–08 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-13-31&r=ene |
| By: | Anabela Botelho (NIMA, Universidade do Minho); Lígia M.Costa Pinto (NIMA, Universidade do Minho); Eduarda Fernandes (Instituto Politécnico de Leiria) |
| Abstract: | The purpose of this paper is to contribute to the multiple-units auction literature, by testing the performance of the dynamic Vickrey auction (the Ausubel model), in an experimental setting, representing the functioning of an emission permits market with an Ausubel auction for the initial allocation of permits. Other features of the experiment include the possibility of banking and the inclusion of uncertainty, and the parameters were set so as to replicate an environment similar to the EU-ETS market.Our results reveal that emission permits are not exactly allocated as theoretically predicted in the Ausubel auction although the differences are not statistically significant.Comparison of our results with previous experimental studies on the same auction mechanism, although under very different conditions, indicate no relevant differences exist on the Ausubel auction performance, which is an important policy indication when decisions are being taken on the implementation of several auctions for multiple units, namely in the context of the EU-ETS. |
| Keywords: | Multi-unit auctions; dynamic Vickrey (Ausubel) auction; emission permits; experiments |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:nim:nimawp:53/2013&r=ene |
| By: | Madison Condon; Ada Ignaciuk |
| Abstract: | An important source of political opposition to measures aimed at reducing emissions of greenhouse gases (GHGs) arises from concerns over their negative effects on the competitiveness of domestic firms, especially those that are energy-intensive and exposed to competition from foreign producers. Politicians and industry representatives alike fear that imports from countries without similar regulations can gain cost-of-production advantages over domestic goods. With many of the major economies of the world contemplating unilateral action to restrict their carbon emissions (while continuing to pursue co-ordinated multilateral action), the parallel concern of carbon leakage — whereby domestic reductions in emissions are partially or wholly counterbalanced by increased emissions elsewhere in the world — has also arisen. Various adjustments have been proposed, both in the academic literature and in draft climate legislation, including levying a border tax or requiring importers to surrender a quantity of carbon permits. Collectively, these kinds of adjustments are often referred to as border carbon adjustments, or BCAs. This note reviews the existing literature on BCAs and alternatives to BCAs and discusses what various researchers have concluded about the efficacy of BCAs from both a trade and an environmental perspective. |
| Keywords: | trade and environment, border tax adjustment, climate change, border carbon adjustment |
| JEL: | F13 F18 F53 F59 H23 K32 K33 Q48 Q54 Q58 |
| Date: | 2013–10–31 |
| URL: | http://d.repec.org/n?u=RePEc:oec:traaaa:2013/6-en&r=ene |
| By: | Geoffron, Patrice |
| Keywords: | Energy; |
| JEL: | Q4 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/12027&r=ene |
| By: | Burtraw, Dallas (Resources for the Future); Sekar, Samantha (Resources for the Future) |
| Abstract: | The introduction of a price on carbon dioxide is expected to be more efficient than prescriptive regulation. It also instantiates substantial economic value. Initially programs allocated this value to incumbent firms (grandfathering), but the growing movement toward auctioning or emissions fees makes carbon revenues into a payment for environmental services. This paper asks, to whom should this payment accrue? If the atmosphere resource, as a common property resource, is viewed as the property of government, then the decision of how to use the revenue can be viewed as a fiscal problem, and efficiency considerations dominate. If the atmosphere is viewed as held in common, then the revenue might be considered compensation to owners and delivered as payment to individuals. This decision has efficiency and distributional consequences that affect the political economy and the likelihood and durability of climate policy. We summarize trends among six existing carbon-pricing programs. |
| Keywords: | auction, cap and trade, emissions fee, emissions tax, allocation, grandfathering, climate change, policy |
| JEL: | H23 N5 P48 |
| Date: | 2013–10–10 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-13-32&r=ene |