nep-ene New Economics Papers
on Energy Economics
Issue of 2013‒12‒29
35 papers chosen by
Roger Fouquet
London School of Economics

  1. American Exceptionalism as a Problem in Global History By Robert Allen
  2. Flip the Switch: The Spatial Impact of the Rural Electrification Administration 1935-1940 By Carl Kitchens; Price Fishback
  3. Distributed Generation, Storage, Demand Response, and Energy Efficiency as Alternatives to Grid Capacity Enhancement By Rahmatallah Poudineh; Tooraj Jamasb
  4. Global Inequality in Energy Consumption from 1980 to 2010 By Scott Lawrence; Qin Liu; Victor M. Yakovenko
  5. Knowledge spillovers from renewable energy technologies, Lessons from patent citations By Joëlle Noailly; Victoria Shestalova
  6. A constructive technology assessment of stationary energy storage systems: prospective life cycle orientated analysis By Manuel Johann Baumann
  7. Might electricity consumption cause urbanization instead? Evidence from heterogeneous panel long-run causality tests. By Liddle, Brantley; Lung, Sidney
  8. Environmental policies in competitive electricity markets. By Langestraat, R.
  9. Labor Demand Effects of Rising Electricity Prices: Evidence for Germany By Cox, Michael; Peichl, Andreas; Pestel, Nico; Siegloch, Sebastian
  10. Are Consumers Willing to Pay More for Electricity from Cooperatives? Results from an Online Choice Experiment in Germany By Sagebiel, Julian; Müller, Jakob R.; Rommel, Jens
  11. Market power issues in the reformed Russian electricity supply industry By Nadia Chernenko
  12. Caught Between Theory and Practice: Government, Market, and Regulatory Failure in Electricity Sector Reforms By Rabindra, Nepal; Tooraj, Jamasb
  13. Testing for Market Integration in the Australian National Electricity Market By Rabindra Nepal; John Foster
  14. The added value from a general equilibrium analyses of increased efficiency in household energy use By Patrizio, Lecca; Peter G., McGregor; J. Kim, Swales; Karen, Turner
  15. The benefits of solar home systems :an analysis from Bangladesh By Samad, Hussain A.; Khandk, Shahidur R.; Asaduzzaman, M.; Yunus, Mohammad
  16. Quantitative Analysis of the "Rumor-based Economical Damage" for Sightseeing Industry Caused by Tokyo Electric Power Company Fukushima No. 1 Nuclear Power Station Accident (Japanese) By KAINOU Kazunari
  17. Social Effects in the Diffusion of Solar Photovoltaic Technology in the UK By Laura-Lucia Richter
  18. Retailer compliance with energy label regulations By Faure, Corinne; Schleich, Joachim; Schlomann, Barbara
  19. Auswirkungen der Biogaserzeugung auf die Landwirtschaft By Gömann, Horst; de Witte, Thomas; Peter, Günter; Tietz, Andreas
  20. Oil Price Shocks, Income, and Democracy By Markus Brückner; Antonio Ciccone; Andrea Tesei
  21. Asymmetric fuel price responses under heterogeneity By Balaguer, Jacint; Ripollés, Jordi
  22. Working Paper 184 - Does Oil Wealth Affect Democracy in Africa? By Anyanwu John; Andrew E. O. Erhijakpor
  23. Emissions embodied in Chinese exports taking into account the special export structure of China By Matthias Weitzel; Tao Ma
  24. Tail-effect and the Role of Greenhouse Gas Emissions Control By In Chang Hwang; Richard S.J. Tol; Marjan W. Hofkes
  25. North-South Convergence and the Allocation of CO2 Emissions By Humberto Llavador; John E. Roemer; Joaquim Silvestre
  26. A Review on Energy Consumption from a Socio-Economic Perspective: Reduction through Energy Efficiency and Beyond By Stephan Schmidt; Hannes Weigt
  27. Input Demand under Joint Energy and Output Prices Uncertainties By Alghalith, Moawia; Guo, Xu; Wong, Wing-Keung; Zhu, Lixing
  28. Energy efficiency in the European Union: What can be learned from the joint application of directional distance functions and slacks-based measures? By Roberto Gómez-Calvet; David Conesa; Ana Rosa Gómez-Calvet; Emili Tortosa-Ausina
  29. Environmental regulation of a global pollution externality in a bilateral trade framework: The case of global warming, China and the US By Gwatipedza, Johnson; Barbier, Edward B.
  30. The Effect of Public Policies on Consumers' Preferences : Lessons from the French Automobile Market By Xavier d'Haultfoeuille; Isis Durrmeyer; Philippe Février
  31. Addressing self-disconnection among prepayment energy consumers: A behavioural approach By Marta Rocha; Michelle Baddeley; Michael G. Pollitt
  32. Unilateral Emissions Mitigation, Spillovers, and Global Learning By Chatterji, Shurojit; Ghosal, Sayantan; Walsh, Sean; Whalley, John
  33. Local consumption and territorial based accounting for CO2 Emissions By Kristinn, Hermannsson; Stuart G., McIntyre
  34. Green Growth and Poverty Reduction: Policy Coherence for Pro-poor Growth By Michael King
  35. Per-capita Income as a Determinant of International Trade and Environmental Policies By James R. Markusen

  1. By: Robert Allen
    Abstract: The causes of the USA's exceptional economic performance are investigated by comparing American wages and prices with wages and prices in Great Britain, Egypt, and India.� Habakkuk's views on the causes of American industrial pre-eminence are reassessed.� While the USA had abundant natural resources, they did not promote manufacturing since international trade equalized prices in Britain and the USA or American tariffs made resources dearer in the USA.� Wages were higher in the USA than in Britain since labor markets were tightly integrated and labor was drawn to the USA as the continent was settled.� Capital services were also more expensive in USA.� American industrialization required tariffs since virtually all input prices were higher than in Britain and industrial productivity was comparable.� America's comparative advantage shifted from agriculture to manufacturing after 1895 was industrial productivity soured.� This was due to a fall in energy prices in the USA, the American policy of mass schooling which increased the supply of skilled adults and induced firms to invent technology to raise their productivity since the supply of child labor was restricted in comparison to Britain, and the great growth of manufacturing investment induced by the tariff which provide a large market for inventions and generated technical knowledge through learning by doing.� Egypt and India could not have industrialized by following American policies since their wages were so low and their energy costs so high that the modern technology that was cost effective in Britain and the USA would not have paid in their circumstances.� The development of Egypt and India required more draconian state intervention than a protective tariff, mass education, and infrastructure investment - the American model.
    Keywords: economic growth, technical change, natural resources, international migration, American exceptionalism
    JEL: F13 F14 N1 N3 N4 N5 N6 N7 O31
    Date: 2013–12–20
  2. By: Carl Kitchens; Price Fishback
    Abstract: To isolate the impact of access to electricity on local economies, we examine the impact of the Rural Electrification Administration low-interest loans in the 1930s. The REA provided loans to cooperatives to lay distribution lines to farms and aid in wiring homes. Consequently, the number of rural farm homes electrified doubled in the United States within 5 years. We develop a panel data set for the 1930s and use changes within counties over time to identify the effect of the REA loans on a wide range of socio-economic measures. The REA loans contributed significantly to increases in crop output and crop productivity and helped stave off declines in overall farm output, productivity, and land values, but had much smaller effects on nonagricultural parts of the economy. The ex-ante subsidy from the low interest loans was large, but after the program was completed, nearly all of the loans were fully repaid, and the ultimate cost to the taxpayer was relatively low.
    JEL: N12 O13 O38
    Date: 2013–12
  3. By: Rahmatallah Poudineh; Tooraj Jamasb
    Abstract: The need for investment in capital intensive electricity networks is on the rise in many countries. A major advantage of distributed resources is their potential for deferring investments in distribution network capacity. However, utilizing the full benefits of these resources requires addressing several technical, economic and regulatory challenges. A significant barrier pertains to the lack of an efficient market mechanism that enables this concept and also is consistent with business model of distribution companies under an unbundled power sector paradigm. This paper proposes a market-oriented approach termed as “contract for deferral scheme” (CDS). The scheme outlines how an economically efficient portfolio of distributed generation, storage, demand response and energy efficiency can be integrated as network resources to reduce the need for grid capacity and defer demand driven network investments.
    Keywords: Distributed generation, storage, demand response, investment deferral, network regulation, business model
    JEL: L43 L51 L52 L94
    Date: 2013–07–12
  4. By: Scott Lawrence; Qin Liu; Victor M. Yakovenko
    Abstract: We study the global probability distribution of energy consumption per capita around the world using data from the U.S. Energy Information Administration (EIA) for 1980-2010. We find that the Lorenz curves have moved up during this time period, and the Gini coefficient G has decreased from 0.66 in 1980 to 0.55 in 2010, indicating a decrease in inequality. The global probability distribution of energy consumption per capita in 2010 is close to the exponential distribution with G=0.5. We attribute this result to the globalization of the world economy, which mixes the world and brings it closer to the state of maximal entropy. We argue that global energy production is a limited resource that is partitioned among the world population. The most probable partition is the one that maximizes entropy, thus resulting in the exponential distribution function. A consequence of the latter is the law of 1/3: the top 1/3 of the world population consumes 2/3 of produced energy. We also find similar results for the global probability distribution of CO2 emissions per capita.
    Date: 2013–12
  5. By: Joëlle Noailly; Victoria Shestalova
    Abstract: This paper studies the knowledge spillovers generated by renewable-energy technologies, unraveling the technological fields that benefit from knowledge developed in storage, solar, wind, marine, hydropower, geothermal, waste and biomass energy technologies. A CPB Background Document accompanies this�CPB Discussion Paper. Using citation data of patents in renewable technologies at seventeen European countries over the 1978-2006 period, the analysis examines the relative importance of knowledge flows within the same specific technological field (intra-technology spillovers), to other technologies in the field of power-generation (inter-technology spillovers), and to technologies unrelated to power-generation (external-technology spillovers). The results show significant differences across various renewable technologies. While wind technologies mainly find applications within their own technological field, a large share of innovations in solar energy and storage technologies find applications outside the field of power generation, suggesting that solar technologies are more general and, therefore, may have a higher value for society. Finally, the knowledge from waste and biomass technologies is mainly exploited by fossil-fuel power-generating technologies. The paper discusses the implications of these results for the design of R&D policies for renewable energy innovation.
    JEL: O33 Q42 Q48 Q55
    Date: 2013–12
  6. By: Manuel Johann Baumann (ITAS, Karlsruhe Institute of Technology and IET/CESNOVA, Universidade Nova de Lisboa, Faculdade de Ciências e Tecnologia)
    Abstract: Environmental concerns over the use of fossil fuels and their resource constraints have increased the interest in generating electric energy from renewable energy sources (RES) to provide a sustainable electricity supply. A main problem of those technologies (wind or solar power generation) is that they are not constant and reliable sources of power. This results inter alia in an increased demand of energy storage technologies. Related stake holders show a big interest in the technical, economic and ecologic aspects of new emerging energy storage systems. This comes especially true for electrochemical energy storage systems as different Li-Ion batteries, Sodium Sulfur or Redox Flow batteries which can be utilized in all grid voltage levels, a wide range of grid applications as well as end user groups (e.g. private households, industry). A prospective and active Constructive Technology Assessment (CTA) can help to minimize potential mismatches, wrong investments, possible social conflicts, and environmental impacts of new energy storage technologies in an early development stage. It is insufficient to exclusively look at the operation phase to assess a technology. Such an approach can lead to misleading interpretations and can furthermore disregard social or ecological impact factors over the whole life cycle. Different energy storage technologies have to be evaluated in a prospective manner with a full integrated sustainability and life cycle approach to form a base for decision making and to support technology developers in order to allow distinctions between more or less sustainable battery technology variations. Therefore CTA is used as a scientific approach using several “neighbouring” engineering orientated disciplines e.g. Life Cycle Analysis (LCA), Social Life Cycle Assessment (SLCA) or Life Cycle Costs (LCC) and their methodologies which were initially developed for other purposes.The aim of the presented PhD Thesis is to make an economic, technological and ecological comparison of Energy storage technologies based on a life cycle sustainability Analysis (LCSA), multi criteria Analysis (or evaluation) (MCA) and to develop a suitable LCSA-MCA model through a new combined highly interdisciplinary approach in frame of CTA.
    Keywords: renewable energy, electric energy, energy storage technologies, Life Cycle Analysis, Constructive Technology Assessment, sustainability
    JEL: O44 Q42 Q55 R49
    Date: 2013–01
  7. By: Liddle, Brantley; Lung, Sidney
    Abstract: The share of a population living in urban areas, or urbanization, is both an important demographic, socio-economic phenomenon and a popular explanatory variable in macro-level models of energy and electricity consumption and their resulting carbon emissions. Indeed, there is a substantial, growing subset of the global modeling literature that seeks to link urbanization with energy and electricity consumption, as well as with carbon emissions. This paper aims to inform both modelers and model consumers about the appropriateness of establishing such a link by examining the nature of long-run causality between electricity consumption and urbanization using heterogeneous panel methods and data from 105 countries spanning 1971-2009. In addition, the analysis of the time series properties of urbanization has implications both for modelers and for understanding the urbanization phenomenon. We consider total, industrial, and residential aggregations of electricity consumption per capita, three income-based panels, and three geography-based panels for non-OECD countries. The panel unit root, cointegration, and causality tests used account for cross-sectional dependence, nonstationarity, and heterogeneity—all of which are present in the data set. We cannot reject pervasively Granger causality in the urbanization to electricity consumption direction. However, the causality finding that is both the strongest and most similar across the various panels is that of long-run Granger causality from electricity consumption to urbanization. In other words, the employment and quality of life opportunities that access to electricity afford likely encourage migration to cities, and thus, cause urbanization. Also, nearly all countries’ urbanization series contained structural breaks, and the most recent post-break annual change rates suggested that nearly all countries’ rates of urbanization change were slowing. Lastly, future modeling work on energy consumption or carbon emissions should consider subnational scales of analysis, and focus on measures of urban density or urban form rather than national urbanization levels.
    Keywords: urbanization and electricity; long-run panel Granger causality; panel unit roots; cross-sectional dependence; panel heterogeneity
    JEL: Q4
    Date: 2013
  8. By: Langestraat, R. (Tilburg University)
    Abstract: Abstract: In this thesis we model and analyze several environmental policies in an existing mathematical representation of a perfectly competitive electricity market. We contribute to the literature by theoretically and numerically establishing a number of effects of environmental policies on investment strategies and prices. We provide a theoretical benchmark for environmental regulators aiming to achieve certain policy goals, and present a way to use numerical tools in case a complete theoretical analysis cannot be obtained. Two policies that charge firms for their carbon emissions, namely cap-and-trade and carbon taxation, are modeled into both a stylized deterministic and a two-stage stochastic framework. In the former we characterize equilibria, leading to key results on the dispatching order of technologies and identification of unused technologies. The latter framework is analyzed through a sampling study and focuses on the effectiveness of the policies in the presence of network limitations. We successively study a renewable energy obligation, which indirectly subsidizes electricity production from renewable resources through green certificates. We additionally explore the effects of technology banding, meaning that different renewable technologies are eligible for a different number of certificates. To account for some of the drawbacks of the existing UK technology banding system, we introduce an alternative banding policy. Finally, a feed-in tariff (FIT) is a direct subsidy on electricity production from renewable resources. In a stochastic framework we derive analytically that under linear cost assumptions, this price based instrument cannot guarantee that quantity based policy targets are met. Assuming non-linear convex cost, we find that the opposite holds and that a regulator has the freedom to set FITs in such a way that any desired mixture of renewable technologies can be attained at equilibrium. These FITs are derived analytically or, when necessary, estimated using the numerical tools that we propose.
    Date: 2013
  9. By: Cox, Michael (IZA); Peichl, Andreas (ZEW Mannheim); Pestel, Nico (IZA); Siegloch, Sebastian (IZA)
    Abstract: Germany plays a pioneering role in replacing conventional power plants with renewable energy sources. While this is beneficial with respect to environmental quality, the energy turnaround implies increasing electricity prices for private households and firms. The extent to which this is associated with negative impacts on employment depends on the interrelationship between labor and electricity as input factors. In this paper, we estimate cross-price elasticities between electricity and heterogeneous labor for the German manufacturing sector. We use administrative linked employer-employee micro data combined with information on electricity prices and usage during the period 2003-2007. Our findings suggest that there is a weak substitutability between electricity and labor, when the production level is held constant. We find positive, but small conditional cross-price elasticities of labor demand with respect to electricity prices between 0.09 and 0.31. In case of adjustable output, we find moderate gross complementarity with negative unconditional cross-elasticities ranging between -0.06 and -0.69. Labor demand is affected differently across skill levels with low- and high-skilled workers being affected more than medium-skilled. Our estimates suggest that the announced increase of the EEG surcharge in 2014 would decrease overall employment in the manufacturing sector by 86,000 workers, a decline by 1.4 percent.
    Keywords: electricity prices, labor demand, employment, energy, Germany
    JEL: J08 J23 Q48 Q58
    Date: 2013–12
  10. By: Sagebiel, Julian; Müller, Jakob R.; Rommel, Jens
    Abstract: With liberalization in 1998, numerous firms have entered the German retail electricity market, including newly formed cooperatives. Based on Transaction Cost Economics, we develop a theoretical framework seeking to explain preferences for electricity supplied by cooperatives from a consumer perspective. Drawing on a convenience sample of 287 German electricity consumers and Choice Experiment data from an online survey, we estimate Willingness-to-Pay values for organizational attributes of electricity suppliers, while accounting for observed and unobserved heterogeneity. Consumers in the sample exhibit a large Willingness-to-Pay for renewable energy. Our results also indicate a substantial Willingness-to-Pay for transparent pricing, participation in decision making, and local suppliers. Democratic decision making – a distinct feature of cooperatives – exhibits positive Willingness-to-Pay values for approximately one fifth of the sample. Taken together, our findings suggest a slightly higher Willingness-to-Pay for electricity produced by cooperatives. Limitations of applied sampling and other important aspects of energy transition are also discussed.
    Keywords: Choice Experiments; Cooperatives; Energy Transition
    JEL: C25 D12 Q41
    Date: 2013
  11. By: Nadia Chernenko
    Abstract: The paper examines long-run and short-run levels of market power in the liberalised Russian electricity market. We observe that despite potential for market power abuse, actual exercise of market power as measured by price-cost markups remained low. We attribute the result to the bid-at-cost rule implemented as a part of a special unit commitment procedure on the day-ahead market. We first look at the restructured industry and discuss the mergers and acquisitions and their impact on competition in long term. The M&A were undertaken in different market zones and thus did not seem to increase concentration (HHI remains almost unchanged) although with future zone integration competition in long run is put at risk. We then examine short-run level of market power by estimating hourly price-cost mark-ups and assessing their dynamics in 2010 and 2011, a year preceeding and following the market liberalisation respectively. Using time series models (AR models) we reject hypothesis of actual market power abuse. Further, using a Tobit regression we find that the liberalisation decreased the mark-ups by about 1.66 percetage points.
    Keywords: Russian electricity market, liberalisation, market power, concentration, price-cost mark-ups
    JEL: L11 L13 L94
    Date: 2013–07–12
  12. By: Rabindra, Nepal; Tooraj, Jamasb
    Abstract: The world-wide electricity sector reforms of the early 1990s have revealed the considerable complexities of making market driven reforms in network and infrastructure industries. This paper reflects on the experiences to date with the process and outcomes of marketbased electricity reforms across less-developed, transition and developed economies. The reforms outcomes suggest similar problems facing the electricity sector of these countries though their contexts vary significantly. Many developing and developed economies continue to have investment inadequacy concerns and the need to balance economy efficiency, sustainability and social equity after more than two decades of experience with reforms. We also use a case study of selected countries that in many respects represent the current state of the reform though they are rarely examined. Nepal, Belarus and Ireland are chosen as country-specific case studies for this purpose. We conclude that the changing dynamics of the electricity supply industry (ESI) and policy objectives imply that analysing the success and failure of reforms will indeed remain a complex process.
    Keywords: liberalisation, politics, market, reforms,
    Date: 2013
  13. By: Rabindra Nepal (School of Economics, University of Queensland); John Foster (School of Economics, University of Queensland)
    Abstract: The National Electricity Market was established in 1998 as a response to the overall deregulation and restructuring of the Australian electricity sector. The wholesale market integration effects of this establishment, however, remain to be examined. We use pairwise unit root tests, cointegration analyses and a time varying coefficient model to determine the level and study the development of market integration in the regionally separate but interconnected markets in Australia. The results from the pairwise unit root tests provide a mixed evidence of price convergence while cointegration analyses does not clearly reject the absence of persistence price differences across the physically interconnected regions. The results from the time-varying coefficient model suggest an integrating market for electricity in Australia although full market integration has not been achieved yet. The results suggest the presence of significant transmission bottlenecks across the inter-regional interconnectors. Our results from cointegration analysis also supports the findings by Gonzalo and Lee (1998) that a proper use of the Johansen cointegration analysis requires a deeper data analysis than just the standard unit root tests.
    Keywords: pot prices, market integration, time series analysis
    JEL: C5 G1 L95 Q47
    Date: 2013–12
  14. By: Patrizio, Lecca; Peter G., McGregor; J. Kim, Swales; Karen, Turner
    Abstract: The aim of the paper is to identify the added value from using general equilibrium techniques to consider the economy-wide impacts of increased efficiency in household energy use. We take as an illustrative case study the effect of a 5% improvement in household energy efficiency on the UK economy. This impact is measured through simulations that use models that have increasing degrees of endogeneity but are calibrated on a common data set. That is to say, we calculate rebound effects for models that progress from the most basic partial equilibrium approach to a fully specified general equilibrium treatment. The size of the rebound effect on total energy use depends upon: the elasticity of substitution of energy in household consumption; the energy intensity of the different elements of household consumption demand; and the impact of changes in income, economic activity and relative prices. A general equilibrium model is required to capture these final three impacts.
    Keywords: Energy efficiency, indirect rebound effects, economy-wide rebound effects, household energy consumption, CGE models,
    Date: 2013
  15. By: Samad, Hussain A.; Khandk, Shahidur R.; Asaduzzaman, M.; Yunus, Mohammad
    Abstract: The Government of Bangladesh, with help from the World Bank and other donors, has provided aid to a local agency called Infrastructure Development Company Limited and its partner organizations to devise a credit scheme for marketing solar home system units and making these an affordable alternative to grid electricity for poor people in remote areas. This paper uses household survey data to examine the financing scheme behind the dissemination of these solar home systems, in particular the role of the subsidy; the factors that determine the adoption of the systems in rural Bangladesh; and the welfare impacts of such adoption. The paper finds that while the subsidy has been declining over time, the demand for solar home systems has seen phenomenal growth, mostly because of technological developments that have made the systems increasingly more affordable. Households with better physical and educational endowments are more likely to adopt solar home systems than poor households. The price of the system matters in household decision making -- a 10 percent decline in the price of the system increases the overall demand for a solar panel by 2 percent. As for the benefits, adoption of a solar home system improves children’s evening study time, lowers kerosene consumption, and provides health benefits for household members, in particular for women. It is also found to increase women's decision-making ability in certain household affairs. Finally, it is found to increase household consumption expenditure, although at a small scale.
    Keywords: Energy Production and Transportation,Renewable Energy,Climate Change Mitigation and Green House Gases,Climate Change Economics,Economic Theory&Research
    Date: 2013–12–01
  16. By: KAINOU Kazunari
    Abstract: The Fukushima No. 1 Nuclear Power Station Accident in March 2011 caused radioactive pollution problems of neighborhood area and also caused steep decrease of tourist number who visit and stay hotels, restaurants, sightseeing attractions and so on in the neighborhood area. The decrease continued several months and resulted in the economical damage to the sightseeing industry located in the area. More than two years have already elapsed and the tourist number recovered the pre-accident level in most of the area, but there still remains significant damage in some area due to the tourist's concern of pollution although most of the area are not actually polluted at all; due to the phenomena so called "rumor-based economical damages." The Tokyo Electric Power Company is liable for the damage and paying compensation for the damage including the "rumor-based economical damages" in accordance with the guideline of Government of Japan, but they are not sure whether the "rumor-based economical damages" are still existing, due to the simplification and speed up of the procedures of compensation payment; although that may cause some problems that the compensation may be used out of the original purposes. The author developed two quantitative judgement criteria to examine the existence of the "rumor-based economical damage" using statistical methodologies such as average treatment effect, and applied them to the regional tourist statistics of 28 major sightseeing area issued by 5 Prefectures, and analyzed and evaluated the results. The author found that the "rumor-based economical damage" still exists in Eastern and Middle Fukushima Region, Aizu-Central and Aizu-South Region, Nikko Region of Tochigi Prefecture and Northern Region of Ibaragi Prefecture at the point of 4th quarter 2012. And the damage has been recovered in Gumma Prefecture and most part of the Tochigi and Ibaragi Prefecture already. The author estimates that these regional difference of the damage is caused by following reasons; the distance from the Power Station and polluted area, specific decrease of tourists who visit Aizu and Nikko Region for historical and cultural tour and hot spring bathing tour, and decrease of sea bating and fishing tourists under the influence of the polluted water leakage accidents at the Power Station. Then the author recommends that simplified compensation payment procedures should be applied only for certain areas in Fukushima, Ibaragi and Tochigi Prefecture because of the continuation of the "rumor-based economical damage," but further checking systems should be introduced in other areas and other Prefectures where no such phenomena is found.
    Date: 2013–12
  17. By: Laura-Lucia Richter
    Abstract: The main research question in this paper is whether the installation rate of solar PV technology is affected by social spillovers from spatially close households. The installed base, defined as the cumulative number of solar PV installations within a neighbourhood by the end of a particular month, serves as a measure for the social effects of interest. Motivated by the technology-specific time lag between the decision to adopt a solar PV panel and the completion of the installation, the third lag of the installed base serves as main regressor of interest in the panel data model employed. The results suggest small, but positive and significant social effects that can be exploited to promote adoption: at the average installation rate of 0.7 installations per 1,000 owner-occupied households, one more solar PV panel in the postcode district increases the installation rate three months later by one percent. At the average number of 6,629 owner-occupied households within a postcode district, this implies an increase in the number of new installations in the neighbourhood by 0.005. Projects involving a high number of installations could hence promote diffusion. A major limitation of the model is that social spillovers are assumed to spread within defined neighbourhoods, only. Spatial econometric methods could allow for social effects across these borders.
    Keywords: social effects, installed base, product adoption, diffusion, solar PV technology, micro-generation
    JEL: C19 D12 D83 Q21 Q42
    Date: 2013–07–12
  18. By: Faure, Corinne; Schleich, Joachim; Schlomann, Barbara
    Abstract: With the Framework Directive 92/75/EEC on Energy Labelling of Household Appliances, the European Union introduced a labelling system that applies to major household appliances. The EU Directive requires manufacturers to provide the data strip (accurate product energy consumption information) with each appliance to the retailers. Retailers are compelled to provide all the appliances displayed in salesrooms with complete energy labels placed on top or front of the appliance in original size and colour and clearly visible (Directive 92/75/EEC). Retailers therefore play a crucial role in the implementation of the European energy label program. Surprisingly however, their role in the success of the program has not received any attention so far. In this paper, we first develop a theoretical framework to explain retailers' compliance with the Directive. The framework comprises instrumental motives for compliance like perceived costs and benefits of compliance as well as normative motives like internalization of regulation or social pressure to comply. These factors are moderated by retailers' ability to comply. Second, we test this framework econometrically on a sample of ca. 100,000 appliances from close to 1,400 retail stores in 27 European countries. Two sets of data were collected in each store: a compliance audit and a standardized survey of store managers. For the compliance audit, researchers noted for each household appliance available in the stores whether the energy label information was available, complete, and placed as required. The survey included perceptual measures of external and internal monitoring, manufacturer compliance, effort to comply, and consumer acceptance of labels. Using as dependent variable the share of completely labelled appliances per retailer - either at the aggregate level or per product category - estimation results of fractional logit models suggest that normative motives generally appear stronger than instrumental ones. --
    Keywords: energy label,compliance,household appliances,retailer
    Date: 2013
  19. By: Gömann, Horst; de Witte, Thomas; Peter, Günter; Tietz, Andreas
    Abstract: In der Studie wurden die Auswirkungen der rasanten, regional sehr unterschiedlichen Ausdeh-nung der Biogaserzeugung und des dafür erforderlichen Energiepflanzenanbaus auf die innersektoralen Wechselwirkungen, die Boden- und Pachtmärkte sowie auf die Ernährungs- und Futtermittelindustrie untersucht und regionale Aspekte herausgearbeitet. Es konnte gezeigt werden, dass der Einfluss der Agrarpreise auf die Wirtschaftlichkeit von Biogasanlagen, die vorrangig mit nachwachsenden Rohstoffen betrieben werden, entscheidender ist als die Novellierung des Erneuerbare-Energien-Gesetz (EEG) von 2012. Die Wirtschaftlichkeitsschwelle wird bei Getreidepreisen von mehr als 200 Euro/t kaum erreicht, so dass die derzeitige Stagnation des Ausbaus von Biogasanlagen in erster Linie auf die momentan hohen Agrarpreise zurückzuführen ist. Angesichts der zunehmenden Konkurrenz um Fläche zur Futter- bzw. Substratproduktion sowie zur Ausbringung zusätzlicher Nährstoffe in Gärresten lässt sich vor allem in Milch- und Veredlungsregionen ein deutlicher Anstieg der Pachtpreise nachweisen. Für die Ernährungs- und Futtermittelindustrie kann aus theoretischer Sicht von Auswirkungen der gestiegenen Biogaserzeugung ausgegangen werden. Allerdings lassen sich diese nur schwer quantifizieren und kaum validieren. -- In this study, the impact of the rapid, regionally very different development of biogas production and the necessary energy plant crops will be considered in terms of interactions within the agricultural sector, land and leasing markets, as well as the food and feedstuff industries, and regional aspects will be defined. It could be shown that the influence of agricultural price development on the economic viability of biogas facilities, which are primarily operated with renewable resources, is more decisive than the revised Renewable Energy Law (EEG) of 2012. The economic threshold is hardly attained with a grain price of more than 200 Euro/ton, so that the momentary stagnation in the building of biogas facilities can primarily be traced back to the currently high agricultural prices. In light of the increasing competition for land to grow feed or substrate, as well as for distributing additional nutrients in fermentation residues, a serious increase in leasing prices can be seen above all in milk and breeding regions. From a theoretical perspective, an impact of the increased biogas production can be assumed for the food and feedstuff industries. However these can only be quantified with difficulty and can hardly be validated.
    Keywords: Erneuerbares-Energien-Gesetz,Biogaserzeugung,Landnutzungsänderungen,Agrarsektor,Boden- und Pachtmärkte,Renewable Energy Law,biogas production,land use change,agricultural sector,land and leasing markets
    JEL: O13 Q12 Q13 Q15 Q42
    Date: 2013
  20. By: Markus Brückner; Antonio Ciccone; Andrea Tesei
    Abstract: We examine the effect of oil price fluctuations on democratic institutions over the 1960-2007 period. We also exploit the very persistent response of income to oil price fluctuations to study the effect of persistent (oil price-driven) income shocks on democracy. Our results indicate that countries with greater net oil exports over GDP see improvements in democratic institutions following upturns in international oil prices. We estimate that a 1 percentage point increase in per capita GDP growth due to a positive oil price shock increases the Polity democracy score by around 0.2 percentage points on impact and by around 2 percentage points in the long run. The effect on the probability of a democratic transition is around 0.4 percentage points.
    Date: 2013–12
  21. By: Balaguer, Jacint; Ripollés, Jordi
    Abstract: We explore the effect of cross-sectional aggregation of data on estimation and test of asymmetric retail fuel price responses to wholesale price shocks. The analysis is performed on data collected daily from individual fuel stations in the Spanish metropolitan areas of Madrid and Barcelona. While the standard OLS estimator is applied to an error correction model in the case of the aggregated time series, we use the mean group approaches developed by Pesaran and Smith (1995) and Pesaran (2006) to estimate the short- and long-run micro-relations under heterogeneity. We found remarkable differences between the results of estimations using aggregated and disaggregated data, which are highly robust to both datasets considered. Our findings could help to explain many of the results in the literature on this research topic. On the one hand, they suggest that the typical estimation with aggregated data clearly tends to overestimate the persistence of shocks. On the other hand, we show that aggregation may generate a loss of efficiency in econometric estimates that is sufficiently large to hide the existence of the “rockets and feathers” phenomenon.
    Keywords: Fuel pricing behavior, asymmetry, daily data, cross-sectional aggregation
    JEL: C31 C32 C33 D43 Q40
    Date: 2013–12
  22. By: Anyanwu John (African Development Bank); Andrew E. O. Erhijakpor
    Abstract: Understanding the effect of oil wealth on democracy is important. National democratic institutions provide a check on governmental power and thereby limit the potential of public officials to amass personal wealth and to carry out unpopular policies. Democracy promotion has thus been at the top of the US and West European foreign policy agenda since the end of the Cold War. Recently rising coups d’états attempts and oil discoveries in some African countries, high energy prices and the North African and Middle East situation characterized by revolutions have made the question of the link between oil wealth and democracy timelier than ever. This paper uses recent data on historical oil wealth to provide new evidence on the effect of oil wealth on democracy in Africa from 1955 to 2008. We find that oil wealth is statistically associated with a lower likelihood of democratization when we estimate the relationship in a pooled cross-sectional and time-series setting. In addition, when estimated using fixed effects, the strong negative statistical association continues to hold. Indeed, this result is robust to the source of oil wealth data, the choice and treatment of the variables set, and the sample selection. Our results also show other interesting and important results. The cross-country evidence examined in the study confirms that the “Lipset/Aristotle/modernization hypothesis” (that prosperity stimulates democracy) is a strong empirical regularity. Also, the propensity for democracy rises with population size, population density, ethnic fractionalization, having British legal origin or colonial heritage, and having a supportive institutional environment in the form of maintenance of the rule of law. However, apart from oil wealth, democracy tends to fall with linguistic fractionalization and rough (mountainous) terrain. Moreover, consistent with the data, North Africa consistently fails to favor democratic development.
    Date: 2013–12–19
  23. By: Matthias Weitzel; Tao Ma
    Abstract: Quantification of CO2 emissions embodied in China's trade is important for an informed debate on whom to blame for the recent rise in Chinese emissions or the calculation of border carbon adjustments. Applying input output techniques, we calculate these emissions in (1) a standard model, (2) a regionally disaggregated model, taking into account that export production is concentrated in more advanced and more emission efficient provinces and (3) in a model with export processing, taking into account that almost half of Chinese exports relies on a large share of imported intermediates and little domestic value and emissions added. We compare year 2007 emissions embodied for in Chinese exports in a unified framework. We also report emissions embodied in Chinese imports used for intermediate production of exports by combining calculations for China with data from global IO models. We find that both a model with 30 provinces (1730 Mt CO2) and a model accounting for export processing (1580 Mt) yield lower Chinese emissions embodied in exports compared to the standard model (1782 Mt). In the regional model, emissions are even lower (1522 Mt), if interprovincial trade is not taken into account
    Keywords: Emissions embodied in trade, China, input-output modelling, export processing, spatial disaggregation
    JEL: C67 F18 Q54
    Date: 2013–12
  24. By: In Chang Hwang (Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands); Richard S.J. Tol (Department of Economics, University of Sussex, Falmer, United Kingdom; Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands; Faculty of Economics and Business Administration, Vrije Universiteit, Amsterdam, The Netherlands; Tinbergen Institute, Amsterdam, The Netherlands; CESifo, Munich, Germany); Marjan W. Hofkes (Faculty of Economics and Business Administration, Vrije Universiteit, Amsterdam, The Netherlands; Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands)
    Abstract: This paper investigates the role of emissions control on reducing the tail-effect of the fat-tailed distribution of the climate sensitivity. Through a simple analysis on temperature distributions and some numerical simulations using the well-known DICE model, we find that the option for emissions control effectively prevents the tail-effect. Climate policy based on HARA utility is less sensitive to fat tails than climate policy based on CRRA utility.
    JEL: Q54 Q58 H23
    Date: 2013–12
  25. By: Humberto Llavador (Universitat Pompeu Fabra); John E. Roemer (Dept. of Political Science, Yale University); Joaquim Silvestre (University of California, Davis)
    Abstract: Mankind must cooperate to reduce GHG emissions to prevent a catastrophic rise in global temperature. How can the necessary costs of reducing GHG emissions be allocated across regions of the world, within the next few generations, and simultaneously address growth expectations and economic development? We postulate a two-region world and, based on sustainability and egalitarian criteria, calculate optimal paths in which a South, like China, and a North, like the United States, converge in welfare per capita to a path of sustained growth of 1% per year by 2080, while global CO2 emissions are restricted to the Representative Concentration Pathway RCP3-PD scenario: a conservative path that leads to the stabilization of concentrations under 450 ppm CO2, providing an expected temperature change not exceeding 2C. Growth expectations in the North and the South must be scaled back substantially, not only after 2080, but also in the transition period. Global negotiations to restrict emissions to an acceptably low level cannot succeed absent such an understanding. Feasible growth paths with low levels of emissions require heavy investments in education and knowledge. Northern and Southern growth must be restricted to 1% and 2.8% per year, respectively, over the next 75 years. Politicians who wish to solve the global-warming problem must prepare their polities to accept this reality.
    Keywords: Climate change, Sustainability, North-South convergence, International negotiations
    JEL: D63 F53 O40 O41 Q50 Q54 Q56
    Date: 2013–12
  26. By: Stephan Schmidt; Hannes Weigt (University of Basel)
    Abstract: Abstract: Reducing energy demand and increasing energy efficiency are seen as major elements of the ongoing transformation of energy systems in multiple national and international programs like the EU 20-20-20 targets. Despite the predominately socio-economic nature of energy demand such interdisciplinary viewpoints – albeit on the rise – are still the minority within energy related research. In this paper we provide a review on energy demand both from an economics and a social science perspective. In particular, we aim to identify potential fields for combined socio-economic research efforts oriented at three questions: ‘What drives energy demand?’, ‘Why do consumers behave the way they do?’ and finally ‘How can (end user) energy consumption be influenced?’
    Keywords: energy consumption, energy efficiency, energy conservation, economics, sociology, political science
    Date: 2013
  27. By: Alghalith, Moawia; Guo, Xu; Wong, Wing-Keung; Zhu, Lixing
    Abstract: In this paper, we analyze the impacts of joint energy and output prices uncertainties on the inputs demands in a mean-variance framework. We find that an increase in expected output price will surely cause the risk averse firm to increase the inputs’ demand, while an increase in expected energy price will surely cause the risk averse firm to decrease the demand for energy and increase the demand for non-risky inputs. Further, increasing the variance of energy price will necessarily cause the risk averse firm to decrease the demands for the non-risky inputs. Furthermore, we investigate the two cases with only uncertain energy price and only uncertain output price. In the case with only uncertain energy price, we find that the uncertain energy price has no impact on the demands for the non-risky inputs.
    Keywords: Price Uncertainty; Mean-Variance; Energy price, Risk
    JEL: C00 G11
    Date: 2013–12–12
  28. By: Roberto Gómez-Calvet (Departament de Matemàtiques per a l’Economia i l’Empresa, Universitat de València, Spain); David Conesa (Departament de Matemàtiques per a l’Economia i l’Empresa, Universitat de València, Spain); Ana Rosa Gómez-Calvet (Departament de Matemàtiques per a l’Economia i l’Empresa, Universitat de València, Spain); Emili Tortosa-Ausina (Department of Economics, Universitat Jaume I, Castellón, Spain)
    Abstract: Over the last few years there have been increasing concerns about the energy mix in many countries. These concerns have been of greater magnitude for countries with a common energy regulation such as European Union (EU) member states. In order to choose a given energy mix, an important aspect to take into account is the efficiency involved to generate it. In this context, the present study analyzes the efficiency with which electricity and derived heat is produced in 25 EU member states over the last decade. This is carried out considering not only the inputs and outputs involved but, more importantly, which undesirable by-products are generated during the production process, which is a relevant issue for the EU climate policy. To this end, two nonparametric frontier models are considered. First, a Directional Distance Function, based on Briec’s (1997) proposal and, second, a modified version of Tone’s (2001) Slack Based Measure (SBM) model, both of which are especially appropriate in this particular context due to its treatment of undesirable outputs. Results from both models show that there are remarkable efficiency differences among EU countries and, therefore, the initiatives aiming at harmonizing environmental policies have still to be intensified.
    Keywords: Data Envelopment Analysis, European Union, efficiency, energy, slackbased measure
    JEL: Q4 Q43
    Date: 2013
  29. By: Gwatipedza, Johnson; Barbier, Edward B.
    Abstract: Bilateral trade and capital flows have increased substantially between the United States and China yielding economic gains to both countries. However, these beneficial bilateral relations also bring about global environmental consequences including greenhouse gas emissions. We develop a footloose capital model of international trade between the North (United States) and the South (China) in the presence of a global pollution externality. Each country's share of global pollution depends on its share of world capital. We show that, if the disutility of pollution in the United States is high, there will be pressure on the US to raise environmental regulations on industry. Capital will move to China. Because the increased pollution in China has global effects, the US may not benefit from the environmental restrictions and a joint regulation of pollution by both parties may be a preferred outcome. We also show that the implementation of differential control policies by the parties may also be optimal. --
    Keywords: global pollution externality,agglomeration,environmental regulation,global warming,greenhouse gas emissions
    JEL: D43 Q54 F18
    Date: 2013
  30. By: Xavier d'Haultfoeuille (CREST); Isis Durrmeyer (University of Mannheim); Philippe Février (CREST)
    Abstract: In this paper, we investigate whether French consumers have modified their preferences towards environmentally-friendly vehicles between 2003 and 2008. We estimate a model of demand for automobiles incorporating both consumers’ heterogeneity and CO2 emissions of the vehicles. Our results show that there has been a shift in preferences towards low-emitting cars, with an average increase of 367 euros of the willingness to pay for a reduction of 10 grams of carbon dioxide per kilometer. We also stress a large heterogeneity in the evolution of preferences between consumers. Rich and young people are more sensitive to environmental issues, and our results are in line with votes for the green party at the presidential elections. We relate these changes with two environmental policies that were introduced at these times, namely the obligation of indicating energy labels by the end of 2005 and a feebate based on CO2 emissions of new vehicles in 2008. Our results suggest that such policies have been efficient tools to shift consumers utility towards environmentally-friendly goods, the shift in preferences accounting for 20% of the overall decrease in average CO2emissions of new cars on the period
    Keywords: Environmental policy, Consumers'preferences, CO2 emissions, Automobiles
    JEL: D12 H23 L62 Q51
    Date: 2013–10
  31. By: Marta Rocha; Michelle Baddeley; Michael G. Pollitt
    Abstract: This paper uses insights from the study of self-control in decision-making to remedy the problem of self-disconnection among energy prepayment consumers. Self-disconnection happens when consumers exhaust all available credit in their meter and are left without supply of energy. This has serious consequences for the wellbeing of consumers and may increase firms’ costs. We design a mechanism composed of a commitment contract and a reminder in order to minimize the number of self-disconnections. We empirically assess this mechanism by examining (1) the determinants of self-disconnection and (2) the choice of different commitment contracts. We show that self-control plays a role in self-disconnection and we are able to identify, in our sample, those consumers who benefit from a commitment contract. Moreover, we find a demand for commitment and an opportunity to save among those consumers who need a commitment contract.
    Keywords: Commitment contract; Self-control; Prepayment meter; Self-disconnection; Reminder
    JEL: D03 D12 D91
    Date: 2013–05–12
  32. By: Chatterji, Shurojit; Ghosal, Sayantan; Walsh, Sean; Whalley, John
    Abstract: What's the role of unilateral measures in global climate change mitigation in a post-Durban, post 2012 global policy regime? We argue that under conditions of preference heterogeneity, unilateral emissions mitigation at a subnational level may exist even when a nation is unwilling to commit to emission cuts. As the fraction of individuals unilaterally cutting emissions in a global strongly connected network of countries evolves over time, learning the costs of cutting emissions can result in the adoption of such activities globally and we establish that this will indeed happen under certain assumptions. We analyze the features of a policy proposal that could accelerate convergence to a low carbon world in the presence of global learning.
    Keywords: Unilateral initiatives, mitigation, spillovers, global learning, technology transfer,
    Date: 2013
  33. By: Kristinn, Hermannsson; Stuart G., McIntyre
    Abstract: We examine the complications involved in attributing emissions at a sub-regional or local level. Speci cally, we look at how functional specialisation embedded within the metropolitan area can, via trade between sub-regions, create intra-metropolitan emissions interdependencies; and how this complicates environmental policy implementation in an analogous manner to international trade at the national level. For this purpose we use a 3-region emissions extended input-output model of the Glasgow metropolitan area (2 regions: city and surrounding suburban area) and the rest of Scotland. The model utilises data on commuter flows and household consumption to capture income and consumption flows across sub-regions. This enables a carbon attribution analysis at the sub-regional level, allowing us to shed light on the signi cant emissions interdependencies that can exist within metropolitan areas.
    Keywords: CO2 emissions, environmental accounting, regional interdependencies, metropoli- tan areas, commuting,
    Date: 2013
  34. By: Michael King
    Abstract: This paper explores the policy coherence for development (PCD) dimensions of green growth strategies pursued by OECD member states. The coherence challenge is to design OECD green growth policies in order to maximise the positive synergies and minimise the negatives effects on pro-poor growth in developing countries. Coherence issues across three cross-cutting themes, climate change, biodiversity and innovation policy, are considered, before a comprehensive set of PCD issues related to agricultural livelihoods, fisheries livelihoods and the energy and minor sectors in developing countries are discussed. In doing so three PCD case studies, Anti-Counterfeiting Trade Agreement (ACTA), the reform of EU biofuels policy and EU fisheries access, are presented and lessons for the green growth agenda are derived.
    Keywords: intellectual property rights, policy coherence for development, biofuels Policy, Pro-poor Growth, fisheries policy, green growth
    Date: 2013–12–16
  35. By: James R. Markusen
    Abstract: International trade policy analysis has tended to focus on the production side of general equilibrium, with policies such as a tariff or carbon tax affecting international and internal income distributions through a Heckscher-Ohlin nexus of factor intensities and factor endowments. Here I move away from this structure to focus on demand and preferences. The specific context is an international environmental externality such as carbon emissions, and I assume a high income elasticity of demand for environmental quality. I analyze how per-capita income differences between two countries affect their abatement efforts in a non-cooperative policy-setting game. This outcome can then be used as a disagreement point to analyze cooperative Nash bargaining. In both outcomes, the poor country makes a lower abatement effort in equilibrium; indeed, it may make none at all and cooperative bargaining with only abatement levels as an instrument may offer no gains. Other features include a novel terms-of-trade externality in which an abating country passes on a part of its abatement cost to its trading partner, in which case the non-cooperative and cooperative outcomes are identical under special symmetry assumptions. When per-capita income differences are large, the poor country may be worse off when the rich country abates. Finally, I examine “issue linking” in international bargaining, in which one country is both large and rich, and hence has both a high tariff and a high abatement effort in a non-cooperative equilibrium.
    JEL: F1 F18 Q56
    Date: 2013–12

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