nep-ene New Economics Papers
on Energy Economics
Issue of 2014‒01‒24
twenty-six papers chosen by
Roger Fouquet
London School of Economics

  1. Environmental Tax Reforms in Switzerland A Computable General Equilibrium Impact Analysis By Christoph Böhringer; André Müller
  2. ICT and the demand for energy: Evidence from OECD countries By Rexhaeuser, Sascha; Schulte, Patrick; Welsch, Heinz
  3. The effects on energy saving from taxes on motor fuels: The Swedish case By Brännlund, Runar
  4. A study of CO2 emissions, output, energy consumption, and trade By Sahbi Farhani; Anissa Chaibi; Christophe Rault
  5. The Impacts of Feed-in Tariffs on Innovation: Empirical Evidence from Germany By Christoph Böhringer; Alexander Cuntz; Dietmar Harhoff; Emmanuel A. Otoo
  6. Demand-side management and European environmental and energy goals: an optimal complementary approach By Claire Bergaentzlé; Cédric Clastres; Haikel Khalfallah
  7. Determinants of the price-premium for Green Energy: Evidence from an OECD cross-section By Kiran Krishnamurthy, Chandra; Kriström, Bengt
  8. What can transmission do for a fully renewable Europe? By Sarah Becker; Rolando A. Rodriguez; Gorm B. Andresen; Martin O. W. Greiner; Stefan Schramm
  9. The Strategic Value of Carbon Tariffs By Christoph Böhringer; Jared C. Carbone; Thomas F. Rutherford
  10. Marginal abatement cost curves and the optimal timing of mitigation measures By Adrien Vogt-Schilb; Stéphane Hallegatte
  11. The Role of Natural Gas Consumption and Trade in Tunisia’s Output By Mohamed Arouri; Sahbi Farhani; Muhammad Shahbaz; Frédéric Teulon
  12. Dynamic Impacts on Growth and Intergenerational Effects of Energy Transition in a Time of Fiscal Consolidation By Frederic Gonand
  13. Nonlinearity in cap-and-trade systems: The EUA price and its fundamentals By Lutz, Benjamin Johannes; Pigorsch, Uta; Rotfuß, Waldemar
  14. Sharing the burden for climate change mitigation in the Canadian federation By Christoph Böhringer; Nicholas Rivers; Tom F. Rutherford; Randall Wigle
  15. Linkage of Greenhouse Gas Emissions Trading Systems: Learning from Experience By Matthew Ranson; Robert Stavins
  16. Volatility spillovers and macroeconomic announcements evidence from crude oil markets By Aymen Belgacem; Anna Creti; Khaled Guesmi; Amine Lahiani
  17. PCan Oil-Rich Countries Encourage Entrepreneurship? ‘Yes’, ‘No’ but not ‘Perhaps’ By Mohammad Reza Farzanegan
  18. On the stationarity of per capita carbon dioxide emissions over a century By Maria Christisou; Theodore Panagiotidis; Abhijit Sharma
  19. Benchmarking time series based forecasting models for electricity balancing market prices By Gro Klaeboe; Anders Lund Eriksrud; Stein-Erik Fleten
  20. How large is the Owner-Renter Divide? Evidence from an OECD cross-section By Kiran Krishnamurthy, Chandra; Kriström, Bengt
  21. Exploring Public Perception of Solar Radiation Management By Christine Merk; Gert Pönitzsch; Carola Kniebes; Katrin Rehdanz; Ulrich Schmidt
  22. Wages, Youth Employment, and School Enrollment: Recent Evidence from Increases in World Oil Prices By Morissette, Rene Chan, Winnie Lu, Yuqian
  23. Inside the Metrics – An Empirical Comparison of Energy Poverty Indices for Sub-Saharan Countries By Gunther Bensch
  24. CAPRI long-term climate change scenario analysis: The AgMIP approach By Heinz-Peter Witzke; Pavel Ciaian; Jacques Delince
  25. Dynamic market power in an exhaustible resource industry: The case of rare earth elements By Pothen, Frank
  26. Les enjeux de sécurité dans la relation gazière UE-Russie By Catherine Locatelli

  1. By: Christoph Böhringer (University of Oldenburg, Department of Economics); André Müller (Ecoplan, Bern, Switzerland)
    Abstract: The Swiss energy strategy until 2050 envisages ambitious CO2 emission reduction targets along with substantial cutbacks in electricity consumption to establish a low-carbon economy without nuclear energy. Our computable general equilibrium analysis find that compliance with stringent CO2 constraints requires high CO2 taxes on economic activities which are not eligible for international emissions trading; likewise, electricity consumers are burdened with substantial electricity taxes. Environmental tax reforms are not likely to generate welfare gains without accounting for the benefits of improved environmental quality . However, economic adjustment costs to a low carbon economy without nuclear energy remain modest and can be markedly reduced through revenue-neutral cuts of initial distortionary taxes. On the other hand, alternative recycling strategies pose a trade-off between efficiency anddistributional justice which has to be resolved on normative grounds.
    Keywords: environmental tax reforms, computable general equilibrium
    JEL: H21 D58 Q48
    Date: 2014–01
  2. By: Rexhaeuser, Sascha; Schulte, Patrick; Welsch, Heinz
    Abstract: This paper analyzes the relationship between information and communication technology (ICT) and energy demand. We construct a comprehensive cross-country cross-industry panel data set covering 13 years, 10 OECD countries, and 27 industries. Using up to 2889 country-industry observations, we find that: (1) ICT capital is associated with a significant reduction in energy demand. (2) This relationship differs with regard to different types of energy. ICT use is not significantly correlated with electricity demand, but is significantly related to a reduction in non-electric energy demand. That is, ICT use comes with a reduction in total energy demand and an increase in the relative demand for electric over non-electric energy. --
    Keywords: technical change,ICT,energy demand,energy efficiency,energy mix,Green IT,cross-country cross-industry data,environmental policy
    JEL: O33 O44 Q41 Q43
    Date: 2013
  3. By: Brännlund, Runar (CERE, Umeå University)
    Abstract: The objective with this study is to analyze the role of energy taxes for energy efficiency in the Swedish transport sector. In particular we analyze how large share the Swedish energy tax will contribute to the overall Swedish target for energy efficiency set by the EU directive for energy efficiency. To obtain the objective a dynamic demand model for gasoline and diesel is estimated, based on Swedish time series data from 1976 to 2012. The results from the demand model shows that a higher tax on gasoline results in lower gasoline demand, but leads to an increase in diesel consumption, and vice versa. A removal of the energy and CO2 tax, lowering both the gasoline and diesel consumer price, leads to an overall increase in energy use, but also to an increase in the share for diesel in fuel use. Concerning energy savings the simulation results show that the current Swedish energy and CO2 taxes are sufficient for achieving the EU stipulated target, and hence no additional measures has to be taken.
    Keywords: energy efficiency; gasoline; diesel; cointegration
    JEL: Q41
    Date: 2013–10–30
  4. By: Sahbi Farhani; Anissa Chaibi; Christophe Rault
    Abstract: This article contributes to the literature by investigating the dynamic relationship between Carbone dioxide (CO2) emissions, output (GDP), energy consumption, and trade using the bounds testing approach to cointegration and the ARDL methodology for Tunisia over the period 1971-2008. The empirical results reveal the existence of two causal long-run relationships between the variables. In the short-run, there are three unidirectional Granger causality relationships, which run from GDP, squared GDP and energy consumption to CO2 emissions. To check the stability in the parameter of the selected model, CUSUM and CUSUMSQ were used. The results also provide important policy implications.
    Keywords: CO2 emissions, Energy consumption, ARDL bounds testing approach
    JEL: Q56 Q43 C51
    Date: 2014–01–06
  5. By: Christoph Böhringer (University of Oldenburg, Departmentof Economics); Alexander Cuntz (Expert Commission for Research and Innovation, Berlin, Germany); Dietmar Harhoff (Max Planck Institute for Intellectual Property and Competition Law, Munich, Germany); Emmanuel A. Otoo (Universtiy of Oldenburg, Department of Economics)
    Abstract: Feed-in tariffs under the Renewable Energy Sources Act, the so - called Erneuerbare - Energien - Gesetz (EEG), have triggered a massive expansion of electricity from renewable energy sources in Germany over the last decade. The increase in non-competitive renewable power generation though went hand in hand with a substantial rise in electricity prices with consumers paying for the renewable energy subsidies. The high cost burden has provoked an intense public debate on the benefits of renewable energy promotion. In this paper, we assess one popular justification for feed-in tariffs, i.e., induced innovation as a positive spillover externality. Based on regressions with a time - technology fixed effect negative binomial model, we find that innovation impacts of feed-in tariffs under the EEG are insignificant.
    Keywords: renewable energy promotion, feed-in tariffs, innovation, negative binomial regression
    JEL: C23 H23 O38
    Date: 2014–01
  6. By: Claire Bergaentzlé (PACTE - Politiques publiques, ACtion politique, TErritoires - Institut d'Études Politiques [IEP] - Grenoble - CNRS : UMR5194 - Université Pierre-Mendès-France - Grenoble II - Université Joseph Fourier - Grenoble I); Cédric Clastres (PACTE - Politiques publiques, ACtion politique, TErritoires - Institut d'Études Politiques [IEP] - Grenoble - CNRS : UMR5194 - Université Pierre-Mendès-France - Grenoble II - Université Joseph Fourier - Grenoble I); Haikel Khalfallah (PACTE - Politiques publiques, ACtion politique, TErritoires - Institut d'Études Politiques [IEP] - Grenoble - CNRS : UMR5194 - Université Pierre-Mendès-France - Grenoble II - Université Joseph Fourier - Grenoble I)
    Abstract: Demand side management (DSM) in electricity markets could improve energy efficiency and achieve environmental targets through controlled consumption. For the past 10 years or so DSM programmes have registered significant results. However, detailed analysis of its real impact as observed by a large number of pilot studies suggests that such programmes need to be fine-tuned to suit clearly identified conditions. This study aims to provide recommendations for the instruments to be used to prompt demand response with a view to maximizing energy and environmental efficiencies of various countries. The present study suggests that different DSM models should be deployed depending on the specific generation mix in any given country. Beside the natural benefits from cross-borders infrastructures, DSM improves the flexibility and reliability of the energy system, absorbing some shock on generation mix. We show efficiency increases with demand response but at a decreasing rate. So, according to rebound and report effects, simple DSM tools could be preferred.
    Keywords: EU energy policy ; Demand side management ; Energy efficiency
    Date: 2014
  7. By: Kiran Krishnamurthy, Chandra (CERE, Umeå University); Kriström, Bengt (CERE, Swedish University of Agricultural Sciences)
    Abstract: Using data from a large, multi-country survey, this paper investigates the determinants of preferences for a completely green residential electricity system. Three important questions are addressed: (i) How much are households willing to pay to use only renewable energy? (ii) Does willingness-to-pay (wtp) vary significantly across household groups and countries? and (iii) What drives the decision to enter the (hypothetical) market for green energy and, given entry, what drives the level of wtp? The analysis here differs from previous ones in the literature in two distinct ways: first, data and analyses are comparable across countries and second, a comprehensive attempt to address censoring and heterogeneity is carried out. The survey data indicate, in common with prior analyses and market experience, a low wtp, about 9􀀀10%. This study addressed a key aspect: how important is income for understanding wtp, relative to more âattitudinalâ determinants? Surprisingly, income exerts almost no effect on wtp, at the margin; this result is robust to controlling for censoring and heterogeneity. Key determinants of the wtp decision appear to be environmental attitudes, particularly membership in an environmental organization.
    Keywords: green electricity; willingness-to-pay; censoring; quantile regression; renewable energy
    JEL: C21 C24 Q42 Q51
    Date: 2013–10–27
  8. By: Sarah Becker; Rolando A. Rodriguez; Gorm B. Andresen; Martin O. W. Greiner; Stefan Schramm
    Abstract: Our research is centred around the question how to best integrate the variable renewable energy sources (VRES), wind power and solar photovoltaics, into the European electricity grid. The future electricity supply will be based to a large extend on these fluctuating resources. We have conducted a study, extrapolating national historical and targeted wind and solar power penetrations in Europe up to 100% VRES (R.A. Rodriguez et al, Renewable Energy 63, p. 467, Mar 2014 and S. Becker et al, Energy 64, p. 404, Jan 2014). A high share of VRES means large fluctuations in the generation, causing overproduction and deficits. One way to reduce such mismatches is power transmission spatially smoothing out the fluctuations. This has the potential to reduce the remaining shortages by sharing the surplus production of others. We find that shortages can at maximum be reduced by 40% in the hypothetical case of unlimited transmission capacities across all of Europe. A more realistic extension of the transmission grid, roughly quadrupling today's installation, turns out to be sufficient to harvest 90% of this potential benefit. Finally, the import and export of single countries is investigated. We conclude that a country's load size as well as its position in the network are the determining factors for its import/export opportunities.
    Date: 2014–01
  9. By: Christoph Böhringer (University of Oldenburg, Department of Economics); Jared C. Carbone (Department of Economics, University Drive NW, Calgary, Canada,); Thomas F. Rutherford (University of Wisconsin, Madison, USA)
    Abstract: Unilateral carbon policies are inefficient due to the fact that they generally involve emission reductions in countries with high marginal abatement costs and because they are subject to carbon leakage. In this paper, we ask whether the use of carbon tariffs—tariffs on the carbon embodied in imported goods—might lower the cost of achieving a given reduction in world emissions. Specifically, we explore the role tariffs might play as an inducement to unregulated countries adopting emission controls of their own. We use an applied general equilibrium model to generate the payoffs of a policy game. In the game, a coalition of countries regulates its own emissions and chooses whether or not to employ carbon tariffs against unregulated countries. Unregulated countries may respond by adopting emission regulations of their own, retaliating against the carbon tariffs by engaging in a trade war, or by pursuing no policy at all. In the unique Nash equilibrium produced by this game, the use of carbon tariffs by coalition countries is credible. China and Russia respond by adopting binding abatement targets to avoid being subjected to them. Other unregulated countries retaliate. Cooperation by China and Russia lowers the global welfare cost of achieving a 10% reduction in global emissions by half relative to the case where coalition countries undertake all of this abatement on their own.
    Date: 2014–01
  10. By: Adrien Vogt-Schilb (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - AgroParisTech); Stéphane Hallegatte (SDN - Sustainable Development Network - The World Bank)
    Abstract: Decision makers facing abatement targets need to decide which abatement measures to implement, and in which order. Measure-explicit marginal abatement cost curves depict the cost and abating potential of available mitigation options. Using a simple intertemporal optimization model, we demonstrate why this information is not sufficient to design emission reduction strategies. Because the measures required to achieve ambitious emission reductions cannot be implemented overnight, the optimal strategy to reach a short-term target depends on longer-term targets. For instance, the best strategy to achieve European's -20% by 2020 target may be to implement some expensive, high-potential, and long-to-implement options required to meet the -75% by 2050 target. Using just the cheapest abatement options to reach the 2020 target can create a carbon-intensive lock-in and make the 2050 target too expensive to reach. Designing mitigation policies requires information on the speed at which various measures to curb greenhouse gas emissions can be implemented, in addition to the information on the costs and potential of such measures provided by marginal abatement cost curves.
    Keywords: climate change mitigation; dynamic efficiency; sectoral policies
    Date: 2014–01–14
  11. By: Mohamed Arouri; Sahbi Farhani; Muhammad Shahbaz; Frédéric Teulon
    Abstract: This paper examines the impact of natural gas consumption, real gross fixed capital formation and trade on the real GDP in the case of Tunisia over the period 1980-2010. We use an Autoregressive Distributed Lag (ARDL) bounds testing approach to test the existence of a longterm relationship between the variables. The Vector Error Correction Method (VECM) Granger approach is applied to test the direction of the causal relation between the series. Our findings indicate the existence of a long-term relationship among the variables. Natural gas consumption, real gross fixed capital formation and trade add in economic growth. Natural gas consumption, real gross fixed capital formation and real trade Granger-cause real GDP. These findings open up new insights for policymakers to formulate a comprehensive energy policy to sustain economic growth in the long term.
    Keywords: Natural gas consumption, Economic growth, ARDL approach
    JEL: C7 D8
    Date: 2014–01–06
  12. By: Frederic Gonand
    Abstract: Social planners in most western countries will be facing two long-lasting challenges in the next years: energy transition and fiscal consolidation. One problem is that governments might consider that implementing an energy transition could get in the way of achieving a fiscal consolidation. If so, interrupting the energy transition in a time of fiscal consolidation would involve significant aggregate impacts on activity and intergenerational redistributive effects. This article tries to assess them empirically. It relies on an overlapping-generations framework in a general equilibrium setting, with a detailed energy module. The model is parameterized on data provided by OECD/IEA for France. Different results emerge. Renouncing to the energy transition would slightly foster the level of GDP during the next 10 to 15 years - depending on the dynamics of the prices of fossil fuels on world markets - but weigh on it more significantly afterwards (up to -1% in 2050). If the prices of fossil fuels keep increasing in the future, implementing an energy transition could have broadly the same favourable effects on the GDP level in the long run as those of a fiscal consolidation diminishing significantly public spending instead of raising taxes. In the long-run, the GDP would be maximized by implementing an energy transition and simultaneously lessening the public deficit by lowering some public expenditure, a policy that would entail an overall gain of around 1,6% of GDP in 2050. Stopping the energy transition would also bring about intergenerational issues. It would be detrimental to the intertemporal wellbeing of almost all cohorts alive in 2010. A fiscal policy with lower public expenditures and frozen tax rates may be still more favourable to young and future generations than implementing an energy transition. However, renouncing to an energy transition would annihilate most of these pro-youth effects.
    Keywords: Energy transition, intergenerational redistribution, overlapping generations, fiscal consolidation, general equilibrium
    JEL: D58 D63 E62 L7 Q28 Q43
    Date: 2014
  13. By: Lutz, Benjamin Johannes; Pigorsch, Uta; Rotfuß, Waldemar
    Abstract: In this paper we examine the nonlinear relation between the EUA price and its fundamentals, such as energy prices, macroeconomic risk factors and weather conditions. By estimating a Markov regime-switching model, we find that the relation between the EUA price and its fundamentals varies over time. In particular, we are able to identify a low and a high volatility regime, both showing a strong impact of the fundamentals on the EUA price. The most important EUA price drivers are changes on the stock market and energy prices. The gas price and a broad European equity index affect the EUA price positively in both regimes, while the coal price and the oil price have a significant, but also positive impact only during the high and the low volatility regime, respectively. The high volatility regime is predominant in phases when economic activities are on a decrease or when institutional changes harm the confidence in the stringency of the EU ETS. This holds during the recession of 2008 and 2009, as well as during 2011 and 2012 when the debt crisis impaired the European economic outlook. --
    Keywords: EU ETS,EUA Price Fundamentals,Markov Regime-Switching
    JEL: C22 C58 G13 Q50
    Date: 2013
  14. By: Christoph Böhringer (University of Oldenburg, Department of Economics); Nicholas Rivers (Graduate School of Public and International Affairs and Institute of Environment, University of Ottawa); Tom F. Rutherford (University of Wisconsin, Madison, USA); Randall Wigle (Balsillie School of International Affairs and School of Business and Economics, Wilfrid Laurier University)
    Abstract: Dividing the burden for greenhouse gas abatement amongst the provinces has proven challenging in Canada, and is a major factor contributing to Canada's poor historic performance on greenhouse gas abatement. As the country aims to achieve substantial cuts to emissions over the next decade and by mid-century, such burden sharing considerations are likely to be elevated in importance. This paper uses a calibrated multi-region multi-sector computable general equilibrium model to compare a number of archetypal rules for sharing the burden of a joint commitment amongst members for the case of greenhouse gas reductions in Canada. Because of the substantial heterogeneity amongst Canadian provinces, these different burden sharing rules imply signifcantly different relative abatement effort amongst provinces, and also signifcantly different welfare implications. When emission permits are allocated on an equal per capita basis, welfare is increased in Ontario, British Columbia, Quebec, and Manitoba, and signifcantly reduced in Alberta and Saskatchewan. In contrast, when emission permits are allocated based on historic emissions, Alberta and Saskatchewan are made better off, and Ontario, British Columbia, Quebec, and Manitoba are made worse off. We compare these archetypal burden sharing rules to existing provincial emission reduction commitments, and find that none of the standard burden sharing rules comes close to existing commitments. We argue that the debate on burden sharing of greenhouse gas abatement in Canada could be objectified if informed by coherent quantitative analysis such as the one presented here.
    Keywords: climate, burden sharing, computable general equilibrium analysis
    JEL: C68 Q50
    Date: 2014–01
  15. By: Matthew Ranson; Robert Stavins
    Abstract: The last ten years have seen the growth of linkages between many of the world’s cap-and-trade systems for greenhouse gases (GHGs), both directly between systems, and indirectly via connections to credit systems such as the Clean Development Mechanism. If nations have tried to act in their own self-interest, this proliferation of linkages implies that for many nations, the expected benefits of linkage outweighed expected costs. In this paper, we draw on the past decade of experience with carbon markets to test a series of hypotheses about why systems have demonstrated this revealed preference for linking. Linkage is a multi-faceted policy decision that can be used by political jurisdictions to achieve a variety of objectives, and we find evidence that many economic, political, and strategic factors – ranging from geographic proximity to integrity of emissions reductions – influence the decision to link. We also identify some potentially important effects of linkage, such as loss of control over domestic carbon policies, which do not appear to have deterred real-world decisions to link. These findings have implications for the future role that decentralized linkages may play in international climate policy architecture. The Kyoto Protocol has entered what is probably its final commitment period, covering only a small fraction of global GHG emissions. Under the Durban Platform for Enhanced Action, negotiators may now gravitate toward a hybrid system, combining top-down elements for establishing targets with bottom-up elements of pledge-and-review tied to national policies and actions. The incentives for linking these national policies are likely to continue to produce direct connections among regional, national, and sub-national cap-and-trade systems. The growing network of decentralized, direct linkages among these systems may turn out to be a key part of a future hybrid climate policy architecture.
    JEL: Q28
    Date: 2014–01
  16. By: Aymen Belgacem; Anna Creti; Khaled Guesmi; Amine Lahiani
    Abstract: The paper employs an event study methodology to investigate the macroeconomic announcements effects on S&P500 and oil prices. Our results provide evidence of a significant impact of the US macroeconomic news on oil prices. This impact is split into two components, namely the direct effect (common response) and indirect effect (volatility transmission). Altogether our results show that the volatility transmission is bidirectional since a significant volatility transmission from the oil market to the US stock market is revealed. Furthermore, a higher volatility transmission is recorded from the oil market to the stock market especially after the release of consumption indicators.
    Keywords: Stock Prices, Oil prices, Macroeconomic Announcements, Volatility Spillovers.
    JEL: G14 G15 C58
    Date: 2014–01–06
  17. By: Mohammad Reza Farzanegan (University of Marburg)
    Abstract: This study provides the first empirical investigation to test one of transmission channels of resource curse, i.e., marginalized entrepreneurship activities. Our panel data analysis of 65 countries from 2004 to 2011 shows a negative and statistically significant association between oil rents dependency and entrepreneurship indicator. This finding is robust to control of other major drivers of entrepreneurship, unobservable country and time fixed effects and a different measurement of oil rents dependency. Additionally our main results show that government effectiveness among other dimensions of good governance has a statistically significant moderating effect in entrepreneurship-oil rents nexus.
    Keywords: resource curse, oil rents, entrepreneurship, governance, business formation
    JEL: O13 Q32 M13
    Date: 2014
  18. By: Maria Christisou (Department of Economics, University of Macedonia); Theodore Panagiotidis (Department of Economics, University of Macedonia); Abhijit Sharma (Bradford University School of Management)
    Abstract: This paper examines the stationarity of carbon dioxide (CO2) emissions per capita for a set of 36 countries covering the period 1870-2006. We employ recently developed unit root and stationarity tests that allow for the mean reverting process to be nonlinear and take into account cross sectional dependence. By grouping countries according to their geographical proximity the importance of cross sectional dependence in panel unit root and stationarity tests is revealed. Using a recently developed nonlinear panel unit root test, we nd strong evidence that the per capita carbon dioxide emissions over the last one hundred and fty years are stationary. Our nonlinear specication captures the dynamics of the emissions time series data more eectively and we obtain evidence supporting stationarity for all country groups under study.
    Keywords: convergence, nonlinear unit roots, panel unit roots, heterogeneous panels, cross-section dependence.
    JEL: C32 C33 Q28 Q54
    Date: 2013–12
  19. By: Gro Klaeboe (Norwegian University of Science and Technology); Anders Lund Eriksrud (Norwegian University of Science and Technology); Stein-Erik Fleten (Norwegian University of Science and Technology)
    Abstract: In the trade-off between bidding in the day-ahead electricity market and the real time balancing market, producers need good forecasts for balancing market prices to make informed decisions. A range of earlier published models for forecasting of balancing market prices, including a few extensions, is benchmarked. The models are benchmarked both for one hour-ahead and day-ahead forecast, and both point and interval forecasts are compared. None of the benchmarked models produce infor- mative day-ahead point forecasts, suggesting that information available before the closing of the day-ahead market is eciently re ected in the day-ahead market price rather than the balancing market price. Evalua- tion of the interval forecasts reveals that models without balancing state information overestimate variance, making them unsuitable for scenario generation.
    Keywords: Federal Reserve, Forecast Evaluation, Survey of Professional Forecasts, Business Cycle, Mahalanobis Distance
    JEL: C5 E2 E3
    Date: 2013–10
  20. By: Kiran Krishnamurthy, Chandra (CERE, Umeå University); Kriström, Bengt (CERE, Swedish University of Agricultural Sciences)
    Abstract: When the agent making an investment decision is different from the one bearing the costs of the usage decision, the outcome (energy usage, in this case) is socially sub-optimal, a scenario known in the energy efficient technology case as âsplit incentiveâ effect. Using a sample of individual households from 11 OECD countries, this paper investigates the magnitude of the âsplit incentivesâ effect between home occupants who are owners and those who are renters. A wide variety of energy-related âtechnologiesâ are considered: appliances, insulation, heat thermostat, solar panels, ground source heat pumps and wind turbines. The raw data provide a clear indication of difference in patterns of access to these technologies consistent with the âsplit incentivesâ hypothesis. Regression results suggest that, even after controlling for the sizeable differences in observed characteristics, owners are substantially more likely to have access to top-rated energy efficient appliances and to better insulation as well as to heat thermostats. For relatively immobile investments such as wind turbines and ground source heat pumps, we find a very small effect, possibly due to the differing institutional characteristics (such as availability of grants and regulations) which influence their adoption.
    Keywords: Principal-Agent Problem; Split Incentives; Energy Effi ciency
    JEL: Q40 Q50
    Date: 2013–10–30
  21. By: Christine Merk; Gert Pönitzsch; Carola Kniebes; Katrin Rehdanz; Ulrich Schmidt
    Abstract: Solar radiation management (SRM) could quickly offset global warming caused by anthropogenic greenhouse gas emissions. Because SRM would have global side effects, it raises not only technological but also political and social concerns. Therefore, SRM research should be accompanied by a global debate that incorporates public perception and concerns into the development and governance of the technology. Our paper provides insight into public perception and explores its underlying patterns using a survey conducted in Germany. The data reveal a differentiated picture. Laboratory research on SRM is broadly approved, whereas field research is much less approved. Immediate deployment is largely rejected. The acceptance of the technology is associated with the belief that climate change is a severe problem and that humans will eventually be able to control nature. It is also determined by the levels of trust in scientists and firms. Among the strongest objections against the technology is the belief that humans should not manipulate nature in the way SRM would. The actual public perception of SRM will, however, evolve along with the ongoing debate between the public, experts, and policymakers
    Keywords: Climate Engineering, Geoengineering, Solar Radiation Management, Climate Change, Public Opinion, Survey
    JEL: Q54 D19 H43
    Date: 2014–01
  22. By: Morissette, Rene Chan, Winnie Lu, Yuqian
    Abstract: Canada's oil reserves are concentrated in three Canadian provinces: Alberta, Saskatchewan, and Newfoundland and Labrador. Oil prices received by Canadian oil producers more than doubled between 2001 and 2008. The proportion of young men employed in the oil industry differs markedly across provinces and education levels. Taken together, these facts suggest that the increases in world oil prices observed between 2001 and 2008 may have induced cross-educational and cross-provincial variation in labour demand and male wage growth in Canada. Using data from the Canadian Labour Force Survey, this study exploits this variation in wage growth in order to estimate the elasticity of young men's labour market participation and school enrollment with respect to wages.
    Keywords: Education, training and learning, Labour, Students, Employment and unemployment, Educational attainment, Wages, salaries and other earnings
    Date: 2014–01–13
  23. By: Gunther Bensch
    Abstract: With the ‘Sustainable Energy for All’ initiative led by the UN and World Bank, the provision of access to modern energy has recently been brought to the top of the international development agenda. However, there is yet little guidance on how to measure modern energy access or its deprivation, energy poverty. This paper discusses five energy poverty measurement approaches and compares their results empirically using a unique household dataset on five sub-Saharan countries. Due to a broad coverage of energy-related issues, this dataset accommodates the data requirements imposed by all metrics. The metrics turn out to perform quite differently in terms of the identification of the energy poor, sensitivities to parameter changes and data requirements. Based on the empirical findings, recommendations are made on essential features of the metrics to support the ambitious goals set out by the ‘Sustainable Energy for All’ initiative.
    Keywords: Energy poverty measurement; energy access; sub-Sahara Africa
    JEL: C81 I32 O13
    Date: 2013–12
  24. By: Heinz-Peter Witzke (Bonn University); Pavel Ciaian (European Commission (DG Joint Research Center)); Jacques Delince (European Commission (DG Joint Research Center))
    Abstract: The current paper investigates the long-term global effects of crops productivity changes under different climate scenarios and the impact of biofuels expansion using the Common Agricultural Policy Regionalised Impact (CAPRI) model. These analyses are conducted in the framework of the AgMIP project (Agricultural Model Intercomparison and Improvement Project). The results indicate that globally there will be both winners and losers, with some regions benefitting from agricultural production adjustment as a result of climate change whilst most regions suffering losses in production and consumption. Biofuel expansion leads to land relocation away from crop agricultural commodity production to new energy crops which is reflected in lower production levels of agricultural commodities and higher agricultural prices.
    Keywords: Climate Change, Lung-run modelling, Agriculture, Productivity, Biofuels
    JEL: Q02 Q11 Q54
    Date: 2014–01
  25. By: Pothen, Frank
    Abstract: This paper investigates China's capability to exert power on Rare Earth markets until 2020. A dynamic partial equilibrium model allowing for a disaggregated representation of the mining sector and endogenous investment in capacities is developed. The model is calibrated on a novel dataset on Rare Earth mines. Simulations show that Chinese market power is a transitory phenomenon. In 2014 and 2015, Light Rare Earth prices increase by 21 per cent and Heavy Rare Earth prices more than double compared to free trade, if assuming export restrictions to remain unchanged. Market power on Light Rare Earths vanishes almost completely by 2017 due to the entry of new suppliers, while it persists until 2019 for Heavy Rare Earths. Export restrictions imply a loss of Marshallian welfare of US$ 1.96 billion outside China. In the short run, even moderate cuts in export quotas can increase exerted market power substantially. Altering tariffs induces smaller but more persistent effects. Sensitivity checks indicate that the results are robust, but delayed opening of new mines and demand shocks can be important for China's capability to exert market power. --
    Keywords: Partial Equilibrium Model,Metals,Rare Earths,Export Restrictions,Exhaustible Resources
    JEL: F17 Q31 Q37
    Date: 2014
  26. By: Catherine Locatelli (PACTE - Politiques publiques, ACtion politique, TErritoires - Institut d'Études Politiques [IEP] - Grenoble - CNRS : UMR5194 - Université Pierre-Mendès-France - Grenoble II - Université Joseph Fourier - Grenoble I)
    Abstract: La sécurité gazière de l'Union européenne émerge depuis le début des années 2000 comme un élément clé de sa politique énergétique. Les relations contractuelles basées sur les contrats de long terme durant les années 1970 et 1980 ont produit une relative stabilité dans les échanges énergétiques entre l'UE et ses fournisseurs gaziers. Mais depuis le milieu des années 1990, le processus d'ouverture à la concurrence des industries gazières de l'UE ainsi que la volonté de créer un marché unique du gaz conduisent à des réorganisations en profondeur de ce secteur. Dans ce contexte, l'UE entend redéfinir la gestion de ses relations avec ses principaux fournisseurs en tentant d'imposer son " modèle " basé sur la concurrence, la dé-intégration des entreprises de réseau et la privatisation. Le " modèle de l'UE " n'est pas celui que la Russie tend à mettre en œuvre dans son secteur gazier en dépit d'importants changements. La logique basée sur l'utilisation privilégiée d'un instrument étatique s'oppose au multilatéralisme et aux principes concurrentiels de l'UE qui prônent l'ouverture, la dé-intégration voire la privatisation du secteur gazier. Le pouvoir normatif de l'UE se trouve ainsi en contradiction avec l'environnement institutionnel du secteur énergétique russe.
    Keywords: sécurité énergétique ; marché gazier de l'UE ; réforme du marché gazier russe ; comportements des entreprises gazières
    Date: 2013–12

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