nep-ene New Economics Papers
on Energy Economics
Issue of 2014‒02‒15
27 papers chosen by
Roger Fouquet
London School of Economics

  1. Energy rebound due to re-spending: a growing concern By Miklós Antal; Jeroen van den Bergh
  2. Fast and Furious (and Dirty): How Asymmetric Regulation May Hinder Environmental Policy By Huse, Cristian
  3. Towards a green internal electricity market: The self-regulation of European Transmission System Operators for Electricity within EU multilevel governance By Brüning, Anna
  4. Influence of wind power on hourly electricity prices and GHG emissions: Evidence that congestion matters from Ontario zonal data By Amor, Mourad Ben; Billette de Villemeur, Etienne; Pellat, Marie; Pineau, Pierre-Olivier
  5. Carbon Tariffs Revisited By Christoph Böhringer; Andre Müller; Jan Schneider
  6. Mishandling carbon intensities By Miguel Rodríguez; Yolanda Pena-Boquete
  7. Diverse and uneven pathways towards transition to low carbon development: The case of diffusion of solar PV technology in China By Iizuka M.
  8. When and how to support renewables? Letting the data speak By Georg Zachmann; Amma Serwaah; Michele Peruzzi
  9. The distributional impact of the Irish public service obligation levy on electricity consumption By Farrell, Niall; Lyons, Seán
  10. Designing an Optimal 'Tech Fix' Path to Global Climate Stability: Directed R&D and Embodied Technical Change in a Multi-phase Framework By Paul David; Adriaan van Zon
  11. From rise in B to fall in C? Environmental impact of biofuels By Giuseppe Piroli; Miroslava Rajcaniova; Pavel Ciaian; d'Artis Kancs
  12. Quantifying the Long-Term Economic Benefits of European Electricity System Integration By Eva Schmid; Brigitte Knopf
  13. Konflikte um den Ausbau der Stromnetze: Status und Entwicklung heterogener Protestkonstellationen By Neukirch, Mario
  14. Solar Grid Parity Dynamics in Italy: A Real Option Approach By Tommaso Biondi; Michele Moretto
  15. The Stability and Effectiveness of Climate Coalitions: A Comparative Analysis of Multiple Integrated Assessment Models By Kai Lessmann; Ulrike Kornek; Valentina Bosetti; Rob Dellink; Johannes Emmerling; Johan Eyckmans; Miyuki Nagashima; Hans-Peter Weikard; Zili Yang
  16. Transmission constraints and strategic underinvestment in electric power generation By Léautier, Thomas-Olivier
  17. Green innovations and organizational change: Making better use of environmental technology By Hottenrott, Hanna; Rexhäuser, Sascha; Veugelers, Reinhilde
  18. The Economic Potential for Forest-Based Carbon Sequestration under Different Emissions Targets and Accounting Schemes* By David Walker
  19. Coal, Smoke, and Death: Bituminous Coal and American Home Heating By Alan Barreca; Karen Clay; Joel Tarr
  20. Resource curse: A comparative study By Azarhoushang, Behzad; Rukavina, Marko
  21. Comparison of Feed-in Tariffs and Tenders to Remunerate Solar Power Generation By Thilo Grau
  22. Technology, Employment, and the Oil-Countries’ Business Cycle By Rodolfo Mendez-Marcano
  23. Environment and Growth By Horii, Ryo; Ikefuji, Masako
  24. Climate change effects and agriculture in Italy: a stochastic frontier analysis at regional level By Auci, Sabrina; Vignani, Donatella
  25. Business models for sustainable technologies: Exploring business model evolution in the case of electric vehicles By René Bohnsack; Jonatan Pinkse; Ans Kolk
  26. Labour productivity in coal mining sector in India: with special to major coal mining states By Santra, Swarup; Bagaria, Nidhi
  27. Is Human Development Index (HDI) a reflector of quality of air? a comparative study on developed and developing countries By Santra, Swarup

  1. By: Miklós Antal; Jeroen van den Bergh
    Abstract: Energy conservation is widely accepted as an important strategy to combat climate change. It can, nevertheless, stimulate new energy uses that partly offset the original savings. This is known as rebound. One particular rebound mechanism is re-spending of money savings associated with energy savings on energy intensive goods or services. We calculate the average magnitude of this “re-spending rebound” for different fuels and countries. We find that emerging economies, neglected in past studies, typically have substantially larger rebounds than OECD countries. The effect is generally stronger for gasoline than for natural gas and electricity. Paradoxically, strengthening financial incentives to conserve energy tends to increase rebound. This is expected to gain importance with climate regulation and peak oil. We discuss the policy implications of our findings.
    Keywords: Rebound effect, re-spending, emerging economies
    Date: 2014–02
  2. By: Huse, Cristian
    Abstract: In the first year after the inception of the Swedish Green Car Rebate (GCR), green cars had carved over 25 percent market share in the new vehicle market, an effect of unprecedented scale if compared to recent policies incentivizing the purchase of fuel-efficient vehicles. By awarding vehicles satisfying certain emission criteria a rebate, but giving alternative fuel vehicles (AFVs, those able to run on alternative fuels) a more lenient treatment than regular fuel vehicles (RFVs, those able to run only on gasoline and diesel), the GCR created a regulatory loophole which led carmakers to increase the emissions of AFVs as compared to RFVs. This paper examines the impact of regulation on market developments comparing CO2 emissions (and fuel economy) of AFVs and RFVs. Once carmakers adjust their product lines to the policy, CO2 emissions of AFVs increased significantly as compared to those of RFVs, thus undermining the very objectives of the GCR.
    Keywords: Automobiles; Emissions; Environmental policy; Alternative fuel vehicles; Flexible-fuel vehicles; Fuel economy; Greenhouse gases; Regulation; Alternative fuels; Renewable fuels.
    JEL: H23 L51 L62 L98 Q42 Q48 Q53
    Date: 2014
  3. By: Brüning, Anna
    Abstract: Due to the 3rd Energy Package of 2009 the regulation of European electricity transmission did change considerably. Before, cross-border electricity issues have been regulated by voluntary contractual agreements between Transmission System Operators. Now, the new-founded Agency for the Cooperation of Energy Regulators (ACER) and the European Network of Transmission System Operators for Electricity (ENTSO-E) are guiding this process together with the European Commission. Currently, these organizations are developing network codes to be implemented as binding EU electricity transmission regulation within the next years. This paper analyzes, if this new regulation process does promote the creation of an internal electricity market as well as a better integration of intermittent renewable ('green') energies due to the multilevel governance approach. --
    Keywords: EU Energy Policy,Transmission Grids,Renewable Energies,Regulation Theory,Multi-level Governance Theory
    JEL: L43 L59 L94
    Date: 2014
  4. By: Amor, Mourad Ben; Billette de Villemeur, Etienne; Pellat, Marie; Pineau, Pierre-Olivier
    Abstract: With the growing share of wind production, understanding its impacts on electricity price and greenhouse gas (GHG) emissions becomes increasingly relevant, especially to design better wind-supporting policies. Internal grid congestion is usually not taken into account when assessing the price impact of fluctuating wind output. Using 2006-2011 hourly data from Ontario (Canada) , we establish that the impact of wind output, both on price level and marginal GHG emissions, greatly differs depending on the congestion level. Indeed, from a 3.3% price reduction when wind production doubles, the reduction jumps to 5.5% during uncongested hours, but is only 0.8% when congestion prevails. Similarly, avoided GHG emissions due to wind are estimated to 331.93 kilograms per megawatt-hour (kg/MWh) using all data, while for uncongested and congested hours, estimates are respectively 283.49 and 393.68 kg/MWh. These empirical estimates, being based on 2006-2011 Ontario data, cannot be generalized to other contexts. The main contribution of this paper is to underscore the importance of congestion in assessing the price and GHG impacts of wind. We also contribute by developing an approach to create clusters of data according to the congestion status and location. Finally, we compare different approaches to estimate avoided GHG emissions.
    Keywords: Wind energy; Electricity prices; Congestion; marginal GHG emissions.
    JEL: L94 Q4 Q42
    Date: 2014–01
  5. By: Christoph Böhringer (University of Oldenburg - Economic Policy & ZenTra); Andre Müller (Ecoplan); Jan Schneider (University of Oldenburg - Economic Policy)
    Abstract: Concerns about adverse impacts on domestic energy-intensive and trade-exposed (EITE) industries are at the fore of the political debate about unilateral climate policies. Tariffs on the carbon embod-ied in imported goods from countries without emission pricing appeal as a measure to reduce carbon leakage and protect domestic EITE industries. We show that the introduction of carbon tariffs can do more harm than good to domestic EITE industries. Two determinants drive the sign and magnitude of EITE impacts. Firstly, the composition of embodied emissions in goods: if a large share of embodied carbon is imported in intermediate inputs, industries might suffer from carbon tariffs. Secondly, the share of domestic output that is supplied to the export market: while carbon tariffs level the playing field on domestic markets, they increase the cost-disadvantage vis-à-vis competitors from abroad in foreign markets.
    Keywords: carbon tariffs, unilateral climate policy, multi-region input-output analysis, CGE
    JEL: Q58 D57 D58
    Date: 2014–02
  6. By: Miguel Rodríguez; Yolanda Pena-Boquete
    Abstract: The goal of this paper is to make clear cut reasoning for the ambiguous evidence in favour of the Environmental Kuznets Curve (EKC) hypothesis. The EKC for CO2 might be flawed with some sort of misconceptions thus providing misleading guidelines for policy makers. The main contribution of this paper (but not unique) is to provide original explanations to dismiss the EKC according to economic concepts. Thus it goes beyond the usual justification based mainly on inadequate use of econometric techniques. Actually, the controversy in the EKC literature may partially be the result of some kind of “monetary illusion” regarding the usual figures for carbon intensity trends. We may summarize the main policy implication of this paper as follows. Neglecting the EKC on CO2 suggests significant distributional consequences from any climate change policy that eventually put at risk any international climate change agreement.
    Keywords: CO2 Emissions, Efficiency, Intensity, Energy Prices,Environmental Kuznet Curve
    JEL: Q01 Q43 Q56
    Date: 2013–11
  7. By: Iizuka M. (UNU-MERIT)
    Abstract: Transition towards low carbon development LCD is an urgent challenge for the global community. As increased economic activities usually result in more carbon emissions, this challenge is particularly crucial for rapidly growing emerging countries. For these countries, reducing carbon emissions means taking one or more of the following actions 1 reducing energy intensity; 2 increasing the use of renewable energy; and 3 introducing systemic change. The above actions call for a strong role of policy and government intervention, as observed in the existing literature based on experiences in developed countries. Emerging countries also need to follow the example of advanced countries with regard to LCD; however, the conditions and pathways for emerging countries may differ greatly. This paper reviews the literature that deals with sustainable transition from a systemic perspective to understand existing frameworks and to identify challenges in using them for observing the transition process in developing countries. It looks at the case of Chinese solar PV technology to link theoretical discussion with practice in order to substantiate the arguments.
    Keywords: Alternative Energy Sources; Environmental Economics: Technological Innovation; Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth;
    JEL: Q42 Q55 Q56
    Date: 2014
  8. By: Georg Zachmann; Amma Serwaah; Michele Peruzzi
    Abstract: See also blog post 'Does Europe need a renewables target?' Low-carbon energy technologies are pivotal for decarbonising our economies up to 2050 while ensuring secure and affordable energy. Consequently, innovation that reduces the cost of low-carbon energy would play an important role in reducing transition costs. We assess the two most prominent innovation policy instruments (i) public research, development and demonstration (RD&D) subsidies and (ii) public deployment policies. Our results indicate that both deployment and RD&D coincide with increasing knowledge generation and the improved competitiveness of renewable energy technologies. We find that both support schemes together have a greater effect that they would individually, that RD&D support is unsurprisingly more effective in driving patents and that timing matters. Current wind deployment based on past wind RD&D spending coincides best with wind patenting. If we look into competitiveness we find a similar picture, with the greatest effect coming from deployment. Finally, we find significant cross-border effects, especially for winddeployment. Increased deployment in one country coincides with increased patenting in nearby countries. Based on our findings we argue that both deployment and RD&D support are needed to create innovation in renewable energy technologies. However, we worry that current support is unbalanced. Public spending on deployment has been two orders of magnitude larger (in 2010 about â?¬48 billion in the five largest EU countries in 2010) than spending on RD&D support (about â?¬315 million). Consequently, basing the policy mix more on empirical evidence could increase the efficiency of innovation policy targeted towards renewable energy technologies
    Date: 2014–02
  9. By: Farrell, Niall; Lyons, Seán
    Abstract: We analyse the distributional impact of financing energy and environmental policies through additional charges on electricity consumption, focussing on the impact Ireland’s flat-rate Public Service Obligation (PSO) levy has on domestic consumers. Switching Ireland’s flate-rate charge to a unit-based charge results in reduced regressivity across the entire income distribution. A unit-based scheme reduces aggregate burden for most households on low incomes. Regressive impacts are greater for a subset of heavy electricity users. Incremental block pricing (IBP) exaggerates these effects. A hybrid fixed/variable structure mitigates regressivity for high users but lessens overall regressivity reduction. Redistribution via Ireland’s Household Benefits Package is sub-optimal relative to a hypothetical equivalised income-based scheme. Net of ‘merit order’ savings, flat charges redistribute burden incidence from rich to poor whilst fixed per-unit charges have a neutral effect. IBP shifts cost to heavy users, predominantly large households. IBP results in a negative net burden for the majority of households across all income groups.
    Keywords: Renewable Energy Support Schemes; Distributional Impact; Policy Cost
    JEL: H22 H23 Q42 Q5 Q58
    Date: 2014–02–06
  10. By: Paul David (Stanford University); Adriaan van Zon (United Nations University)
    Abstract: The research reported here gives priority to understanding the inter-temporal resource allocation requirements of a program of technological changes that could halt global warming by completing the transition to a "green" (zero net CO2- emission) production regime within the possibly brief finite interval that remains before Earth's climate is driven beyond a catastrophic tipping point. This paper formulates a multi-phase, just-in-time transition model incorporating carbon-based and carbon-free technical options requiring physical embodiment in durable production facilities, and having performance attributes that are amenable to enhancement by directed R&D expenditures. Transition paths that indicate the best ordering and durations of the phases in which intangible and tangible capital formation is taking place, and capital stocks of different types are being utilized in production, or scrapped when replaced types embodying socially more efficient technologies, are obtained from optimizing solutions for each of a trio of related models that couple the global macro-economy's dynamics with the dynamics of the climate system. They describe the flows of consumption, CO2 emissions and the changing atmospheric concentration of greenhouse gas (which drives global warming), along with the investment dynamics required for the timely transformation of the production regime.
    Keywords: global warming, tipping point, catastrophic climate instability, extreme weather†related damages, R&D, directed technical change, capitalâ€embodied technologies, optimal sequencing, multiâ€phase optimal control, sustainable endogenous growth
    JEL: Q54 Q55 O31 O32 O3
    Date: 2014–01
  11. By: Giuseppe Piroli; Miroslava Rajcaniova; Pavel Ciaian; d'Artis Kancs
    Abstract: This is the first paper that econometrically estimates the impact of the rising Bioenergy production on the global CO2 emissions. We apply a structural vector autoregression (SVAR) approach to time series with annual observation for the world biofuel production and global CO2 emissions from 1961 to 2009. We find that in the medium- to long-run biofuels significantly reduce global CO2 emissions: the CO2 emission elasticities with respect to biofuels range between -0.57 and -0.80. In the short-run, however, biofuels may increase CO2 emissions temporarily (elasticity 0.57). Our findings complement those of life-cycle assessment and simulation models. However, by employing a more holistic approach and obtaining more robust estimates of environmental impact of biofuels, our results are particularly valuable for policy makers.
    Keywords: Biofuels, C02 emissions, environmental impact, SVAR.
    JEL: C14 C22 C51 D58 Q11 Q13 Q42
    Date: 2014–01–01
  12. By: Eva Schmid (Potsdam Institute for Climate Impact Research); Brigitte Knopf (Potsdam Institute for Climate Impact Research)
    Abstract: This paper analyses a set of model-based decarbonization scenarios in order to quantify the long-term economic benefits that arise from an increasing integration of the pan-European electricity system. It thereby focuses on the interplay between transmission infrastructure and renewable generation capacity expansion. We confirm earlier findings that, on aggregate, pan-European transmission capacity expansion constitutes a no-regret option for integrating increasing shares of variable renewables in mitigation scenarios with positive social returns on investment. However, it turns out that the change in total discounted system costs that occurs as transmission capacity expansion increases is modest in magnitude, with a maximum of 3.5% for a case with no expansion compared to one with massive expansion. In technical terms this means that the optimum is rather flat and that taking into account regional and local benefits and distributional aspects, could alter the evaluation of the economic benefits considerably. A crucial finding in this context is that the configuration of pan-European transmission infrastructure and the importance of specific country-connections, i.e. a “Southern” versus a “Northern” solution, crucially hinges on the relative development of specific investment costs for solar and wind technologies over the next decades.
    Keywords: Transmission Infrastructure Planning, European Energy Policy Targets, Mitigation
    JEL: Q42 Q48 Q54
  13. By: Neukirch, Mario
    Abstract: Der vorliegende Artikel basiert auf Ergebnissen des Projekts Adaptive Capacities, Path Creation and Variants of Sectoral Change, das im Rahmen der Helmholtz-Allianz ENERGY-TRANS durchgeführt wird (Fuchs et al. 2012). Darin wird die Dynamik unterschiedlicher Handlungsfelder betrachtet und danach gefragt, inwiefern alte und neue, zentral und dezentral agierende Akteure des Energieversorgungssystems zur Energiewende beitragen. Eines dieser Handlungsfelder ist der Ausbau der Stromnetze. Nach dem Konzept der Bundesregierung sollen die neuen Leitungen dazu dienen, erneuerbare Energien aus Norddeutschland in die Verbrauchszentren zu transportieren. Weitere Gründe sind der europäische Stromhandel und der Anschluss neuer Kraftwerke. Jedoch fallen die wesentlichen Projekte teils um Jahre hinter den ursprünglichen Planungszeitplan zurück. Verzögerungen beim Umbau der Energieversorgung werden befürchtet. Das vorliegende Papier untersucht die regionalen Bürgerproteste, die als ein wesentlicher Grund der Verzögerungen gelten. Unterstützt werden die Protestierenden durch betroffene Kommunen und Landkreise, Umweltgruppen und Wissenschaftler. Ein Teil der Untersuchung befasst sich mit der Frage, wie die Protestierenden hinsichtlich ihrer Ziele und Handlungsorientierungen zu klassifizieren sind. In welchem Verhältnis stehen die Akteure zueinander und welche Aussagen lassen sich vor dem Hintergrund, dass im Zuge des Konflikts neue Protestakteure hinzugetreten sind, über Entwicklungen des Handlungsfeldes treffen? -- This paper is based on the results of the project Adaptive Capacities, Path Creation and Variants of Sectoral Change, which is conducted within the framework of the Helmholtz-Alliance ENERGY-TRANS (Fuchs et al. 2012). The project analyzes the dynamics of different action fields. It is being asked in how far old and new, central and decentralized actors contribute to Energy Transition. One of these action fields is the extension of electricity grids. The federal government wants to build new power lines mainly to transport renewable energies from northern Germany to the industrial centers. Further reasons are European power trading and the construction of new power plants. Most of the crucial projects, however, are lagging behind the original timetable for several years. Delays for the Energy Transition are feared. This paper examines the regional public protests which are considered to be an important reason for these delays. The protest groups are supported by concerned municipalities and districts, environmental organizations and scientists. A part of the investigation deals with the question, in which way the protest actors can be classified considering their aims and orientations for action. What can be said about the relationships between them? New protest actors have entered the action field during the conflict. In which way did their presence lead to changes in the action field?
    Date: 2014
  14. By: Tommaso Biondi (Sinloc, Sistema Iniziative Locali S.p.A); Michele Moretto (Department of Economics and Management, University of Padova, Fondazione Eni Enrico Mattei and Centro Studi Levi- Cases)
    Abstract: Over the past three years Italy has witnessed a rapid growth in the photovoltaic energy market, followed by an equally sudden decline when the government decided to reduce the incentives. This sharp change in the trend of the market calls into question the achievement of Grid Parity and the possibility that the market is able to develop independently. Starting from the standard Grid Parity Model, widely used for the photovoltaic (PV) market, we internalize the uncertainty surrounding both the energy price and PV module costs, to forecast the dynamics of the Italian PV market. We show that these sources of uncertainty can delay the Grid Parity timing of several years compared to current forecasts, well describing the current market situation.
    Keywords: Photovoltaic Market, Grid Parity
    JEL: O3 O31 O32
    Date: 2013–12
  15. By: Kai Lessmann (Potsdam Institute for Climate Impact Research (PIK)); Ulrike Kornek (Potsdam Institute for Climate Impact Research (PIK)); Valentina Bosetti (Università Bocconi and Fondazione Eni Enrico Mattei (FEEM)); Rob Dellink (Environmental Economics and Natural Resources Group, Department of Economics, Wageningen University); Johannes Emmerling (Fondazione Eni Enrico Mattei (FEEM) and Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC)); Johan Eyckmans (KU Leuven – Center for Economics and Corporate Sustainability (CEDON)); Miyuki Nagashima (Research Institute of Innovative Technology for the Earth); Hans-Peter Weikard (Environmental Economics and Natural Resources Group, Department of Economics, Wageningen University); Zili Yang (Department of Economics, State University of New York at Binghamton)
    Abstract: In this paper we report results from a comparison of numerically calibrated game theoretic integrated assessment models that explore stability and performance of international coalitions for climate change mitigation. Specifically, by means of this ensemble of models we are able to identify robust results concerning incentives of nations to commit themselves to a climate agreement, and to estimate what stable agreements can achieve in terms of greenhouse gas mitigation. We also assess the potential of transfers that redistribute the surplus of cooperation in order to foster stability of climate coalitions. In contrast to much of the existing analytical game theoretical literature, we find substantial scope for self-enforcing climate coalitions in most models that close much of the abatement and welfare gap between complete absence of cooperation and full cooperation. This more positive message follows from the use of transfer schemes that are designed to counteract free riding incentives.
    Keywords: Coalition Stability, International Environmental Agreements, Numerical modeling, Transfers
    JEL: Q5 Q58 C7
  16. By: Léautier, Thomas-Olivier
    Abstract: This article is the first to examine electric power producers' investment decisions when com- petition is imperfect and the transmission grid congested. This analysis yields numerous original insights. First, congestion on the grid is transient, and may disappear when demand is highest. Second, transmission capacity increases have complex impacts on generation: they may increase, decrease, or have no impact on the marginal value of generation, and may have similar or opposite impacts on the marginal value of di¤erent technologies. Third, the true social value of transmission, including its impact on investment, may be significantly lower than is commonly assumed.
    Keywords: electric power markets, imperfect competition, investment, transmission constraints
    JEL: D61 L11 L94
    Date: 2014–01–06
  17. By: Hottenrott, Hanna; Rexhäuser, Sascha; Veugelers, Reinhilde
    Abstract: This study investigates productivity effects to firms introducing new environmental technologies. The literature on within-firm organisational change and productivity suggests that firms can get higher productivity effects from adopting new technologies if complementary organisational changes are adopted simultaneously. Such complementarity effects may be of critical importance for the case of adoption of greenhouse gas (GHG) abatement technologies. The adoption of these technologies is often induced by public authorities to limit social costs of climate change, whereas the private returns are much less obvious. We find empirical support for complementarity between green technology adoption and organisational change for a sample of firms located in Germany. The adoption of CO2 reducing and sustainable technologies innovations is associated with lower productivity. The simultaneous implementation of organisational innovations, however, increases the returns to the adoption of green technologies. --
    Keywords: technical change,environmental innovation,organisational change,productivity
    Date: 2014
  18. By: David Walker (School Economics, La Trobe University)
    Abstract: Concern for the Earth’s changing climate, as a consequence of rising greenhouse gas (GHG) concentrations in the atmosphere, has led to policies aimed at reducing GHG emissions and increasing carbon sequestration. In Australia this has been acknowledged in the New South Wales Greenhouse Gas Abatement Scheme and the Carbon Farming Initiative, which provide price incentives for forest-based sequestration. However, the issue of the most appropriate accounting scheme to account for the impermanence of forest based sequestration has been debated and remains unresolved in policy documents. The objective of the paper is to investigate the economic potential for forest-based sequestration to reduce carbon dioxide concentrations in the atmosphere for three different accounting schemes. To this end, a model of the New South Wales forest sector is developed to simulate changes in land use from agriculture to forestry; and in forest management, for a range of carbon prices and accounting regimes. The model builds on previous modelling of forestry in Australia and that of forest-based sequestration by incorporating: endogenous timber prices; the probability of fire destroying a portion of the forest; and an increasing opportunity cost of agricultural land. Importantly, the paper improves our understanding of the sector wide potential for carbon sequestration for the different accounting rules.
    Keywords: Carbon sequestration, carbon accounting, forestry, forest-sector model
    JEL: C61 L52 Q15 Q23 Q54
  19. By: Alan Barreca; Karen Clay; Joel Tarr
    Abstract: Air pollution was severe in many urban areas of the United States in the first half of the twentieth century, in part due to the burning of bituminous coal for heat. We estimate the effects of this bituminous coal consumption on mortality rates in the U.S. during the mid 20th century. Coal consumption varied considerably during the 20th century due to coal-labor strikes, wartime oil and gas restrictions, and the expansion of gas pipelines, among other reasons. To mitigate the influence of confounding factors, we use a triple-differences identification strategy that relies on variation in coal consumption at the state-year-season level. It exploits the fact that coal consumption for heating was highest in the winter and uses within-state changes in mortality in non-winter months as an additional control group. Our estimates suggest that reductions in the use of bituminous coal for heating between 1945 and 1960 decreased winter all-age mortality by 1.25 percent and winter infant mortality by 3.27 percent, saving 1,923 all age lives per winter month and 310 infant lives per winter month. Our estimates are likely to be a lower bound, since they primarily capture short-run relationships between coal and mortality.
    JEL: I18 N32 N52 Q53
    Date: 2014–02
  20. By: Azarhoushang, Behzad; Rukavina, Marko
    Abstract: Weak economic performance of most oil rich countries states that natural resources are more curse than blessing for these countries. Resource curse theory examines the negative effects of rich natural resources on economic growth from an economic and political perspective. Since 1960s appreciation of real domestic exchange rate (Dutch Disease) was explained as the main reason for poor economic performance of oil rich countries. But since 1990s, other causes such as long lasting ineffective institutions, corruption and rent seeking are considered to be other major political reasons behind backwardness of most resource rich countries. These political features are the corner stone of Resource Curse theory. In this paper we examine the viability of Resource Curse theory for Iran, Russia and Norway to see whether natural resources are curse or blessing for these countries. Furthermore, we compare main macroeconomic and good governance indicators from 2000 to 2010 of Iran with Turkey and Russia with China to illustrate the negative effects of oil revenue on economic performance. The result of this research shows that institutional quality has vital role in sustainable economic development. Norway as a successful oil rich country shows that efficient institutions can turn natural resource into blessing; while Iran's and Russia's experiences are a clear example of resource curse. --
    Keywords: Resource Curse,Dutch Disease,Iran,Russia,Norway,China,Turkey
    JEL: O11 O52 O53
    Date: 2014
  21. By: Thilo Grau
    Abstract: This paper analyzes the trade-offs for using feed-in tariffs or tenders to remunerate different scales of solar photovoltaics (PV) projects. In recent years, European countries increasingly combined feed-in tariffs for small renewables systems with tenders for large installations. This study develops an analytic framework to quantify deployment effectiveness of responsive feed-in tariff adjustment mechanisms across project scales and to compare specific cost effectiveness factors of feed-in tariffs and tenders for PV plants with their dynamic cost trends. To assess deployment effectiveness, an analytic model is used to simulate installations and feed-in tariffs for different project sizes. Then semi-structured interviews with German and French project developers are conducted to identify additional factors to be considered for a comparison of feed-in tariffs and tenders, and to explore how different remuneration schemes impact cost of capital and transaction costs. The paper finally discusses the relative merits of feed-in tariffs and tenders.
    Keywords: Feed-in tariff, tender, solar photovoltaics
    JEL: O33 Q42 Q48
    Date: 2014
  22. By: Rodolfo Mendez-Marcano
    Abstract: On the ground of the significance and potential dual-nature of oil price shocks- they may act simultaneously like pure technology and pure expenditure shocks- in the context of the oil-countries-net oil-exporters with a substantial share of oil-income on their total export an/or fiscal-income. The paper questions the validity in such context of Gal´ı (1999)’s influential methodology for evaluating- so far, negatively- the empirical merits of it aimed to restore such validity by disentangling oil-price shocks from the rest of shocks. The comparison of the results from the application of both methodologies to Norway, Mexico, Russia, Trinidad&Tobago and Venezuela, besides supporting the dual-nature hypothesis and the necessity of such disentangling, proves the latter to be instrumental to get results consistent with Gal´ı (1999)’s. Additionally, the paper unveil some startling facts about the effects of oil–price shocks in this context—remarkably, the prevalence of their technological-nature when oil-income has a higher weight on export— than on fiscal-income, and of their expenditure-nature otherwise—and shed some light on the influence of institutional reform on such effects.
    Keywords: SVAR; identifying restrictions; small open economies; oil economies; dutch disease; resource curse
    JEL: C32 E32 F41 F44 Q33
    Date: 2014–02
  23. By: Horii, Ryo; Ikefuji, Masako
    Abstract: This paper examines the implications of the mutual causality between environmental quality and economic growth. While economic growth deteriorates the environment through increasing amounts of pollution, the deteriorated environment in turn limits the possibility of further economic growth. In a less developed country, this link, which we call "limits to growth," emerges as the "poverty-environment trap," which explains the persistent international inequality both in terms of income and environment. This link also threatens the sustainability of the world's economic growth, particularly when the emission of greenhouse gases raises the risk of natural disasters. Stronger environmental policies are required to overcome this link. While there is a trade-off between the environment and growth in the short run, we show that an appropriate policy can improve both in the long run.
    Keywords: Environmental Kuznets Curve, Limits to Growth, Poverty-Environment Trap, Sustainability, Natural Disasters
    JEL: O41 O44 Q54 Q56
    Date: 2014–02
  24. By: Auci, Sabrina; Vignani, Donatella
    Abstract: Climate changes, associated to atmospheric accumulation of greenhouse gases, could alter level of temperature at the surface, rainfalls and regional water supplies. There are many areas of the Earth that will cope with a rapid increasing of warming at the surface and with an extremization of weather conditions. Although many economic sectors are influenced, agriculture is the most susceptible as weather heavily affects crop production trends, yield variability and reduction of areas suitable to be cultivated. Climate change effects represent a “challenge” that European agriculture has to face in the immediate future. The aim of our work is to analyze the economic impacts of climate change on agricultural sector in Italy at regional scale (NUTS2) in the light of mitigation policies undertaken by Italy in accordance with the commitments made by the EU Policy in the struggle against climate change. Using the stochastic frontier approach, we investigate on the Italian Regions efficiency in the period 2000-2010. Considering that inefficiency could be influenced by two main meteorological factors – rainfall and minimum temperature– we find that rainfall variable has a positive impact on efficiency while minimum temperature variable reduces the efficiency of harvested production.
    Keywords: Climate change effects, agricultural sector, mitigation and adaptation, Italian Regions efficiency, stochastic frontier approach
    JEL: Q10 Q54
    Date: 2014–01–30
  25. By: René Bohnsack (University of Amsterdam Business School - University of Amsterdam Business School); Jonatan Pinkse (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM)); Ans Kolk (Amsterdam Business School - University of Amsterdam)
    Abstract: Sustainable technologies challenge prevailing business practices, especially in industries that depend heavily on the use of fossil fuels. Firms are therefore in need of business models that transform the specific characteristics of sustainable technologies into new ways to create economic value and overcome the barriers that stand in the way of their market penetration. A key issue is the respective impact of incumbent and entrepreneurial firms' path-dependent behaviour on the development of such new business models. Embedded in the literature on business models, this paper explores how incumbent and entrepreneurial firms' path dependencies have affected the evolution of business models for electric vehicles. Based on a qualitative analysis of electric vehicle projects of key industry players over a five-year period (2006-2010), the paper identifies four business model archetypes and traces their evolution over time. Findings suggest that incumbent and entrepreneurial firms approach business model innovation in distinctive ways. Business model evolution shows a series of incremental changes that introduce service-based components, which were initially developed by entrepreneurial firms, to the product. Over time there seems to be some convergence in the business models of incumbents and entrepreneurs in the direction of delivering economy multi-purpose vehicles.
    Keywords: Sustainable technology; business models, evolution; path dependencies; electric vehicles
    Date: 2014
  26. By: Santra, Swarup; Bagaria, Nidhi
    Abstract: Coal is one of the Primary sources of Energy accounting for about 67% of total energy consumption in India. The production of Coal has increased from 35 million tons in 1951 to 409.3 million tons in 2004. At the same time, the Average Daily Employment (ADE) has increased from 352 thousand in 1951 to 405 thousand in 2004. However, the journey of Coal sector was not uniform throughout the five decades. It is shown in recent time that the productivity of labour in coal mines in Tamil Nadu and Orissa is very high in comparison with other major coal producing states, like, West Bengal and Jharkhand. However, the coal mining in Tamil Nadu and Orissa is mostly and increasingly dependents on Open-cast mining. The paper is wanted to show that the labour productivity in coal mine are the boom in productivity in Orissa and Tamil Nadu is only due to the weighted average of different types of productivities. But, the coals at open-cast and below ground are not same. They are different in quality. So, we simply cannot add (although we are taking the weighted average) the two different quality things. That is why we are getting the problem of Addition.
    Keywords: Coal, Productivity of Labour, Average Daily Employment (ADE), Open-cast Mining, Inter-states comparison, India
    JEL: J01
    Date: 2014–01–20
  27. By: Santra, Swarup
    Abstract: Economic Indicators alone cannot capture the totality of ‘Quality of Life’ (QOL). The Most acceptable Measure of QOL is the ‘Human Development Index’ (HDI) of UNDP. HDI is a composite Index of three Indicators of three essential dimensions of life. These three indicators are of per capita GDP adjusted to purchasing power, life expectancy at birth, and adult literacy rate(including the gross school enrollment ratios). While, the measurement of HDI is considered as a measure of Human well-being, it ignores the other dimension of life, which is the quality of natural environment. Human being lives within this natural environment. In a polluted environment, human being cannot be stay well. In this study, it was examined whether the Quality of Air is Reflected through the HDI or not. In this study, the result has been come out that the Quality of Air is reflected through the HDI only for the Developing Countries. But, in case of Developed Countries, the Quality of Air is not reflected through the HDI.
    Keywords: Composite Index for Quality of Air(CIQA), Human Development Index (HDI), Principal Component Analysis(PCA), Spearman’s Rank correlation Coefficient
    JEL: O15 Q53
    Date: 2014–01–15

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