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on Energy Economics |
| By: | Miklós Antal; Jeroen C.J.M. 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: | 2014–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:wfo:wpaper:y:2014:i:463&r=ene |
| By: | Curtis, John; Pentecost, Anne |
| Abstract: | This paper combines data on residential building energy performance certificates (EPC) and household energy expenditure to estimate expenditure equations (Engel curves) as a function of building energy efficiency and household characteristics. Engle curves for gas, oil, electricity, solid fuel, and aggregate fuel expenditure are estimated for a sample of 5,891 households in the Republic of Ireland. With building energy performance measured using a 7 point letter scale (A to G) our results find that households living in relatively energy inefficient properties spend between â?¬160-â?¬419 per annum more on energy than households in B rated properties. In percentage terms a one letter improvement in building energy rating is associated with a 4-10% change in total household energy expenditure. When energy use for entertainment, cooking, and laundry purposes are excluded, this represents approximately a 6-14% change in energy expenditure for heating, lighting and ventilation purposes (i.e. building related energy). |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp478&r=ene |
| By: | Ian Cronshaw; Quentin Grafton |
| Abstract: | This article reviews key past trends in energy security from the perspective of both International Energy Agency members and the Asia Pacific over the past 30 years, and assesses future energy risks. Developments in energy efficiency, unconventional oil and gas, and stationary renewable energy sources are highlighted. Lessons learned from past policy successes and failures provide the basis for 10 reflections to promote energy security in the region. |
| Keywords: | energy security; energy demand; Asia Pacific; China; India |
| URL: | http://d.repec.org/n?u=RePEc:een:appswp:201404&r=ene |
| By: | Syed Abul, Basher |
| Abstract: | Concerns about the effects of oil prices on stock markets ebb and flow with the rise and fall in oil prices themselves. This paper reviews selected empirical evidence on the relationship between energy price shocks and stock markets. Existing evidence indicates that although a general increase in oil prices tends to favor stock markets of energy-exporting countries more than their oil-importing counterparts, a demand-led rise in oil prices tends to favor stock markets across the globe through the stimulating impact on the aggregate economy. Whereas, supply-driven surge in oil price shocks carries a less significant role in explaining fluctuations in stock returns. A brief assessment on the role of speculation in driving oil prices during 2007–2008 is also presented. |
| Keywords: | Oil price shocks; Stock returns; Speculation. |
| JEL: | G15 Q43 |
| Date: | 2014–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:53863&r=ene |
| By: | Gilbert Kollenbach |
| Abstract: | The consequences of the 2°C climate target and the implicitly imposed ceiling on CO2 have been analyzed in several studies. We use an endogenous growth model with a ceiling and a carbon capture and storage (CCS) technology to study the effect of the ceiling on the allocation of limited funds for R&D, CCS and capital accumulation. It turns out that the advantagenousness of CCS investments rise with the CO2 stock. If the gains of CCS, in terms of lower energy costs, outweigh the gains of R&D and capital accumulation, investments are reallocated towards CCS. On the one hand, this reduces the investments into R&D and/or capital. On the other hand, lower energy costs may increase research and/or capital investments. Positive CCS investments allow a higher extraction of fossil fuel, which implies lower backstop utilization. Consequently, CCS investments lower the advantageousness of R&D ceteris paribus. Furthermore, we show that the gains of CCS can be high enough to justify an investment reallocation even before the ceiling is binding, which contrast with existing literature. |
| Keywords: | Climate Change, Research and Development, Carbon Capture and Storage, Endogenous Growth, Fossil Fuel, Renewable Resource |
| JEL: | O13 O44 Q54 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:sie:siegen:163-14&r=ene |
| By: | Xaquín Garcia-Muros; Mercedes Burguillo; Mikel Gonzalez-Eguino; Desiderio Romero-Jordán |
| Abstract: | Local air pollution and global climate change are two significant environmental problems which are interrelated. Some recent papers examine them together, but most of the relevant literature has focused either on climate change alone or on the ancillary benefits of mitigating it (in terms of air pollution). In regard to distribution, most publications have focused on the impacts of climate change-related taxes such as excise duties on CO2, energy or fuels. This paper explores the distributional implications of policies for taxing local air pollution and compares them with climate change taxes. The framework of taxation on air pollution is based on the estimated damage associated with the main local air pollutants, while the climate change framework is based on a CO2 tax. The case of Spain is examined, using an Input-Output model in combination with a micro-simulation model. The distributional implications of a revenue-neutral tax reform are also explored. We find that taxes on local pollutants are more regressive than those levied on climate change pollutants, because the goods implicitly taxed have a greater weight in the consumer basket of low income groups, even if the tax revenues are recycled. |
| Keywords: | Environmental Tax Reform; Distributional Impact; Local air pollution taxes; global climate change taxes |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:bcc:wpaper:2014-01&r=ene |
| By: | Gilbert Kollenbach |
| Abstract: | Under which conditions unilateral tightening of climate policy causes a weak or strong green paradox or even decreases social welfare has recently been studied by Hoel (2011). Hoel assumes that the costs of extracting fossil fuel are linear in output. We extend his model by allowing for progressively increasing and stock dependent extraction costs. Increasing unit costs imply the simultaneous utilization of fossil fuel and a clean backstop. This has a signicant effect on the results, as the utilization of backstop by the country which tightens its climate policy always prevents a weak green paradox. As a consequence, the effect of a tighter climate policy on social welfare can be reversed. Due to the stock dependence of extraction costs the amount of fossil fuel left in situ may be increased by a tighter climate policy. This implies that social welfare may increase, even if a weak green paradox occurs. |
| Keywords: | Climate change, green paradox, exhaustible resources, renewable energy |
| JEL: | Q41 Q42 Q54 Q58 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:sie:siegen:164-14&r=ene |
| By: | Yazid Dissou (Department of Economics, University of Ottawa, Ottawa, ON); Lilia Karnizova (Department of Economics, University of Ottawa, Ottawa, ON) |
| Abstract: | Empirical industry-level studies find a systematic pattern of output and price responses to variations in oil prices. This pattern depends on the energy-intensity of production and on the origin of oil price shocks. We build a multisector business cycle model that features endogenous production of oil, multiple sources of oil price movements and intersectoral input-output linkages. The model explains the observed sectoral heterogeneity in output and price responses to oil prices changes, previously emphasized by empirical studies. In addition, we show that accounting for the sectoral linkages helps amplify the predicted effects of oil price changes at the aggregate level. |
| Keywords: | oil price; multiple sectors; business cycle; industry effects |
| JEL: | E32 Q43 E37 D57 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:e1401e&r=ene |
| By: | Matthew E. Kahn; Nils Kok |
| Abstract: | The commercial real estate sector is responsible for a large share of a city’s overall carbon footprint. An ongoing trend in this sector has been the entry of big-box stores such as Wal-Mart. Using a unique monthly panel data set for every Wal-Mart store in California from 2006 through 2011, we document three main findings about the environmental performance of big-box retailers. First, Wal-Mart’s stores exhibit very little store-to-store variation in electricity consumption relative to a control group of similar size and vintage retail stores. Second, Wal-Mart’s store’s electricity consumption is lower in higher priced utilities and is independent of the store’s ownership versus leased status. Third, unlike other commercial businesses, Wal-Mart’s newer buildings consume less electricity. Together, these results highlight the key roles that corporate size and centralization of management play in determining a key indicator of a firm’s overall environmental performance. |
| JEL: | Q41 Q54 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19912&r=ene |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-057&r=ene |
| By: | Mauritzen, Johannes (Research Institute of Industrial Economics (IFN)); Tangerås, Thomas (Research Institute of Industrial Economics (IFN)) |
| Abstract: | We analyse in a theoretical framework the link between real-time and day-ahead market performance in a hydro-based and imperfectly competitive wholesale electricity market. Theoretical predictions of the model are tested on data from the Nordic power exchange, Nord Pool Spot (NPS).We reject the hypothesis that prices at NPS were at their competitive levels throughout the period under examination. The empirical approach uses equilibrium prices and quantities and does not rely on bid data nor on estimation of demand or marginal cost functions. |
| Keywords: | Hydro power; Market power; Nord Pool Spot |
| JEL: | D43 D92 L13 L94 Q41 |
| Date: | 2014–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1009&r=ene |
| By: | Gérard Mondello (GREDEG CNRS; University of Nice Sophia Antipolis) |
| Abstract: | Starting from the standard analysis of accident theory, this paper shows that determining the first-best level of care of ultra-hazardous activities also involves determining the best industrial structure. The analysis assesses the impact of the civil nuclear liability on the organization of given electro-nuclear parks. The object is to know whether these liability rules induce horizontally concentrating the management of nuclear industry or not. In a model extended from two to n plants, we show that the institutional conditions (cap on the operator’s liability and the insurance compensation) play a fundamental role in the inducement to centralize or not this management. Hence, a priori, no organization framework is more efficient than the other one. |
| Keywords: | Strict liability, Electric Energy, nuclear plants, limited liability, concentration |
| JEL: | Q5 Q58 Q53 K23 L13 L52 L94 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2014-05&r=ene |
| By: | Yulia Raskina |
| Abstract: | This paper evaluates convergence of energy intensity for the former USSR countries during 1995-2010. We divide these countries into three clubs and show convergence in income and in energy intensity for each club. We also demonstrate that rate of convergence is higher in countries with a low level of development. |
| Date: | 2014–02–20 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0362&r=ene |
| By: | Bahman Kashi (Eastern Mediterranean University, Cyprus and Queen's University, Canada) |
| Abstract: | In this article we argue that the conventional financing and contractual arrangements in private power generation projects encourage the independent power producers (IPPs) to overstate the capital cost as a risk-mitigation strategy. Since the markup is only added to the capital cost, and not to the operating costs, it promotes the use of cheaper and less efficient power plants. The distortion in the choice of technology results in economic losses over the life of the plants. The findings of this research have important policy implications that can assist regulatory bodies, governments, and international financing agencies to adopt a more informed approach to the integration of private investment into the electricity generation capacity of developing countries. |
| Keywords: | IPP, PPA, privatization, power generation, electricity, risk management |
| JEL: | L94 D61 L33 L20 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:qed:dpaper:248&r=ene |
| By: | Tian Tang; David Popp |
| Abstract: | The Clean Development Mechanism (CDM) is a project-based carbon trade mechanism that subsidizes the users of climate-friendly technologies and encourages technology transfer. The CDM has provided financial support for a large share of Chinese wind projects since 2002. Using pooled cross-sectional data of 486 registered CDM wind projects in China from 2002 to 2009, we examine the determinants of technological change in wind power from a learning perspective. We estimate the effects of different channels of learning—learning through R&D in wind turbine manufacturing, learning from previous experience of installation, and learning through the network interaction between project developer and turbine manufacturer—on technological change, measured as reductions in projected costs or as increased capacity factor across CDM wind projects. While we find that a manufacturer’s R&D and previous installation experience matter, interactions between wind turbine manufacturers and wind project developer lead to the largest cost reductions. Whereas existing literature suggests that wind power firms can learn from the experience of other wind farm developers, our results indicate that wind power firms mainly learn from their own experience and that knowledge spillovers mostly occur within certain partnerships between wind project developer and foreign turbine manufacturers in China’s wind power industry. |
| JEL: | O33 O38 Q42 Q48 Q54 Q55 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:19921&r=ene |
| By: | Petros C. Mavroidis |
| Abstract: | Canada-Renewable Energy presented the WTO Panel and Appellate Body (AB) with a novel issue: at the heart of the dispute was a measure adopted by the province of Ontario whereby producers of renewable energy would be paid a premium relative to conventional power producers. Some WTO Members complained that the measure was a prohibited subsidy because payments were conditional upon using Canadian equipment for the production of renewable energy. The AB gave them right only in part: it found that a local content requirement had indeed been imposed, but also found that it lacked evidence to determine whether a subsidy had been bestowed. The report is, for the reasons explained below, incoherent and could hardly serve as precedent for resolution of similar conflicts in the future. The facts of the case though, do raise legitimate questions both with respect to the specifics of the case, as well as of more general nature regarding the WTO Agreement on Subsidies and Countervailing Measures (SCM Agreement), and the role of the judge when facing legislative failure. In this paper, we provide some responses to these questions in light of the theory and evidence regarding industrial policy in the name of environmental protection. |
| Keywords: | WTO |
| Date: | 2014–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:erp:euirsc:p0368&r=ene |
| By: | Joseba De la Torre (New York University, United States / Universidad Publica de Navarra, Navarra, Spain); Mar Rubio (Universidad Publica de Navarra, Navarra, Spain) |
| Abstract: | Tres décadas después de la decisión gubernamental de paralizar y replantear el programa atómico español que se había diseñado en los años del desarrollismo, la controversia permanece abierta. Pese a su relevancia, la historiografía económica de la energía nuclear está tan sólo en sus inicios. Este trabajo analiza el papel que el Estado jugó para conseguir que uno de los países más pobres de Europa occidental entrara en el exclusivo club de países productores de esa energía. Proponemos una nueva periodización del avance de la energía nuclear en España basada en la evolución político-económica del sector que va más allá de los estadios tecnológicos que se describen en la literatura. |
| Keywords: | energía nuclear, historia económica, política energética, sector eléctrico |
| JEL: | N2 N4 N5 N7 Q43 Q48 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ahe:dtaehe:1403&r=ene |
| By: | Pasquale Lucio Scandizzo (CEIS University of Rome "Tor Vergata") |
| Abstract: | This paper examines the controversial problem of the choice of the social discount rate in development projects, by focusing on the investment required to adapt to climate change, considering the threats to food security and the needs for human and natural capital, especially for developing countries. Because climate change introduces negative trends and time increasing volatilities both in production and in consumption, social rates of discount can only be estimated within a framework of dynamic uncertainty. For this purpose, climate change can be modeled as a twin stochastic process of the geometric Brownian motion variety, affecting both consumption and productive capacity. Unlike the case of deterministic neoclassical growth, and contrary to the usual estimates for project evaluation, the stochastic nature of climate changes links the social discount rate (SDR) to volatility in two distinct and important ways. On the side of consumption and growth, the SDR is reduced by the likely negative effects of climate change (CC) on growth and food security. It also becomes dependent on the fact that the volatility of growth favors the accumulation of precautionary savings and thus reduces the rate of fall of the value of consumption over time. On the side of production capacity, the SDR is also reduced by the negative effect of CC on the productivity of capital and by the fact that the opportunity cost of the displacement of private investment under dynamic uncertainty is lowered by the value of the options to invest when more information will be available. |
| Keywords: | social, discount, uncertainty, climate change |
| JEL: | H8 D1 Q5 |
| Date: | 2014–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:rtv:ceisrp:309&r=ene |
| By: | Ngo Van LONG |
| Abstract: | N/A |
| Keywords: | N/A |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:mtl:montec:02-2014&r=ene |
| By: | Rohlf, Alexander; Römer, Daniel; von Graevenitz, Kathrine |
| Abstract: | In this paper, we study the effect of the release of emission information on housing prices. The main event under study is the release of the first wave of data from the European Pollutant Release and Transfer Register (E-PRTR) publishing emission quantities for the reporting year 2007. We base our analysis on quarterly house prices at the German postal code level for the years 2004-2011 and provide, to the best of our knowledge, the first analysis outside the US on this research question. We estimate a differences-in-differences model and find no significant effect of the release of emission information on the value of houses in affected postal code areas when controlling for observable differences in land use, prevalence of housing types, tax revenues and other postal code area characteristics by means of propensity score matching. This result survives several robustness checks. We conclude that disclosing the first wave of E-PRTR emissions had no robust impact on housing prices. |
| Date: | 2014–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:awi:wpaper:0554&r=ene |
| By: | Ioulia Ossokina; Gerard Verweij |
| Abstract: | This paper exploits a quasi-experiment to value the benefits of reducing urban traffic externalities. As a source of exogenous variation we use the opening of a new bypass in The Hague, the Netherlands, that reduced traffic on a number of local streets, leaving others unaffected. We calculate the effect of the change in traffic nuisance on housing prices and find that a reduction of 50% in traffic density induces a 1% increase in housing prices on average. Reductions in traffic nuisance are valued much more positively when the traffic density is already high. We do not find evidence of anticipation effects up to 3 years before the change. Furthermore, our results indicate that traffic nuisance effects are likely to be biased in cross-sectional studies. |
| JEL: | Q53 R2 R4 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:267&r=ene |