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on Energy Economics |
| By: | Abolhosseini, Shahrouz (Seoul National University); Heshmati, Almas (Sogang University); Altmann, Jörn (Seoul National University) |
| Abstract: | The increased concerns about climate change have made renewable energy sources an important topic of research. Several scholars have applied different methodologies to examine the relationships between energy consumption and economic growth of individual and groups of countries and to analyze the environmental effects of energy policies. Previous studies have analyzed carbon emission savings, using renewable energy usage as an individual source or in combination with traditional sources of energy (e.g., hybrid plants) in connection with lifecycle analysis methods. It is shown that after a certain period, economic growth leads to the promotion of environmental quality. However, econometric modelling critiques have opposed the results of these studies. One reason is that the effectiveness of governance-related parameters has previously been neglected. In this research, we analyze the impact of renewable energy development on carbon emission reduction. We estimate a model to evaluate the effectiveness of renewable energy development, technological innovation, and market regulations in carbon emission reduction. The empirical results are based on a panel data estimation using the EU-15 countries data observed from 1995 to 2010. The elasticities of CO2 emissions are estimated, in order to evaluate the effectiveness of each parameter. The findings show that the effects of a negative climate change could be mitigated by governance-related parameters instead of economic development. |
| Keywords: | renewable energy, technological innovation, environmental tax, carbon emission, economic growth |
| JEL: | D62 H23 N50 O13 O14 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7989&r=ene |
| By: | Brigitte Knopf (Potsdam Institute for Climate Impact Research (PIK)); Yen-Heng Henry Chen (Massachusetts Institute of Technology (MIT), Joint Program on the Science and Policy of Global Change); Enrica De Cian (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center on Climate Change); Hannah Förster (Öko-Institut); Amit Kanudia (KanORS-EMR); Ioanna Karkatsouli (Massachusetts Institute of Technology (MIT), Joint Program on the Science and Policy of Global Change); Ilkka Keppo (University College London); Tiina Koljonen (VTT Technical Research Centre of Finland); Katja Schumacher (Öko-Institut); Detlef van Vuuren (PBL Netherlands Environmental Assessment Agency and Utrecht University, Department of Geosciences) |
| Abstract: | The Energy Modeling Forum 28 (EMF28) study systematically explores the energy system transition required to meet the European goal of reducing greenhouse gas (GHG) emissions by 80% by 2050. The 80% scenario is compared to a reference case that aims to achieve a 40% GHG reduction target. The paper investigates mitigation strategies beyond 2020 and the interplay between different decarbonization options. The models present different technology pathways for the decarbonization of Europe, but a common finding across the scenarios and models is the prominent role of energy efficiency and renewable energy sources. In particular, wind power and bioenergy increase considerably beyond current deployment levels. Up to 2030, the transformation strategies are similar across all models and for both levels of emission reduction. However, mitigation becomes more challenging after 2040. With some exceptions, our analysis agrees with the main findings of the “Energy Roadmap 2050” presented by the European Commission. |
| Keywords: | European Decarbonisation, Mitigation Scenarios, Model Comparison, Climate Change, EU Energy Roadmap 2050 |
| JEL: | Q2 Q4 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.15&r=ene |
| By: | Brigitte Knopf (Potsdam Institute for Climate Impact Research (PIK)); Bjørn Bakken (SINTEF Energy Research); Samuel Carrara (Fondazione Eni Enrico Mattei and Euro-Mediterranean Center on Climate Change); Amit Kanudia (KanORS-EMR); Ilkka Keppo (University College London); Tiina Koljonen (VTT Technical Research Centre of Finland); Silvana Mima (PACTE-EDDEN, CNRS, Université Grenoble Alpes); Eva Schmid (Potsdam Institute for Climate Impact Research (PIK)); Detlef van Vuuren (PBL Netherlands Environmental Assessment Agency and Utrecht University, Department of Geosciences) |
| Abstract: | The Energy Modeling Forum 28 (EMF28) performed a large-scale model comparison exercise to illustrate different technology pathways for cutting European greenhouse gas emissions by 80% by 2050. Focusing on selected countries (France, Germany, Italy, Sweden and UK), this paper first analyses climate and energy policy objectives and debates in the respective countries. It then compares EMF28 model results to the short-term projections of the National Renewable Energy Action Plans (NREAPs) and the long-term transformation pathway given in the European Commission’s “Energy Roadmap 2050”. It concludes that there is sufficient agreement with the NREAPs and national policies to accept the model results as conceivable scenarios. The scenarios suggest that in the future a variety of different national energy mixes will continue to reflect the different resource bases and preferences of individual Member States. In order to ensure a cost-efficient transformation, it is important to improve coordination between Member State policies and those at EU level. |
| Keywords: | European Climate and Energy Policy, National Renewable Action Plans (Nreaps), Environmental Federalism, Mitigation Scenarios |
| JEL: | Q2 Q4 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.14&r=ene |
| By: | Anna Alberini (AREC, University of Maryland, Centre for Energy Policy and Economics (CEPE), ETH Zürich, and Fondazione Eni Enrico Mattei); Markus Bareit (CEPE, ETH Zürich); Massimo Filippini (CEPE, ETH Zürich, and University of Lugano) |
| Abstract: | To correct market failures due to the presence of negative externalities associated with energy consumption, governments have adopted a variety of policies, including taxes, subsidies, regulations and standards, and information-based policies. For example, labels that clearly convey energy consumption rates, associated costs, and emissions of conventional pollutants and CO2, have been devised and used in the last two decades in several countries. In 2003, Switzerland introduced a system of fuel economy labels, based on grades ranging from A to G, where is A best and G is worst, to assist consumers in making decisions that improve the fleet’s fuel economy and lower emissions. We use a dataset documenting all passenger cars approved for sale in Switzerland each year from 2000 to 2011 to answer three key research questions. First, what is the willingness to pay for fuel economy? Second, do Swiss drivers—or Swiss auto importers on their behalf—appear to do a one-to-one tradeoff between car purchase price and savings on fuel costs over the lifetime of the car? Third, does the label have an additional effect on price, all else the same, above and beyond that of fuel efficiency alone? Hedonic pricing regressions that exploit the variation in fuel economy across make-models, and over time within make-models, suggest that there is a (modest) capitalization of fuel economy into car prices. The diesel premium, however, exceeds the future fuel cost savings made possible by diesel cars, even at zero discount rates. An alternate calculation suggests that the fuel economy premium is consistent with a very low discount rate (2.5%). We use a sharp regression discontinuity design (RDD) based on the mechanism used by the Swiss Federal Office of Energy to assign cars to the fuel economy label to see if the label has an independent effect on price, above and beyond that of the fuel economy. The RDD approach estimates the effect to be 6-11%. To broaden the fuel economy range over which we assess the effect of the A label, we also deploy matching estimators, and find that the effect of an A label on car price is approximately 5%. |
| Keywords: | Fuel Economy, CO2 Emissions, Passenger Vehicles, Hedonic Pricing Model, Matching Estimator, Regression Discontinuity Design, Fuel Efficiency Premium, Discounted Future Fuel Costs |
| JEL: | Q48 Q53 Q54 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.16&r=ene |
| By: | Florian Ziel; Rick Steinert |
| Abstract: | The raising importance of renewable energy, especially solar and wind power, led to new impacts on the formation of electricity prices. Hence, this paper introduces an econometric model for the hourly time series of electricity prices of the EEX which incorporates specific features like renewable energy. The model consists of several sophisticated and established approaches and can be regarded as a periodic VAR-TARCH with wind power, solar power and load as influencing time series. It is able to map the distinct and well-known features of electricity prices in Germany. An efficient iteratively reweighted lasso approach is used for estimation. Moreover, it is shown that several existing models are outperformed by using the procedure developed within this paper. |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1402.7027&r=ene |
| By: | Olga Efimova; Apostolos Serletis (University of Calgary) |
| Abstract: | This paper investigates the empirical properties of oil, natural gas, and electricity price volatilities using a range of univariate and multivariate GARCH models and daily data from wholesale markets in the United States for the period from 2001 to 2013. The key contribution to the literature is the estimation of trivariate BEKK and DCC models that allow us to observe spillovers and interactions among energy markets. We evaluate and compare the performance of univariate and multivariate models with a range of diagnostic and forecast performance tests, and assess forecasting performance and conditional correlation dynamics. |
| Date: | 2014–02–24 |
| URL: | http://d.repec.org/n?u=RePEc:clg:wpaper:2014-39&r=ene |
| By: | Yahya F. Anouti (Division of Economics and Business, Colorado School of Mines); Carol A. Dahl (Division of Economics and Business, Colorado School of Mines) |
| Abstract: | Today, a confluence of factors, such as growing concerns about associated consumption externalities and socioeconomic pressures, is building the momentum towards reducing fossil fuel consumption for road transport and rationalizing prices to reflect direct, indirect and externality costs. While limited country specific work has been done, considering optimal transport fuel prices, (e.g. Parry 2012), we have found no attempts to do so with the breadth and scope of our analysis. Thus in this paper, we make three main contributions. First, we survey policies aimed at reducing transport fuel consumption. Out of these policies, we chose fiscal instruments for our extensive quantitative analysis carried out in a supply and demand framework for 123 countries. Second, we quantify the rationalized cost of transport fuels to reflect the direct costs (production), indirect costs (road maintenance), and negative externalities (climate change, local pollutants, traffic accidents and congestion). Finally, we measure the change in demand, environmental emissions, government revenues and welfare induced by successively phasing in our three cost categories. By rationalizing prices, we estimate that total demand for gasoline could be reduced by 8.5 percent and that of diesel by 5.7 percent. This would lead to not only reduction in associated negative externalities, but also generate an estimated $400 billion in revenues to governments. |
| Keywords: | transport policy, energy demand, subsidy, externalities, gasoline, diesel |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:mns:wpaper:wp201401&r=ene |
| By: | Silvester van Koten |
| Abstract: | Cap-and-trade programs, such as the EU carbon Emission Trading Scheme, are currently the most prominent market-based method used to reduce carbon emissions. Cap-and-trade programs are, on theoretical grounds, considered to be a cost-efficient method. Experimental evidence, however, shows that experimental subjects make highly inefficient abatement choices and that permit allocation methods (allocating permits for free or against payment) bias subjects to too much or too little abatement. The experimental evidence thus suggests that cap-and-trade programs may in practice be more costly than theory predicts. This study, however, challenges this interpretation and shows that, when they are price takers (as in thick markets) and have ample opportunities for learning, subjects quickly learn to make accurate decisions and that these decisions are not affected by the permit allocation method. |
| Keywords: | abatement; cap-and-trade; experimental economics; emission trading system; carbon permits; experience effects; |
| JEL: | C91 D62 Q54 Q55 Q58 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp503&r=ene |
| By: | Taran Fæhn; Elisabeth Thuestad Isaksen (Statistics Norway) |
| Abstract: | Publicly announced GHG mitigation targets and emissions pricing strategies by individual governments may suffer from inherent commitment problems. When emission prices are perceived as short-lived, socially cost-effective upfront investment in climate technologies may be hampered. This paper compares the social abatement cost of a uniform GHG pricing system with two policy options for overcoming such regulatory uncertainty: one with a state guarantee scheme whereby the regulatory risk is borne by the government and one which combines emissions pricing with subsidies for upfront climate technology investments. A technology-rich CGE model is applied that accounts for abatement both within and beyond existing technologies. Our findings suggest a tripling of abatement costs if domestic climate policies fail to stimulate investment in new technological solutions. Since the cost of funding investment subsidies is found to be small, the subsidy scheme performs almost as well as the guarantee scheme. |
| Keywords: | Abatement costs; Climate technologies; Credible commitment; Computable general equilibrium model; Technological change; Technological diffusion; Hybrid modelling |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ssb:dispap:768&r=ene |
| By: | Jussi Lintunen (Finnish Forest Research Institute, Finland); Jussi Uusivuori (Finnish Forest Research Institute, Finland) |
| Abstract: | First-best optimal forest sector carbon policy is examined. Using a comprehensive forest sector model with a detailed carbon cycle section we show that the renewability and carbon neutrality arguments do not warrant emission free treatment of forest bioenergy. However, under the biomass stock change carbon accounting convention followed by UNFCCC and IPCC, the forest owners pay for the roundwood emissions and, to avoid double counting, the use of roundwood is treated as emission free. The bioenergy from harvest residues cannot be treated as emission free either. Their emission factors are determined through the decay time-scales specific to residue fractions and discount rate used in welfare assessment. In addition, we show that an optimal policy subsidizes the production of wood products sequestering carbon. The relative magnitude of the subsidy is based on the fraction of the carbon stored, the lifetime of the products and the discount rate. Correspondingly, the carbon removals by biomass growth are subsidized and the harvest residue generation taxed. Further, we show that the supply side policies are independent of final use of harvested timber. Numerical solution of the model shows that, although the use of wood is not emission free, it is optimal to increase the use of wood, possibly also in the energy sector. Before the wood use can be increased, the forest biomass has to be increased. This initial carbon sink speeds up the convergence to the lower steady-state atmospheric carbon stock. |
| Keywords: | Optimal Policy, Forest Carbon, Effective Emission Factor, Age-Structured Forest |
| JEL: | Q23 Q43 Q50 Q54 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.13&r=ene |
| By: | Lange, Ian; Moro, Mirko; Rahman, Mohammad |
| Abstract: | Much attention in recent years has turned to the potential of behavioural insights to improve the performance of government policy. One behavioural concept of interest is the effect of a cash transfer label on how the transfer is spent. The Winter Fuel Payment (WFP) is a labelled cash transfer to offset the costs of keeping older households warm in the winter. Previous research has shown that households spend a higher proportion of the WFP on energy expenditures due to its label (Beatty et al., 2011). If households interpret the WFP as money for their energy bills, it may reduce their willingness to undertake investments which help achieving the same goal, such as the adoption of renewable energy technologies. In this paper we show that the WFP has distortionary effects on the renewable technology market. Using the sharp eligibility criteria of the WFP in a Regression Discontinuity Design, this analysis finds a reduction in the propensity to install renewable energy technologies of around 2.7 percentage points due to the WFP. This is a considerable number. It implies that 62% of households (whose oldest member turns 60) would have invested in renewable energy but refrain to do so after receiving the WFP. This analysis suggests that the labelling effect spreads to products related to the labelled good. In this case, households use too much energy from sources which generate pollution and too little from relatively cleaner technologie s. |
| Keywords: | Renewable energy; Regression Discontinuity; Winter Fuel Payment |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:stl:stledp:2014-01&r=ene |
| By: | Mohamed Arouri; Gazi Salah Uddin; Phouphet Kyophilavong; Frédéric Teulon; Aviral Kumar Tiwari |
| Abstract: | This paper contributes to literature by investigating the relationship between energy utilization and output per capita in France using asymmetric causality test over the period 1960-2011. Our approach is based on bootstrap simulation method combined with leveraged corrections that provide accurate critical values. We show that energy utilization explains output per capita over the long-run, but that the relationship between the two variables is rather asymmetric. |
| Keywords: | Energy Utilization, Income, Asymmetric Causality Test, France |
| Date: | 2014–02–25 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-102&r=ene |
| By: | Peter Heindl |
| Abstract: | Fuel poverty measurement consists of two independent parts: firstly, the definition of an adequate fuel poverty line, and secondly, techniques to measure fuel poverty. This paper reviews options for the definition of fuel poverty lines and techniques for fuel poverty measurement. Based on household data from Germany, figures that would result from different fuel poverty lines are derived. Different fuel poverty lines yield highly different results with respect to which households are identified as fuel poor. Thus, the choice of the fuel poverty line matters decisively for the resulting assessment. Options for fuel poverty measurement and subgroup comparison are discussed. |
| Keywords: | Fuel poverty, energy poverty, poverty measurement, Energiearmut, Germany |
| JEL: | I32 Q28 Q48 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp632&r=ene |
| By: | Xin Li; Borghan Narajabad; Ted Temzelides |
| Abstract: | We study a dynamic stochastic general equilibrium model where agents are concerned about model uncertainty regarding climate change. An externality from greenhouse gas emissions adversely affects the economy’s capital stock. We assume that the mapping from climate change to damages is subject to uncertainty, and we adapt and use techniques from robust control theory in order to study efficiency and optimal policy. We obtain a sharp analytical solution for the implied environmental externality, and we characterize dynamic optimal taxation. A small increase in the concern about model uncertainty can cause a significant drop in optimal energy extraction. The optimal tax which restores the social optimal allocation is Pigouvian. Under more general assumptions, we develop a recursive method and solve the model computationally. We find that the introduction of uncertainty matters qualitatively and quantitatively. We study optimal output growth in the presence and in the absence of concerns about uncertainty and find that these can lead to substantially different conclusions. |
| JEL: | N10 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_4562&r=ene |
| By: | Scott Barrett; Astrid Dannenberg |
| Abstract: | According to the Framework Convention on Climate Change, global collective action is needed to stabilize “greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous [our emphasis] anthropogenic interference with the climate system.” The Framework Convention thus implies that, on the far side of some critical concentration level, climate change will be “dangerous,” while on the near side of the threshold, climate change will be “safe” (though perhaps still undesirable). Rather than be linear and smooth, the Framework Convention warns that climate change may be “abrupt and catastrophic.” |
| Keywords: | climate change, prisoners’ dilemma, catastrophe, negotiations, cooperation, uncertainty, experimental economics |
| JEL: | C72 F51 H41 H87 Q54 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_4573&r=ene |
| By: | Vipin Arora; Yiyong Cai |
| Abstract: | We evaluate potential global impacts of increase in U.S. natural gas exports as a result of the shale gas boom. To our knowledge this is the first such analysis using a global economic model to understand this timely policy issue. Our primary conclusion is that world economic activity is higher through most of the simulation period [2014-2035] when U.S. natural gas exports rise. The overall U.S. results mirror the global ones, but the magnitude of income gains depends upon how the rate of increase and level of exports are determined, and the price elasticity of natural gas supply. The U.S. benefits more when export increases and levels depend on natural gas production rather than when they are pre-determined by assumption. The economic impacts on other natural gas importers and exporters can change as well based on how export levels are determined. The effects on natural gas prices, consumption, and production in individual countries vary with the scenarios and model parameter values. |
| Keywords: | natural gas, exports, shale, general equilibrium, international |
| JEL: | E17 F47 Q31 Q43 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2014-22&r=ene |
| By: | Barreca, Alan I. (Tulane University); Clay, Karen (Carnegie Mellon University); Tarr, Joel (Carnegie Mellon University) |
| 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. |
| Keywords: | air pollution, coal, mortality, infant mortality, heating |
| JEL: | Q53 N72 I18 N32 N52 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp7987&r=ene |
| By: | Salman Huseynov, Vugar Ahmadov (Central Bank of the Republic of Azerbaijan) |
| Abstract: | In this study, we investigate the nature and possible sources of economic fluctuations in oil exporting countries using principle component and impulse-response analysis. The principal component analysis shows that the first two components can be statistically significantly explained by world GDP, but not by oil prices. We further develop our study using impulse-response analysis and find that a global demand shock is as important as oil supply and oil demand shocks in determining the dynamics of macroeconomic variables of interest. Though previous studies in this field underline the importance of institutional factors, we find that rising global political and economic integration can play a critical role in explaining business cycles of these economies. With increasing integration into the world economic system, oil exporting countries have become more susceptible to world business cycles, the sources of economic fluctuations have become more diversified, and consequently, the role of oil has declined over time. These results have crucial policy implications for the role of the fiscal and monetary policy in managing economic fluctuations in these economies. |
| Keywords: | Business Cycles; Oil Exporting Countries; Oil price; Bayesian methods |
| JEL: | C11 C32 E30 E32 |
| Date: | 2014–02–18 |
| URL: | http://d.repec.org/n?u=RePEc:gii:giihei:heidwp03-2014&r=ene |
| By: | Anand, Mukesh (National Institute of Public Finance and Policy) |
| Abstract: | A hornet's nest could be an apt simile for fossil fuel prices in India. Over years a policy maze has evolved around it, with sharply diverging influence on disparate constituencies. We estimate the increase in total cost of farming as a multiple of direct input costs of fossil fuels in farming. Over the period between 1990-1 and 2010-1, direct use of fossil fuels on farms has risen and there is also increasing indirect use of fossil fuels for non-energy purposes. Consequently, for Indian agriculture both energy intensity and fossil fuel intensity are rising. But, these are declining for the aggregate Indian economy. Thus, revision of fossil fuel prices has acquired greater significance for Indian agriculture than for the remainder of the economy. We validate these findings by utilising an input-output table for the Indian economy to assess the impact of fossil fuel price increase. We assess that fossil fuels sector has strong forward linkages and increase in its price has a steep inflationary impact. Using a three-sector I-O model for Indian economy, we estimate that a 10 per cent increase in fossil fuel price could cause, ceteris paribus, the wholesale price index (WPI) to rise about 4.3 percentage points with 0.7 percentage points being contributed by the farm sector alone. |
| Keywords: | Agriculture ; Fossil-fuel intensity ; Inflation ; Input-output analysis |
| JEL: | C67 E31 Q12 Q43 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:npf:wpaper:14/132&r=ene |
| By: | Reid Ewing; Harry W. Richardson; Keith Bartholomew; Arthur C. Nelson; Chang-Hee Christine Bae |
| Abstract: | This paper examines the relative merits of compact cities or urban sprawl (suburban settlement patterns) as a spatial solution to environmental problems (such as climate control), automobile dependence, economic development, infrastructure costs and the quality of urban life. |
| Keywords: | compact cities, sprawl, vehicle miles traveled, carbon emissions, infrastructure costs, residential preferences, commuting times |
| JEL: | R14 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_4571&r=ene |
| By: | Daniel M. Knight |
| Abstract: | During the Greek economic crisis a focus on energy practice highlights the temporal complexities of local coping strategies. Re-launched in 2011, the European Union supported solar energy initiative encourages installation of futuristic, high-tech photovoltaic panels on fertile agricultural land. Entangled with intricate notions of neo-colonialism and occupation, the solar program provides extra income for disenfranchised farmers and much needed local employment opportunities. However, winter 2012-13 witnessed a return en-mass to ‘archaic’ open fires and wood-burning stoves that locals associate with material poverty, pre-modernity, and pre-Europeanization. Energy practice provides a prism through which to discuss increased social suffering and reassess the place of Greece in a modern Europe. |
| Keywords: | energy; economic crisis; temporality; modernity; belonging |
| JEL: | N0 |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:55285&r=ene |
| By: | Kristine Grimsrud; Knut Einar Rosendahl; Halvor Briseid Storrøsten; Marina Tsygankova |
| Abstract: | In a non-renewable resource market with imperfect competition, both the resource rent and current prices influence a large resource owner’s optimal supply. New information regarding future market conditions that affect the resource rent will consequently impact current supply. Bleaker demand prospects tend to accelerate resource extraction. A more pessimistic outlook for future demand may, however, slow down the early resource extraction of producers with sufficiently large resource stocks and thus more limited resource rent, because the supply from these producers is driven more by current market considerations than by changes in the resource rent. As producers with relatively smaller resource stocks accelerate their supply in response to bleaker demand prospects, producers with sufficiently large resource stocks will reduce their current supply. A numerical model of the European gas market illustrates that the effect of the shale gas revolution is an accelerated supply by most gas producers, but a reduced supply by Russia who loses market shares even before the additional gas enters the market. |
| Keywords: | resource extraction, Cournot competition, European gas market |
| JEL: | Q31 Q33 Q42 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_4579&r=ene |
| By: | John Cotter (UCD School of Business, University College Dublin); Jim Hanly (UCD School of Business, University College Dublin) |
| Abstract: | Hedgers as investors are concerned with both risk and return; however the literature has generally neglected the role of both returns and investor risk aversion by its focus on minimum variance hedging. In this paper we address this by using utility based performance metrics to evaluate the hedging effectiveness of utility based hedges for hedgers with both moderate and high risk aversion together with the more traditional minimum variance approach. We apply our approach to two asset classes, equity and energy, for three different hedging horizons, daily,weekly and monthly. We find significant differences between the minimum variance and utility based hedges and their attendant performance in-sample for all frequencies. However out of sample performance differences persist for the monthly frequency only. |
| Keywords: | Energy, Hedging Performance; Utility, Risk Aversion |
| JEL: | G10 G12 G15 |
| Date: | 2014–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:ucd:wpaper:201401&r=ene |
| By: | Andreas Blöchl; Gebhard Flaig |
| Abstract: | In this paper we use the Hodrick-Prescott filter for analysing global temperature data. We are especially concerned with a reliable estimation of the trend component at the end of the data sample. To this end we employ time-varying values for the penalization parameter. The optimal values are derived by a comparison with an ideal filter. The method is applied to temperature data for the northern hemisphere from 1850 to 2012. The main result is that for the optimal specification of the flexible penalization the trend component of temperature is still increasing, possibly with a somewhat lower pace. |
| Keywords: | climate change, global warming, trend, Hodrick-Prescott filter, flexible penalization |
| JEL: | Q54 C22 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_4577&r=ene |