nep-ene New Economics Papers
on Energy Economics
Issue of 2014‒05‒17
34 papers chosen by
Roger Fouquet
London School of Economics

  1. Taxing Electricity Sector Carbon Emissions at Social Cost By Paul, Anthony; Beasley, Blair; Palmer, Karen
  2. Explaining the Adoption of Diesel Fuel Passenger Cars in Europe By Linn, Joshua
  3. General Equilibrium Impacts of a Federal Clean Energy Standard By Goulder, Lawrence H.; Hafstead, Marc A.C.; Williams, Roberton C.
  4. Environmental and Technology Policy Options in the Electricity Sector: Interactions and Outcomes By Fischer, Carolyn; Newell, Richard G.; Preonas, Louis
  5. Why Have Greenhouse Emissions in RGGI States Declined? An Econometric Attribution to Economic, Energy Market and Policy Factors By Brian C. Murray; Peter T. Maniloff; Evan M. Murray
  6. Energy from Waste: Generation Potential and Mitigation Opportunity By Francesco Bosello; Lorenza Campagnolo; Fabio Eboli; Ramiro Parrado
  7. The Costs and Consequences of Clean Air Act Regulation of CO2 from Power Plants By Burtraw, Dallas; Linn, Joshua; Palmer, Karen; Paul, Anthony
  8. When Does Regulation Distort Costs? Lessons from Fuel Procurement in U.S. Electricity Generation By Steve Cicala
  9. Knowledge Spillovers from Renewable energy Technologies, Lessons from patent citations By Joelle Noailly; Victoria Shestalova
  10. Fluctuating Climate Changes Induced by Optimal Carbon Capturing Policies By Michel Moreaux; Cees Withagen
  11. Exploring Policy Options to include Petroleum, Natural Gas and Electricity under the Proposed Goods and Services Tax (GST)Regime in India. By Mukherjee, Sacchidananda; Rao, R. Kavita
  12. Why Wind Is Not Coal: On the Economics of Electricity By Lion Hirth; Falko Ueckerdt; Ottmar Edenhofer
  13. Short- and Long-Run Relationships between Natural Gas Consumption and Economic Growth: Evidence from Pakistan By Muhammad Shahbaz; Mohamed Arouri; Frédéric Teulon
  14. Japanese Industrial Policy and the Enhancement of Nuclear Power Plants Efficiency: Promotion of domestic production and the "Improvement & Standardization Plan" (Japanese) By ISHII Susumu
  15. The goodness-of-fit of the fuel-switching price using the mean-reverting Lévy jump process By Julien Chevallier; Stéphane Goutte
  16. Fostering Renewables and Recycling a Carbon Tax: Joint Aggregate and Intergenerational Redistributive Effects By Frédéric Gonand
  17. National corridors for climate change mitigation: managing industrial CO2 emissions in France By Jeff Bielicki; Guillaume Calas; Richard Middleton; Minh Ha-Duong
  18. The hidden winners of renewable energy promotion : insights into sector-specific wage differentials By Antoni, Manfred; Janser, Markus; Lehmer, Florian
  19. On the Mechanism of International Technology Diffusion for Energy Productivity Growth By Wei Jin; ZhongXiang Zhang
  20. Elasticities of Residential Electricity Demand in Chile By Claudio A Agostini; Eduardo Saavedra
  21. The Danish Agricultural Revolution in an Energy Perspective: A Case of Development with Few Domestic Energy Sources By Henriques, Sofia Teives; Sharp, Paul
  22. Environmental Pressure and Armed Conflict - Is there an empirical Kuznets Curve for Myanmar? By Parlow, Anton
  23. GCC Countries and the Nexus between Exchange Rate and Oil Price: What wavelet decomposition reveals? By Bouoiyour, Jamal; Selmi, Refk
  24. How does bad and good volatility spill over across petroleum markets? By Jozef Barunik; Evzen Kocenda; Lukas Vacha
  25. The Housing Market Impacts of Shale Gas Development By Muehlenbachs, Lucija; Spiller, Elisheba; Timmins, Christopher
  26. Optimal Monetary Responses to Oil Discoveries By Samuel Wills
  27. Location decisions of natural gas extraction establishments: a smooth transition count model approach By Brown, Jason; Lambert, Dayton
  28. Can climate finance achieve gender equity in developing countries? By Wong, Sam
  29. Modeling fuel choice among households in northern Cameroon By Nlom, Jean Hugues; Karimov, Aziz
  30. Pollution and Informal Economy By Ceyhun Elgin; Oguz Oztunali
  31. Environment and Growth By Ryo Horii; Masako Ikefuji
  32. Climate Change and Psychological Adaptation: A Behavioral Environmental Economics Approach By Aronsson, Thomas; Schöb, Ronnie
  33. Income Heterogeneity and Environmental Kuznets Curve in Africa By Ogundipe, Adeyemi; Alege, Philip; Ogundipe, Oluwatomisin
  34. Models as usual for Unusual Risks? On the value of Catastrophic Climate Change By Bruno Lanz

  1. By: Paul, Anthony (Resources for the Future); Beasley, Blair; Palmer, Karen (Resources for the Future)
    Abstract: Concerns about budget deficits, tax reform, and climate change are fueling discussions about taxing carbon emissions to generate revenue and reduce greenhouse gas emissions. Imposing a carbon tax on electricity production based on the social cost of carbon (SCC) could generate between $21 and $82 billion in revenues in 2020 and would have important effects on electricity markets. The sources of emissions reductions in the sector depend on the level of the tax. A carbon tax based on lower SCC estimates reduces emissions by reducing demand and through the substitution of gas for coal, whereas taxes based on higher SCC estimates induce switching to wind and nuclear generation. The slow rate of growth of the SCC estimates means that any SCC-based carbon tax trajectory provides weaker long-run incentives for expanded renewable and nuclear generation than a cap-and-trade program that achieves an equivalent level of cumulative carbon dioxide emissions reductions. Taxing carbon at the SCC is welfare enhancing, but the SCC may not be the optimal tax rate. Classification-JEL: Q58, H23, H77
    Keywords: carbon tax, cap and trade, social cost of carbon, electricity, energy, climate
    Date: 2013–11–21
  2. By: Linn, Joshua (Resources for the Future)
    Abstract: Compared with gasoline engines, diesel fuel engines significantly reduce fuel consumption and greenhouse gas emissions from passenger vehicles, but they emit more nitrogen oxides and other pollutants. Across countries, the market share of diesel fuel engines in passenger vehicles varies from close to zero to more than 80 percent. Using a structural model of vehicle markets in seven European countries, I show that vehicle taxes and willingness to pay for fuel costs, rather than fuel prices or supply, explain adoption. The model is used to compare the environmental implications of fuel taxes and carbon dioxide emissions rate standards.
    Keywords: vehicle demand estimation, demand for fuel economy and performance, fuel taxes, vehicle taxes, carbon dioxide emissions rates
    JEL: L62 Q4 Q5
    Date: 2014–04–14
  3. By: Goulder, Lawrence H. (Resources for the Future); Hafstead, Marc A.C. (Resources for the Future); Williams, Roberton C. (Resources for the Future)
    Abstract: Economists have tended to view emissions pricing (e.g., cap and trade or a carbon tax) as the most cost-effective approach to reducing greenhouse gas emissions. This paper offers a different view. Employing analytical and numerically solved general equilibrium models, the paper indicates plausible conditions under which a more conventional form of regulation—namely, the use of a clean energy standard (CES)—is more cost-effective. The models reveal that in a realistic economy with prior taxes on factors of production, the CES distorts factor markets less because it is a smaller implicit tax on factors. This advantage more than offsets the disadvantages of the CES when relatively minor reductions in emissions are called for. Numerical simulations indicate that the cost-effectiveness of the CES is sensitive to what is deemed “clean” electricity. To achieve maximal cost-effectiveness, the CES must offer significant credit to electricity generated from natural gas. Classification-JEL: Q58, Q54, H23
    Keywords: clean energy standard, intensity standard, emissions pricing, climate
    Date: 2014–02–10
  4. By: Fischer, Carolyn (Resources for the Future); Newell, Richard G.; Preonas, Louis
    Abstract: Myriad policy measures aim to reduce greenhouse gas emissions from the electricity sector, promote generation from renewable sources, and encourage energy conservation. To what extent do innovation and energy efficiency (EE) market failures justify additional interventions when a carbon price is in place? We extend the model of Fischer and Newell (2008) with advanced and conventional renewable energy technologies and short and long-run EE investments. We incorporate both knowledge spillovers and imperfections in the demand for energy efficiency. We conclude that some technology policies, particularly correcting R&D market failures, can be useful complements to emissions pricing, but ambitious renewable targets or subsidies seem unlikely to enhance welfare when placed alongside sufficient emissions pricing. The desirability of stringent EE policies is highly sensitive to the degree of undervaluation of EE by consumers, which also has implications for policies that tend to lower electricity prices. Even with multiple market failures, emissions pricing remains the single most cost-effective option for reducing emissions. Classification-JEL: Q42, Q52, Q55, Q58
    Keywords: climate change, cap-and-trade, renewable energy, portfolio standards, subsidies, spillovers, energy efficiency, electricity
    Date: 2013–12–12
  5. By: Brian C. Murray (Duke University); Peter T. Maniloff (Division of Economics and Business, Colorado School of Mines); Evan M. Murray (Duke University)
    Abstract: The Regional Greenhouse Gas Initiative (RGGI) is a consortium of northeastern states that have agreed to limit carbon dioxide emissions from electricity generation through a regional emissions trading program. Since the initiative came into effect in 2009, emissions have dropped precipitously, while the price of emissions allowances has fallen from approximately \$4 per ton to the program floor price of just under \$2.00. We ask why the emission reductions have come so fast and inexpensively, finding that it is due to a combination of factors, including the emissions trading program itself, complementary environmental programs, lower natural gas prices, and possibly some regional spillover effects. We find that the effect of the recession was small compared with other factors. Lower natural gas prices had a substantial impact on regional emissions. Econometric challenges makes it difficult to assign how much of the RGGI reduction is due to the price and how much is due to an overall ``regime effect'' guiding long-term planning decisions. We also present results consistent with but not dispositive of RGGI emissions reductions being due to policy leakage. But taken together, and compared to emission reduction outcomes in the rest of the U.S., it appears the RGGI program has induced a substantial reduction in the emissions, all else equal.
    Date: 2014–04
  6. By: Francesco Bosello (Fondazione Eni Enrico Mattei, Euro-Mediterranean Center on Climate Change and University of Milan); Lorenza Campagnolo (Fondazione Eni Enrico Mattei and University of Venice Ca’ Foscari); Fabio Eboli (Fondazione Eni Enrico Mattei, Euro-Mediterranean Center on Climate Change and University of Venice Ca’ Foscari); Ramiro Parrado (Fondazione Eni Enrico Mattei, Euro-Mediterranean Center on Climate Change and University of Venice Ca’ Foscari)
    Abstract: The present research proposes a macroeconomic assessment of the role of waste incineration with energy recovery (WtE) and controlled landfill biogas to electricity generation and their potential contribution to a CO2 emission reduction policy, within a recursive-dynamic computable general equilibrium model. From the modelling viewpoint, introducing these energy sectors in such a framework required both the extension of the GTAP7 database and the improvement of the ICES production nested function. We focus our analysis on Italy as a signatory of the GHG reduction commitment of 20% by 2020 wrt 1990 levels proposed by the European Community; the rest of the world is represented by 21 geo-political countries/regions. It is shown that albeit in the near future WtE and landfill biogas will continue to represent a limited share of energy inputs in electricity sector (in Italy, around 2% for WtE and 0.6% for biogas in 2020) they could play a role in a mitigation policy context. The GDP cost of the EU emission reduction target for the Italian economy can indeed be reduced by 1% when the two energy generating options are available. In absolute terms, this translates into an annuitized value of 87-122 million €.
    Keywords: Climate Change, Mitigation, Energy From Waste
    JEL: C68 E27 Q42 Q43 Q54
    Date: 2014–04
  7. By: Burtraw, Dallas (Resources for the Future); Linn, Joshua (Resources for the Future); Palmer, Karen (Resources for the Future); Paul, Anthony (Resources for the Future)
    Abstract: US climate policy is unfolding under the Clean Air Act. Mobile source and construction permitting regulations are in place. Most important, the US Environmental Protection Agency (EPA) and the states will determine the form and stringency of the regulations for existing power plants. It is widely believed that flexible approaches could be suggested in EPA guidelines or proposed by states. Various approaches would create an implicit price on emitting greenhouse gases and create valuable assets that would be distributed differently among electricity producers, consumers, and the government. We compare a tradable performance standard with three variations on cap-and-trade policies that would distribute the asset value in different ways. Keeping the value within the electricity sector by distributing it to fossil-fueled producers or consumers or spending on energy efficiency has smaller effects on average electricity prices than a revenue-raising policy. These approaches impose greater social cost, but comparable net benefits in the sector. Classification-JEL: Q54, Q58
    Keywords: climate policy, efficiency, equity, Clean Air Act, coal, compliance flexibility, regulation
    Date: 2014–02–01
  8. By: Steve Cicala
    Abstract: This paper evaluates changes in fuel procurement practices by coal- and gas-fired power plants in the United States following state-level legislation that ended cost-of-service regulation of electricity generation. I find that deregulated plants substantially reduce the price paid for coal (but not gas), and tend to employ less capital-intensive sulfur abatement techniques relative to matched plants that were not subject to any regulatory change. Deregulation also led to a shift toward more productive coal mines. I show how these results lend support to theories of asymmetric information, capital bias, and regulatory capture as important sources of regulatory distortion.
    JEL: D24 D72 D82 L11 L43 L51 L94 L98 Q4 Q48
    Date: 2014–05
  9. By: Joelle Noailly; Victoria Shestalova (The Centre for International Environmental Studies, The Graduate Institute of International and Development Studies, Geneva)
    Abstract: This paper studies the knowledge spillovers generated by renewable energy technologies, unraveling the technological fields that benefit from knowledge developed in storage, solar, wind, marine, hydropower, geothermal, waste and biomass energy technologies. Using citation data of patents in renewable technologies at 17 European countries over the 1978-2006 period, the analysis examines the relative importance of knowledge flows within the same specific technological field (intra-technology spillovers), to other technologies in the field of power-generation (inter-technology spillovers), and to technologies unrelated to power-generation (external-technology spillovers). The results show significant differences across various renewable technologies. While wind technologies mainly find applications within their own technological field, a large share of innovations in solar energy and storage technologies find applications outside the field of power generation, suggesting that solar technologies are more general and, therefore, may have a higher value for society. Finally, the knowledge from waste and biomass technologies is mainly exploited by fossil-fuel power-generating technologies. The paper discusses the implications of these results for the design of R&D policies for renewable energy innovation.
    Keywords: Renewable energy, innovation, patents, knowledge spillovers, technology policy.
    Date: 2013–12–01
  10. By: Michel Moreaux (Toulouse School of Economics (IDEI and LERNA)); Cees Withagen (VU University Amsterdam)
    Abstract: We study optimal carbon capture and storage (CCS), taking into account damages incurred from the accumulation of carbon in the atmosphere and exhaustibility of fossil fuel reserves. High carbon concentrations call for full CCS. We identify conditions under which partial or no CCS is optimal. In the absence of CCS the CO2 stock might be inverted U-shaped. With CCS more complicated behavior may arise. It can be optimal to have full capture initially, yielding a decreasing stock, then partial capture while keeping the CO2 stock constant, and a final phase without capturing but with an inverted U-shaped CO2 stock.
    Keywords: Climate change, carbon capture and storage, non-renewable resources
    JEL: Q32 Q43 Q54
    Date: 2014–05
  11. By: Mukherjee, Sacchidananda (National Institute of Public Finance and Policy); Rao, R. Kavita (National Institute of Public Finance and Policy)
    Abstract: The study analyses the impact of keeping crude petroleum, natural gas, motor spirit (gasoline/ petrol), high speed diesel (diesel), aviation turbine fuel (ATF) and electricity out of the Value Added Tax (VAT) scheme. Specifically, the study finds that keeping these items out of the input tax credit mechanism (either partially or fully) would result in cascading. Through an input-output framework, this study proposes some alternatives to the proposed design of GST and assesses the implications for cascading and prices. It captures the degree of cascading across 48 sectors under different scenarios and explores alternative policy options to phase out under-recoveries of oil market companies on account of sales of diesel and petrol under the administered pricing mechanism.
    Keywords: Goods and services tax, Value added tax, Tax cascading, Tax incidence analysis, Ad valorem tax, Input-output analysis, Revenue neutral rates, Taxation of petroleum products, India
    Date: 2014–05
  12. By: Lion Hirth (Potsdam Institute for Climate Impact Research and Vattenfall GmbH, Geremany); Falko Ueckerdt (Potsdam Institute for Climate Impact Research, Germany); Ottmar Edenhofer (Potsdam Institute for Climate Impact Research, Chair Economics of Climate Change, Technische Universität Berlin and Mercator Research Institute on Global Commons and Climate Change (MCC), Germany)
    Abstract: The economics of electricity is shaped by its physics. A well know example is the non-storability of electricity that causes its price to fluctuate widely. More generally, physical constraints cause electricity to be a heterogeneous good along three dimensions - time, space, and lead-time. Consequently, different generation technologies, such as coal and wind power, produce different economic goods that have a different marginal economic value. Welfare maximization or competitiveness analyses that ignore heterogeneity deliver biased estimates. This paper provides an analytical welfare-economic framework that accounts for heterogeneity for unbiased assessments of power generators. The framework offers a rigorous interpretation of commonly used cost indicators such as ‘levelized electricity costs’ and ‘grid parity’. Heterogeneity is relevant for all generators, but especially for variable renewables such as wind and solar power. We propose a definition of ‘variability’, derive the opportunity costs of variability, and link that concept to the ‘integration cost’ literature. A literature review shows that variability can reduce the value of wind power by 20-50%. Thus it is crucial that economic analysis accounts for the physics of electricity.
    Keywords: Power Generation, Electricity Sector, Integrated Assessment Modeling, Variable Renewables, Integration Costs, Welfare Economics, Power Economics, Levelized Electricity Cost, Grid Parity
    JEL: Q42 D61 C61
    Date: 2014–04
  13. By: Muhammad Shahbaz; Mohamed Arouri; Frédéric Teulon
    Abstract: This paper examines the dynamic relationship between natural gas consumption and economic growth in Pakistan using a multivariate model by including capital and labor as control variables for the period between 1972QI and 2011QIV. The results of the ARDL bounds testing indicate the presence of cointegration among the variables. The estimated long-run impact of gas consumption on economic growth is greater than other factor inputs suggesting that energy is a critical driver of production and growth in Pakistan. Furthermore, the results of causality test suggest that natural gas consumption and economic growth are complements. Given that natural gas constitutes to the primary source of energy in Pakistan, the implication of this study is that natural gas conservation policies could harm growth and, therefore, requires the policy makers to improve the energy supply efficiency as well as formulate appropriate policies to attract investment and establish public-private partnership initiatives.
    Keywords: Gas Consumption, Economic Growth, Cointegration.
    JEL: C22 R41
    Date: 2014–05–15
  14. By: ISHII Susumu
    Abstract: In the 1960s, the Japanese government promoted not only swift import of nuclear technology, but also domestic production of nuclear power plants. Japanese power companies and electric machinery makers conducted a joint study of importation and original development of the nuclear technology from their independent standpoints. They formed two groups—PWR group and BWR group—and promoted nuclear power plant projects. In the process of the construction of nuclear power plants, they not only improved the imported technology but also developed the new technology. After the oil crises in 1970s, the government upgraded its energy policy and strongly promoted the construction of nuclear power plants as an alternative energy to oil. The Japanese government then planned the "Improvement & Standardization Plan" of nuclear power plants in the view of enhancing safety and efficiency. The Improvement Plan progressed, but the Standardization Plan performed poorly. Power companies and electric machinery makers took the initiative of the industrial policy over the government after mid-1970s, which resulted in a plurality of the types of nuclear reactors.
    Date: 2014–05
  15. By: Julien Chevallier; Stéphane Goutte
    Abstract: This article analyzes the interactions between the electricity and CO2 (carbon) markets. In particular, we describe the dynamics of the fuel-switching price (from coal to gas) when taking into account carbon costs. Several stochastic processes are considered to model the fuel-switching price: (i) the Brownian motion, and (ii) the Lévy jump process. Besides, the probability density function is evaluated by considering the Gaussian case versus the Normal Inverse Gaussian and the Variance Gamma distributions. The results unambigu- ously point out the need to resort to jump modeling techniques to model satisfactorily the fuel-switching price with evidence of heavy tails. The Gaussianity assumption is also clearly rejected in favor of its main competitors, whereas it is found that the NIG beats the Variance Gamma distribution. Taken together, these empirical results convey implications for risk managers looking to forecast and hedge their utilities’ production.
    Keywords: CO2; Fuel-Switching; Lévy Jump process; Mean-reversion; Normal Inverse Gaussian; Variance Gamma; Model fit; Heavy tails; Goodness-of-fit testing.
    JEL: C15 C53 Q40
    Date: 2014–05–12
  16. By: Frédéric Gonand
    Abstract: A rising share of renewables in the energy mix pushes up the average price of energy - and so does a carbon tax. However the former bolsters the accumulation of capital whereas the latter, if fully recycled, does not. Thus, in general equilibrium, the effects on growth and intertemporal welfare of these two environmental policies differ. The present article assesses and compares these effects. It relies on a computable general equilibrium model with overlapping generations, an energy module and a public finance module. The main result is that an increasing share of renewables in the energy mix and a fully recycled carbon tax have opposite (though limited) impacts on activity and individuals’ intertemporal welfare in the long run. The recycling of a carbon tax fosters consumption and labour supply, and thus growth and welfare, whereas an increasing share of renewables does not. Results also suggest that a higher share of renewables and a recycled carbon tax trigger intergenerational redistributive effects, with the former being relatively detrimental for young generations and the latter being pro-youth. The policy implication is that a social planner seeking to modify the structure of the energy mix while achieving some neutrality as concerns the GDP and triggering some proyouth intergenerational equity, could usefully contemplate the joint implementation of higher quantitative targets for the future development of renewables and a carbon tax fully recycled through lower proportional taxes.
    Keywords: Energy transition, intergenerational redistribution, overlapping generations, carbon tax, general equilibrium
    JEL: D58 D63 E62 L7 Q28 Q43
    Date: 2014
  17. By: Jeff Bielicki (Department of Civil, Environmental, and Geodetic Engineering - The Ohio State University, The John Glenn School of Public Affairs - The Ohio State University); Guillaume Calas (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - AgroParisTech); Richard Middleton (Earth and Environmental Sciences - Los Alamos National Laboratory); Minh Ha-Duong (CIRED - Centre International de Recherche sur l'Environnement et le Développement - Centre de coopération internationale en recherche agronomique pour le développement [CIRAD] : UMR56 - CNRS : UMR8568 - École des Hautes Études en Sciences Sociales (EHESS) - École des Ponts ParisTech (ENPC) - AgroParisTech)
    Abstract: Planning for the deployment of carbon dioxide capture and storage (CCS), infrastructure must consider numerous uncertainties regarding where and how much CO2 is produced and where captured CO2 can be geologically stored. We used the SimCCS engineering-economic geospatial optimization models to determine the characteristics of CCS deployment in France and corridors for pipelines that are robust to a priori uncertainty in CO2 production from industrial sources and CO2 storage locations. We found a number of stable routes that are robust to these uncertainties, and thus can provide early options for pipeline planning and rights-of-way acquisition.
    Date: 2013–12–12
  18. By: Antoni, Manfred (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Janser, Markus (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]); Lehmer, Florian (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
    Abstract: "In light of Germany´s transition approaches towards a sustainable energy system this paper examines differences of employment structure and wage differentials between renewable energy establishments and their sector peers. To do so, we have developed a novel data set by linking company-level information from the German Renewable Energy Federation with establishment-level data of the IAB Establishment History Panel. According to our descriptive evidence, there are significant differences in wages and in several other characteristics. Looking at the top-four renewable energy sectors, our estimates show that human capital and other establishment- level characteristics mostly explain the wage differential among manufacturers and energy providers. However, we find a persistent 'renewable energy wage premium' of more than ten percent in the construction installation activities and the architectural and engineering services. We interpret this premium as a positive indirect effect of the promotion of renewable energies for the benefit of employees in renewable energy establishments within these two sectors." (Author's abstract, IAB-Doku) ((en))
    JEL: J31 P48 Q42 Q52 C81
    Date: 2014–05–05
  19. By: Wei Jin (College of Public Policy and Administration, Zhejiang University); ZhongXiang Zhang (Department of Public Economics School of Economics, Fudan University)
    Abstract: International diffusion of advanced environment and energy-related technologies has received much attention in recent environmental economics studies. As a much needed complement to the “black box” complex numerical modelling, this paper contributes to developing a simple, intuitive analytical framework to unveil the mechanism of international technology diffusion for energy productivity growth. We draw on the Solow growth model to build a benchmark exogenous framework to explore the basic mechanism of energy technology diffusion. This exogenous model is then extended to a Romer-type endogenous one where the R&D-induced expansion of energy technology varieties is used to represent the deep structure of technology diffusion. We show that the growth rates of energy productivity are the same across countries in the balanced growth path equilibrium, but the cross-country differences in the efficiency of foreign technology absorption and indigenous innovation lead to cross-country divergence in the levels of energy productivity. The economy that has a stronger capacity of assimilating foreign technology diffusion and undertaking indigenous innovation tends to gain a higher level of energy productivity.
    Keywords: Technological Innovation, Energy Technology Diffusion, Solow Growth Model, Endogenous Growth Model
    JEL: Q55 Q58 Q43 Q48 O13 O31 O33 O44 F18
    Date: 2014–04
  20. By: Claudio A Agostini (Escuela de Gobierno, Universidad Adolfo Ibáñez); Eduardo Saavedra
    Date: 2014–03
  21. By: Henriques, Sofia Teives (Department of Business and Economics); Sharp, Paul (Department of Business and Economics)
    Abstract: Is a lack of domestic energy resources necessarily a limiting factor to growth, as suggested for example by the work of Robert C. Allen? We examine the case of Denmark - a country which historically had next to no domestic energy resources - for which we present new historical energy accounts for the years 1800-2011. Focusing on the period of the first Industrial Revolution, we demonstrate that Denmark’s take off at the end of the nineteenth century was in fact relatively energy dependent. We relate this to her well-known agricultural transformation and development through the dairy industry. The Danish cooperative creameries, which spread throughout the country over the last two decades of the nineteenth century, were dependent on coal – a point which has not been stressed before in the literature. Denmark had next to no domestic coal deposits, but we demonstrate that her geography allowed cheap availability throughout the country through imports. Thus, Denmark might be seen as the exception that proves the rule: although modern energy forms are important for growth, domestic energy resources are not necessary, as long as it is possible to import them cheaply from elsewhere.
    Keywords: Coal; dairying; Denmark; energy transition
    JEL: N50 Q40
    Date: 2014–05–06
  22. By: Parlow, Anton
    Abstract: Empirical Kuznets Curves (EKC) usually imply an inverted U-shaped relationship between a pollutant and per capita GDP growth. We initially find an inverted U-shaped EKC between CO2-emissions and per capita GDP for the period 1960 to 2004. However, once accounting for a major uprising in 1988 in Myanmar, we can identify two different growth regimes. This structural break changes the nature of the EKC relationship.
    Keywords: Empirical Kuznets Curve, GDP, Armed Conflicts, CO2-emissions
    JEL: O5 O53
    Date: 2014–04–01
  23. By: Bouoiyour, Jamal; Selmi, Refk
    Abstract: We employ wavelet decomposition and nonlinear causality test to investigate the nexus between the real oil price and the real effective exchange rate in three GCC countries : Qatar, Saudi Arabia and UAE. We find strong evidence in favor of a feedback hypothesis in Qatar and UAE and of a neutrality hypothesis in Saudi Arabia. The first observation outcome means that Qatar and UAE should reinforce the downward effect of oil price on real exchange rate by improving diversification policy. The second one implies that the behavior of Saudi Arabia as a price maker may allows it to maintain a quick recovery under oil shocks.
    Keywords: real oil price, real effective exchange rate, wavelets, nonlinear causality.
    JEL: Q4 Q43
    Date: 2014
  24. By: Jozef Barunik; Evzen Kocenda; Lukas Vacha
    Abstract: We detect and quantify asymmetries in volatility spillovers using the realized semivariances of petroleum commodities: crude oil, gasoline, and heating oil. During the 1987--2014 period we document increasing spillovers from volatility among petroleum commodities that substantially change after the 2008 financial crisis. The increase in volatility spillovers correlates with the progressive financialization of the commodities. In terms of asymmetries in spillovers we show that periods of increasing crude oil prices strongly correlate with dominating spillovers due to bad volatility. Overall, bad volatility due to negative returns spills over among petroleum commodities to a much larger extent than good volatility due to positive returns. After the 2008 financial crisis the asymmetries in spillovers markedly declined in terms of total as well as directional spillovers. An analysis of directional spillovers further reveals that no commodity dominates other commodities in terms of spillover transmission in general.
    Date: 2014–05
  25. By: Muehlenbachs, Lucija (Resources for the Future); Spiller, Elisheba; Timmins, Christopher
    Abstract: Using data from Pennsylvania and New York and an array of empirical techniques to control for confounding factors, we recover hedonic estimates of property value impacts from shale gas development that vary with geographic scale, water source, well productivity, and visibility. Results indicate large negative impacts on nearby groundwater-dependent homes, while piped-water-dependent homes exhibit smaller positive impacts, suggesting benefits from lease payments. At a broader geographic scale, we find that new wellbores increase property values, but these effects diminish over time. Undrilled permits cause property values to decrease. Results have implications for the debate over regulation of shale gas development.Classification-JEL: Q32, Q33, Q50, Q53
    Keywords: shale gas, groundwater, property values, hedonic models, nearest neighbor matching, differences-in-differences, triple differencesCreation-Date: 2013-12-09
  26. By: Samuel Wills
    Abstract: This paper studies how monetary policy should respond to news about an oil discovery, using a workhorse New Keynesian model. Good news about future production can create a recession today under exchange rate pegs and a simple Taylor rule, as seen in practice. This is explained by forward-looking inflation. Recession is avoided by a Taylor rule that accommodates changes in the natural level of output, which closely approximates optimal policy. Central banks have an incentive to exploit oil revenues by appreciating the terms of trade, creating “Dutch disease” and a deflationary bias which is overcome by committing to future policy.
    Keywords: Natural resources, oil, optimal monetary policy, small open economy, news shock.
    JEL: E52 E62 F41 O13 Q30 Q33
    Date: 2014–05
  27. By: Brown, Jason (Federal Reserve Bank of Kansas City); Lambert, Dayton
    Abstract: The economic geography of the United States' energy landscape changed rapidly with domestic expansion of the natural gas sector. Recent work with smooth transition parameter models is extended to an establishment location model estimated using Poisson regression to test whether expansion of this sector, as evidenced by firm location decisions from 2005 to 2010, is characterized by different growth regimes. Results suggest business establishment growth of firms engaged in natural gas extraction was faster when the average area of shale and tight gas transition coverage in neighboring counties exceeded 17%. Local agglomeration externalities, access to skilled labor and transportation infrastructure were of more economic importance to location decisions in the high growth regime. Accordingly, growth rates were heterogeneous across the lower 48 States, suggesting potentially different outcomes with respect to local investment decisions supporting this sector.
    Keywords: Natural gas extraction; Location choice; Count model; Endogenous growth regimes; Spatially varying parameters
    Date: 2014–04–01
  28. By: Wong, Sam
    Abstract: We develop the climate finance-gender equity framework in this paper and use the .contextual-procedural-distributive. equity as a lens of analysis to examine how climate finance helps challenge, and reinforce, gender inequities in the mitigation, adaptati
    Keywords: climate finance, gender equity, access, land rights, Green Climate Fund
    Date: 2014
  29. By: Nlom, Jean Hugues; Karimov, Aziz
    Abstract: The present study aims to explore economic and socio-demographic factors that influence the household.s probability to switch from firewood to clean fuels in northern Cameroon. The paper employs an ordered probit model to construct cooking patterns and fu
    Keywords: Cameroon, firewood, clean fuels, ordered probit model
    Date: 2014
  30. By: Ceyhun Elgin; Oguz Oztunali
    Date: 2014–03
  31. By: Ryo Horii (Graduate School of Economics and Management, Tohoku University); Masako Ikefuji (Department of Environmental and Business Economics, University of Southern Denmark)
    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: Q5
    Date: 2014–04
  32. By: Aronsson, Thomas (Department of Economics, Umeå School of Business and Economics); Schöb, Ronnie (School of Business and Economics)
    Abstract: Economic models of climate policy (or policies to combat other environmental problems) typically neglect psychological adaptation to changing life circumstances. People may adapt or become more sensitive, to different degrees, to a deteriorated environment. The present paper addresses these issues in a simple model of tax policy to combat climate change and elaborates on the consequences for optimal climate policies, and argues from a normative point of view that psychological adaptation needs to be taken into account by a pure welfarist government, which aims at internalizing an intertemporal externality.
    Keywords: Behavioral environmental economics; climate change; intertemporal externalities; adaptation; sensitization; taxation
    JEL: D03 D61 D91 H21
    Date: 2014–05–06
  33. By: Ogundipe, Adeyemi; Alege, Philip; Ogundipe, Oluwatomisin
    Abstract: The Environmental Kuznets Curve (EKC) hypothesis asserts that pollution levels rises as a country develops, but reaches a certain threshold where pollution begins to fall with increasing income. In EKC analysis, the relationship between environmental degradation and income is usually expressed as a quadratic function with turning point occurring at a maximum pollution level. The study seeks to examine the pattern and nature of EKC in Africa and major income groups according to World Bank classification comprising low income, lower middle income and upper middle income in Africa. In ensuring the robustness of our study; the paper proceeded by ascertaining the nature of EKC in all fifty-three countries of Africa in order to confirm the results obtained from basic and augmented EKC model. The study could not validate EKC hypothesis in Africa (combined), low income and upper middle income but empirical and analytical evidences supports the existence of EKC in lower middle income countries. Likewise, evidences from the robustness checks confirmed the findings from the basic and augmented EKC model. The study could not attain a reasonable turning point as there are evidences that Africa could be turning on the EKC at lower levels of income. Also, there is need to strengthen institutions in order to enforce policies that prohibits environmental pollution and ensure pro-poor development.
    Keywords: Pollution, Income, Environmental Kuznets Curve, Africa
    JEL: N17 Q1 Q4 Q5
    Date: 2014–05–03
  34. By: Bruno Lanz (The Centre for International Environmental Studies, The Graduate Institute of International and Development Studies, Geneva)
    Abstract: We study the role of alternative intertemporal preference representations in a model of economic growth, stock pollutant and endogenous risk of catastrophic collapse. We contrast the traditional “discounted utility” model, which assumes risk neutrality with respect to intertemporal utility, with a multiplicative choice model that displays risk aversion in that dimension. First, we show that both representations of preferences can rationalize the same “business as usual” economy for a given interest rate and no pollution externality. Second, once we introduce a collapse risk whose hazard rate is a function of the pollution stock, multiplicative preferences recommend a much more stringent policy response. An illustration in the context of climate change indicates that switching to the multiplicative preference representation has a similar effect, in terms of policy recommendations, as scaling up the schedule of the hazard rate by a factor of 100.
    Keywords: Environme ntal policy; Climate change; Catastrophic risks; Risk aversion; Discounting.
    JEL: D63 D81 D99 Q53 Q54
    Date: 2013–11–01

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