|
on Energy Economics |
| By: | Nina Boogen (ETH Zurich, Switzerland); Souvik Datta (ETH Zurich, Switzerland); Massimo Filippini (ETH Zurich, Switzerland) |
| Abstract: | In this paper we estimate the long- and short-run price elasticities of residential electricity consumption in Switzerland from a household survey by constructing an index of the stock of household appliances as well as by using energy services. We create the index by aggregating the information on the major household appliances. The index is used to estimate the impact of appliances on residential electricity demand. Furthermore, we also use energy services to estimate the electricity demand. We adopt an instrumental variables approach to obtain consistent estimates of the price elasticity to account for potential endogeneity concerns with the average price as well as the appliance index. Our results suggest that the price elasticity is around -0.6. We conclude that Swiss households are price inelastic in electricity prices. This can be used for policy makers as well as by utility companies to design pricing instruments to modify electricity consumption. We also find that estimates of the electricity demand when we substitute the usual residential characteristics with energy services are quite comparable. |
| Keywords: | Residential electricity; appliance stock index; energy services; instrumental variables |
| JEL: | D D1 Q Q4 Q5 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:14-200&r=ene |
| By: | Patrícia Pereira da Silva (Faculty of Economics, University of Coimbra and INESC Coimbra, Portugal); Pedro Cerqueira (Faculty of Economics, University of Coimbra and GEMF, Portugal) |
| Abstract: | Electricity as well as gas or refined petroleum products exemplify a significant part of the consumer basket of European households and companies. As energy products are important inputs of nearly all final goods and services, any change of energy prices has a direct impact of the general price level. In this context, the main purpose of this study is to assess the main drivers of household electricity prices in the European Union (EU), throughout a period of deep sector transformation. Relying on Eurostat up to date data, not only we analyze the long-term evolution of household electricity prices across the EU, but also we provide the latest empirical evidence on their determinants while confronting the results with the EU energy policy path. For this purpose a new approach is herein developed based on a dynamic model with panel data through GMM proposal method by Blundell and Bond (1998) with the Windermeijer correction (2005). The data analysis provides grounds for a relation between the variable of household electricity prices with variables related to sector liberalization, renewable energy sources which support the EU policy to boost liberalization. This study offers evidence that the sector liberalization, herein assumed via the market share of the largest electricity producer, is accompanied by a decreasing trend in prices, which is consistent with the European Commission’s objectives to liberalize. |
| Keywords: | household electricity prices, market reform, system-GMM panel data model. |
| JEL: | Q28 Q48 C33 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2014-13.&r=ene |
| By: | Konstantin A. Kholodilin; Claus Michelsen |
| Abstract: | Concerns about global warming and growing scarcity of fossile fuels require substantial changes in energy consumption patterns and energy systems, as targeted by many countries around the world. One key element to achieve such transformation is to increase energy efficiency of the housing stock. In this context, it is frequently argued that private investments are too low in the light of the potential energy cost savings. However, heterogenous incentives to invest in energy efficiency, particularly for owner-occupants and landlords, may serve as one explanation. This is particularly important for countries with a large rental sector, like Germany. Nevertheless, previous literature largely focuses on the pay offs owner-occupants receive, leaving out the rental market. This paper addresses this gap by comparing the capitalization of energy efficiency in selling prices (rents) for both types of residences. For this purpose data from the Berlin housing market are analyzed in hedonic regressions. The estimations reveal that energy efficiency is well capitalized in apartment prices and rents. The comparison of implicit prices and the net present value of energy cost savings/rents reveals that investors anticipate future energy and house price movements reasonably. However, in the rental segment, the value of future energy cost savings exceeds tenants' implicit willingness to pay by factor 2.98. This can either be interpreted as a result of market power of tenants, uncertainty in the rental relationship, or the "landlord-tenant dilemma." |
| Keywords: | Energy efficiency, house price capitalization, rental/owner-occupied housing, hedonic analysis |
| JEL: | R21 R31 Q40 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1398&r=ene |
| By: | Ketter, W. |
| Abstract: | __Abstract__ Many of the world’s most urgent problems such as climate change, population growth, poverty, malnutrition and environmental degradation not only demand solutions but also require us to find more sustainable ways of living. Market mechanisms can be effective in solving large-scale resource allocation problems of this kind, but only if the market design reflects the social costs. The growth and spread of advanced information and communication technologies mean that new smart markets offer a way to achieve this and will become central to many areas of economic activity. However, the volumes of data and speed of transactions involved place a burden on human decisionmaking capabilities, and information systems can have a central role to play in helping to devise solutions – in particular, in developing intelligent software agents to provide decision support. This address looks at the challenges and opportunities involved for information systems researchers, and sets out an agenda for sustainable smart markets research, centered on collaborative approaches. It focuses on three overlapping areas: market and learning agent design; market evaluation using autonomous learning agents; and real-time decision support. Examples are included of current work on sustainable smart markets for electricity (smart grid) and for flowers (Dutch Flower Auctions). |
| Keywords: | Agent-based Decision Support, Competitive Benchmarking, Energy Information Systems, Sustainable Energy, Machine Learning, Mechanism Design, Preference Modeling, Smart Grid, Supply Chain Management |
| JEL: | C61 D4 D61 D81 O13 |
| Date: | 2014–06–20 |
| URL: | http://d.repec.org/n?u=RePEc:ems:euriar:51584&r=ene |
| By: | Fouquau, Julien; Bessec, Marie; Méritet, Sophie |
| Abstract: | The French wholesale market is set to expand in the next few years under European pressure and national decisions. In this paper, we assess the forecasting ability of several classes of time series models for electricity wholesale spot prices at a day-ahead horizon in France. Electricity spot prices display a strong seasonal pattern, particularly in France given the high share of electric heating in housing during winter time. To deal with this pattern, we implement a double temporal segmentation of the data. For each trading period and season, we use a large number of specifications based on market fundamentals: linear regressions, markov-switching models, threshold models with a smooth transition. Non-linear models designed to capture the sudden and fast-reverting spikes in the price dynamics yield more accurate forecasts. Modeling each season independently also leads to better results. Finally, pooling forecasts gives more reliable results. Individual models are generally superior but their performance is more unstable across hours and seasons. |
| Keywords: | Electricity spot prices; forecasting; regime-switching; |
| JEL: | C22 C24 Q43 |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/13532&r=ene |
| By: | Nicolas Boccard |
| Abstract: | The Fukushima disaster has lead the French government to release novel cost information relative to its nuclear electricity program allowing us to compute a levelized cost. We identify a modest escalation of capital cost and a larger than expected operational cost. Under the best scenario, the cost of French nuclear power over the last four decades is 59 d/MWh (at 2010 prices) while in the worst case it is 83 d/MWh. On the basis of these findings, we estimate the future cost of nuclear power in France to be at least 76 d/MWh and possibly 117 d/MWh. A comparison with the US confirms that French nuclear electricity nevertheless remains cheaper. Comparisons with coal, natural gas and wind power are carried out to the advantage of these. |
| Keywords: | Electricity, Nuclear Power, Levelized Cost, Alternative Fuels |
| JEL: | L51 H42 D61 |
| Date: | 2013–11 |
| URL: | http://d.repec.org/n?u=RePEc:auu:dpaper:687&r=ene |
| By: | Jaeck, Edouard; Lautier, Delphine |
| Abstract: | It is common to assert, in the literature on commodity derivative markets, that the behavior of futures prices is characterized by the "Samuelson Hypothesis": there is a decreasing pattern of volatilities along the prices curve. Despite some debates about statistical measurements, this hypothesis has found a large empirical support. Yet, to the best of our knowledge, one of its empirical implications has never been proposed nor tested: if Samuelson is right, then prices shocks emerging in the physical market should propagate in the direction of the paper market. The first contribution of this paper is to fill this gap. Second contribution: up to now, the validation of the Samuelson hypothesis has never been considered in the case of electricity futures markets. Yet the non storability of this commodity raises interesting questions. Is the Samuelson hypothesis still valid in such a context? What does this commodity learn us about the role of inventories in the prices’ volatilities? In order to answer these questions, we examine the prices behavior of the four most important electricity futures markets, worldwide, from 2009 to 2013: the German market, the NordPool, the Australian market and the PJM Western Hub in the USA. We use the American crude oil market as a benchmark for a storable commodity negotiated on a futures market and as an example of a mature market. We find evidence, for all markets, of a maturity impact. Finally, we rely on the recent notion of indirect storability as a first direction to explain such conclusion. |
| Keywords: | Samuelson hypothesis; Commodity futures; Energy derivative markets; |
| JEL: | C22 G13 G15 Q41 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/13630&r=ene |
| By: | Finon, Dominique; Geoffron, Patrice; Keppler, Jan Horst |
| Abstract: | Si la libéralisation des industries électriques appelle la très longue durée, tant est complexe cette industrie, les Européens attendent, au bout de quinze années, des bénéfices identifiables en matière de prix, d’innovation dans les services associés, de performance environnementale ou de sécurité de fourniture... Plutôt que l’évidence du progrès, la complexité – voire la confusion – caractérise aujourd’hui l’Europe électrique. L’insertion de renouvelables intermittentes à grande échelle amplifie la difficulté de progression vers un régime de marchés électriques simple et efficace. La vocation de la nouvelle Chaire European Electricity Markets qui vient d’être installée à Paris Dauphine est de rentrer dans cette complexité pour explorer les solutions de second et de troisième rang qui permettraient d’améliorer la situation. La voie est étroite, mais il nous paraît possible, dans l’espace électrique européen, d’associer coordination publique, régime de marché et équité sociale. On le fait ici autour de sept recommandations, dont certaines concernent directement les enjeux de la transition énergétique. |
| Keywords: | Transition énergétique; Industries électriques; |
| JEL: | Q42 Q41 L94 |
| Date: | 2013–03 |
| URL: | http://d.repec.org/n?u=RePEc:dau:papers:123456789/11697&r=ene |
| By: | ZhongXiang Zhang (School of Economics, Fudan University) |
| Abstract: | The Chinese leadership in November 2013 determined to embark upon a new wave of comprehensive reforms in China. This is clearly reflected by the key decision of the Third Plenum of the 18th Central Committee of Communist Party of China to assign the market a decisive role in allocating resources. To have the market to play that role, getting the energy prices right is crucial because it sends clear signals to both producers and consumers of energy. While the overall trend of ChinaÕs energy pricing reform since 1984 has been moving away from the pricing completely set by the central government in the centrally planned economy towards a more market-oriented pricing mechanism, the pace and scale of the reform differ across energy types. This paper discusses the evolution of price reforms for coal, petroleum products, natural gas and electricity in China, provides some analysis of these energy price reforms, and suggests few areas of reforms could take place in order to have the market to play a decisive role in allocating resources and to help ChinaÕs transition to a low-carbon economy. |
| Keywords: | energy prices, tiered prices, differentiated tariffs, subsidies, coal, electricity, natural gas, petroleum products, resource taxes, desulfurization and denitrification state-owned enterprises, China |
| JEL: | H23 H71 O13 O53 Q41 Q43 Q48 Q53 Q58 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1406&r=ene |
| By: | Jin Wei (Zhejiang University); ZhongXiang Zhang (School of Economics, Fudan University) |
| Abstract: | International diffusion of energy-saving technologies has received considerable attention in recent energy and environmental economics studies. As a helpful complement to the existing large-scale "black box" modelling works for energy/climate policy analysis, this paper contributes to a transparent analytical model for an economically intuitive exposition of the fundamental mechanism of international technology diffusion for energy productivity growth. We first develop a Solow-type exogenous model where technical change is specified as improvements in energy use efficiency (efficiency-improving vertical innovation). This model is then extended to a Romer-type endogenous model where technical change is described as an expansion of energy technology variety induced by R&D (variety-expanding horizontal innovation). We show that there is a cross-country convergence in the growth rate of energy productivity in a balanced growth path equilibrium, but the absolute levels of energy productivity diverge due to cross-country differences in indigenous innovation efficiency and knowledge absorptive capacities. An economy with a strong capacity of absorbing foreign knowledge diffusion and undertaking indigenous innovation tends to have 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: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1405&r=ene |
| By: | Firouz Fallahi (Department of Economics, University of Tabriz); Mohammad Karimi (Department of Economics, University of Ottawa); Marcel-Cristian Voia (Department of Economics, Carleton University) |
| Abstract: | This paper analyzes the persistence property of energy use in 107 countries around the world during 1971-2011 using different subsampling confidence intervals introduced by Romano and Wolf (2001). These confidence intervals are much more informative than the unit root tests and are more robust to misspecification errors as they require fewer assumptions on the nature of data generating process. While providing evidence about the stationarity or non-stationarity of the variables, they also show the degree of persistence and consequently are very informative for the role of government intervention in environ- mental oriented policies. The findings show that there are three classes of countries in terms of energy use: with explosive behavior (highly populated with high growth economies- 4 countries); non-stationary (developing and highly oil dependent economies- 64 countries); and stationary (generally developed and energy-rich countries- 39 countries). An explosive behavior of energy use would make government environmental related policies improbable as they require strict enforcement rules for the policy to be effective. For the nonstationary cases, government interventions can be effective for energy conservation and other environmental oriented policies, while for the stationary cases the effect of government intervention, energy conservation or environmental-oriented demand-management policies would be tem- porary, and their effects will not last long. |
| Keywords: | Energy use; Confidence interval; Stationary; Persis- tence; Subsampling. |
| JEL: | C22 Q40 |
| Date: | 2014–03–03 |
| URL: | http://d.repec.org/n?u=RePEc:car:carecp:14-02&r=ene |
| By: | Rossella Bardazzi; Filippo Oropallo; Maria Grazia Pazienza |
| Abstract: | The reaction of energy demand to price changes is a key policy issue as it describes the economy's reaction to changes in market conditions or to policy interventions. The issue is even more important for the Italian economy, highly exposed to energy price changes, given its almost complete fossil fuel-related energy dependence, environmental sensitivity and highly fragmented industrial structure. Besides the policy issue, there is also an important methodological debate, concerning the best way to evaluate energy demand elasticities, looking at alternative models, data and elasticity definitions. After a discussion of the main methodological issues, this paper presents an estimation of demand elasticities (by factors and by fuels) for Italian industrial firms, by using a microeconomic panel in a two-stage translog model. By using cross-price and Morishima elasticities, we derive information on the magnitude and asymmetry of firms’ reaction to price changes. Moreover, the use of the micro-dataset enables the highly heterogeneous Italian industrial sector to be considered: results are discussed according to sector and firm dimension. These estimations constitute an important cornerstone of energy demand by Italian industrial firms, given that empirical literature is particularly rare on the Italian case study. |
| Keywords: | Capital-energy substitution, fuel substitution, microdata, panel estimation |
| JEL: | C33 D2 Q4 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:frz:wpaper:wp2014_08.rdf&r=ene |
| By: | Shahateet, Mohammed |
| Abstract: | ABSTRACT: This paper examines the relationship between energy consumption and real economic growth in 17 Arab countries: Algeria, Bahrain, Egypt, Iraq, Jordan, Kuwait, Lebanon, Libya, Morocco, Oman, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, United Arab Emirates and Yemen. It uses an Auto Regressive Distributed Lag (ARDL) model to determine this econometric relationship using data during 1980-2011. After testing for unit root and cointegration, it identifies Granger causality between energy consumption and real economic growth. The analysis allowed for the verification of the four hypotheses that have been discussed widely in economic literature: Neutrality, Conservation, Growth, and Feedback hypotheses. Empirical findings support neutrality hypothesis in 16 out of 17 Arab countries. These findings, of no causality from economic growth to energy consumption and the other way round, imply that energy conservation will not have a significant impact on economic growth and economic growth will have insignificant effect on changes in energy consumption. They also suggest including other more important variables in the determination of economic growth, such as labor and capital. |
| Keywords: | economic growth; energy consumption; ARDL model; Granger causality; Arab countries |
| JEL: | C33 O13 O47 Q43 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57304&r=ene |
| By: | Gao, Liping; Kim, Hyeongwoo; Saba, Richard |
| Abstract: | This paper evaluates the degree of pass-through from oil price shocks to disaggregate U.S. consumer prices. We find significantly positive effects of the oil price shock only on energy-intensive CPIs, which imply that significantly positive, though quantitatively small, response of the total CPI is mainly driven by substantial increases in prices of energy-related commodities. Unexpected changes in the oil price may result in decreases in the budget for non-energy commodities, if the demand for energy is inelastic (Edelstein and Kilian, 2009). Decreases in the demand for non-energy commodities will then result in limited influences on prices of those goods, which is consistent with our empirical findings. |
| Keywords: | Oil Price Shocks; Pass-Through; Disaggregated Consumer Price Indices; Vector Autoregression |
| JEL: | E21 E31 Q43 |
| Date: | 2014–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57259&r=ene |
| By: | Jiranyakul, Komain |
| Abstract: | This study investigates the impact of oil price volatility (uncertainty) on the Stock Exchange of Thailand. Monthly data from May 1987 to December 2013 are applied to the two-stage procedure. In the first step, a bivariate generalized autoregressive conditional heteroskedastic (GARCH) model is estimated to obtain the volatility series of stock market index and oil price. In the second step, the pairwise Granger causality tests are performed to determine the direction of volatility transmission between oil to stock markets. It this found that movement in real oil price does not adversely affect real stock market return, but stock price volatility does affect real stock return. In addition, there exists a positive one-directional volatility transmission running from oil to stock market. These findings give important implications for risk management and policy measures. |
| Keywords: | Real stock price, real oil price, volatility transmission, emerging markets |
| JEL: | C22 G15 Q40 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57262&r=ene |
| By: | Lucas Fievet; Zal\`an Forr\`o; Peter Cauwels; Didier Sornette |
| Abstract: | We present a new Monte-Carlo methodology to forecast the crude oil production of Norway and the U.K. based on a two-step process, (i) the nonlinear extrapolation of the current/past performances of individual oil fields and (ii) a stochastic model of the frequency of future oil field discoveries. Compared with the standard methodology that tends to underestimate remaining oil reserves, our method gives a better description of future oil production, as validated by our back-tests starting in 2008. Specifically, we predict remaining reserves extractable until 2030 to be 188 +/- 10 million barrels for Norway and 98 +/- 10 million barrels for the UK, which are respectively 45% and 66% above the predictions using the standard methodology. |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1407.3652&r=ene |
| By: | Soren T. Anderson; Ryan Kellogg; Stephen W. Salant |
| Abstract: | We show that oil production from existing wells in Texas does not respond to price incentives. Drilling activity and costs, however, do respond strongly to prices. To explain these facts, we reformulate Hotelling's (1931) classic model of exhaustible resource extraction as a drilling problem: firms choose when to drill, but production from existing wells is constrained by reservoir pressure, which decays as oil is extracted. The model implies a modified Hotelling rule for drilling revenues net of costs and explains why production is typically constrained. It also rationalizes regional production peaks and observed patterns of price expectations following demand shocks. |
| JEL: | E22 L71 Q3 Q4 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20280&r=ene |
| By: | Ben Jebli, Mehdi; Ben Youssef, Slim; Apergis, Nicholas |
| Abstract: | This study explores the relationship between carbon dioxide (CO2) emissions, economic growth, renewable energy consumption, the number of tourist arrivals and trade in Central and South America spanning the period 1995-2010. We apply panel cointegration techniques and panel Granger causality tests to investigate the relationship across the variables both in the short- and in the long-run. The empirical findings reveal the presence of a long-run relationship across the variables under investigation. Furthermore, short-run dynamics show a unidirectional causality running from renewable energy consumption to CO2 emissions and from renewable energy consumption to trade. In addition, there is a unidirectional short-run causal link without feedback effects from economic growth to trade and the number of tourist arrivals as well as a unidirectional causality running from the number of tourist arrivals to trade. In the long-run, there is evidence of bidirectional causality between emissions, renewable energy consumption and the number of tourist arrivals. Long-run estimates highlight that both the number of tourist arrivals and renewable energy consumption contribute to the reduction of emissions, while both real GDP and trade contribute to the increase of emissions. |
| Keywords: | Carbon dioxide emissions; renewable energy consumption; tourist arrivals; trade |
| JEL: | C33 F18 O44 Q42 |
| Date: | 2014–07–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57261&r=ene |
| By: | Patrice Bougette (University Nice Sophia Antipolis and GREDEG/CNRS); Christophe Charlier (University Nice Sophia Antipolis and GREDEG/CNRS) |
| Abstract: | Faced with the energy transition imperative, governments have to decide about public policy to promote renewable electrical energy production and to protect domestic power generation equipment industries. For example, the Canada – Renewable energy dispute is over Feed-in tariff (FIT) programs in Ontario that have a local content requirement (LCR). The EU and Japan claimed that FIT programs constitute subsidies that go against the SCM Agreement, and that the LCR is incompatible with the non-discrimination principle of the World Trade Organization (WTO). This paper investigates this issue using an international quality differentiated duopoly model in which power generation equipment producers compete on price. FIT programs including those with a LCR are compared for their impacts on trade, profits, amount of renewable electricity produced, and welfare. When `quantities’ are taken into account, the results confirm discrimination. However, introducing a difference in the quality of the power generation equipment produced on both sides of the border provides more mitigated results. Finally, the results enable discussion of the question of whether environmental protection can be put forward as a reason for subsidizing renewable energy producers in light of the SCM Agreement. |
| Keywords: | Feed-in tariffs, Subsidies, Local content requirement, Industrial policy, Canada – Renewable energy dispute, Trade policy. |
| JEL: | F18 L52 Q42 Q48 Q56 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2014.08&r=ene |
| By: | Gunter Stephan; Georg Müller-Fürstenberger |
| Abstract: | Is it possible to combat global climate change through North-to-South technology transfer even without a global climate treaty? Or do carbon leakage and the rebound effect imply that it is possible to take advantage of technological improvements under the umbrella of a global arrangement only? For answering these questions two possible states of the world are discussed: one, where more energy efficient technologies are transferred unconditionally from the North to the South, and where regions do not cooperate in the solution of the global climate problem but unilaterally decide on climate policies and technology transfers; one, where the North-to-South technology transfer is tied to the requirement that the South in some way contributes to the solution of the global climate problem. Rebound and leakage effects hinder a sustainable and welfare improving solution of the climate problem. |
| Keywords: | global warming, climate change, technological change, technology transfer, trade in carbon energy, Post-Kyoto-policy regimes |
| JEL: | C68 D58 F18 Q56 Q54 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1397&r=ene |
| By: | Saraly Andrade de Sa (GREThA); Julien Daubanes (ETH-Zürich) |
| Abstract: | This paper questions the ability of a carbon tax to reduce oil extraction. Demand for oil is very price inelastic. Facing such demand, an extractive cartel induces the highest price that does not destroy its demand: it tolerates ”non-drastic” substitutes but deters substitution possibilities that have the potential to drastically deteriorate its demand. Limit-pricing equilibria of non-renewable resource markets sharply differ from conventional Hotelling outcomes. Oil taxes become neutral. Policies only reduce current oil extraction when they support existing non-drastic substitutes. Since the carbon tax applies to oil and to its current carbon substitutes, it induces higher oil current production. |
| Keywords: | Carbon tax, Limit pricing, Non-renewable resource, Monopoly, Demand elasticity |
| JEL: | Q30 L12 H21 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2014.07&r=ene |
| By: | Lucas Bretschger (ETH Zurich, Switzerland); Lin Zhang (ETH Zurich, Switzerland) |
| Abstract: | There is widespread concern that an international agreement on stringent climate policies will not be reached because it would imply too high costs for fast growing economies like China. To quantify these costs we develop a general equilibrium model with fully endogenous growth. The framework includes disaggregated industrial and energy sectors, endogenous innovation, and sector-specific investments. We find that the implementation of Chinese government carbon policies until 2020 causes a welfare reduction of 0.3 percent. For the long run up to 2050 we show that welfare costs of internationally coordinated emission reduction targets lie between 3 and 8 percent. Assuming faster energy technology development, stronger induced innovation, and rising energy prices in the reference case reduces welfare losses significantly. We argue that increased urbanization raises the costs of carbon policies due to altered consumption patterns. |
| Keywords: | Carbon policy; China; Endogenous growth; Induced innova- tion; Urbanization. |
| JEL: | Q54 O41 O53 C68 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:14-201&r=ene |
| By: | M. Iqbal Irfany (Georg-August-University Göttingen) |
| Abstract: | The objectives of this study are to analyze the household carbon footprint pattern in Indonesia and to analyze the determinants of the growing carbon footprint in this emerging economy. To measure the household emissions, we combine national input-output, emission database to generate sectoral CO2 emission intensities and matched these intensities with two waves of national expenditure surveys from 2005 and 2009. We then use this household CO2 emission for investigating the drivers of the rise in emissions from the micro perspective. Comparing CO2 intensities, the results show that transportation, fuel-light, are the two most intensive emitting sectors in Indonesia. We also found a significant difference of household carbon emission comparing between per capita expenditure level, region, and education. Regression analysis suggests that expenditure is the main determinant of household emission. Although other household characteristics determine the variation of emission, it is shown that varying affluent level differs significantly in term of carbon footprint. The decomposition analysis confirms that changes in emission are dominantly contributed by the rise of expenditure comparing between household level and over the two periods. Expenditure elasticities analysis suggest that the rise of household emission is mainly caused by general volume increase in overall household consumption, and not by shifting the share of expenditure amongst consumption basket. |
| Keywords: | carbon footprint; household; Indonesia |
| JEL: | O12 O13 Q54 Q56 Q41 |
| Date: | 2014–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:got:gotcrc:161&r=ene |
| By: | Warwick J. McKibbin (Crawford School of Public Policy, The Australian National University); Adele C. Morris (Brookings Institution); Peter J. Wilcoxen (Maxwell School of Citizenship and Public Affairs, Syracuse University) |
| Abstract: | The United States Environmental Protection Agency (EPA) has begun regulating existing stationary sources of greenhouse gases (GHG) using its authority under the Clean Air Act (the Act). The regulatory process under the Act is long and involved and raises the prospect that significant U.S. action might be delayed for years. This paper examines the economic implications of such a delay. We analyze four policy scenarios using an economic model of the U.S. economy embedded within a broader model of the world economy. The first scenario imposes an economy-wide carbon tax that starts immediately at $15 and rises annually at 4 percent over inflation. The second two scenarios impose different (and generally higher) carbon tax trajectories that achieve the same cumulative emissions reduction as the first scenario over a period of 24 years, but that start after an eight year delay. All three of these policies use the carbon tax revenue to reduce the federal budget deficit. The fourth policy imposes the same carbon tax as the first scenario but uses the revenue to reduce the tax rate on capital income. We find that by nearly every measure, the delayed policies produce worse economic outcomes than the more modest policy implemented now, while achieving no better environmental benefits. |
| JEL: | Q54 H2 E17 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1408&r=ene |
| By: | Asian Development Bank (ADB); (Regional and Sustainable Development Department, ADB); ; |
| Abstract: | Since the inception of the Climate Investment Funds (CIF), the Asian Development Bank (ADB) has participated in the preparation of 15 investment plans covering the two main CIF funds, the Clean Technology Fund (CTF) and the Strategic Climate Fund (SCF). The SCF comprises three separate programs—the Pilot Program for Climate Resilience (PPCR), the Scaling Up Renewable Energy Program (SREP), and the Forest Investment Program (FIP). This study, which is part of a wider review of CIF experiences in ADB, uses a case study approach to examine how stakeholder engagement was carried out in the preparation of investment plans in Cambodia, Nepal, and the Philippines, with reference to the guidance provided by ADB and CIF in stakeholder participation. |
| Keywords: | adb, asian development bank, asdb, asia, pacific, poverty asia, climate investment funds, low-carbon, climate-resilient development, stakeholder participation, engagement, cambodia, indonesia, nepal, philippines, public consultation, consultation, adaptation, climate change, public opinion, CIF, steering group |
| Date: | 2013–07 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt135712-3&r=ene |
| By: | Paul J. Burke (Crawford School of Public Policy, The Australian National University) |
| Abstract: | This article discusses the potential benefits of an enhanced use of externality pricing schemes in the Asia Pacific. Prices on emissions and congestion could ameliorate the negative effects of underpriced resource use, be pro-poor, and improve fiscal capacities. The main implementation challenges are political and institutional. Lessons are drawn from recent experiences in environmental taxation and the removal of fossil fuel subsidies. |
| Keywords: | pricing, taxation, externalities, green, Asia Pacific |
| JEL: | H23 Q53 Q56 Q58 R48 R41 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1409&r=ene |