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on Energy Economics |
| By: | Paul Collier; Anthony J. Venables |
| Abstract: | Climate policy required that much of the world’s reserves of fossil fuels remain unburned. This paper makes the case for implementing this directly through policy to close the global coal industry. Coal is singled out because of its high emissions intensity, low rents per unit value, local environmental costs and sheer scale. Direct supply policy – the sequenced closure of coal mines – may lead to less policy leakage (across countries and time) than other policies based on demand or price management. It also has the advantage of involving relatively few players and leading to clear-cut and observable outcomes. Appropriately sequenced closure of the world coal industry could, we suggest, create the moral force needed to mobilise collective international action. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp157&r=ene |
| By: | Sahbi, Farhani; Shahbaz, Muhammad |
| Abstract: | This study attempts to explore the causal relationship between renewable and non-renewable electricity consumption, output and carbon dioxide (CO2) emissions for 10 Middle East and North Africa (MENA) countries over the period of 1980–2009. The results from panel Fully Modified Ordinary Least Squares (FMOLS) and Dynamic Ordinary Least Squares (DOLS) show that renewable and non-renewable electricity consumption add in CO2 emissions while output (real gross domestic product (GDP) per capita) exhibits an inverted U-shaped relationship with CO2 emissions i.e. environment Kuznets curve (EKC) hypothesis is validated. The short-run dynamics indicate the unidirectional causality running from renewable and non-renewable electricity consumption and output to CO2 emissions. In the long-run, there appears to be the bidirectional causality between electricity consumption (renewable and non-renewable) and CO2 emissions. The findings suggest that future reductions in CO2 emissions might be achieved at the cost of economic growth. |
| Keywords: | Electricity consumption, Output, CO2 emissions, MENA region |
| JEL: | C5 |
| Date: | 2014–07–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57461&r=ene |
| By: | Nuno Carvalho Figueiredo (EFS Initiative, University of Coimbra, Sustainable Energy Systems – MIT-P, Coimbra, Portugal and INESC Coimbra, Portugal); 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: | This paper aims to assess the influence of wind power generation on the market splitting behaviour of the Iberian electricity spot markets. We use logit models to express the probability response for market splitting of day-ahead spot electricity prices together with explanatory variables like, wind speed, available transmission capacity and electricity demand. The results show that the probability of market splitting increases with the increase of wind power generation. The European interconnection capacity target of 10% of the peak demand of the smallest interconnected market has to be reconsidered, in order to keep electricity market integration a reality. As demonstrated, investment in interconnection capacity has to follow the investment and deployment of further wind power capacity, so coordination policies governing both interconnection development and renewable incentives should be designed. |
| Keywords: | Electricity Market Integration, Market Splitting, Renewable Energy. |
| JEL: | C10 C35 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:gmf:wpaper:2014-14.&r=ene |
| By: | Noël Bonneuil (INED - Institut National d'Etudes Démographiques Paris - INED, EHESS - École des hautes études en sciences sociales - École des Hautes Études en Sciences Sociales (EHESS)); Raouf Boucekkine (AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM)) |
| Abstract: | When cheap fossil energy is polluting and pollutant no longer absorbed beyond a certain concentration, there is a moment when the introduction of a cleaner renewable energy, although onerous, is optimal with respect to inter-temporal utility. The cleaner technology is adopted either instantaneously or gradually at a controlled rate. The problem of optimum under viability constraints is 6-dimensional under a continuous-discrete dynamic controlled by energy consumption and investment into production of renewable energy. Viable optima are obtained either with gradual or with instantaneous adoption. A longer time horizon increases the probability of adoption of renewable energy and the time for starting this adoption. It also increases maximal utility and the probability to cross the threshold of irreversible pollution. Exploiting a renewable energy starts sooner when adoption is gradual rather than instantaneous. The shorter the period remaining after adoption until the time horizon, the higher the investment into renewable energy. |
| Keywords: | multi-stage optimal control; threshold effects; irreversibility; non-renewable resources; viability |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01025470&r=ene |
| By: | John Foster (School of Economics, University of Queensland); Liam Wagner (School of Economics, University of Queensland); Liam Byrnes (School of Economics, University of Queensland) |
| Abstract: | Distributed Generation (DG), which is electricity generation located close to the load/demand. While the definition of DG is far from “settled” [1], for the purpose of this project, DG will refer to electricity generation that is produced and consumed within the catchment area of the local Distribution Network Service Provider (DSNP). Many in the energy economics and policy literature also use the term “embedded generation”, which tends to reflect DG that has been incorporated into a larger electricity grid (but often still retains the ability to operate in isolation from the grid). Distributed power generation has been used for decades [2], and has been met with mixed success. There is a plethora of literature that examines the use of DG in developing countries [3-5], in relation to World Bank development projects [6], with respect to high penetration of DG in Australia [7-10], and for a more general discussion [5]. Furthermore, the DG literature has been growing and is now being examined in context of rural communities across different scales from household systems [11] to community mini-grids [12] and grid connected systems [13]. |
| Keywords: | Energy Economics, Electricity Markets, Energy Policy, Resources Policy, Renewable Energy |
| JEL: | Q48 Q41 Q43 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqeemg:3-2014&r=ene |
| By: | Swantje Sundt; Katrin Rehdanz |
| Abstract: | The number of studies published focusing on people’s preferences for green electricity has increased steadily, making it more and more difficult to identify key explanatory factors that determine people’s willingness-to-pay (WTP). Based on results of a meta-regression our results indicate e.g. that hydropower is the least preferred technology. Variables such as information on the type of power plant that will be replaced by renewables, which are often omitted from primary valuation studies, are important in explaining differences in values as well. When assessing the predictive power of our results for out-of-sample value transfers we find median errors of approximately 30%, depending on model specification |
| Keywords: | meta-analysis, renewable energy, valuation, value transfer, willingness to pay |
| JEL: | C53 D62 Q40 Q48 Q51 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1931&r=ene |
| By: | Pere Mir-Artigues (Universitat de Lleida); Pablo del Río (Institute of Public Goods and Policies. Consejo Superior de Investigaciones Científicas (CSIC)) |
| Abstract: | Policy combinations and interactions have received a considerable attention in the energy policy realm. The aim of our working paper is to provide insight on the cost-effectiveness of combinations of deployment instruments for the same technology. A financial model is developed for this purpose, whereby feed-in tariffs (FITs) and premiums (FIPs) are combined with investment subsidies and soft loans. The results show that combining deployment instruments is not a cost-containment strategy. However, combinations may lead to different inter-temporal distributions of the same amount of policy costs which can affect the social acceptability and political feasibility of renewable energy support. |
| Keywords: | Renewable energy, policies, combinations, cost-effectiveness, feed-in tariffs |
| JEL: | H81 L51 Q48 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2013/6/doc2014-23&r=ene |
| By: | Kerres,, Bertrand (KTH Royal Institute of Technology); Fischer, Katharina (Fraunhofer-Institut für Windenergie und Energiesystemtechnik IWES); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)) |
| Abstract: | We develop a stochastic model for assessing the life-cycle cost and availability of wind turbines resulting from different maintenance scenarios, with the objective to identify the most cost-effective maintenance strategy. Using field-data based reliability models, the wind turbine – in terms of reliability – is modeled as a serial connection of the most critical components. Both direct cost for spare parts, labor, and access to the turbine, as well as indirect cost from production losses are explicitly taken into account. The model is applied to the case of a Vestas V44–600kW wind turbine. Results of a Reliability-Centered Maintenance (RCM) analysis of this wind turbine are used to select the most critical wind turbine components and to identify possible maintenance scenarios. |
| Keywords: | Maintenance strategy; Reliability modeling; Wind turbines; Stochastic analysis; Life-cycle cost |
| Date: | 2014–03 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2014_003&r=ene |
| By: | William Paul Bell (School of Economics, University of Queensland); Phil Wild (School of Economics, University of Queensland); John Foster (School of Economics, University of Queensland) |
| Abstract: | This report primarily aims to provide both dispatch and wholesale spot price forecasts for the lifetime of the proposed hybrid gas-solar thermal plant at Collinsville. This report is the second of two reports and uses the findings of Bell, Wild and Foster (2014b) in the first report. |
| Keywords: | Energy Economics, Electricity Markets, Renewable Energy, Solar Thermal |
| JEL: | Q48 Q41 Q43 L94 C61 Q2 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqeemg:6-2014&r=ene |
| By: | William Paul Bell (School of Economics, University of Queensland); Phil Wild (School of Economics, University of Queensland); John Foster (School of Economics, University of Queensland) |
| Abstract: | This report’s primary aim is to provide yield projections for the proposed Linear Fresnel Reflector (LFR) technology plant at Collinsville, Queensland, Australia. However, the techniques developed in this report to overcome inadequate datasets at Collinsville to produce the yield projections are of interest to a wider audience because inadequate datasets for renewable energy projects are commonplace. |
| Keywords: | Energy Economics, Electricity Markets, Renewable Energy, Solar Thermal |
| JEL: | Q48 Q41 Q43 L94 C61 Q2 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqeemg:5-2014&r=ene |
| By: | Diaz Anadon, Laura; Nemet, Gregory; Verdolini, Elena |
| Abstract: | Characterization of the anticipated performance of energy technologies to inform policy decisions increasingly relies on expert elicitation. Knowledge about how elicitation design factors impact the probabilistic estimates emerging from these studies is, however, scarce. We focus on nuclear power, a large-scale low-carbon power option, for which future cost estimates are important for the design of energy policies and climate change mitigation efforts. We use data from three elicitations in the USA and in Europe and assess the role of government research, development, and demonstration (RD&D) investments on expected nuclear costs in 2030. We show that controlling for expert, technology, and design characteristics increases experts' implied public RD&D elasticity of expected costs by 25%. Public sector and industry experts' cost expectations are 14% and 32% higher, respectively than academics. US experts are more optimistic than their EU counterparts, with median expected costs 22% lower. On average, a doubling of public RD&D is expected to result in an 8% cost reduction, but the uncertainty is large. The difference between the 90th and 10th percentile estimates is on average 58% of the experts' median estimates. Public RD&D investments do not affect uncertainty ranges, but US experts are less confident about costs than Europeans. |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:hksfac:10998462&r=ene |
| By: | M. 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); V. Journé (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: | Since there is no authoritative, comprehensive and public historical record of nuclear power plant accidents, we reconstructed a nuclear accident data set from peer-reviewed and other literature. We found that, in a sample of five random years, the worldwide historical frequency of a nuclear major accident, defined as an INES level 7 event, is 14 %. The probability of at least one nuclear accident rated at level ≥4 on the INES scale is 67 %. These numbers are subject to uncertainties because of the fuzziness of the definition of a nuclear accident. © 2014 Springer Science+Business Media New York. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-01018478&r=ene |
| By: | Zied Ftiti; Khaled Guesmi; Frédéric Teulon; Slim Chouachi |
| Abstract: | In this paper we examine the degree of interdependence between oil prices and four major countries (United |
| Keywords: | oil price shocks, stock markets, evolutionary co-spectral analysis, OPEC |
| JEL: | C14 C22 G12 G15 Q43 |
| Date: | 2014–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-421&r=ene |
| By: | Dirk-Jan van de Ven; Roger Fouquet |
| Abstract: | The purpose of this paper is to identify the changes in the impact of energy shocks on economic activity – with an interest in assessing if an economy’s vulnerability and resilience to shocks improved with economic development. Using data on the United Kingdom over the last three hundred years, the paper identifies supply, aggregate demand and residual shocks to energy process and estimates their changing influence on energy prices and GDP. The results suggest that the economy became more vulnerable to supply shocks with its increasing dependence on coal, and less vulnerable with its partial transition to oil. However, the transition from exporting coal to importing oil increased the negative impacts of demand shocks. More generally, the results indicate that vulnerability and resilience to shocks did not progress systematically as the economy developed. Instead, the changes in vulnerability and resilience depended greatly on the circumstances related to the demand for and supply of energy sources. |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp153&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. It is also found that oil price movement and its uncertainty adversely affect two main sub-index returns. These important findings give some 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:57350&r=ene |
| By: | Ladislav Kristoufek; Petra Lunackova |
| Abstract: | We reinvestigate the "rockets and feathers" effect between retail gasoline and crude oil prices in a new framework of fractional integration, long-term memory and borderline (non-)stationarity. The most frequently used error-correction model is examined in detail and we find that the prices return to their equilibrium value much more slowly than would be typical for the error-correction model. Such dynamics is usually referred to as "the Joseph effect". The standard procedure is shown to be troublesome and we introduce three new tests to investigate possible asymmetry in the price adjustment to equilibrium under these complicated time series characteristics. On the dataset of seven national gasoline prices, we report that apart from Belgium, there is no asymmetry found. The proposed methodology is not limited to the gasoline and crude oil case but it can be utilized for any asymmetric adjustment to equilibrium analysis. |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1407.5466&r=ene |
| By: | Derek Bunn; Julien Chevallier; Yannick Le Pen; Benoît Sévi |
| Abstract: | As both speculative and hedging financial flows into commodity futures are expected to link commodity price formation more strongly to equity indices, we investigate whether these processes also create increased correlation amongst the commodities themselves. Considering U.S. oil and gas futures, using the large approximate factor models method- ology we investigate whether common factors derived from a large international dataset of real and nominal macro variables are able to explain both returns and whether, be- yond these fundamental common factors, the residuals remain correlated. We further investigate a possible explanation for this residual correlation by using some proxies for hedging and speculative activity, showing that speculation increases and hedging reduces the inter-commodity correlations. |
| Keywords: | Oil Futures, Gas Futures, Common Factors, Approximate Factor Models, Excess Comovement |
| JEL: | C22 C32 G15 E17 |
| Date: | 2014–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-414&r=ene |
| By: | Michelle Harding |
| Abstract: | Diesel and gasoline account for around 95% of energy used for road transport in the OECD and for the largest share of revenue from taxes on energy. In 33 out of 34 OECD countries, diesel fuel is taxed at lower rates than gasoline both in terms of energy and carbon content. To assess whether this difference is warranted from an environmental perspective, this paper examines the rationales for taxing both fuels, considering the externalities (including local air pollution, carbon emissions and other social costs related to road transport) associated with the use of each fuel and the fuel efficiency advantage of diesel vehicles. The revenue, distributional and competitiveness consequences of increasing tax rates on diesel are also briefly considered and the revenue effects of the tax treatment of diesel are shown to be significant. We conclude that the externalities associated with each fuel show that the lower tax rates that currently apply to diesel fuel are not justifiable from an environmental perspective. Reduction of the diesel differential is warranted. A gradual approach to removing the differential would allow the adverse distributional and competitiveness impacts to be mitigated during the transitional phase. Avantage fiscal en faveur du gazole : différences de traitement fiscal de l'essence et du gazole à usage routier Le gazole et l’essence représentent environ 95 % de l’énergie consommée pour le transport routier dans la zone OCDE et génèrent l’essentiel des recettes issues des taxes sur l’énergie. Dans 33 des 34 pays de l’OCDE, le gazole est taxé à des taux inférieurs à ceux applicables à l’essence, tant du point de vue du contenu énergétique que de la teneur en carbone. Afin de déterminer si cette différence est justifiée d’un point de vue environnemental, ce document examine les raisons qui sous-tendent l’imposition de ces deux types de carburants, tenant compte des externalités (pollution atmosphérique locale, émissions de carbone et autres coûts sociaux induits par le transport routier, etc.) associées à l’utilisation de chacun de ces carburants et la moindre consommation des véhicules diesel. Les conséquences sur le plan des recettes, de la distribution et de la compétitivité d’un relèvement des taux d’imposition du gazole font également l’objet d’une analyse succincte et les répercussions de la taxation du gazole sur les recettes fiscale s’avèrent significatives. En conclusion, les externalités associées à chacun de ces carburants ne justifient pas, d’un point de vue environnemental, les taux d’imposition plus faibles actuellement réservés au gazole. Une réduction de l’avantage fiscal en faveur du gazole est justifiée. Une réduction progressive de cet avantage permettrait l'atténuation dans la phase transitoire des effets défavorables sur la distribution et la compétitivité. |
| Date: | 2014–07–11 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ctpaaa:21-en&r=ene |
| By: | Gérard GAUDET; Stephen W. SALANT |
| Abstract: | The purpose of this chapter is to provide an elementary introduction to the nonrenewable resource model with multiple demand curves. The theoretical literature following Hotelling (1931) assumed that all energy needs are satisfied by one type of resource (e.g. "oil"), extractible at different per-unit costs. This formulation implicitly assumes that all users are the same distance from each resource pool, that all users are subject to the same regulations, and that motorist users can switch as easily from liquid fossil fuels to coal as electric utilities can. These assumptions imply, as Herfindahl (1967) showed, that in competitive equilibrium all users will exhaust a lower cost resource completely before beginning to extract a higher cost resource: simultaneous extraction of different grades of oil or of oil and coal should never occur. In trying to apply the single-demand curve model during the last twenty years, several teams of authors have independently found a need to generalize it to account for users differing in their (1) location, (2) regulatory environment, or (3) resource needs. Each research team found that Herndahl's strong, unrealistic conclusion disappears in the generalized model; in its place, a weaker Herfindahl result emerges. Since each research team focussed on a different application, however, it has not always been clear that everyone has been describing the same generalized model. Our goal is to integrate the findings of these teams and to exposit the generalized model in a form which is easily accessible. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:mtl:montec:08-2014&r=ene |
| By: | Cathleen Cimino (Peterson Institute for International Economics); Gary Clyde Hufbauer (Peterson Institute for International Economics) |
| Abstract: | Horizontal drilling and fracking are transforming global energy production, consumption, and trade leading to a surge of domestic production in the United States. Free exports of liquefied natural gas, crude oil, and other energy products are an essential complement of US international economic policy, which has long advocated free trade in raw materials, unconstrained by export barriers or restrictions. The Obama White House should prod the Department of Energy, the Department of Commerce, the Federal Energy Commission, and other agencies to speed up their approvals of such exports. Short of lifting full restrictions on crude oil exports, the Department of Commerce should build on its recent exemptions for ultralight oil condensate and exempt light crude oil from the current export prohibitions with determination that sales to Europe are consistent with the US national interest. |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:iie:pbrief:pb14-19&r=ene |
| By: | Stein-Erik Fleten (Norwegian University of Science and Technology); Ronald Huisman (Erasmus School of Economics and IEB); Mehtap Kilic (Erasmus School of Economics); Enrico Pennings (Erasmus School of Economics); Sjur Westgaard (Norwegian University of Science and Technology) |
| Abstract: | This paper provides insight in the time-varying relation between electricity futures prices and fundamentals in the form of prices of contracts for fossil fuels. As supply curves are not constant and different producers have different marginal costs of production, we argue that the relation between electricity futures prices and futures prices of underlying fundamentals such as natural gas, coal and emission rights are not constant and vary over time. We test this view by applying a model that linearly relates electricity futures prices to the marginal costs of production and calculate the log-likelihood of different time-varying and constant specifications of the coefficients. To do so, we formulate the model in state-space form and apply the Kalman Filter to observe the dynamics of the coefficients. We analyse historical prices of futures contracts with different delivery periods (calendar year and seasons, peak and off-peak) from Germany and the U.K. The results indicate that analysts should choose a time-varying specification to relate the futures price of power to prices of underlying fundamentals. |
| Keywords: | Electricity futures prices, prices of fossil fuels, time-varying coefficients, statespace model |
| JEL: | Q41 Q48 C51 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2013/6/doc2014-21&r=ene |
| By: | Desiderio Romero-Jordán (Universidad Rey Juan Carlos); Pablo del Río (Institute of Public Goods and Policies. Consejo Superior de Investigaciones Científicas (CSIC)); Cristina Peñasco (Institute of Public Goods and Policies. Consejo Superior de Investigaciones Científicas (CSIC)) |
| Abstract: | This paper analyses the determinants of household electricity demand with a panel data, partial adjustment model of Spanish regions in the 1998-2009 period. The results show that electricity demand responds positively and significantly to electricity demand in the previous year, income, temperature range, penetration of electric water heating in households and the number of heating and cooling degree days. It is significantly and negatively related to electricity prices, gas prices, penetration of electric heating in households and whether households have at least one member being 64 years or older. Price elasticities in the preferred model are -0.26 (short-term) and -0.37 (long-term). Income elasticities are 0.31 (short-term) and 0.43 (long-term). Several implications for electricity-efficiency policies are derived from the results of the analysis. |
| Keywords: | Electricity demand, residential sector, partial adjustment model |
| JEL: | Q41 Q43 Q55 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2013/6/doc2014-24&r=ene |
| By: | Dean Fantazzini (Moscow School of Economics, Moscow State University, Russia); Mario Maggi (Department of Economics and Management, University of Pavia) |
| Abstract: | The increase of oil and natural gas prices since the year 2000 stimulated the planning and construction of new coal-fired electricity generating plants and coal-to-liquids plants in the US. However, a large number of these projects have been canceled or abandoned since 2007. Using a set of 145 proposed coal power plants and 25 coal-to- liquids plants, we examine the main determinants that influence the decision to abandon a project or to proceed with it. In case of coal power plants, the number of searches performed on Google relating to coal power plants and the prices of alternative fuels for electricity generation are the main factors. As for coal-to-liquids plants, the political affiliation of the state governor is the most important factor across several model specifications. An out-of-sample exercise confirms these findings. These results hold also with robustness checks considering alternative Google search keywords and the potential effects of the recession in the years 2008-2009. |
| Keywords: | Coal, Coal plants, Coal-to-Liquids, Logit, Probit, Training, Validation, Forecasting, Model Confidence Set, Google, Google Trends, Second Great Contraction, Global Financial Crisis |
| JEL: | C25 C52 C53 L94 Q40 Q41 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:pav:demwpp:demwp0082&r=ene |
| By: | Marius Paschen (University of Oldenburg, Department of Economics) |
| Abstract: | This paper analyzes the dynamic behavior of day-ahead spot prices in the German electricity spot market due to positive structural shocks in wind and solar power. It uses a dynamic structural vector autoregressive model to estimate the related structural impulse response functions. The estimates suggest that wind power shocks have a more prolonged negative effect on spot prices than solar power shocks. These may be explained by signifcant autocorrelations of wind power for larger lags. The total negative merit order effect of a solar power shock, however, is larger. One reason might be that solar power shocks coincide with demand peaks. Past empirical results show differences in the total average negative merit order effects. The inherently dynamic nature of wind and solar power could explain these dfferences because the dynamics, which are ignored by past studies on the subject using static ordinary least squares estimations, could be transferred to the merit order effects. |
| Keywords: | Electricity Market, Spot Prices, Wind and Solar Power Dynamics, Structural Vector Autoregressive Model, Structural Impulse Response Functions |
| JEL: | Q42 Q41 C32 C51 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:old:dpaper:368&r=ene |
| By: | Cédric Clastres (PACTE - Politiques publiques, ACtion politique, TErritoires - Institut d'Études Politiques [IEP] - Grenoble - CNRS : UMR5194 - Université Pierre-Mendès-France - Grenoble II - Université Joseph Fourier - Grenoble I); Haikel Khalfallah (PACTE - Politiques publiques, ACtion politique, TErritoires - Institut d'Études Politiques [IEP] - Grenoble - CNRS : UMR5194 - Université Pierre-Mendès-France - Grenoble II - Université Joseph Fourier - Grenoble I) |
| Abstract: | The aim of this work is to demonstrate analytically under what conditions activating elasticity of demand of consumers could be beneficial for the social welfare. It has added to the literature on analyzing the use of price signals in eliciting demand response by an analytical approach. We develop so an analytical Nash model to quantify the effect of implementing demand response, via price signals, on social welfare and energy exchanges. A prior results show that the trade-off between producing locally and exporting energy depends on the opportunity cost of the energy and the global efficiency of the generation technology. Results are moreover impacted by the degree of integration between the countries. The novelty of this research is the demonstration of the existence of an optimal region of price signal for which demand response leads to increase the social welfare. This optimality region is negatively correlated to the degree of competitiveness of the generation technologies and to the market size of the system. We particularly notice that the value of un-served energy or energy reduction the producers could lose from such demand response program would limit the effectiveness of its implementation. This constraint is strengthened when energy exchanges between countries are limited. Finally, we demonstrate that when we only consider the impact in term of consumers' surplus, more aggressive DR could be adopted. The intensity of DR program is however negatively correlated to the degree of the elasticity of demand. |
| Keywords: | demand response ; elasticity of demand ; electricity market |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01019679&r=ene |
| By: | Arouri, Mohamed El Hedi (EDHEC Business School); Ben Youssef, Adel (University of Nice Sophia-Antipolis); M'henni, Hatem (University of Manouba); Rault, Christophe (University of Orléans) |
| Abstract: | Using a bootstrap panel analysis that allows for cross-country dependence, without requiring the use of pre-tests for a unit root, we study the causality links between energy use and employment for a sample of 16 African countries over the 1991-2010 period (according to availability of countries' data) in a panel Vector AutoRegressive model. Our results indicate that employment and energy use are strongly linked in Africa. Unidirectional causality from employment to energy use in Tunisia, Cameroun, Zambia and Ethiopia is found. A unidirectional causality from energy use to employment is found in DRC and Egypt. We found also bidirectional causality for Algeria, Benin, Kenya, Mozambique and Tanzania). However, our estimates did not indicate any causality in Big African players like South Africa, Nigeria, Morocco, Ghana and Senegal. |
| Keywords: | growth, energy consumption, employment, VAR |
| JEL: | Q43 Q53 Q56 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8296&r=ene |
| By: | Francesco Benedetto; Gaetano Giunta; Loretta Mastroeni |
| Abstract: | This paper proposes a novel method for assessing the predictability of energy market time series, by predicting the entropy of the series. According to conventional entropy-based analysis where the entropy is always ex-post estimated), high entropy values characterize unpredictable series, while more stable series exhibits lesser entropy values. Here, we predict ex-ante the entropy regarding the future behavior of a series, based on the observation of historical data. Our prediction is performed according to the optimum least squares minimization algorithm. Preliminary results, applied to energy commodities, show the efficacy of the proposed method for application to energy market time series. |
| Keywords: | Entropy analysis, market efficiency, energy commodity, energy time |
| JEL: | C53 C63 G17 Q47 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:rtr:wpaper:0192&r=ene |
| By: | David Bradford; Charles Courtemanche; Garth Heutel; Patrick McAlvanah; Christopher Ruhm |
| Abstract: | We investigate the predictive power of survey-elicited time preferences using a representative sample of US residents. In regressions controlling for demographics and risk preferences, we show that the discount factor elicited from choice experiments using multiple price lists and real payments predicts various health, energy, and financial outcomes, including overall self-reported health, smoking, drinking, car fuel efficiency, and credit card balance. We allow for time-inconsistent preferences and find that the long-run and present bias discount factors (δ and β) are each significantly associated in the expected direction with several of these outcomes. Finally, we explore alternate measures of time preference. Elicited discount factors are correlated with several such measures, including self-reported willpower. A multiple proxies approach using these alternate measures shows that our estimated associations between the time-consistent discount factor and health, energy, and financial outcomes may be conservative. |
| JEL: | D14 D91 I10 Q40 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20320&r=ene |
| By: | Limin Du; Aoife Hanley; Katrin Rehdanz |
| Abstract: | Our analysis is the first of its kind to explore patterns of subsidization and CO2 emissions in China’s electricity producing sector. Applying data for all power plants across China and controlling for the age, capacity and location of generating stations, we find that plants attracting a higher government subsidy are also worryingly the plants generating a disproportionate share of CO2 emissions. This distortion is incongruent with China’s aspiration for a greener economy but may be eliminated if China delivers on its November 2013 announcement to review many industry subsidies on its way to a fully-fledged market economy (Bloomberg News, 28.02.2014) |
| Keywords: | CO2 emissions, China, energy sector, plant-level data |
| JEL: | Q53 Q48 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1934&r=ene |
| By: | John Foster (School of Economics, University of Queensland); Liam Wagner (School of Economics, University of Queensland); Alexandra Bratanova (School of Economics, University of Queensland) |
| Abstract: | LCOE models are widely applied at national and regional levels for the energy systems design, energy generation projections and technology assessment. Although LCOE is a well developed and standard technique in the energy sector economics, authors approach model construction in different ways to ensure the model matches research tasks and data availability. The LCOE model is interdependent with the data availability – data determines the construction of LCOE model and vice-versa – LCOE model defines what data is required for calculations. However, adjustments made to the standard LCOE comes at a price of limited comparability of the outcomes from the different models. The following section introduces few well known LCOE models developed for national governments with further comparison of basic assumptions in order to determine theoretical framework and datasets to be allied in the project. The next section then will provide the results of comparative analysis of the LCOE models key assumptions, concentrating on capital costs, discount rates and technology learning curves. |
| Keywords: | Energy Economics, Electricity Markets, Energy Policy, Renewable Energy, Levelised Cost of Energy |
| JEL: | Q48 Q41 Q43 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:qld:uqeemg:4-2014&r=ene |
| By: | Caspar Sauter (Institute of economic research IRENE, Faculty of Economics and Business, University of Neuchâtel, Switzerland) |
| Abstract: | One of the biggest obstacles in cross-country empirical research in the area of environmental economics is the absence of a sound indicator quantifying environmental policy stringency. A variety of indicators have been proposed and are currently used. Almost none of them rely on an explicitly stated methodology, violating thereby one of the most fundamental rules of index construction. To overcome this problem, this paper develops a new general methodology for the measurement of environmental policy stringency and proposes a first implementation using the example of CO2 policy stringency. To do so it combines originally extensive databases on CO2 emissions. |
| Keywords: | Greenhouse gas emissions, environmental regulation, environmental policy stringency, policy stringency index, CO2 emissions |
| JEL: | Q50 Q53 Q58 C18 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:14-01&r=ene |
| By: | Caspar Sauter (Institute of economic research IRENE, Faculty of Economics and Business, University of Neuchâtel, Switzerland) |
| Abstract: | This is the online appendix to the paper “How should we measure environmental policy stringency? A new approach” (Sauter, 2014). The main paper outlines the general methodology proposed to construct environmental policy indexes and proposes a first implementation of a CO2 input index and a CO2 performance index. This online appendix reports the results of the implementation of a SO2 input index, a SO2 performance index, a CH4 input index, a CH4 performance index as well as the broad GHG input index. All of those indexes have been constructed using the methodology outlined in the main paper. |
| Keywords: | Greenhouse gas emissions, environmental regulation, environmental policy stringency, policy stringency index, CO2 emissions |
| JEL: | Q50 Q53 Q58 C18 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:14-02&r=ene |
| By: | Ingmar Schumacher |
| Abstract: | The results in this paper show that a policy maker who ignores regional data and instead relies on aggregated integrated assessment models will strongly underestimate the carbon price and thus the required climate policy. Using a stylized theoretical model we show that, under the mild and widely-accepted assumptions of asymmetric climate change impacts and declining marginal utility, an Aggregation Dilemma may arise that dwarfs most other policy- relevant aspects in the climate change cost-benefit analysis. Estimates based on the RICE model (Nordhaus and Boyer 2000) suggest that aggregation leads to around 26% higher total world emissions than those from a regional model. The backstop energy use would be zero in aggregated versions of the model, while it is roughly 1.3% of Gross World Product in the regionally-disaggregated models. Though the policy recommendations from fully aggre- gated models like the DICE model are always used as a benchmark for policy making, the results here suggest that this should be done with the reservations raised by the Aggregation Dilemma in mind. |
| Keywords: | Aggregation Dilemma; aggregation; Integrated Assessment Models; climate policy. |
| JEL: | Q54 Q58 |
| Date: | 2014–07–16 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-428&r=ene |
| By: | Ted Temzelides (Rice University); Borghan Narajabad (Federal Reserve) |
| 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 economys 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 dfferent conclusions. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:red:sed014:59&r=ene |
| By: | Bangzhu Zhu; Shujiao Ma; Julien Chevallier; Yiming Wei |
| Abstract: | The aim of this research is to examine the structural changes of European carbon futures price under the European Union Emissions Trading Scheme (EU ETS) during 2005-2012. More speci fically, by relying on the daily EU allowance (EUA) futures contract, we investigate the structural changes of the European carbon futures price. Structural breakpoints are detected based on the i terative cumulative sums of squares (ICSS) algorithm, and event study models. The results show that since 2005, there have been three major breakpoints of the European carbon futures price, stemming from the two extreme events of the 2008 global financial crisis and the 2011 European debt crisis. This study contributes to understanding the pricing mechanism of the EU ETS, and effectively forecasting carbon prices. |
| Keywords: | Carbon futures; Structural breakpoint tests; ICSS algorithm; Event study |
| JEL: | C22 G15 Q40 |
| Date: | 2014–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2014-422&r=ene |
| By: | Honma, Satoshi; Yoshida, Yushi |
| Abstract: | For the period between 1988 and 2009, we constructed the two sets of the world panel database for the pollution emission embedded in international trade. By applying the time-invariant common pollution intensity at industry level for international trade of over 150 countries, a change in pollution emission from the first database reflects scale and composition effects. This first database allows us to investigate whether the composition of international trade for a country changed toward pollution intensive industries during the last two decades. By utilizing a time-varying and country-varying pollution intensity variable for technique effect, the second database provides a full account of pollution emission embodied in global trade and show to what degree the pollution emission is attributed to scale, composition and technique effects. |
| Keywords: | Database Construction; Environment; International trade; Pollution emission; World Panel Database |
| JEL: | F18 O13 Q56 |
| Date: | 2014–07–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:57489&r=ene |
| By: | Dabo Guan; Xin Su; Qiang Zhang; Glen Peters; Zhu Liu; Yu Lei; Kebin He |
| Abstract: | Primary PM2.5�emissions contributed significantly to poor air quality in China. We present an interdisciplinary study to measure the magnitudes of socioeconomic factors in driving primary PM2.5�emission changes in China between 1997–2010, by using a regional emission inventory as input into an environmentally extended input–output framework and applying structural decomposition analysis. Our results show that China's significant efficiency gains fully offset emissions growth triggered by economic growth and other drivers. Capital formation is the largest final demand category in contributing annual PM2.5�emissions, but the associated emission level is steadily declining. Exports is the only final demand category that drives emission growth between 1997–2010. The production of exports led to emissions of 638 thousand tonnes of PM2.5, half of the EU27 annual total, and six times that of Germany. Embodied emissions in Chinese exports are largely driven by consumption in OECD countries. |
| URL: | http://d.repec.org/n?u=RePEc:qsh:wpaper:184101&r=ene |
| By: | Juan Antonio Duro (Universitat Rovira i Virgili); Jordi Teixidó-Figueras (Universitat Rovira i Virgili); Emilio Padilla (Univ. Autónoma de Barcelona) |
| Abstract: | This paper uses the possibilities provided by the regression-based inequality decomposition (Fields, 2003) to explore the contribution of different explanatory factors to international inequality in CO2 emissions per capita. In contrast to previous emissions inequality decompositions, which were based on identity relationships (Duro and Padilla, 2006), this methodology does not impose any a priori specific relationship. Thus, it allows an assessment of the contribution to inequality of different relevant variables. In short, the paper appraises the relative contributions of affluence, sectoral composition, demographic factors and climate. The analysis is applied to selected years of the period 1993–2007. The results show the important (though decreasing) share of the contribution of demographic factors, as well as a significant contribution of affluence and sectoral composition. |
| Keywords: | CO2 emissions, international emissions inequality, regression-based decomposition |
| JEL: | C19 D39 Q43 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ieb:wpaper:2013/6/doc2014-20&r=ene |
| By: | Carola Kniebes; Christine Merk; Gert Pönitzsch; Katrin Rehdanz; Ulrich Schmidt |
| Abstract: | Climate engineering (CE) and carbon capture and storage sub-seabed (CCS-S) are currently controversially debated options to address climate change. Our paper provides empirical evidence on the public perception of two different CE measures, namely, stratospheric sulphate injection (SSI) and afforestation, as well as CCS-S. Using data from a novel large-scale survey, we analyse the determinants of acceptance of these measures in Germany. We also provide experimental evidence on how additional information on these measures changes the respondents’ acceptance. We show that the acceptance differs strongly between the three measures. Afforestation is strongly favoured over CCS-S and SSI. This ranking holds independent of the amount of information provided. For all three measures, we find that, on average, additional information decreases acceptance. However, the sign and the strength of the information effect strongly depend on personal characteristics, such as gender and risk attitude |
| Keywords: | Climate Engineering, Carbon Capture and Storage, Climate Change, Public Opinion, Survey |
| JEL: | Q50 Q54 C83 D19 |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:kie:kieliw:1936&r=ene |
| By: | Mouez Fodha (EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Thomas Seegmuller (AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM)); Hiroaki Yamagami (Seikei University - Seikei University) |
| Abstract: | This article analyzes the consequences of environmental tax policies when the government imposes a constraint on stabilizing public debt. A public sector of pollution abatement is financed by taxation and by issuing public debt. Considering a simple overlapping-generations model, the tax reform stimulates steady-state investment. Then, the environmental quality and the aggregate consumption increase if and only if (i) pollution abatement is large enough and (ii) there is under-accumulation of the per capita capital stock. This arises if environmental taxation allows a decrease of either income taxation or debt-output ratio. |
| Keywords: | environmental tax reform; debt; public emission abatement; double dividend |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01023798&r=ene |
| By: | Jean Cavailhes; Daniel Joly (ThéMA, Centre National de la Recherche Scientifique); Mohamed Hilal (Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux, INRA); Thierry Brossard (ThéMA, Centre National de la Recherche Scientifique); Pierre Wavresky (Centre d'Economie et de Sociologie Rurales Appliquées à l'Agriculture et aux Espaces Ruraux, INRA) |
| Abstract: | Nous présentons un modèle théorique dans lequel des ménages consomment une aménité climatique, où le climat modifie leur goût pour un mode de vie extérieur (effet barbecue) et où le prix unitaire des migrations alternantes dépend du climat (effet verglas). Des prédictions théoriques sont tirées de ce modèle sur le gradient de rente foncière et sur l’étalement des villes. Elles sont testées par des modèles économétriques qui prennent en compte un biais de sélection et l’endogénéité de régresseurs, à partir des enquêtes Logement de l’Insee. Les résultats montrent que la température a un prix hédoniste positif, que là où le climat est plus chaud les aires urbaines sont plus étendues et que les gradients de rente foncière sont plus plats. Par conséquent, dans le cas d’un pays tempéré comme la France, l’étalement urbain et le réchauffement climatique se renforcent mutuellement, dans un cercle vicieux pour l’environnement. |
| Abstract: | We present a theoretical model in which, households consume a climatic amenity, warmer climates increase an outdoor way of life (barbecue effect) and where commuting costs depend on climate (glare ice effect). We derive theoretical predictions on land rent gradients and urban sprawl. They are tested by econometric models that take into account a selection bias and endogenous variables using individual data from housing surveys. First, we estimate hedonic prices of climatic variables, second we show that were temperature is warmer urban areas are more sprawled and land rent gradients flatter. Therefore, in the French case, urban sprawl and warming reinforce each other, in an environmental vicious circle. |
| Keywords: | habitat, prix hédoniste, climat, france, modèle théoriqueéconomie urbaine, comportement des consommateurs |
| JEL: | D12 Q51 Q54 R31 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:inr:wpaper:264230&r=ene |
| By: | Mark Purdon; Razack Lokina |
| Abstract: | This study presents findings from a systematic comparative research effort to investigation the additionality claims of CDM afforestation projects in Tanzania, Uganda and Moldova.Using what we refer to as an ex-post comparative baseline approach that accounts for how project financing and background economic conditions evolve over a CDM project’s implementation and crediting periods, we demonstrate that the projects in Uganda and Moldova are very likely to be fully additional while only approximately one-quarter of carbon credits resulting from the Tanzania project are genuine. The conditions of additionality can change significantly over the course of a CDM project in a way that undermines project environmental integrity because the CDM rules do not accommodate changing baseline conditions. Rather, current CDM rules allow initial baseline conditions to be frozen over a project’s crediting period. We recommend that a reformed CDM, REDD, NAMA or other new market mechanism adopt some of the elements of our approach including use of comparative performance benchmarks, an additionality risk management tool and engaging donors in the development of “ODA-baselines” for climate mitigation projects which combine carbon finance and development assistance. |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp149&r=ene |
| By: | Emanuele Campiglio |
| Abstract: | It is widely acknowledged that introducing a price on carbon represents a crucial precondition for filling the current gap in low-carbon investment. However, as this paper argues, carbon pricing in itself may not be sufficient. This is due to the existence of market failures in the process of creation and allocation of credit that may lead commercial banks – the most important source of external finance for firms willing to invest – not to respond as expected to price signals. Under certain economic conditions, banks would shy away from lending to low-carbon activities even in presence of a carbon price. This possibility calls for the implementation of additional policies not based on prices. In particular, the paper discusses the potential role of monetary policies and macroprudential financial regulation: modifying the incentives and constraints that banks face when deciding their lending strategy – through, for instance, a differentiation of reserve requirements according to the destination of lending – may fruitfully expand credit creation directed towards low-carbon sectors. This seems to be especially feasible in emerging economies, where the central banking framework usually allows for a stronger public control on credit allocation and a wider range of monetary policy instruments than the sole interest rate. |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp160&r=ene |
| By: | Richard Chisik (Department of Economics, Ryerson University, Toronto, Canada); Bill Battaile (The World Bank); Harun Onder (The World Bank) |
| Abstract: | This paper shows how Dutch disease effects may arise solely from a shift in demand following a natural resource discovery. The natural resource wealth increases the demand for non-tradable luxury services due to non-homothetic preferences. Labor that could be used to develop other non-resource tradable sectors is pulled into these service sectors. As a result, manufactures and other tradable goods are more likely to be imported, and learning and productivity improvements accrue to the foreign exporters. However, once the natural resources diminish, there is less income to purchase the services and non-resource tradable goods. Thus, the temporary gain in purchasing power translates into long-term stagnation. As opposed to conventional models where income distribution has no effect on economic outcomes, an unequal distribution of the rents from resource wealth further intensifies the Dutch disease dynamics within this framework.\ |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:rye:wpaper:wp041}&r=ene |
| By: | Natacha Raffin (EconomiX - CNRS : UMR7166 - Université Paris X - Paris Ouest Nanterre La Défense, Climate Economics Chair - University Paris Dauphine); Thomas Seegmuller (AMSE - Aix-Marseille School of Economics - Centre national de la recherche scientifique (CNRS) - École des Hautes Études en Sciences Sociales (EHESS) - Ecole Centrale Marseille (ECM)) |
| Abstract: | This paper presents an overlapping generations model where pollution, private and public healths are all determinants of longevity. Public expenditure, financed through labour taxation, provide both public health and abatement. We study the complementarity between the three components of longevity on welfare and economic stability. At the steady state, we show that an appropriate fiscal policy may enhance welfare. However, when pollution is heavily harmful for longevity, the economy might experience aggregate instability or endogenous cycles. Nonetheless, a fiscal policy, which raises the share of public spending devoted to health, may display stabilizing virtues and rule out cycles. This allows us to recommend the design of the public policy that may comply with the dynamic and welfare objectives. |
| Keywords: | longevity; pollution; welfare; complex dynamics |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01024691&r=ene |
| By: | Emma Suckling; Leonard Smith |
| Abstract: | While state-of-the-art models of the Earth’s climate system have improved tremendously over the last twenty years, nontrivial structural flaws still hinder their ability to forecast the decadal dynamics of the Earth system realistically. Contrasting the skill of those models not only with each other but also with their physical basis effectively and quantify their ability to add information to operational forecasts. The skill of decadal probabilistic hindcasts for annual global-mean and regional-mean temperatures from the EU ENSEMBLES project is contrasted with several empirical models. Both the ENSEMBLES models and a “Dynamic Climatology” empirical model show probabilistic skill above that of a static climatology for global-mean temperature. The Dynamic Climatology model, however, often outperforms the ENSEMBLES models. The fact that empirical models display skill similar to that of today’s state-of-the-art simulation models suggests that empirical forecasts can improve decadal forecasts for climate services, just as in weather, medium range, and seasonal forecasting. It is suggested that the direct comparison of simulation models with empirical models becomes a regular component of large model forecast evaluations. Doing so would clarify the extend to which state-of-the-art simulation models provide information beyond that available from simpler empirical models and clarify current limitations in using simulation forecasting for decision-support. Ultimately the skill of simulation models based on physical principles is expected to surpass that of empirical models in a changing climate; their direct comparison provides information on progress towards that goal which is not available in model-model intercomparisons. |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp150&r=ene |