nep-ene New Economics Papers
on Energy Economics
Issue of 2014‒08‒16
thirty-two papers chosen by
Roger Fouquet
London School of Economics

  1. A Sectoral Prospective Analysis of CO2 Emissions in China, USA and France, 2010-2050 By Pascal Da Costa; Wenhui Tian
  2. Retail price effects of feed-in tariff regulation By Maria Teresa Costa; Elisa Trujillo-Baute
  3. Programs, Prices and Policies Towards Energy Conservation and Environmental Quality in China By ZhongXiang Zhang
  4. An illustrative note on the system price effect of wind and solar power - The German case By Jägemann, Cosima
  5. Making the Best of New Energy Resources in the United States By Douglas Sutherland
  6. The inter-temporal optimization of the operation of the nuclear fuel reservoir in a liberalized electricity market dominated by the nuclear generation By Pascal Gourdel; Maria Lykidi
  7. Is Germany’s Energy Transition a case of successful Green Industrial Policy? Contrasting wind and solar PV By Pegels, Anna; Lütkenhorst, Wilfried
  8. Double moral hazard and the energy efficiency gap By Louis-Gaëtan Giraudet; Sébastien Houde
  9. The Economic Consequences of Delay in U.S.Climate Policy By Warwick J McKibbin; Adele C. Morris; Peter J. Wilcoxen
  10. The time scale behavior of oil-stock relationships: what we learn from the ASEAN-5 countries By Gazi Salah Uddin; Ilhan Ozturk; Ahmed Taneem Muzaffar; Duc Khuong Nguyen
  11. Cross-Border Effects of Capacity Mechanisms in Electricity Markets By Elberg, Christina
  12. Moving'diversely'towards'the'green'economy.'CO2'abating'techno organisational'trajectories'and'environmental'policy'in'EU'sectors. By Massimiliano Mazzanti; Ugo Rizzo
  13. Sensitivity analysis of an energy-economy model of the residential building sector By Frédéric Branger; Louis-Gaëtan Giraudet; Céline Guivarch; Philippe Quirion
  14. Climate Change, Hydro-dependency and the African Dam Boom By Matthew A. Cole; Robert J.R. Elliott; Eric Strobl
  15. Oil Prices and Interstate Conflict Behavior By Cullen S. Hendrix
  16. Economic curtailment of intermittent renewable energy sources By Arthur Henriot
  17. Paternalism and Energy Efficiency: An Overview By Hunt Allcott
  18. The optimal short-term management of flexible nuclear plants in a competitive electricity system as a case of competition with reservoir By Pascal Gourdel; Maria Lykidi
  19. Problems Encountered during the Transition to Market Economy in Azerbaijan and Solution Attempts By Suleymanov, Elchin; Yusifov, Sabuhi
  20. Electricity Consumption, Inflation, and Economic Growth in Nigeria: A Dynamic Causality Test By Njindan Iyke, Bernard
  21. On the Risk Comovements between the Crude Oil Market and the U.S. Dollar Exchange Rates By Gilles de Truchis; Benjamin Keddad
  22. An Overview of the OECD ENV-Linkages Model: Version 3 By Jean Chateau; Rob Dellink; Elisa Lanzi
  23. Energy Sector Reform, Economic Efficiency and Poverty Reduction By Tooraj Jamasb; Rabindra Nepal
  24. Exploring Potential Data Sources for Estimating Private Climate Finance By Randy Caruso; Raphaël Jachnik
  25. Product Innovation in Response to Environmental Standards and Competitive Advantage: A Hedonic Analysis of Refrigerators in the Japanese Retail Market By Kimitaka Nishitani; Munehiko Itoh
  26. Designing generic technologies in Energy Research: learning from two CEA technologies for double unknown management By Sophie Hooge; Olga Kokshagina; Pascal Le Masson; Kevin Levillain; Benoît Weil; Vincent Fabreguettes; Nathalie Popiolek
  27. Backtesting and Evaluation of Different Trading Schemes for the Portfolio Management of Natural Gas By Popov, Maxim; Madlener, Reinhard
  28. The Impact of Crude Oil Price on Islamic Stock Indices of South East Asian (SEA) Countries: A Comparative Analysis By Abdullah, Ahmad Monir; Saiti, Buerhan; Masih, Abul Mansur M.
  29. Le positionnement de l'Inde sur le changement climatique By Sandrine Mathy
  30. A Cheap-talk Model with Multiple Free-riding Audiences: Reference to Global Environmental Protections By Yeung, Timothy
  31. Official Support for Private Sector Participation in Developing Country Infrastructure By Kaori Miyamoto; Kim Biousse
  32. Impact de la rente pétrolière sur la demande des pays frontaliers du Cameroun By Mireille NTSAMA ETOUNDI

  1. By: Pascal Da Costa (LGI - Laboratoire Génie Industriel - EA 2606 - Ecole Centrale Paris); Wenhui Tian (LGI - Laboratoire Génie Industriel - EA 2606 - Ecole Centrale Paris)
    Abstract: In order to avoid dangerous climate change, the Intergovernmental Panel on Climate Change has suggested that the increase in global temperature should be limited to under 2°C by the end of this century. In response to this objective, many countries have set up varied mitigation targets for CO2 emissions, which reflect their own specific situations. In this article, scenarios for CO2 emissions up to 2050 are set up for three representative countries: the United States of America, France and China. We compare these scenarios to Business-as-Usual scenarios in the framework of a sectoral-emission model. This model establishes the feasibility of the scenarios and targets, by dividing emissions into three main sectors: the power sector, the transport sector and others. The model, based on STIRPAT modeling and Support Vector Regressions, includes three major types of technical improvements: hybrid vehicles, energy-structure changes and energy-efficiency improvements. Governmental targets prove to be stricter than the 2°C scenario for the US and France, while the governmental target for China is more tolerant than the 2°C scenario, taking economic development into account. The article also shows that the energy mix could remain unchanged for electricity production with the implementation of Carbon Capture and Storage technology in order to hit the government target in China, and the 2°C objective in the US. Otherwise, these countries would have to reduce their share of coal in the energy mix to under 20%. In the meantime, half of traditional vehicles should be replaced by hybrid vehicles, and energy efficiency has to be improved by over 50% to achieve the targets of all the three countries.
    Keywords: STIRPAT Model; Support Vector Regression; CO2-Emission Scenarios
    Date: 2014–07–22
  2. By: Maria Teresa Costa (Universitat de Barcelona & IEB); Elisa Trujillo-Baute (Universitat de Barcelona & IEB)
    Abstract: The feed-in tariff regulation is the wider spread promotion scheme used to encourage the take-up and development of generation from renewable energy sources in the EU, and the costs of resources devoted to this promotion are usually borne by final consumers. Two components of the electricity retail price are expected to be influenced by feed-in tariff regulation: the incentive to those firms producing electricity from renewable energy sources and the wholesale price of electricity. In this study we analyze the effects that feed-in tariff regulation has on electricity retail price for industrial consumers. This analysis is performed by estimating the relative intensity of the effects from the cost of incentives for electricity generation under the feed-in tariff and the electricity wholesale price over the Spanish industrial retail price. Especial attention is devoted to technology-specific considerations, as well as short and long run effects. In general, results show that there is not a strong link between the retail and wholesale market for Spanish industrial consumers. Moreover, taking into account technology-specific characteristics, results indicates that an increase of solar generation leads to a higher increase in the industrial retail price than in the case of a proportional increase of wind generation. This implies that, when evaluating the feed-in tariff regulation impact on the industrial retail price, the cost of incentives effect prevails over the wholesale price effect, and this is stronger for solar than for wind generation.
    Keywords: Electricity prices, feed-in-tariff, retail market, wholesale market
    JEL: L11 L94 L51 L52
    Date: 2014
  3. By: ZhongXiang Zhang (School of Economics, Fudan University)
    Abstract: China has gradually recognized that the conventional path of encouraging economic growth at the expense of the environment cannot be sustained. It has to be changed. This article focuses on ChinaÕs efforts towards energy conservation and environmental quality. The article discusses a variety of programs, prices, market-based instruments, and other economic and industrial policies and measures targeted for energy saving and pollution cutting, and the associated implementation and reliability issues. The article ends with some concluding remarks and recommendations.
    Keywords: energy saving, environmental quality, low-carbon development, power generation, energy prices; market-based instruments, economic policies, industrial policies, resource taxes, implementation and reliability, China
    JEL: H23 H71 O13 O53 P28 Q43 Q48 Q52 Q53 Q54 Q56 Q58
    Date: 2014–06
  4. By: Jägemann, Cosima (Energiewirtschaftliches Institut an der Universitaet zu Koeln)
    Abstract: Exposing wind and solar power to the market price signal allows for cost-efficient investment decisions, as it incentivizes investors to account for the marginal value (MV el) of renewable energy technologies. As shown by Lamont (2008), the MV el of wind and solar power units depends on their penetration level. More specifically, the MV el of wind and solar power units is a function of the respective unit's capacity factor and the covariance between its generation profile and the system marginal costs. The latter component of the MV el (i.e., the covariance) is found to decline as the wind and solar power penetration increases, displacing dispatchable power plants with higher short-run marginal costs of power production and thus reducing the system marginal costs in all generation hours. This so called `system price effect' is analyzed in more detail in this paper. The analysis complements the work Lamont (2008) in two regards. First of all, an alternative expression for the MV el of wind and solar power units is derived, which shows that the MV el of fluctuating renewable energy technologies depends not only on their own penetration level but also on a variety of other parameters that are specific to the electricity system. Second, based on historical wholesale prices and wind and solar power generation data for Germany, a numerical `ceteris paribus' example for Germany is presented which illustrates that the system price effect is already highly relevant for both wind and solar power generation in Germany.
    Keywords: Fluctuating generation technologies; wind power; solar power; system price effect
    JEL: Q42
    Date: 2014–07–12
  5. By: Douglas Sutherland
    Abstract: Since around 2007, the country has been enjoying an “energy renaissance” thanks to its abundant stocks of shale oil and gas. The resurgence in oil and gas production is beginning to create discernible economic impacts and has changed the landscape for natural gas prices in the United States, boosting competitiveness. In order to reap the benefits fully, significant investment is needed. Federal and state governments capture some of the resource rents, but there are potential opportunities to increase taxation and use the revenues to support future well-being. Taxing natural resource rents with profit taxes can be less distortionary than other forms of taxation, though only one state uses this form of tax. Production of shale resources, like other forms of resource extraction, poses a number of challenges for the environment. Respecting demands on water resources requires adequate water rights are in place while state and federal regulators need to monitor the environmental impact of hydraulic fracturing closely and strengthen regulations as needed. Natural gas is a potential “bridge fuel” towards a lower carbon economy, helping to reduce emissions by leading to a substitution away from coal. Flanking measures are desirable to counter natural gas hindering renewables and low prices stymieing innovation. This Working Paper relates to the 2014 OECD Economic Survey of United States ( States). Capital naturel aux États-Unis Les États-Unis possèdent un riche capital naturel. Depuis 2007 environ, le pays connaît une « renaissance énergétique » grâce à ses abondantes réserves de pétrole et de gaz de schiste. Le nouvel essor de la production pétrolière et gazière commence à avoir des effets économiques perceptibles et a changé la situation des prix de l’énergie aux États-Unis, stimulant la compétitivité. Pour tirer pleinement parti de cette évolution, il faudra des investissements significatifs. Le gouvernement fédéral et les États devraient capter une partie de la rente des ressources naturelles et mettre ces recettes au service de l’amélioration du bien-être futur. Alors que la taxation des rentes de ressources via l’impôt sur les bénéfices peut être moins distorsive que d’autres formes de fiscalité, seul un État y a recours. La production de pétrole et de gaz de schiste s’accompagne d’un certain nombre de défis environnementaux. Pour respecter les demandes d’utilisation des ressources en eau, il faut veiller à l’existence de droits sur l’eau appropriés, et les autorités chargées de la réglementation au niveau fédéral et à celui des États doivent surveiller de près les répercussions environnementales de la fracturation hydraulique et renforcer la réglementation autant que nécessaire. Le gaz naturel peut être une « énergie relais » dans la transition vers une économie sobre en carbone et contribuer à réduire les émissions en entraînant le remplacement du charbon. En l’absence d’une action concertée, il y a toutefois un risque que le marché de l’énergie se reporte de nouveau sur le charbon en cas d’épuisement des réserves de gaz naturel ou de modification des prix relatifs. Des mesures d’accompagnement seraient souhaitables pour éviter que le gaz naturel freine le développement des énergies renouvelables et que la faiblesse des prix paralyse l’innovation. Ce Document de travail se rapporte à l'Étude économique de l'OCDE de États-Unis 2014 ( Unis).
    Keywords: government policy, hydrocarbon resources, resource taxation, energy, resource booms, air and water pollution, impôts sur les ressources, énergie, ressources en hydrocarbures, pollution de l'air et de l'eau, boom des ressources, politiques publiques
    JEL: H25 Q33 Q4 Q53 Q58
    Date: 2014–07–21
  6. By: Pascal Gourdel (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Maria Lykidi (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: We look at the optimal inter-temporal management of the fuel reservoir of nuclear units in a liberalized electricity market. We use the assumption that nuclear fuel works as a "reservoir" of energy due to the periodical shutdown of nuclear units to reload their fuel. In the medium-term, how a producer sets the nuclear fuel of the reservoir to respond to the variations of seasonal demand in order to maximize its production value on a multi-annual basis? The dynamic nature of the nuclear fuel reservoir highlighted the discontinuity of the price which complicates the resolution of the optimal inter-temporal production problem and even leads to a lack of solutions. Theoretically, at the optimum, nuclear is used to serve baseload and thermal follows demand's variations. Numerically, both nuclear and thermal units operate in load-following mode. Solutions characterized by a constant nuclear production do not exist which shows that the significant share of nuclear in the energy mix does not permit to produce at a constant rate unless further investments in thermal capacity are done. Inter-temporal optimization shows the role of nuclear for ensuring the equilibrium between supply and demand.
    Keywords: Electricity production; nuclear fuel reservoir; inter-temporal optimization; thermal production; merit order price; discontinuity problem
    Date: 2014–01
  7. By: Pegels, Anna; Lütkenhorst, Wilfried
    Abstract: In this paper, we address the challenge of Germany’s energy transition (Energiewende) as the centrepiece of the country’s green industrial policy. In addition to contributing to global climate change objectives, the Energiewende is intended to create a leading position for German industry in renewable energy technologies, boost innovative capabilities and create employment opportunities in future growth markets at the least possible cost. The success in reaching these aims, and indeed the future of the entire concept, is hotly debated. The paper aims to provide an up-to-date assessment of what has become a fierce controversy by comparing solar photovoltaic (PV) and wind energy along five policy objectives: 1) competitiveness, 2) innovation, 3) job creation, 4) climate change mitigation, and 5) cost. We find mixed evidence that Germany reaches its green industrial policy aims at reasonable costs. Wind energy seems to perform better against all policy objectives, while the solar PV sector has come under intense pressure from international competition. However, this is only a snapshot of current performance, and the long term and systemic perspective required for the energy sector transformation suggests a need for a balanced mix of a variety of clean energy sources.
    Keywords: Green industrial policy; renewable energies; Germany
    JEL: O3 O31 O38 Q2 Q42 Q48 Q57
    Date: 2014
  8. By: Louis-Gaëtan Giraudet (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); Sébastien Houde (University of Maryland - University of Maryland)
    Abstract: We investigate how moral hazard problems can cause sub-optimal investment in energy efficiency, a phenomenon known as the energy efficiency gap. We argue that such problems are likely to be important for home energy retrofits, where both the seller and the buyer can take hidden actions. The retrofit contractor may cut on the quality of installation to save costs, while the homeowner may rebound, that is, increase her use of energy services when provided with higher energy efficiency. We first formalize the double moral hazard problem described above and examine how the resulting energy efficiency gap can be reduced through minimum quality standards or energy-savings insurance. We then calibrate the model to the U.S. home insulation market and quantify the deadweight loss. We find that for a large range of market environments, the welfare gains from undoing moral hazard are substantially larger than the costs of quality audits. They are also about one order of magnitude larger than those from internalizing carbon dioxide externalities associated with the use of natural gas for space heating. Moral hazard problems are consistent with homeowners investing with implied discount rates in the 15-35% range. Finally, we find that minimum quality standards outperform energy-savings insurance.
    Keywords: Energy efficiency gap, moral hazard, energy-savings insurance, minimum quality standard
    Date: 2014–06–21
  9. By: Warwick J McKibbin; Adele C. Morris; Peter J. Wilcoxen
    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.
    Keywords: fiscal policy, carbon tax, general equilibrium
    JEL: Q54 H2 E17
    Date: 2014–07
  10. By: Gazi Salah Uddin; Ilhan Ozturk; Ahmed Taneem Muzaffar; Duc Khuong Nguyen
    Abstract: This article takes a time scale perspective to examine the interactions between crude oil and stock
    Keywords: oil prices, stock returns, time–frequency analysis, ASEAN-5.
    JEL: C40 G15 Q41 Q47
    Date: 2014–07–24
  11. By: Elberg, Christina (Energiewirtschaftliches Institut an der Universitaet zu Koeln)
    Abstract: To ensure security of supply in liberalized electricity markets, different types of capacity mechanisms are currently being debated or have recently been implemented in many European countries. The purpose of this study is to analyze the cross-border effects resulting from different choices on capacity mechanisms in neighboring countries. We consider a model with two connected countries that differ in the regulator's choice on capacity mechanism, namely strategic reserves or capacity payments. In both countries, competitive firms invest in generation capacity before selling electricity on the spot market. We characterize market equilibria and find the following main result: While consumers' costs may be the same under both capacity mechanisms in non-connected countries, we show that the different capacity mechanisms in interconnected countries induce redistribution effects. More precisely, we find that consumers' costs are higher in countries in which reserve capacities are procured than in countries in which capacity payments are used to ensure the targeted reliable level of electricity.
    Keywords: Electricity Markets; Capacity Mechanisms; Cross-Border Effects
    JEL: Q41
    Date: 2014–07–31
  12. By: Massimiliano Mazzanti (Dipartimento di Economia e Management, Università  di Ferrara and SEEDS - Sustainability Environmental Economics and Dynamic Studies.); Ugo Rizzo (Dipartimento di Economia e Management, Università  di Ferrara.)
    Abstract: This paper investigates, from ex ante perspectives, potential techno- organisational dynamics aimed at reducing GHG emissions in the EU by 2030 and 2050. We take a qualitative view by exploiting interviews with representatives from principal manufacturing sectors in the EU. The novel value of this analysis is in its focus on 'sectors', which, following neo-Schumpeterian theory, are key 'players' in the technological domain. From a conceptual point of view, we mainly refer to the integrated concepts of sector and national systems of innovation which have consolidated into innovation-oriented evolutionary theory: The EU is characterized by national sector specialisations that emerge from historical developments and markets effects, but also from industrial, innovation and environmental policy effects. In this way this work complements more consolidated quantitative econometric and modelling based analyses, as it presents sector-specific techno-organisational options to help reach the decarbonisation targets. We assess the feasibility of those targets from technological and economic perspectives: specific emphasis is put on the smooth or 'radical' change-driven transition towards a greener economy. Both market and policy factors are considered. The assessment of experts' qualitative responses, together with main outcomes from the literature, shows that heavy industrial sectors share some similarities but also key distinctions in relation to their past and future responses to market and policy dynamics. Their specificities should be taken into consideration when defining the specific design of the future EU policy package for energy efficiency and CO2 abatement at EU and national levels.
    Keywords: techno-organisational change, climate change, EU 2030 2050 targets, sectors, eco-innovations.
    JEL: L52 O33 Q58
    Date: 2014–05
  13. By: Frédéric Branger (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, AgroParisTech - AgroParisTech); Louis-Gaëtan Giraudet (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); Céline Guivarch (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); Philippe Quirion (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: In this paper, we discuss the results of a sensitivity analysis of Res-IRF, an energy-economy model of the demand for space heating in French dwellings. Res-IRF has been developed for the purpose of increasing behavioral detail in the modeling of energy demand. The different drivers of energy demand, namely the extensive margin of energy efficiency investment, the intensive one and building occupants' behavior are disaggregated and determined endogenously. The model also represents the established barriers to the diffusion of energy efficiency: heterogeneity of onsumer preferences, landlord-tenant split incentives and slow diffusion of information. The relevance of these modeling assumptions is assessed through the Morris method of sensitivity analysis, which allows for the exploration of uncertainty over the whole input space. We find that the Res-IRF model is most sensitive to energy prices. It is also found to be quite sensitive to the factors parameterizing the different drivers of energy demand. In contrast, inputs mimicking barriers to energy efficiency have been found to have little influence. These conclusions build confidence in the accuracy of the model and highlight occupants' behavior as a priority area for future empirical research.
    Keywords: Sensitivity Analysis, Morris Method, Monte Carlo, Energy Efficiency
    Date: 2014–05–09
  14. By: Matthew A. Cole; Robert J.R. Elliott; Eric Strobl
    Abstract: We examine Africa’s increasing reliance on hydropower in light of climate change induced variations in rainfall and the potential power outages that may result. We use a continent wide riverflow model and IPPC climate change scenarios and show that current plans for African dam building are fairly well matched with river-flow predictions so that fears that international donors and national governments are making a series of expensive and environmentally damaging investments may be overstated. However, predictions of an increase in extreme events and reduced rainfall for certain countries means there are still viability concerns for certain planned hydropower investments.
    Keywords: Hydropower, Climate change, Africa, Energy
    Date: 2014–07–24
  15. By: Cullen S. Hendrix (Peterson Institute for International Economics)
    Abstract: Anecdotal evidence suggests high oil prices embolden leaders in oil-rich states to pursue more aggressive foreign policies. This article tests the conjecture in a sample of 153 countries for the time period 1947–2001. It finds strong evidence of a contingent effect of oil prices on interstate disputes, with high oil prices associated with signifi cant increases in dispute behavior among oil-exporting states, while having either a negative or null effect on dispute behavior in nonexporting states.
    Keywords: oil, conflict, diplomacy, Russia, Iran, Venezuela, resource curse
    JEL: D74 F51 Q41
    Date: 2014–07
  16. By: Arthur Henriot
    Abstract: In a power system featuring a large share of intermittent renewable energy sources (RES) and inflexible thermal generators, efficiency gains on generation costs could be achieved by curtailing the production of RES. However, as RES feature very low variable production costs, over-curtailment can be costly. In this article, we use a stylised analytical model to assess this trade-off. We show that while curtailing RES when their variability is high and the system flexibility is low can reduce generation costs, the different stakeholders (consumers, dispatchable generators, RES) will not necessarily benefit from such measures. As a consequence, generators will opt for a sub-optimal level of curtailment, and this level of curtailment should rather be set by the TSO. Either incentive to provide the TSO with accurate forecasts of RES availability, or alternatively centralised forecasting by the TSO, should then be put into place to solve the resulting problem of asymmetry of information.
    Keywords: Market design, Curtailment, Large-scale renewables, Intermittency
    JEL: Q42 L94
    Date: 2014–05
  17. By: Hunt Allcott
    Abstract: This review paper provides an overview of the application of behavioral public economics to energy efficiency. I document policymakers' arguments for "paternalistic" energy efficiency policies, formalize with a simple model of misoptimizing consumers, review and critique empirical evidence, and suggest future research directions. While empirical results suggest that policies to address imperfect information or internalities may increase welfare in some cases, some existing policies may be mistargeted or of the wrong magnitudes.
    JEL: D03 D12 D83 H21 L51 L94 Q41 Q48
    Date: 2014–08
  18. By: Pascal Gourdel (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Maria Lykidi (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: In many countries, the electricity systems are quitting the vertically integrated monopoly organization for an operation framed by competitive markets. It therefore questions how flexible nuclear plants capable of load-following should be operated in an open market framework. A number of technico-economical features of the operation of flexible nuclear plants drive our modelling complex which makes difficult to determine the optimal management of the nuclear production within our model. In order to examine the existence of an equilibrium and calculate it, we focus on a short-term (monthly) management horizon of the fuel of nuclear reactors. The marginal cost of nuclear production being (significantly) lower than that of thermal production induces a discontinuity of producer's short-term profit. The problem of discontinuity makes the resolution of the optimal short-term production problem extremely complicated and even leads to a lack of solutions. That is why it is necessary to study an approximate problem (continuous problem) that constitutes a "regularization" of our economical problem (discontinuous problem). Its resolution provides us with an equilibrium which proves the existence of an optimal production trajectory.
    Keywords: Electricity market; nuclear generation; competition with reservoir; optimal short-term production problem; price discontinuity; quadratic programming
    Date: 2014–01
  19. By: Suleymanov, Elchin; Yusifov, Sabuhi
    Abstract: After re-gaining its independence on 18 October 1991, the Republic of Azerbaijan started the transformation to the market-based economy and the integration into the world economy. The country’s oil and natural gas reserves have been considered the main source for financing a range of government programs for reforms. On the one hand, these reserves had to be used effectively; on the other hand, there was a huge demand for foreign investment for extraction. To this end, Azerbaijan has signed “Contract of the Century” in 1994. Although Azerbaijan has wide oil and natural gas reserves, it has faced a number of difficulties in its transition path. This study analyzes these problems and reforms for solving them. One of the types of the problems related to the economic structure of the former Soviet Union: disruption of the economic ties between the republics resulted in a decline of production, high levels of unemployment and prices and consequently led to an economic recession in all of the republics. Another set of problems related to the lack of sufficient institutional bases to transform to the market economy. Moreover, internal conflicts between the political parties and groups for having authority as well as political chaos in the republic can be considered other serious problems during the transition period. Furthermore, Karabakh war and occupation of 20 percent of the Azerbaijani territory by the Armenian military forces had made the situation extremely complicated. Despite all of these extremes, Azerbaijan transformed to the market-based economy decidedly and even became one of the fast growing countries of the world. Even in 2013, with the GDP growth rate of 5.6 percent, Azerbaijan was a leader among growing economies. In parallel with this significant economic development, there is still a need for some socio-economic and institutional reforms in order to get a well-functioning market-based economy in Azerbaijan.
    Keywords: Azerbaijan, oil, natural gas, informal sector, energy resources, oil dependency
    JEL: P2 P21
    Date: 2014–07–14
  20. By: Njindan Iyke, Bernard
    Abstract: This paper examines the dynamic causal linkages between electricity consumption and economic growth in Nigeria within a trivariate VECM, for the period 1971-2012. The paper obviates the variable omission bias, and the use of cross-sectional techniques that characterise most existing studies. The results show that there is a distinct causal flow from electricity consumption to economic growth: both in the short run and in the long run. This finding supports the electricity-led growth hypothesis, as documented in the literature. The paper urges policy-makers in Nigeria to implement policies which enhance the generation of electricity in order to engineer economic growth. Appropriate monetary policies must also be put in place, in order to moderate inflation, thus enhancing growth.
    Keywords: Electricity Consumption, Economic Growth, Inflation, Cointegration, Causality, Nigeria
    JEL: C32 Q43
    Date: 2014–07–13
  21. By: Gilles de Truchis (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS); Benjamin Keddad (Aix-Marseille University (Aix-Marseille School of Economics), CNRS & EHESS)
    Abstract: This article examines the volatility dependence between the crude oil price and four US dollar exchange rates using both fractional cointegration and copula techniques. The former exploits the long memory behavior of the volatility processes to investigate whether they are tied through a common long-run equilibrium. The latter is complementary as it allows to explore whether the volatility of the markets are linked in the short run. The cointegration results conclude in favor of long-run independence for the Canadian and Japan exchange rates while few evidence of long-run dependence are found for the European and British exchange rates. Concerning the copula analysis, we conclude in favor of weak dependence when we consider static copulas. Considering time-varying copulas, it appears that dependence is sensitive to market conditions as we found increasing linkages just before the 2008 market collapse and more recently, in the aftermath of the European debt crisis.
    Keywords: comovement, volatility linkage, Fractional cointegration, copula, oil market, exchange rate
    JEL: E44 C22
    Date: 2014–05
  22. By: Jean Chateau; Rob Dellink; Elisa Lanzi
    Abstract: This document provides a detailed technical description of the ENV-Linkages model. The OECD ENV-Linkages Computable General Equilibrium (CGE) model is an economic model that describes how economic activities are inter-linked across several macroeconomic sectors and regions. It links economic activity to environmental pressure, specifically to emissions of greenhouse gases (GHGs). The links between economic activities and emissions are projected for several decades into the future, and thus shed light on the impacts of environmental policies for the medium- and long-term future. In this paper specific attention is given to the equations that form the core of the model. The version of the model presented here is used for analysis carried out for the OECD Environmental Outlook to 2050 (OECD, 2012). An updated version of the model is expected to play a key role in the new CIRCLE project (OECD, 2013). Ce manuel donne une description détaillée du modèle ENV-Linkages. Le modèle ENV-Linkages de l’OECD est un modèle d’Équilibre Général Calculable (MEGC) qui décrit les relations économiques entre secteurs d’activité, pays et agents économiques. Le modèle associe les émissions de gaz à effet de serre aux différentes activités économiques reproduites. Les liens entre les émissions et les activités économiques sont projetés à un horizon de plusieurs décennies, mettant ainsi en avant les impacts à moyen et long terme des politiques environnementales. L’attention est portée dans ce document sur une description technique des équations sous-jacentes du modèle. La version du modèle présentée est celle utilisée dans les Perspectives de l’environnement à l’horizon 2050 (OECD, 2012). Une version mise à jour du modèle jouera un rôle essentiel dans le nouveau projet CIRCLE (OCDE, 2013).
    Keywords: climate change, long-term scenarios, general equilibrium models, scénarios de long-terme, changement climatique, équilibre général calculable
    JEL: D58 H23 O41 Q54 Q56
    Date: 2014–06–11
  23. By: Tooraj Jamasb (Durham University Business School); Rabindra Nepal (School of Economics, The University of Queensland)
    Abstract: It has been more than two decades since the widespread initiation of global energy sector reforms and restructuring. However, the empirical evidence on the microeconomic, macroeconomic and quality related performance of reforms across developing countries needs to be examined considering the sizable gap in the energy economics literature. This paper reviews the empirical and theoretical literature on the linkages between energy sector reforms; economic and technical efficiency and poverty reduction. The extent of reforms have varied across developing countries in terms of changes in market structures, the role of the state and the regulation of the sector. Reforms have improved the efficiency and productivity in the sector among many reforming countries. However, the efficiency gains have not always reached the end consumers due to the inability of sector regulators and inadequate regulatory frameworks. Reforms seem to generate poverty alleviation impacts and promote welfare of the poor only when the poor have access to energy. This implies that at a minimum, reforms should be aimed at catering the energy to the poor to produce any significant impacts on poverty reduction in developing countries. Future studies of reforms can also focus on the welfare analysis of reforms using cost-benefit analysis, which remains largely limited in the context of developing countries.
    Date: 2014–08–08
  24. By: Randy Caruso; Raphaël Jachnik
    Abstract: The paper reviews a number of commercial and public data sources to examine their potential for increasing coverage and understanding of the volume and characteristics of private climate finance beyond renewable energy projects. Such information is needed to assess progress towards the global transition to low-carbon, climate-resilient economies, as well towards the fulfilment of international commitments by developed countries under the United Nations Framework Convention on Climate Change. The data sources investigated in this analysis are evaluated across four areas relating to their: (i) use of sectoral classification systems; (ii) coverage of private finance transactions and instruments; (iii) definitions and methods for categorising finance as private and identifying its geographic origin; and (iv) data access restrictions and methodological transparency. To provide a frame of reference, the paper distils corresponding definitions and methodologies used by key known data sources for tracking climatespecific finance as well as investments and finance more broadly...
    JEL: C81 F21 F53 G39 O16 O19 Q56
    Date: 2014–07–08
  25. By: Kimitaka Nishitani (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Munehiko Itoh (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)
    Abstract: The purpose of this study is to analyze whether a manufacturer's product innovation in response to environmental standards produces a competitive advantage, as the Porter hypothesis suggests. If a product with environmentally friendly attributes that are innovated in response to environmental standards is preferred in the market, the product can receive a price premium for its attributes. The main findings from our hedonic price regression for refrigerators, using Japanese retail market data during the period 1998–2012, are as follows. First, the attribute-adjusted refrigerator price has decreased drastically in last 15 years, which implies that the fundamental value of "refrigerating" has been commoditized. Second, price premiums are found for products that have been innovated in response to environmental standards to be chlorofluorocarbon (CFC)-free and use energy more efficiently. Third, the price premiums for these attributes show specific trends during this period. A CFC-free product initially received a high price premium; however, the premium decreased and became 0. On the other hand, although an energy-consumption-efficient product did not receive a high price premium initially, the price premium increased every time manufacturers faced new or revised environmental standards. These findings prove that product innovation in response to environmental standards can create a competitive advantage where product commoditization has occurred, and that the trends in the price premiums for environmentally friendly attributes are not unique for CFC-free and energy-consumption-efficient products.
    Keywords: Porter hypothesis, Environmental innovation, Hedonic price approach, POS data, CFC-free, Energy-consumption efficiency
    Date: 2014–07
  26. By: Sophie Hooge (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Olga Kokshagina (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Pascal Le Masson (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Kevin Levillain (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Benoît Weil (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Vincent Fabreguettes (Centre de recherche du Commissariat à l'Energie Atomique - CEA Cadarache (Saint Paul-lez-Durance, France) - Centre de recherche du Commissariat à l'Energie Atomique - CEA Cadarache (Saint Paul-lez-Durance, France)); Nathalie Popiolek (CEA - CEA Saclay - CEA)
    Abstract: The aim of this paper is to shed light on an innovative strategy for the design of generic technologies (GTs). Research on radical innovation management, while recognizing the success of GTs, generally describes their design according to evolutionary strategies featuring multiple and uncertain trials, which would finally result in the discovery of common features between multiple applications. Building on a case study conducted on two technological development programs at the French Alternative Energies and Atomic Energy Commission (CEA), we exhibit an anomaly to this rarely discussed idea: we describe an alternative strategy that consists in intentionally designing common features that bridge the gap between a priori heterogeneous applications and a priori heterogeneous technologies. This anomaly brings three main results: 1) The usual trial-and-learning strategy is not necessarily the only strategy to design a GT; 2) beyond technological breakthrough, the value of GTs also relies on the capacity to reuse and connect existing technologies; 3) the design of GT might require sophisticated organizational patterns to be able to involve multiple technology suppliers and applications' providers.
    Keywords: Design; Generic technologies; double unknown; Energy
    Date: 2014–06–06
  27. By: Popov, Maxim (Nexus Energie GmbH); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: The aim of our research is to test and evaluate the technical indicators and oscillators, which are commonly used on other stocks and commodity markets (e.g. moving averages, stochastic oscillator, etc.) in terms of their efficiency at the present European natural gas virtual trading points (VTPs). The decisive factors are the achievable cost savings in purchases. The scope of our work includes the testing of trading systems on historical prices of European natural gas VTPs. These trading systems will be compared with each other and evaluated in terms of their efficiency and long-term stability. The results show that in more than half of the cases, the average buying price of natural gas is lower than the median price; hence the use of technical-indicator-based trading systems in natural gas procurement portfolio management would be beneficial.
    Keywords: Portfolio management; Virtual trading point; Title transfer facility; Backtesting; Natural gas
    JEL: C63 D22 F14 G11 Q37
    Date: 2014–05
  28. By: Abdullah, Ahmad Monir; Saiti, Buerhan; Masih, Abul Mansur M.
    Abstract: An understanding of how volatilities of and correlations between commodity returns and Islamic stock indices change over time including their directions and size are of crucial importance for both the domestic and international investors with a view to diversifying their portfolios for hedging against unforeseen risks. This paper is the first attempt to add value to the existing literature by empirically testing for the ‘time-varying’ and ‘scale dependent’ volatilities of and correlations between the selected Islamic stock indices of South East Asian countries and selected commodities for enhancing portfolio diversification benefits. The methodologies appropriate to achieving the objectives were the recently introduced dynamic conditional correlations and wavelet decompositions. Our findings tend to suggest that there is a theoretical relationship between the selected Islamic stock indices and the selected commodities and that the Islamic stock indices of Singapore, Philippines and Indonesia are leading the other Islamic stock indices and the commodities (as evidenced in the Vector Error-Correction models). Consistent with these results, our analysis based on the application of the recent wavelet technique MODWT tends to indicate that the Singapore Islamic index is leading the other Islamic indices and the commodities. From the point of view of portfolio diversification benefits based on the extent of dynamic correlations between variables, our results tend to suggest that an investor should be aware that the Philippine Islamic stock index is less correlated with the crude oil in the short run (as evidenced in the continuous wavelet transform analysis) and that an investor holding the crude oil can gain by including the Malaysian Islamic stock index in his/her portfolio (as evidenced in the Dynamic conditional correlations analysis).
    Keywords: Commodity, Islamic Stock Index Returns (ISIR), MODWT, CWT, DCC-MGARCH, Diversification, Causality
    JEL: C58 Q43
    Date: 2014–06–28
  29. By: Sandrine Mathy (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: Ce texte vise à décrire le positionnement de l'Inde vis-à-vis du changement climatique dans le but de cerner les marges de manœuvres existantes dans la contribution de l'Inde à l'atteinte d'un accord international lors de la COP 21 à Paris en 2015. Les première et seconde parties montrent respectivement les défis d'une Inde à la fois fortement exposée aux impacts du changement climatique et dont le développement économique est rendu dépendant du développement résilient d'un secteur énergétique. La troisième partie explique en quoi le positionnement historique de l'Inde dans les négociations internationales sur les questions d'équité a bloqué l'émergence de politiques climatiques en Inde jusqu'à 2007. Néanmoins, depuis la préparation de la Conférence de Copenhague, l'Inde s'est engagée dans des politiques climatiques que nous décrivons. Enfin, nous décrivons en quoi la position actuelle de l'Inde dans les négociations internationales en amont de la COP21 s'est récemment refermée.
    Date: 2013–12
  30. By: Yeung, Timothy
    Abstract: This paper presents a cheap-talk one-sender-multiple-receiver model in which audiences freeride on each other in the context of global environmental protections. The sender observes the magnitude of damage of emission, and sends the same message simultaneously to all audiences, who then play a game to determine individual emission level. The sender may find it impossible to credibly send the truth when externality is large enough because of the incentive to correct free-riding behavior. If a private club is established for sharing information, the sender’s information with more countries may not be optimal because the sender is less truthful when the club is larger.
    Keywords: Cheap Talk, Externality, Environmental Protections
    JEL: D82 H41
    Date: 2014–06
  31. By: Kaori Miyamoto; Kim Biousse
    Abstract: The objective of this study is to take stock of support by bilateral and multilateral donors for private sector participation in developing country infrastructure. It tries to draw out trends, opportunities and challenges, collective activities to address them, and possible further actions for the Development Assistance Committee (DAC). The exercise tries to contribute to the aim of using development co-operation more strategically in leveraging other development related flows. The methodology involved research on 22 donor policies and institutions, as well as data analysis of the DAC’s Creditor Reporting System. The results of the study indicate that official development finance (ODF) for infrastructure is increasing, with a sizable proportion disbursed to support the private sector directly, mostly through loans and equity by bilateral and multilateral development finance institutions (DFIs). However, almost 70% is directed to infrastructure in upper middle income countries, where the domestic financial sector might be relatively developed, which raises the question of additionality of official support. In terms of sectors, 60% of support to the private sector goes to energy, particularly to renewables, such as hydro, wind, solar, and geothermal energy. This is followed by transport, telecommunications, and water. Export credit agencies also provide significant amount of financing to developing country infrastructure. Donors further provide about 15% of funding to help improve the enabling environment for investment by building the capacity of partner government ministries, public-private-partnership units, regional organisations, or local administrations. Conclusions include the need for better co-ordination among various agencies or units involved in supporting infrastructure development within donor countries or multilateral institutions as well as the establishment of a transparent monitoring mechanism of DFI activities to ensure additionality and development effectiveness.
    Date: 2014–07–11
  32. By: Mireille NTSAMA ETOUNDI
    Abstract: Ce papier examine l’effet des augmentations de la rente pétrolière dans les pays voisins du Cameroun, sur la demande d’exportations de produits alimentaires en provenance du Cameroun. En utilisant le modèle de gravité de commerce sur données de panel, il ressort que les ressources pétrolières des pays frontaliers au Cameroun sont à l’origine de l’intensification des exportations camerounaises en produits alimentaires vers les pays voisins pétroliers. La sensibilité des exportations aux chocs de revenus pétroliers dans les pays partenaires commerciaux apparait significative, positive et robuste aux différentes spécifications économétriques appropriées aux données bilatérales de commerce. L’avantage comparatif du Cameroun dans la production et l’exportation de produits alimentaires dans la sous-région a été examiné, sur le plan qualitatif, par plusieurs travaux récents. Les analyses récentes concluent par exemple que le Cameroun devrait tirer profit de cette demande en produits vivriers et améliorer sa productivité agricole qui est en dessous de ses potentialités (BAD, 2009 ; OCDE, 2011). En renforçant ses capacités d’offre, la pression exercée sur les prix domestiques du fait de l’excédent de demande en provenance de la sous-région devrait graduellement s’atténuer tout en renforçant les gains directs liés de l’activité commerciale transfrontalière.
    Keywords: rente pétrolière, exportations agricoles, pays frontaliers, CEMAC
    JEL: Q33 O13 F15 C23

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