nep-ene New Economics Papers
on All new papers
Issue of 2014‒09‒08
forty-six papers chosen by
Roger Fouquet
London School of Economics

  1. Market Design for Trading Commoditized Renewable Energy By Heshmati, Almas; Abolhosseini, Shahrouz
  2. The Main Support Mechanisms to Finance Renewable Energy Development By Abolhosseini, Shahrouz; Heshmati, Almas
  3. A Review of Renewable Energy Supply and Energy Efficiency Technologies By Abolhosseini, Shahrouz; Heshmati, Almas´; Altmann, Jörn
  4. The Role of Renewable Energy Consumption and Trade: Environmental Kuznets Curve Analysis for Sub-Saharan Africa Countries By Mehdi Ben Jebli; Slim Ben Youssef; Ilhan Ozturk
  5. A Capacity Market for Electricity Sectors with Promotion of Renewable Energy By Sebastian Schäfer; Lisa Schulten
  6. The cost of failing to install renewable energy in regional Western Australia By Liam Byrnes
  7. Turn on the Lights: Macroeconomic Factors Affecting Renewable in Pakistan By Ihtisham Abdul Malik; Ghamz-e-Ali Siyal; Alias Bin Abdullah; Arif Alam; Khalid Zaman
  8. Measuring resilience in energy systems: Insights from a range of disciplines By Lynette Molyneaux; Colin Brown; Liam Wagner; John Foster
  9. The Electricity Consumption in a Rentier State: Do Institutions Matter ? By Jamal Bouoiyour; Refk Selmi; Muhammad Shahbaz
  10. Price convergence and integration in the Germany, France and Italy electricity markets By Lanouar Charfeddine; Rafik Jbir; Jihane Karboul
  11. Revisiting Electricity Liberalization and Security of Supply: Empirical Evidence By Rabindra Nepal; John Foster; Antonio Carvalho
  12. An empirical analysis of energy demand in Tunisia By Besma Talbi; Duc Khuong Nguyen
  13. Energy Use and Economic Growth in Africa: A Panel Granger-Causality Investigation By Mohamed El Hedi Arouri; Adel Ben Youssef; Hatem M’Henni; Christophe Rault
  14. The Role of Information Communication Technologyand Economic Growth in Recent Electricity Demand: Fresh Evidence from Combine Cointegration Approachin UAE By Muhammad Shahbaz; Rashid Sbia; Helmi Hamdi; Ijaz Ur Rehman
  15. Exploring the Causality Links between Energy and Employment in African Countries By Mohamed El Hedi Arouri; Adel Ben Youssef; Hatem M’Henni; Christophe Rault
  16. Goal Setting and Energy Conservation By Matthew Harding; Alice Hsiaw
  17. Key success factors for the integration of Circular economy by energy sector firms in the early 21st century? A research agenda By Dominique Bonet Fernandez; Gael-Miguel Juillard
  18. Optimal Transition from Coal to Gas and Renewable Power under Capacity Constraints and Adjustment Costs By Oskar Lecuyer; Adrien Vogt-Schilb
  19. Asymmetric and nonlinear passthrough of crude oil prices to gasoline and natural gas prices By Ahmed Atil; Amine Lahiani; Duc Khuong Nguyen
  20. Instabilities in the relationships and hedging strategies between crude oil and US stock markets: do long memory and asymmetry matter? By Walid Chkili; Chaker Aloui; Duc Khuong Nguyen
  21. Price and Income Elasticities of Demand for Oil Products in African Member Countries of OPEC: A Cointegration Analysis By Suleiman Sa ad; Muhammad Shahbaz
  22. Has Oil Pirce Predicted Stock Returns for Over a Century? By Paresh K. Narayan; Nico Katzke
  23. Conditional dependence structure between oil prices and exchange rates: A copula-GARCH approach By Riadh Aloui; Mohamed Safouane Ben Aïssa; Duc Khuong Nguyen
  24. On the relationship between oil price and exchange rates: A wavelet analysis By Gazi Salah Uddin; Aviral Kumar Tiwari; Mohamed Arouri; Frederic Teulon
  25. Date Stamping Historical Oil Price Bubbles: 1876-2014 By Itamar Caspi; Nico Katzke
  26. Is Chad Affected by Dutch or Nigerian Disease? By Sandrine Kablan; Josef Loening
  27. On the determinants of renewable energy consumption: International Evidence By Anis Omri; Duc Khuong Nguyen
  28. Are Environmentally Related Taxes Effective? By Sebastian Miller; Mauricio Vela
  30. The Drivers of Long-run CO2 Emissions: A Global Perspective since 1800 By Henriques, Sofia Teives; Borowiecki, Karol Jan
  31. Revisiting the Environmental Kuznets Curve in a Global Economy By Muhammad Shahbaz; Ilhan Ozturk; Talat Afza; Amjad Ali
  32. Development of a Procedure for the Construction of GEI Emission Abatement Curves Incorporating the Uncertainty Associated to the Main Mitigation Variables By Jacques Clerc; Manuel Diaz; Bruno Campos
  33. Causal interactions between CO2 emissions, FDI, and economic growth: Evidence from dynamic simultaneousequation models By Anis Omri; Duc Khuong Nguyen; Christophe Rault
  34. Selective Reporting and the Social Cost of Carbon By Havranek, Tomas; Irsova, Zuzana; Janda, Karel; Zilberman, David
  35. The Effects of Air Pollution on Educational Outcomes: Evidence from Chile By Sebastian Miller; Mauricio Vela
  38. What is MENA Region Initially Needed: Grow Output or Mitigate CO2 Emissions? By Sahbi Farhani; Muhammad Shahbaz; Rashid Sbia; Anissa Chaibi
  39. Risk Spillovers across the Energy and Carbon Markets and Hedging Strategies for Carbon Risk By Mehmet Balcılar; Rıza Demirer; Shawkat Hammoudeh; Duc Khuong Nguyen
  40. True or Spurious Long Memory in Volatility : Further Evidence on the Energy Futures Markets By Charfeddine Lanouar
  41. Intensity-Based Permit Quotas and the Business Cycle: Does Flexibility Pay Off? By Olli-Pekka Kuuselaa; Gregory S. Amacher; Kwok Ping Tsang
  42. Optimal Adaptation and Mitigation to Climate Change in Small Environmental Economies By Omar Chisari; Sebastian Galiani; Sebastian Miller
  43. Review of the Stochastic Properties of CO2 Futures Prices By Julien Chevallier
  44. Economic policy uncertainty, oil price shocks and GCC stock markets By Mohamed Arouri; Christophe Rault; Frederic Teulon
  45. Determinants of labor shortage - with particular focus on the German environmental sector By Horbach, Jens
  46. Environmental Aspects of Resource Extraction Contracts By Hanna Krings

  1. By: Heshmati, Almas (Centre of Excellence for Science and Innovation Studies (CESIS), and Jönköping University (JIBS)); Abolhosseini, Shahrouz (College of Engineering, TEMEP, Seoul National University, Seoul, Korea)
    Abstract: Information and communication technology plays an important role in achieving a higher level of energy efficiency. In particular, energy efficiency can be achieved by integrating information technology into electricity networks to enable the interaction between suppliers and customers (smart grids). Power generation by renewable energy sources can also benefit from this integration of technologies. Distributed power generation, which will be the basis of renewable energy production, encourages the production of renewable energy resources and, accordingly, decreases transmission loss, increases energy saving, and enhances energy efficiency. Therefore, integrating distributed, renewable energy sources and smart grids within local marketplaces for trading renewable energy in small units can be a promising combination. In this paper, we propose a structure of a marketplace for renewable energy sources, design a market mechanism for trading in this market, and outline the requirements for such a market to function efficiently. Finally, we conclude and present recommendations to policymakers to provide incentives to generators to increase deployment of renewable energy sources and to end users to save electricity and to consume clean energy.
    Keywords: Market design; market mechanism; trading energy; renewable energy; clean energy; energy policy
    JEL: D40 H44 L11 L49 Q13 Q27 Q42
    Date: 2014–08–25
  2. By: Abolhosseini, Shahrouz (College of Engineering, TEMEP, Seoul National University, Seoul, Korea); Heshmati, Almas (Centre of Excellence for Science and Innovation Studies (CESIS), and Jönköping University (JIBS))
    Abstract: Considering that the major part of greenhouse gases is carbon dioxide, there is a global concern aimed at reducing carbon emissions. Additionally, major consumer countries are looking for alternative sources of energy to avoid the impact of higher fossil fuel prices and political instability in the major energy supplying countries. In this regard, different policies could be applied to reduce carbon emissions, such as enhancing renewable energy deployment and encouraging technological innovation and creation of green jobs. There are three main support mechanisms employed by governments to finance renewable energy development programs: feed-in-tariffs, tax incentives, and tradable green certificates. Considering that many of the promising technologies to deploy renewable energy require investment in small-scale energy production systems, these mechanisms could be used to enhance renewable energy development at the desired scale. Employing a carbon emission tax or emission trading mechanism could be considered ideal policies to mitigate emissions at the lowest cost. The comparison of feed-in-tariffs and renewable portfolio standard policies showed that the former is good when a policy to develop renewable energy sources with a low level of risk for investors is considered. However, the latter is an appropriate policy when a market view policy is applied by the government.
    Keywords: Renewable energy; financing renewable energy; feed-in-tariffs; tax incentives; tradable green certificates; carbon emission tax; green jobs
    JEL: H23 L71 O13 O31 Q27 Q42
    Date: 2014–08–25
  3. By: Abolhosseini, Shahrouz (College of Engineering, TEMEP, Seoul National University, Seoul, Korea); Heshmati, Almas´ (Centre of Excellence for Science and Innovation Studies (CESIS), and Jönköping University (JIBS)); Altmann, Jörn (College of Engineering, TEMEP, Seoul National University, Seoul, Korea)
    Abstract: Electricity consumption will comprise an increasing share of global energy demand during the next two decades. In recent years, the increasing prices of fossil fuels and concerns about the environmental consequences of greenhouse gas emissions have renewed the interest in the development of alternative energy resources. In particular, the Fukushima Daiichi accident was a turning point in the call for alternative energy sources. Renewable energy is now considered a more desirable source of fuel than nuclear power due to the absence of risk and disasters. Considering that the major component of greenhouse gases is carbon dioxide, there is a global concern about reducing carbon emissions. In this regard, different policies could be applied to reducing carbon emissions, such as enhancing renewable energy deployment and encouraging technological innovations. Two main solutions may be implemented to reduce CO2 emissions and overcome the problem of climate change: replacing fossil fuels with renewable energy sources as much as possible and enhancing energy efficiency. In this paper, we discuss alternative technologies for enhancing renewable energy deployment and energy use efficiency.
    Keywords: energy resources; renewable energy; energy use efficiency; generation technology; carbon emission; green employment
    JEL: D61 D62 H23 N50 O13 Q52 Q55
    Date: 2014–08–25
  4. By: Mehdi Ben Jebli; Slim Ben Youssef; Ilhan Ozturk
    Abstract: Based on the Environmental Kuznets Curve (EKC) hypothesis, this paper uses panel cointegration techniques to investigate the short and the long-run relationship between CO2 emissions, economic growth, renewable energy consumption and trade openness for a panel of 24 Sub-Saharan Africa countries over the period 1980-2010. The validity of the EKC hypothesis has not been supported for these countries. Short-run Granger causality results reveal that there is a bidirectional causality between emissions and economic growth; bidirectional causality between emissions and real exports; unidirectional causality from real imports to emissions; and unidirectional causality runs from trade (exports or imports) to renewable energy consumption. There is an indirect short-run causality running from emissions to renewable energy and an indirect short-run causality from GDP to renewable energy. In the long-run, the error correction term is statistically significant for emissions, renewable energy consumption and trade openness. The long-run estimates suggest that real GDP per capita and real imports per capita both have a negative and statistically significant impact on per capita CO2 emissions. The impact of the square of real GDP per capita and real exports per capita are both positive and statistically significant on per capita CO2 emissions. For the model with imports, renewable energy consumption per capita has a positive impact on per capita emissions. One policy recommendation is that Sub-Saharan countries should expand their trade exchanges particularly with developed countries and try to maximize their benefit from technology transfer generated by such trade relations as this increases their renewable energy consumption.
    Keywords: Environmental Kuznets Curve; Renewable electricity consumption; International trade; Panel cointegration; Sub-Sahara.
    JEL: C33 F14 Q43 O55
    Date: 2014–08–29
  5. By: Sebastian Schäfer (University of Siegen); Lisa Schulten (University of Marburg)
    Abstract: A capacity mechanism next to the energy-only market provides necessary investment incentives that spot markets lack. The adequate capacity mix can only be achieved by accounting for the current transition phase to electricity generation with a growing share of renewables. We show that an increasing share of renewable energy leads to a comparative advantage for peak-load power plants in a capacity market. This results in higher flexibility as opposed to missing flexibility induced by the merit order effect at the spot market. Suggested capacity mechanisms do not account for the promotion of renewable energy so far. We consider support for renewables via endogenous discrimination of prices paid for offered capacity. This triggers more efficient incentives to direct the capacity mix to its long-run equilibrium where discriminated prices converge to one equilibrium capacity price.
    Keywords: Capacity Markets, Electricity Markets, Resource Adequacy, Reliability Options, Renewable Energy, Merit Order Effect
    JEL: Q41 Q42 Q48 L94
    Date: 2014
  6. By: Liam Byrnes (School of Economics, University of Queensland)
    Abstract: Providing electricity to regional and remote communities is challenging and expensive. Uniform tariff policies result in subsidised electricity costs for consumers in high cost regional areas. Prices have a dual role of incentivising efficient use of resources and distributing income. These dual roles cause tension between efficient resource use and the provision of reliable and affordable electricity access regardless of location and economic circumstances. This study assesses the benefit resulting from deployment of solar PV across distributed networks in the case of regional Western Australia. Installing solar PV reduces the total cost to supply, particularly for diesel powered networks. The reduction reduces the required subsidy and inefficiency associated with the cross-subsidisation of electricity tariffs. However, the results also highlight that requiring technological adaptation to manage intermittent supply prior to connection acts as a disincentive to deployment. If governments and electricity utilities intend to exploit the reductions in cost of supply that solar PV can provide, careful consideration needs to be given to the requirement to pay for adaptation to existing infrastructure prior to connection. Failure to do so will likely reduce incentives for grid connected renewable energy, while simultaneously reinforcing the status quo – and consequently the inefficient allocation of resources.
    Keywords: Energy Economics, Electricity Markets, Energy Policy, Renewable Energy
    JEL: Q48 Q41 Q43
    Date: 2014–09
  7. By: Ihtisham Abdul Malik; Ghamz-e-Ali Siyal; Alias Bin Abdullah; Arif Alam; Khalid Zaman
    Abstract: The objective of the study is to examine the relationship between macroeconomic factors (i.e., population growth; urbanization, industrialization, exchange rate, price level, food production index and live stock production index) and renewable energy in Pakistan over a period of 1975-2012. In addition, this study uses oil rent as an intervening variable to overcome the biasness of the single equation model. The results indicate that macroeconomic factors positively contributed to renewable energy consumption in Pakistan. The causality test indicate that there is a unidirectional causality running towards macroeconomic factors to renewable energy in Pakistan, however, renewable energy Granger cause oil rent but not via other route. In addition, there is bidirectional causality between exchange rate and live stock production in Pakistan. Variance decomposition analysis shows that economic growth has a major contribution to increase renewable energy in Pakistan.
    Keywords: Renewable energy; oil rent; exchange rate; consumer price index; Pakistan.
    Date: 2014–08–29
  8. By: Lynette Molyneaux (School of Economics, University of Queensland); Colin Brown (School of Agriculture and Food Sciences, University of Queensland, Australia); Liam Wagner (School of Economics, University of Queensland); John Foster (School of Economics, University of Queensland)
    Abstract: Economic stability is dependent on the effective functioning and resilience of energy systems. Resilience is a term used across all research disciplines and in everyday discourse. As a concept it purports to serve as a useful indicator of sustainability and robustness, but it has proved difficult to measure. Ecological resilience, psychological resilience, risk management and energy security are all fields of research in which measures of the ability to respond to the unexpected are sought. The goal is to build adaptive capacity but quite different methods have been developed to achieve this end. Research on energy security, in particular, has focused on the security of oil supplies, not resilience or the adaptive capacity of the energy system or the role that renewable energy plays in building such capacity. This paper discusses how different disciplines seek to measure and build resilience and explores its connection with the state or quality of a system’s adaptive capacity. When the parameters of redundancy and diversity are present, resilience is enhanced. For this reason, in energy systems we must understand the size and scope of the key parameters required to facilitate the development of adaptive capacity and to build resilience that can enhance economic stability.
    Keywords: Resilience, Sustainable Energy, Energy Security
    JEL: Q40 Q43 Q48 Q32 Q34
    Date: 2014–08
  9. By: Jamal Bouoiyour; Refk Selmi; Muhammad Shahbaz
    Abstract: The core focus of this paper is to assess the relationship between the electricity consumption and institutions within rentierism phenomenon by incorporating economic growth, urbanization, trade openness and foreign direct investment in the case of Algeria. To this end, we have applied the ARDL bounds testing approach to cointegration and innovative accounting approach (variance decomposition and impulse response methods) over the period of 1971-2012. Our empirical results show that these variables are cointegrated in the long-run. We find that institutions play an important role to explain this cointegration. The response of electricity demand is increasingly negative due to the one standard deviation shock in institutions. This highlights an insightful evidence, providing that the poor governance drawbacks in a rentier state may affect directly electricity consumption or indirectly via urbanization and foreign direct investment. The contribution of economic growth to electricity consumption appears minor (the conservation hypothesis is limitedly supported), while that of trade openness seems insignificant.
    Keywords: Electricity consumption, institutions, rentier state.
    Date: 2014–08–29
  10. By: Lanouar Charfeddine; Rafik Jbir; Jihane Karboul
    Abstract: This paper examines empirically the electricity market integration process for Germany, France and Italy countries by investigating possible price convergence. Two empirical approaches have been considered to investigate this issue : cointegration analysis and state space model with time varying coefficients during the period 06 July 2009 to 15 April 2011. Using both methods, empirical results show that the Germany and France markets are highly integrated. For the Germany and Italy, and France and Italy pairs no price convergence has been detected when the cointegration analysis is employed and when using the time varying coefficients model, empiricl results show evidence for weak convergence.
    Keywords: Electricity market integration, Price convergence, cointegration, time varying coefficients model.
    Date: 2014–08–29
  11. By: Rabindra Nepal (School of Economics, University of Queensland); John Foster (School of Economics, University of Queensland); Antonio Carvalho (Heriot-Watt University)
    Abstract: What effect does firm structure have on the product service quality on offer? We answer this question by empirically assessing the impacts of complete vertical separation, such as ownership unbundling, on the quality of service delivered by a liberalized network industry. Electricity distribution utilities in New Zealand are considered for this purpose. The results show robust evidence that ownership unbundling contributed to a fall in the duration and frequency of supply interruptions in electricity distribution. However, the results also show that unbundling has no effect in reducing distribution network losses. Overall the results highlight the non-simple impacts of unbundling on quality of electricity distribution. We conclude that quality of service may improve when largely accounted in incentive regulation frameworks than completely relying on specific reform measures such as ownership unbundling.
    Keywords: unbundling, ownership, quality, regulation
    JEL: L94
    Date: 2014–08
  12. By: Besma Talbi; Duc Khuong Nguyen
    Abstract: This article assesses the impact of real energy prices on the consumption of different energy sources in Tunisia. We estimate the short-run and long-run energy demand elasticities over the period 1980-2004, where energy demand is specified by a simple partial adjustment model. Our results show that energy demand in Tunisia is generally sensitive to the income level and real prices of energy products. Moreover, the price elasticity and income elasticity differ across energy sources. These findings imply that energy price increases will not only affect energy demand, but also give rise to substitution effects between different forms of energy.
    Keywords: Elasticity, energy demand, partial adjustment model.
    JEL: Q4 C4
    Date: 2014–08–29
  13. By: Mohamed El Hedi Arouri; Adel Ben Youssef; Hatem M’Henni; Christophe Rault
    Abstract: We make use of a bootstrap panel analysis of causality between energy use and economic growth for a sample of sixteen African countries over the period 1988-2010. Our results show that growth and energy use are strongly linked in Africa. However, African countries are heterogeneous and there is no “one way” recommendation about energy-growth relationship that may work for all countries in Africa.
    Keywords: energy use, growth, VAR.
    JEL: Q43 Q53 Q56
    Date: 2014–08–29
  14. By: Muhammad Shahbaz; Rashid Sbia; Helmi Hamdi; Ijaz Ur Rehman
    Abstract: This paper investigates relationship between information communication technology (ICT), economic growth and electricity consumption using data of UAE over the period of 1975- 2011.We have tested the unit properties of variables and the Bayer and Hanck combined cointegration approach for long run relationship. The innovative accounting approach is applied to test the robustness of the VECM Granger causality findings. Our empirical results confirm the existence of cointegration between the series. We find that ICT adds in electricity demand but electricity prices lower it. Income growth increases electricity consumption. The non-linear relationship between ICT and electricity consumption is an Inverted U-shaped. The causality results reveal that ICT and electricity prices Granger cause electricity demand. The feedback effect exists between economic growth and electricity consumption.
    Date: 2014–08–29
  15. By: Mohamed El Hedi Arouri; Adel Ben Youssef; Hatem M’Henni; Christophe Rault
    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: employment, energy consumption, growth, VAR
    JEL: Q43 Q53 Q56
    Date: 2014–08–29
  16. By: Matthew Harding (Department of Economics, Stanford University); Alice Hsiaw (Department of Economics and Accounting, College of the Holy Cross)
    Abstract: This paper develops a theoretical model of consumer demand for an energy conservation program that involves non-binding, self-set goals. We present evidence from a Northern Illinois goal-setting program, aimed at reducing residential electricity consumption, that is difficult to reconcile with standard preferences and is broadly consistent with a model of presentbiased consumers with reference-dependent preferences. We find that the need for commitment is correlated with program adoption, higher pre-adoption consumption, and lower responsiveness to goals. Consumers choosing realistic goals persistently save substantially more, achieving savings of nearly 11%, than those choosing very low or unrealistically high goals.
    Date: 2014–04
  17. By: Dominique Bonet Fernandez; Gael-Miguel Juillard
    Abstract: Circular Economy (CE) is a hot and innovative topic. CE attempts to address practical and effective ways to economic, political, environmental and social current challenges. In this context, energy business strategies are a matter rarely addressed in research literature. The aim of our doctoral research is to identify facilitators and barriers to integration practices of CE in large French industrial companies. We present the context of research, the theoretical framework and the proposed methodology.
    Keywords: Circular Economy, Energy Strategies, France
    Date: 2014–08–29
  18. By: Oskar Lecuyer (Department of Economics and Oeschger Centre for Climate Change Research - University of Bern); Adrien Vogt-Schilb (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, Climate Change Group - The World Bank)
    Abstract: This paper studies the optimal transition from existing coal power plants to gas and renewable power under a carbon budget. It solves a model of polluting, exhaustible resources with capacity constraints and adjustment costs (to build coal, gas, and renewable power plants). It finds that optimal investment in renewable energy may start before coal power has been phased out and even before investment in gas has started, because doing so allows for smoothing investment over time and reduces adjustment costs. Gas plants may be used to reduce short-term investment in renewable power and associated costs, but must eventually be phased out to allow room for carbon-free power. One risk for myopic agents comparing gas and renewable investment is thus to overestimate the lifetime of gas plants - e.g., when computing the levelized cost of electricity - and be biased against renewable power. These analytical results are quantified with numerical simulations of the European Commission's 2050 energy roadmap.
    Keywords: climate change mitigation; path dependence; optimal timing; investment; resource extraction; dynamic efficiency; early-scrapping
    Date: 2014
  19. By: Ahmed Atil; Amine Lahiani; Duc Khuong Nguyen
    Abstract: In this article, we use the recently developed nonlinear autoregressive distributed lags (NARDL) model to examine the pass-through of crude oil prices into gasoline and natural gas prices. Our approach allows us to simultaneously test the short- and long-run nonlinearities through positive and negative partial sum decompositions of the predetermined explanatory variables. It also offers the possibility to quantify the respective responses of gasoline and natural gas prices to positive and negative oil price shocks from the asymmetric dynamic multipliers. The obtained results indicate that oil prices affect gasoline prices and natural gas prices in an asymmetric and nonlinear manner, but the price transmission mechanism is not the same. Important policy implications can be learned from the empirical findings.
    Keywords: oil price shocks, gasoline, natural gas, NARDL model, asymmetric pass-through.
    JEL: C58 Q40 Q47
    Date: 2014–08–29
  20. By: Walid Chkili; Chaker Aloui; Duc Khuong Nguyen
    Abstract: This article uses the DCC-FIAPARCH model to examine the time-varying properties of conditional return and volatility of crude oil and US stock markets as well as their dynamic correlations over the period 1988-2013. Our results indicate that both the long memory and asymmetric behavior characterize the conditional volatility of oil and stock market returns. On the other hand, the dynamic conditional correlations (DCC) between the crude oil and US stock markets are affected by several economic and geopolitical events. When looking at the optimal design of an oil-stock portfolio, we find that investors in the US markets should have more stocks than crude oil asset in order to reduce their portfolio risk. Finally, the use of the DCC-FIAPARCH model that explicitly accounts for long memory and asymmetric volatility effects enables the investors to effectively hedge the risk of their stock portfolios with lower costs, as compared to the standard DCC-GARCH model.
    Keywords: asymmetric volatility, long memory, crude oil, stock returns, hedging strategy.
    JEL: C58 G1 G15 Q43
    Date: 2014–08–29
  21. By: Suleiman Sa ad; Muhammad Shahbaz
    Abstract: This paper analyses the demand for petroleum products in African member countries of OPEC namely Algeria, Angola, Libya and Nigeria over the period of 1980-2007. For this purpose, econometric models based on time series data are generated for individual products so as to capture product specific factors affecting demand. In doing so, the ARDL bounds testing approach to cointegration is applied to examine the long run relationship among the variables. Four specifications such as total petroleum product demand function, gasoline demand function, diesel demand function and kerosene demand functions have been estimated. The review of trends in the consumption and real prices of the various products suggest that demand for oil products has risen fast due to fast rise in income levels of individuals in these countries as compared to price level. Furthermore, results of estimation show mixed evidence about cointegration between the variables in all the countries studied. The evidence from the estimates show that the diesel demand specification provided satisfactory results in terms of producing expected signs than other specifications. The results for the kerosene model was the least satisfactory as most of the coefficients were found with unexpected signs. Finally the overall result indicates that demand for oil products are more responsive to changes in income than the real prices, both in the short and long run. This result is consistent with the previous studies on developing countries. Finally, the policy implication for result show the need for diversification, increase refining capacity and demand management policies in these countries to promote energy efficiency, conservation as well as discourage cross border smuggling of products and encourage private investment into the oil sector.
    Keywords: Petroleum product demand, ARDL procedure
    Date: 2014–08–29
  22. By: Paresh K. Narayan (Centre for Financial Econometrics, School of Accounting, Economics and Finance, Deakin University, Australia); Nico Katzke (Department of Economics, University of Pretoria)
    Abstract: This paper contributes to the debate on the role of oil prices in predicting stock returns. The novelty of the paper is that it considers monthly time-series historical data that span over 150 years (1859:10-2013:12) and applies a predictive regression model that accommodates three salient features of the data, namely, a persistent and endogenous oil price, and model heteroskedasticity. Three key findings are unraveled: First, oil price predicts US stock returns. Second, in-sample evidence is corroborated by out-sample evidence of predictability. Third, both positive and negative oil price changes are important predictors of US stock returns, with negative changes relatively more important. Our results are robust to the use of different estimators and choice of in-sample periods.
    Keywords: Stock returns, Predictability, Oil price
    JEL: C22 E37 G17 Q43
    Date: 2014–08
  23. By: Riadh Aloui; Mohamed Safouane Ben Aïssa; Duc Khuong Nguyen
    Abstract: We study the conditional dependence structure between crude oil prices and U.S. dollar exchange rates using a copula-GARCH approach. Various copula functions of the elliptical, Archimedean and quadratic families are used to model the underlying dependence structure in both bearish and bullish market periods. Over the period from January 2000 to February 2011, we …nd evidence of signi…cant and symmetric dependence for almost all the oil-exchange rate pairs considered. The rise in the price of oil is found to be associated with the depreciation of the dollar. Our results also indicate that Student-t copulas best capture the extreme dependence, and that taking the extreme comovement into account leads to improve the accuracy of VaR forecasts.
    Keywords: Copulas, dependence measures, crude oil price, US dollar ex-
    JEL: C58 F37 G17 Q43
    Date: 2014–08–29
  24. By: Gazi Salah Uddin; Aviral Kumar Tiwari; Mohamed Arouri; Frederic Teulon
    Abstract: We may find numerous works in the existing literature regarding the cohesion between oil prices and exchange rates, yet an exact shape of the relationship remains undefined. By restoring to wavelet analysis and using a rich database from Japan, this study contributes to the literature by investigating the said relationship within the time–frequency space. Over the time horizon, it is being established that the strength of the relationship between oil price and exchange rate keeps changing. If the Bank of Japan needs to control the exchange rate, it should give proper importance to shocks on oil prices, while formulating exchange rate policy.
    Keywords: Oil price, Exchange rates, Wavelets, Japan
    JEL: C40 E31 E32 F44
    Date: 2014–08–29
  25. By: Itamar Caspi (Research Department; Bank of Israel); Nico Katzke (Department of Economics, Stellenbosch University, South Africa; Department of Economics, University of Pretoria)
    Abstract: This paper sets out to date-stamp periods of historic oil price explosivity (or bubbles) using the Generalized sup ADF (GSADF) test procedure suggested by Phillips et al. (2013). The date-stamping strategy used in this paper is effective at identifying periodically collapsing bubbles; a feature found lacking with previous bubble detecting methods. We set out to identify bubbles in the real price and the nominal price-supply ratio of oil for the period 1876 - 2014. The recursive identification algorithms used in this study identifies several periods of significant explosivity, and as such provides future researchers with a reference for studying the macroeconomic impact of historical periods of significant oil price build-ups.
    Keywords: Oil-prices, Date-Stamping Strategy, Periodically Collapsing Bubbles, Explosivity, Flexible Window, GSADF Test, Commodity Price Bubbles
    JEL: C15 C22
    Date: 2014–08
  26. By: Sandrine Kablan; Josef Loening
    Abstract: We examine the effects of the ‘natural resource curse’ on Chad and find little evidence for Dutch disease. Structural vector auto-regression suggests that changes in domestic output and prices are overwhelmingly determined by aggregate demand and supply shocks, and while oil production and high international prices negatively affect agricultural output, the effects are small. Consistent with empirical evidence for neighbouring Cameroon, we observe minimal impact on Chad’s manufacturing sector. We associate our findings with structural underemployment and the inefficient use of existing production factors. In this context, increased public expenditures in tradable sectors present the opportunity to make oil revenues an engine of national development.
    Keywords: Natural resource curse, Dutch disease, Chad, Structural VAR.
    JEL: C30 E32 E61 O11 O13
    Date: 2014–08–29
  27. By: Anis Omri; Duc Khuong Nguyen
    Abstract: Over recent years, renewable energy sources have emerged as an important component of world energy consumption. Little is however known about the determinants of renewable energy consumption. This article tackles this issue for a global panel consisting of 64 countries over the period 1990-2011 by using a dynamic system- GMM panel model. We also consider three homogeneous subpanels which are constructed based on the income level of sample countries (high-, middle-, and low-income subpanels). We mainly find that the increases in CO2 emissions and trade openness are the major drivers of renewable energy consumption. Oil price increases have a smaller but negative impact on renewable energy consumption in the middle-income and global panels. Policy implications of our results are also discussed.
    Keywords: Renewable energy consumption, Dynamic panel data, system-GMM.
    Date: 2014–08–29
  28. By: Sebastian Miller; Mauricio Vela
    Abstract: This paper focuses on the question of whether the magnitude of long-established environmentally related taxes (ERT) is related to countries environmental performance. While environmental taxes efficiencies have previously been discussed, those taxes contribution to reducing pollution and improving environmental quality has not been fully explored. This paper therefore analyzes the effectiveness of environmental taxes by examining the environmental performance of 50 countries from all regions in association with the amount of revenues from environmentally related taxes each country collects. Using a cross-section regression and a panel dynamic regression, the paper finds that countries with higher revenues from these types of taxes also exhibit higher reductions in CO2 emission, PM10 emissions, and energy consumption and production from fossil sources.
    JEL: H23 Q53 Q58
    Date: 2013–11
  29. By: Loganathan, Nanthakumar; Muhammad Shahbaz; Roshaiza Taha
    Abstract: This paper explores how carbon taxation and economic growth affect environment hazards in Malaysia using time series data over the period of 1974-2010. We applied cointegration and causality approaches to determine long term and the direction of causal relationship between these variables. Based on the results, we found the cointegration relationship between the variables. Furthermore, we noted that Kuznets’ theory i.e. inverted-U shaped curve between economic growth and CO2 emissions is valid for Malaysia but the carbon taxation policy is ineffective to control CO2 emissions. The causality analysis revealed that there is bidirectional relationship is found between carbon tax and CO2 emissions. Economic growth Granger causes CO2 emissions and carbon tax is Granger cause of economic growth. To enhance the awareness on pollution issues governments should rely on alternative instruments, which may give benefit not only to taxpayers but also to reduce pollution, which is the pivotal issue to be tackle globally.
    Keywords: economic growth, environment hazards
    Date: 2014–08–29
  30. By: Henriques, Sofia Teives (Department of Business and Economics); Borowiecki, Karol Jan (Department of Business and Economics)
    Abstract: Fossil-fuel-related carbon dioxide emissions have risen dramatically since 1800. We identify the long-run drivers of CO2 emissions for a sample of twelve developed economies using an extended Kaya decomposition. By considering biomass and carbon-free energy sources along with fossil fuels we are able to shed light on the effects of past and present energy transitions on CO2 emissions. We find that at low levels of income per capita, fuel switching from biomass to fossil fuels is the main contributing factor to emission growth. Scale effects, especially income effects, become the most important emission drivers at higher levels of income and also dominate the overall long-run change. Technological change is the main offsetting factor. Particularly in the last decades, technological change and fuel switching have become important contributors to the decrease in emissions in Europe. Our results also individualize the different CO2 historical paths across parts of Europe, North America and Japan.
    Keywords: CO2 emissions; Kaya decomposition; Energy transition
    JEL: N70 O44 Q40 Q54
    Date: 2014–08–25
  31. By: Muhammad Shahbaz; Ilhan Ozturk; Talat Afza; Amjad Ali
    Abstract: The present study deals with an empirical investigation between CO2 emissions, energy intensity, economic growth and globalization using annual data over the period of 1970- 2010 for Turkish economy. We applied unit root test and cointegration approach in the presence of structural breaks. The direction of causality between the variables is investigated by applying the VECM Granger causality approach. Our results confirmed the existence of cointegration between the series. The empirical evidence reported that energy intensity, economic growth (globalization) increase (condense) CO2 emissions. The results also validated the presence of Environmental Kuznets curve (EKC). The causality analysis shows bidirectional causality between economic growth and CO2 emissions. This implies that economic growth can be boosted at the cost of environment.
    Keywords: Carbon dioxide emissions, EKC, economic growth
    JEL: C32 O4 Q56
    Date: 2014–08–29
  32. By: Jacques Clerc; Manuel Diaz; Bruno Campos
    Abstract: The general objective of the study is to develop a methodology for the preparation of greenhouse-gas abatement curves for the energy demand sector, incorporating the uncertainty associated to the variables involved in estimating the marginal abatement costs. Furthermore, this approach will be applied in a case study to the power generation sector as well as to three other demand sectors in six Latin American countries.
    JEL: D22 D53 G21 L11 L60 O14
    Date: 2013–06
  33. By: Anis Omri; Duc Khuong Nguyen; Christophe Rault
    Abstract: In this article, we investigate the causality links between CO2 emissions, foreign direct investment, and economic growth using dynamic simultaneous-equation panel data models for a global panel of 54 countries over the period 1990–2011. We also implement these empirical models for 3 regional sub-panels: Europe and Central Asia, Latin America and the Caribbean, and the Middle East, North Africa, and sub-Saharan Africa. Our results provide evidence of bidirectional causality between FDI inflows and economic growth for all the panels and between FDI and CO2 for all the panels, except Europe and North Asia. They also indicate the existence of unidirectional causality running from CO2 emissions to economic growth, with the exception of the Middle East, North Africa, and sub-Sahara panel, for which bidirectional causality between these variables cannot be rejected. These empirical insights are of particular interest to policymakers as they help build sound economic policies to sustain economic development.
    Keywords: CO2 emissions, FDI inflows, economic growth
    JEL: C33 C51 E22 O13 Q43 Q56
    Date: 2014–08–29
  34. By: Havranek, Tomas; Irsova, Zuzana; Janda, Karel; Zilberman, David
    Keywords: Social and Behavioral Sciences, Social cost of carbon, climate policy, integrated assessment models, meta-analysis, selective reporting, publication bias
    Date: 2014–08–25
  35. By: Sebastian Miller; Mauricio Vela
    Abstract: In addition to the morbidity and mortality concerns of outdoor air pollution, studies have shown that air pollution also generates problems for children`s cognitive performance and human capital formation. High concentrations of pollutants can affect children’s learning process by exacerbating respiratory illnesses, fatigue, absenteeism and attention problems. The purpose of this work is to analyze the possible contemporary effects of PM10 and other different air pollutants on standardized test scores in Chile. It examines results for 3,880 schools in the Metropolitan, Valparaiso and O’Higgins regions for children in fourth, eight and tenth grades between 1997 and 2012. Data for particulate matter (PM10 and PM2. 5), carbon monoxide (CO), nitrogen oxide (NOx) and ozone (O3) were interpolated at school level using a kriging methodology. The results suggest that higher annual P M10 and O3 levels are clearly associated with a reduction in test scores. Nonetheless, as of 2012 many municipalities in these Chilean regions are still exceeding the annual P M10 international standard quality norm (50 micrograms per cubic meter) by 15 micrograms per cubic meter on average. Efforts to reduce pollution below this norm in the most polluted municipalities would account for improvements in reading and math test scores of 3. 5 percent and 3. 1 percent of a standard deviation, respectively.
    JEL: H23 I25 Q51 Q53
    Date: 2013–12
  36. By: Thai-Thanh Dang; Annabelle Mourougane
    Abstract: The objective of this paper is to estimate time variant shadow prices for CO2, SOx, NOx and PM10 in 19 OECD countries over the period 1990-2008 relying on an output distance function approach. Shadow prices for pollutants are found to vary widely across countries, depending on national environmental regulations, the use of inefficient abatement technologies and the structure of the economy. All countries but Korea experienced a decline in CO2 and NOx prices over the period 1990-2008, with the bulk of the decrease occurring since 2000. This suggests that most OECD countries have strengthened their regulatory framework and encouraged the adoption of clean technologies since the 2000s. Estimates of shadow prices of PM10 appear to be extremely variable across countries. Contrary to what is observed for CO2 and NOx, steep declines have occurred in both 1990-2000 and 2000-2008 sub-periods. The empirical work undertaken in this paper could easily be replicated to other countries, and is relatively parsimonious in terms of data.
    Date: 2014–08–29
  37. By: Thai-Thanh Dang; Annabelle Mourougane
    Abstract: The objective of this paper is to estimate the effect on MFP of air pollution in 7 ASEAN economies (Cambodia, Indonesia, Lao PDR, Malaysia, Philippines, Thailand and Vietnam) and China. For this purpose, standard measures of MFP are corrected for the impact of pollution applying the framework developed by Brandt et al. (2013), and valuing pollution through country-specific time-varying shadow price estimates for CO2, SOx, NOx and PM10, derived from an output distance function approach. Shadow prices of pollutants, the opportunity cost of abating pollution in the form of reduced output, are found to vary widely across economies, depending on national environmental regulations, the use of inefficient abatement technologies, and the structure of the economy. In all countries but Cambodia, shadow prices of the various pollutants experience a downward trend since the Asian crisis, suggesting that ASEAN countries and China have strengthened their regulatory framework and encouraged the adoption of clean technologies. Accounting for pollution leads to very different adjustments to standard MFP measures across countries. In most countries the adjustment is positive, suggesting that standard MFP measures have tended to underestimate the true measure. Such correction would be above 2 percentage points in Lao PDR and the Philippines. It is estimated to be around 1 percentage point in China, Indonesia and Thailand and about half that size in Malaysia. It would be negative in Cambodia in this country and nil in Vietnam.
    Date: 2014–08–29
  38. By: Sahbi Farhani; Muhammad Shahbaz; Rashid Sbia; Anissa Chaibi
    Abstract: We contribute to the economic growth–CO2 emissions literature in the MENA region by focusing on both production and environmental functions. Adopting an original analytical framework, our empirical investigation parallels two approaches. The first one follows the studies by Lean and Smyth (2010a) and Sadorsky (2012) which examine the dynamic interaction of energy consumption and trade openness using production function. The second one extends the recent works by Halicioglu (2009), Jalil and Mahmud (2009), and Jayanthakumaran et al. (2012) which attempt to introduce energy consumption and trade openness in the environmental function as a solution to circumvent omitted variable bias. Our findings suggest that MENA countries should adopt policies to control the increase of pollution as well as to stabilize the productivity growth. One of these policies is to increase the share of renewable energy relative to non-renewable energy sources.
    Keywords: Energy; Economic growth; CO2 emissions; Panel data analysis
    Date: 2014–08–29
  39. By: Mehmet Balcılar; Rıza Demirer; Shawkat Hammoudeh; Duc Khuong Nguyen
    Abstract: This study examines the risk spillovers between energy futures prices and Europe-based carbon futures contracts. We use a Markov regime-switching dynamic correlation, generalized autoregressive conditional heteroscedasticity (MSDCC- GARCH) model in order to capture the time variations and structural breaks in the spillovers. We further evaluate the optimal weights, hedging effectiveness, and dynamic hedging strategies for the MS-DCC-GARCH model based on both the regime dependent and regime independent optimal hedge ratios. We finally complement our analysis by examining the in- and out-of sample hedging performances for alternative strategies. Our results mainly show significant volatility and time-varying risk transmission from energy markets to carbon market. We also find that spot and futures segments of the emission markets exhibit time-varying correlations and volatile hedging effectiveness. These results have important investment and policy implications.
    Keywords: Multivariate regime-switching; time-varying correlations; hedging; CO2 allowance prices.
    JEL: C32 G11 G19 Q47 Q54
    Date: 2014–08–29
  40. By: Charfeddine Lanouar
    Abstract: The main goal of this paper is to investigate whether the long memory behavior observed in many volatility energy futures markets series is a spurious behavior or not. For this purpose, we employ a wide variety of advanced volatility models that allow for long memory and/or structural changes : the GARCH(1,1), the FIGARCH(1,d,1), the Adaptative-GARCH(1,1,k), and the Adaptative-FIGARCH(1,d,1,k) models. To compare forecasting ability of these models, we use out-of- sample forecasting performance. Using the crude oil, heating oil, gaso- line and propane volatility futures energy time series with one month and three month's maturities, we found that ve out of the eight time series are characterized by both long memory and structural breaks. For these series, dates of breaks coincide with some majors economics and nancial events. For the three others time series, we found strong evidence of long memory in volatility.
    Keywords: Long Memory, Structural Breaks, Fractional Integra- tion, Volatility, Volatility Forecasting.
    Date: 2014–08–29
  41. By: Olli-Pekka Kuuselaa; Gregory S. Amacher; Kwok Ping Tsang
    Abstract: Tradable permit markets for carbon dioxide (C02) emissions respond to short-run fluctuations in economic activity. To provide stability, both price and quantity interventions have been proposed. This paper focuses on the relative performance of fixed versus intensity allowances in the presence of both productivity and energy price uncertainty. Both instruments achieve the same steady-state emissions reduction target of 20 percent, which is similar to the current policy proposals, and the regulator then chooses the allowance policy that has the lowest expected abatement cost. A standard real business cycle (RBC) model is used to solve for the expected abatement cost under both policies. Expected cost outcomes are compared using data from the U. S. economy as the baseline scenario. Unlike previous studies, this paper’s results show that, under a reasonable model calibration, fixed allowances outperform intensity allowances by a cost difference of as much as 30 percent.
    JEL: E32 Q54 Q58
    Date: 2013–10
  42. By: Omar Chisari; Sebastian Galiani; Sebastian Miller
    Abstract: This paper compares the optimal dynamic choices between policies of mitigation and adaptation for three economies: Brazil, Chile and the United States. The focus is on the optimal role of mitigation and adaptation for “environmentally small economies,” i. e. , economies that are witnessing an exogenous increase in emissions to which they are contributing very little. The simulations lead to three main conclusions. First, small economies should concentrate their environmental efforts, if any, on adaptation. This is not a recommendation that such economies indulge in free-riding. Instead, it is based on considerations of cost effectiveness, ceteris paribus. Second, small economies that are unable to spend enough on adaptation may end up spending less on mitigation owing to their impoverishment as a result of negative climate shocks. Third, higher mitigation expenditures may arise not only as a result of greater optimal adaptation expenditures, but also because of increased adaptation to the incentives for mitigation provided by richer countries.
    JEL: Q52 Q54
    Date: 2013–10
  43. By: Julien Chevallier
    Abstract: In this paper, we review the extant mathematical and environmental economics literatures on the stochastic properties of CO2 emission allowance futures prices. We explain the main findings arising from this literature from both continuous- and jump-diffusion models. Based on the Activity Signature Fuction by Todorov and Tauchen (2010,2011), our review shows that the Brownian motion shall be dismissed when modeling CO2 futures, in sharp contrast with the bulk of previous literature on this topic. The central result is that the evolution of the carbon futures price can be described in terms of a pure jump-diffusion process. For instance, important cases of informational shocks leading to allowance price jump can be addressed when modeled as an appropriately sampled, centered Lévy or Poisson process.
    Keywords: Carbon Price; Stochastic Modeling; Activity Signature Function.
    JEL: C14 C32 G1 Q4
    Date: 2014–08–29
  44. By: Mohamed Arouri; Christophe Rault; Frederic Teulon
    Abstract: We contribute to the literature by studying of economic policy uncertainty (EPU) for major net oil importers (USA, Europe and China) on Gulf Cooperation Council (GCC) stock markets. We use panel data methods to estimate different specification. We find that (i) an increase in EPU affect negatively stock returns (ii) this effect is persistent and interacts with oil price changes and (iii) an increase in EPU has a delayed positive effect on volatility.
    Keywords: Economic policy uncertainty (EPU), GCC stock markets, Oil price, Volatility.
    Date: 2014–08–29
  45. By: Horbach, Jens
    Abstract: "Despite the ongoing discussion on labor shortage in the German economy there is still a lack of empirical analyses of this problem based on adequate econometric methods. The paper explores the determinants of labor shortage in the environmental sector supplying products and services that help to reduce environmental impacts and energy use. Labor shortages occur when the price adjustment mechanism is too slow to balance labor demand and supply. The empirical analysis of labor shortage uses recent data of the establishment panel of the Institute for Employment Research in Nuremberg. A descriptive analysis shows that the environmental sector seems to be over-proportionally affected by labor shortage. Following the results of an econometric analysis innovative firms are significantly more likely to be characterized by labor shortage problems. For climate protection technologies, analytics/consulting or environmental research and development labor shortage seems to result from the respective innovative activities of the firms requiring highskilled and specialized staff whereas labor shortage in the recycling sector is due to a lack of low-paid personnel. Further econometric estimations show that firms characterized by labor shortage problems are significantly more likely to pay wages above average." (Author's abstract, IAB-Doku) ((en))
    Keywords: Arbeitskräftebedarf, Fachkräfte, Arbeitskräftemangel, IAB-Betriebspanel, regenerative Energie, Umweltschutzindustrie, Ökologie
    JEL: J23 J63 Q55 C35
    Date: 2014–08–28
  46. By: Hanna Krings (University of Aachen)
    Abstract: This paper analyzes resource partnerships and their influence on the environmental quality in a resource-rich country by introducing incomplete contracts, imperfect property rights protection, and a lack of valuation for the environment by the government in the South. Employing numerical simulations, I determine the equilibrium extraction rate, the applied extraction technology, and the environmental quality in dependence of the state of democracy in the resource-rich country. In contrast to what one might expect, under certain circumstances it can be environmentally beneficial to have incomplete contracts that induce the utilization of a suboptimal technology for resource extraction. Further, reducing the holdup problem by shifting bargaining power to the North, is only desirable if the environmental quality in- creases with a better extraction technology.
    Keywords: Resource Extraction, Environment, North-South Trade
    JEL: F18 Q37 Q56
    Date: 2014

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