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on Energy Economics |
| By: | Audoly, Richard; Vogt-Schilb, Adrien; Guivarch, Celine |
| Abstract: | This paper covers three policy-relevant aspects of the carbon content of electricity that are well established among integrated assessment models but under-discussed in the policy debate. First, climate stabilization at any level from 2 to 3°C requires electricity to be almost carbon-free by the end of the century. As such, the question for policy makers is not whether to decarbonize electricity but when to do it. Second, decarbonization of electricity is still possible and required if some of the key zero-carbon technologies -- such as nuclear power or carbon capture and storage -- turn out to be unavailable. Third, progressive decarbonization of electricity is part of every country's cost-effective means of contributing to climate stabilization. In addition, this paper provides cost-effective pathways of the carbon content of electricity -- computed from the results of AMPERE, a recent integrated assessment model comparison study. These pathways may be used to benchmark existing decarbonization targets, such as those set by the European Energy Roadmap or the Clean Power Plan in the United States, or inform new policies in other countries. The pathways can also be used to assess the desirable uptake rates of electrification technologies, such as electric and plug-in hybrid vehicles, electric stoves and heat pumps, or industrial electric furnaces. |
| Keywords: | Climate Change Mitigation and Green House Gases,Energy Production and Transportation,Environment and Energy Efficiency,Energy and Environment,Transport Economics Policy&Planning |
| Date: | 2014–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7075&r=ene |
| By: | Frédéric Branger (CIRED and AgroParistech ENGREF (France)); Philippe Quirion (CIRED and CNRS (France)) |
| Abstract: | We analyse variations of carbon emissions in the European cement industry from 1990 to 2011, at the European level (EU 27), and at the national level for six major producers (Germany, France, Spain, United Kingdom, Italy and Poland). We apply a Log-Mean Divisia Index (LMDI) method, crossing data from three databases: the Getting the Numbers Right (GNR) database developed by the Cement Sustainability Initiative, the European Union Transaction Log (EUTL), and the Eurostat International Trade database. Our decomposition method allows disentangling seven channels of emissions change: activity, clinker trade, clinker share, alternative fuels, thermal and electric energy efficiency, and electricity decarbonisation. We find that, apart from a slow trend of emissions reductions coming from technological improvements (first from a decrease in the clinker share, then from an increase in alternative fuels), most of the emissions changes can be attributed to the activity effect. Using counterfactual scenarios, we estimate that the introduction of the EU ETS brought small but positive technological abatement (2.0% ± 1.1% between 2005 and 2011). Moreover, we find that the European cement industry have ained 3.5 billion euros of “overallocation profits”, mostly due to the slowdown of production. Based on these findings, we advocate for output-based allocations, based on a stringent hybrid clinker and cement benchmarking. |
| Keywords: | Cement Industry, LMDI, EU ETS, Abatement, Overallocation, Windfall Profits, Overallocation Profits, Carbon Emissions, Energy Efficiency |
| JEL: | Q4 Q48 Q55 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.77&r=ene |
| By: | Adnen Ben Nasr (Laboratoire BESTMOD, ISG de Tunis, Universite de Tunis, Tunisia.); Rangan Gupta (Department of Economics, University of Pretoria, South Africa.); Joao Ricardo Sato (Center of Mathematics, Computation and Cognition, Universidade Federal do ABC,Brazil.) |
| Abstract: | There exists a huge international literature on the, so-called, Environmental Kuznets Curve (EKC) hypothesis, which in turn, postulates an inverted u-shaped relationship between environmental pollutants and output. The empirical literature on EKC has mainly used test for cointegration, based on polynomial relationships between pollution and income. Motivated by the fact that, measured in per capita CO2 equivalent emissions, South Africa is the world’s most carbon-intensive non-oil-producing developing country, this paper aims to test the validity of the EKC for South Africa. For this purpose, we use a century of data (1911-2010), to capture the process of development better compared to short sample-based research; and the concept of co-summability, which is designed to analyze non-linear long-run relations among persistent processes. Our results, however, provide no support of the EKC for South Africa, implying that to reduce emissions without sacrificing growth, policies should be aimed at promoting energy efficiency. |
| Keywords: | Environmental Kuznets Curve, CO2 emissions; Output; Co-summability; South Africa |
| JEL: | C01 C22 Q53 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201466&r=ene |
| By: | James A. Lennox (Fondazione Eni Enrico Mattei (FEEM)); Jan Witajewski (Fondazione Eni Enrico Mattei (FEEM)) |
| Abstract: | We develop a theoretical model of directed technical change in which clean (zero emissions) and dirty (emissions-intensive) technologies are embodied in long-lived capital. We show how obsolescence costs generated by technological embodiment create inertia in a transition to clean growth. Optimal policies involve higher and longer-lasting clean R&D subsidies than when technologies are disembodied. From a low level, emissions taxes are initially increased rapidly, so they are higher in the long run. There is more warming. Introducing spillovers from an exogenous technological frontier representing non-energy-intensive technologies reduces mitigation costs. Optimal taxes and subsidies are lower and there is less warming. |
| Keywords: | Climate Change Mitigation, Directed Technical Change, Capital-Embodiment, Investment-Specific Technological Change, Obsolescence |
| JEL: | O33 O44 Q54 Q55 Q58 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.73&r=ene |
| By: | Surender Kumar (Department of Business Economics, University of Delhi); Hidemichi Fujii (Faculty of Environmental Studies, Nagasaki University); Shunsuke Managi (Graduate School of Environmental Studies, Tohoku University) |
| Keywords: | Fossil fuels, Renewable energy, Morishima elasticity of substitution, Directional distance function, shadow price of CO2, OECD countries |
| JEL: | L60 Q20 Q42 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:kch:wpaper:sdes-2014-8&r=ene |
| By: | Xiao, Jingjie; Liu, Andrew; Pekny, Joseph |
| Abstract: | Retail electricity rates have been kept flat for the past century due to the lack of advanced metering technology and infrastructure. The flat-rate structure prevents consumers from responding to the fluctuation of actual costs of electricity generation, which varies hourly (or even minute-by-minute). The absence of demand response leads to an electricity system that is overly built with costly assets, solely to maintain system reliability. One of the core visions of the future electricity system, referred to as Smart Grid, is to use advanced metering infrastructure (AMI) and information technology to enable dynamic electricity rates. The main goal of this paper is to present an approximate dynamic programming (ADP) based modeling and algorithm framework that can make home energy management systems capable of optimally managing the appliance usage using the information of anticipated whole electricity prices. The other goal of the paper is to use the modeling framework to provide numerical evidence to the debate that if dynamic rate structure is superior than the current flat rate structure in terms of reducing peak demand and overall electricity costs. |
| Keywords: | Electricity Markets, Electricity Pricing, Demand side management, dynamic programming |
| JEL: | C6 C61 Q41 Q47 Q48 |
| Date: | 2012–11–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:58781&r=ene |
| By: | Jussila Hammes , Johanna (VTI) |
| Abstract: | European Union’s (EU) energy legislation from 2009 is still being implemented in the Member States. We study analytically the Renewable Energy Directive and the Fuel Quality Directive’s provisions for the transport sector. The former Directive imposes a biofuel mandate and allows double counting of some biofuels. The latter Directive imposes a Low Carbon Fuel Standard (LCFS). We show that either the biofuel mandate or the LCFS is redundant. Double counting makes the biofuel mandate easier to fulfil but also depresses the price of biofuels. Production of the doubly counted biofuels increases nevertheless and production of the single-counted biofuels falls. Given the type of technical change studied, double counting spurs technical development of the doubly counted biofuels. The LCFS directs support towards those biofuels with lowest life-cycle carbon emissions. The redundant policy instrument, the biofuel mandate or the LCFS, only creates costs but no benefits and should be abolished. Double counting makes the biofuel mandate non-cost-efficient and should be reconsidered. |
| Keywords: | Biofuel mandate; Low carbon fuel standard; Double counting; Technical change; European energy legislation |
| JEL: | D61 H21 H23 |
| Date: | 2014–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2014_019&r=ene |
| By: | Ali, Mohsin; Masih, Mansur |
| Abstract: | This paper investigates the time-varying relationship between the oil price and disaggregated stock market of India using DCC-MGARCH and Continuous Wavelet Transformation methodologies. Our findings reveal the evolving relationship between the oil price and disaggregated stock market. The correlations are generally volatile before the 2007-08 crisis but since then the correlations are positive implying no diversification benefits for the investors during rising oil prices. Since, emerging markets in general, and India in particular, is expected to increase its share of oil consumption in the world’s energy market (due to rapid expansion), therefore for the stock market to grow, especially the oil-intensive industries, we recommend the government should increase its reliance on alternative energy resources such as coal and renewables. Furthermore, as rising oil prices can also have its adverse effect through exchange rate channel, we suggest the monetary policies should be time varying to manage the oil inflationary pressures arising out of extreme volatility in the oil prices. |
| Keywords: | DCC-GARCH, CWT, Disaggregated stock market, India, Oil price shocks, Diversification |
| JEL: | C22 C58 E44 G11 |
| Date: | 2014–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:58828&r=ene |
| By: | Victoria Shestalova; Chiara Criscuolo; Nick Johnstone; Carlo Menon |
| Abstract: | This study assesses the role of feed-in tariffs (FITs) and renewable energy certificates (RECs) in creating incentives for cross-border investments and for investments in particular technological portfolios via M&A. The analysis explores the dataset on M&As in alternative energy sources worldwide over 2005‑2011. The results suggests that FITs encourage more diversified M&A than RECs. With respect to foreign investment, the study finds a linear relationship between FITs and cross-border M&As in the wind energy sector, but an inverted U-shaped relationship in the solar energy sector. One possible explanation for the latter may lie in reduced policy credibility due to the public finance implications of ‘generous’ FITs. Another possible explanation for this finding concerns the use of high solar FITs by countries whose natural conditions provide little comparative advantage in solar energy, suggesting that low profitability and limited potential of solar energy in those countries might have deterred the entry of foreign investors. |
| JEL: | G34 Q42 Q48 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:cpb:discus:288&r=ene |
| By: | MAT RAHIM, SITI ROHAYA |
| Abstract: | This paper examine whether asymmetrics cointegration present in the relationship between barley and crude oil price. The result suggest that an asymmetric cointegration statistically found barley price and oil price are cointegrated and adjustment mechanisms exist in the case between these two variables. |
| Keywords: | barley price, oil price, asymmetrics cointegration, threshold adjustment |
| JEL: | C32 C36 C5 F1 |
| Date: | 2014–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:58447&r=ene |
| By: | Ratti, Ronald A.; Vespignani, Joaquin L. |
| Abstract: | Hamilton identifies 1973 to 1996 as “the age of OPEC†and 1997 to the present as “a new industrial age.†During 1974-1996 growth in non-OPEC oil production Granger causes growth in OPEC oil production. OPEC oil production decreases significantly with positive shocks to non-OPEC oil production in the earlier period, but does not do so in the “new industrial ageâ€. In the “new industrial age†OPEC oil production rises significantly with an increase in oil prices, unlike during “the age of OPEC†period. OPEC oil production responds significantly to positive innovations in global GDP throughout. Over 1997:Q1-2012:Q4 the negative effect on real oil price of positive shocks to non-OPEC oil production is larger in absolute value than that of positive shocks to OPEC oil production. The cumulative effects of structural shocks to non-OPEC oil production and to real oil price on OPEC oil production are large. The cumulative effects of structural shocks to OPEC production and real oil price on non-OPEC production are small. Results are robust to changes in model specification. An econometric technique to predict OPEC oil production provides support for the results from the SVAR analysis. Results are consistent with important changes in the global oil market. |
| Keywords: | OPEC production, non-OPEC, oil Price, global oil market |
| JEL: | E0 E1 E10 Q4 |
| Date: | 2014–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59527&r=ene |
| By: | Ghassen El Montasser (Ecolesuperieure de Commerce de Tunis, Campus Universitaire de la Manouba - 2010 La Manouba, Tunisia.); Kenza Aggad (Department of Economics, University of Pretoria, South Africa.); Louise Clark (Department of Economics, University of Pretoria, South Africa.); Rangan Gupta (Department of Economics, University of Pretoria, South Africa.); Shannon Kemp (Department of Economics, University of Pretoria, South Africa.) |
| Abstract: | This paper investigates the causality between oil price and economic uncertainty in India. In order to test for this relationship, we collect data on the Brent crude oil price as well as the crude oil ETF volatility index. We also use the policy-related economic uncertainty index as well as the stock market volatility index for India. Our results suggest that the standard Granger causality test rejects the hypothesis of causality between oil price changes and economic uncertainty in India. As a result of the shortcoming of the standard Granger test in the presence of parameter instability, we perform Rossi’s (2005) test. It shows that the Brent crude oil price does not have a causal impact on India’s economic uncertainty but the crude oil ETF volatility index does. Clearly, oil and India’s economic uncertainty go hand-in hand. These findings can thus be used in the context of policy recommendation. |
| Keywords: | Economic policy uncertainty, stock market uncertainty, oil price, time-varying causality, India |
| JEL: | C14 C32 D80 E20 E66 G18 Q43 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201467&r=ene |
| By: | Shahateet, Mohammed Issa; Al-Majali, Khalid Ali; Al-Hahabashneh, Fedel |
| Abstract: | This paper aims at determining the relationship between economic growth and energy consumption in Jordan within the neo-classical productivity theory framework where capital, labour and energy are treated as separate production factors. It constructs an econometric model using annual time series data covering the period 1970– 2011. After estimating the parameters of the model, it uses causality tests to examine the existence and direction of causality between output growth and production factors including energy consumption. Empirical findings suggest that there exists Granger causality running from GDP to energy consumption, but there is no Granger causality running from energy consumption to GDP. The implication being that energy supply constraints could be introduced with little or no impact on economic growth. This unidirectional causality provides empirical evidence that Jordan is a less energy-dependent economy. Such findings undermine the theory of energy conservation policies and support the Government policies that aim at raising the prices of energy and reducing public demand for energy consumption mainly to reduce the deficit of government budget, foreign debt, and its services. |
| Keywords: | C33; O4; O13; Q43 |
| JEL: | C32 C51 C54 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59067&r=ene |
| By: | Misund, Bard (UiS); Osmundsen, Petter (UiS); Sikveland, Marius (UiS) |
| Abstract: | This paper studies financial statement information from the 50 largest international oil and gas companies during 1992 to 2011 and evaluates their relation to market values. In particular, we examine how this relationship is affected by accounting method choice (successful efforts versus full cost accounting) and vertical integration. We find that net income is more value relevant for full cost companies compared to companies that use the successful efforts accounting method. Furthermore, the value relevance of oil and gas reserves is different among successful efforts and full cost companies. Larger reserves among successful efforts companies are awarded a premium by stock markets. The value relevance of book value is significantly lower for integrated companies than for pure upstream companies. We also find that the value relevance of oil and gas reserves is different for upstream and integrated companies. |
| Keywords: | Company Valuation; Value-relevance; Financial Analysis; Oil and Gas Industry |
| JEL: | F23 G00 L71 M41 |
| Date: | 2014–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:stavef:2014_018&r=ene |
| By: | Raffaele Miniaci; Carlo Scarpa; Paola Valbonesi |
| Abstract: | In this paper we discuss a number of ways to define and measure the affordability of energy consumption, and we examine the emergence of fuel poverty in Italy in the period from 1998 to 2011. The paper examines the eligibility criteria for claiming the benefits available to support energy consumption for vulnerable families and it identifies the potential beneficiaries. The study assesses the appropriateness of the eligibility criteria by comparing the population targeted by the policy with the population actually living in fuel poverty. A simulation exercise, using the hypothetical scenario most likely to result in energy benefits being made available, shows that, regardless of the affordability index adopted, the provision of state energy benefits has little impact on fuel poverty. |
| Keywords: | fuel poverty; affordability; energy benefits; vulnerable consumers |
| JEL: | D12 I32 I38 Q4 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bcu:iefewp:iefewp66&r=ene |
| By: | Brockwell, Erik (Department of Economics, Umeå School of Business and Economics) |
| Abstract: | This thesis consists of an introductory part and three papers. Paper [I] examines how taxes affect consumption of commodities that are detrimental to health and the environment. Specifically, this paper examines if a tax increase leads to a significantly larger change in consumption than a producer price change, which is referred to as the signaling effect from taxation. The analysis uses aggregated cross-sectional time series data and information on major legislation introductions in Sweden, Denmark and the United Kingdom from 1970 to 2009. We find the main result to be that the signaling effect is significant for “Electricity” in Sweden and Denmark and significant for “Electricity” and “Petrol” in the United Kingdom. Paper [II] examines how sin taxation changes long-term consumer behavior regarding commodities which are deemed harmful for both health and the environment. These include tobacco, alcoholic beverages, sugar and confectionary, household energy, and motor fuel. Specifically, we examine the signaling effect from taxation which is seen if a tax increase leads to a significantly larger change in consumption than a producer price change. The empirical analysis is conducted by a US panel data study, during the period 1988-2012 for the four US census regions, using the Almost Ideal Demand System (AIDS). We find the main result to be that the signaling effect from taxation is significant for tobacco as well as for electricity and motor fuel. Paper [III] examines state and industry responses on consumption of cigarettes and petroleum in the United States from 1998-2012. Upon facing consumption choices, the consumer faces two competing sets of messages, one from the government and another from the industry. The objective of the state is to steer consumption in the right direction due to the harmful effects from consumption and asymmetric information among consumers. This is done mainly via taxation and state media expenditures. The industry, on the other hand, seeks to incentivize the public to ignore or reject state research and signals as well as maximizing net economic returns. This is mainly done via industry media and lobbying expenditures. We find that the main results indicate, for cigarettes, industrial media and lobbying expenditure is statistically significant on consumption. For petroleum, we find that producer prices, state media expenditure, and industrial lobbying expenditure are statistically significant on consumption. |
| Keywords: | Taxation; legislation; regulation; health; environment; tobacco; alcohol; petroleum; electricity; gas; sugar; consumption; prices; signaling effect; almost ideal demand system; public policy; panel data; media expenditure; lobbying; vector error correction model |
| JEL: | C22 C23 D12 D72 D80 H23 I18 Q58 |
| Date: | 2014–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:umnees:0894&r=ene |
| By: | Martijn I. Dr�es (University of Amsterdam, VU University Amsterdam, and the Amsterdam School of Real Estate, the Netherlands); Hans R.A. Koster (VU University Amsterdam) |
| Abstract: | In many countries, wind turbines are constructed as part of a strategy to reduce dependence on fossil fuels. In this paper, we measure the external effect of wind turbines on the transaction prices of nearby houses. A unique house price dataset covering the period 1985-2011 is used, including the exact location of all wind turbines built in the Netherlands. We find that house prices within a two kilometer radius of a turbine, after it has been constructed, decrease by about 1.4 to 2.3 percent on average. We find anticipation effects up to three years in advance of the construction of a wind turbine. We provide further evidence that the external costs of a wind turbine are at least 10 percent of its construction cost. |
| Keywords: | renewable energy; wind turbines; externalities; house prices |
| JEL: | R31 Q42 Q15 L94 |
| Date: | 2014–09–18 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20140124&r=ene |
| By: | Ranson, Matthew (Abt Associates Inc); Stavins, Robert N. (Harvard University) |
| Abstract: | The last ten years have seen the growth of linkages between many of the world's cap-and-trade systems for greenhouse gases (GHGs), both directly between systems, and indirectly via connections to credit systems such as the Clean Development Mechanism. If nations have tried to act in their own self-interest, this proliferation of linkages implies that for many nations, the expected benefits of linkage outweighed expected costs. In this paper, we draw on the past decade of experience with carbon markets to test a series of hypotheses about why systems have demonstrated this revealed preference for linking. Linkage is a multi-faceted policy decision that can be used by political jurisdictions to achieve a variety of objectives, and we find evidence that many economic, political, and strategic factors--ranging from geographic proximity to integrity of emissions reductions--influence the decision to link. We also identify some potentially important effects of linkage, such as loss of control over domestic carbon policies, which do not appear to have deterred real-world decisions to link. These findings have implications for the future role that decentralized linkages may play in international climate policy architecture. The Kyoto Protocol has entered what is probably its final commitment period, covering only a small fraction of global GHG emissions. Under the Durban Platform for Enhanced Action, negotiators may now gravitate toward a hybrid system, combining top-down elements for establishing targets with bottom-up elements of pledge-and-review tied to national policies and actions. The incentives for linking these national policies are likely to continue to produce direct connections among regional, national, and sub-national cap-and-trade systems. The growing network of decentralized, direct linkages among these systems may turn out to be a key part of a future hybrid climate policy architecture. |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp14-012&r=ene |
| By: | Maria Jose Gil-Molto; Dimitrios Varvarigos |
| Abstract: | We compare economic and environmental outcomes under mixed and private oligopolies, in order to examine the effects of privatization when firms invest in abatement and emissions are taxed. We show that the number of competing firms in the market is an important factor in the determination of these effects. While privatization often involves a welfare trade-off, in the sense that higher (lower) output production implies higher (lower) pollution, there are also circumstances where it leads to both lower output and higher emissions simultaneously. Our results also indicate that privatization tends be associated with reductions in social welfare. |
| Keywords: | Privatization, Pollution, Abatement, Mixed Oligopoly |
| JEL: | L22 L32 Q52 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:lec:leecon:14/15&r=ene |
| By: | David Newbery; Michael Grubb |
| Abstract: | The UK Government has developed a carefully designed Capacity Mechanism to ensure security of supply in the GB electricity system. This paper criticises the methods used to determine the amount of capacity to procure, and argues that the amount finally proposed is likely to be excessive, particularly (but not exclusively) in ignoring the contribution from interconnectors. More broadly, there has been too little attention to either the political economy, or the option value aspects. Procuring too little is risky, but fear of'the lights going out' can easily become a catch-all argument for excessive procurement, and associated subsidy. The risk of over-procurement, particularly of new capacity on long-term contracts, is that it drives up the costs to consumers; undermines renewable energy by transferring capped resources from renewable to fossil fuel producers; and impedes the Single Market including by weakening the business case for future interconnectors. The paper argues that the development of technologies and markets, particularly on the demand- side and of potentially available – 'latent' – capacity - further lowers the risks and increases options. This implies greater potential to defer more capacity procurement – and enhances the value of a more appropriate treatment of interconnectors in security assessments. |
| Keywords: | Capacity Mechanisms, procurement volume, interconnectors |
| Date: | 2014–10–03 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1433&r=ene |
| By: | Carlo Cambini; Sara De Masi; Laura Rondi |
| Abstract: | This paper examines the relationship between CEO pay and firm performance within a sample of European publicly listed energy utilities from 2000 to 2010, focusing on the differential responses that arise from being subject to different regulatory regimes. In particular, we investigate the difference in pay-performance sensitivity across regulated and unregulated firms as well as the impact of different regulatory schemes – incentive vs. cost-based regulation - on CEO monetary incentives. Using various measures of performance, we find that European energy utilities link CEO compensation to firm performance, but CEO pay-performance is higher for unregulated companies. When we focus on the effect of alternative regulatory schemes, our results show that payperformance sensitivity is significantly higher for firms under incentive regulation than within firms under cost-based regulation. This result holds after controlling for firm - private vs. state - ownership and for varying degrees of market liberalization across countries. |
| Keywords: | Managerial compensation, Incentive contracts, Incentive regulation, Energy utilities |
| JEL: | G30 J33 L51 M12 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:bcu:iefewp:iefewp58&r=ene |
| By: | Masako Ikefuji (University of Southern Denmark, Esbjerg, Denmark); Jan Magnus (VU University Amsterdam, Netherlands); Hiroaki Sakamoto (Waseda University, Japan) |
| Abstract: | This paper develops a dynamic model consisting of two regions (North and South), in which the accumulation of human capital is negatively influenced by the global stock of pollution. By characterizing the equilibrium strategy of each region, we show that the regions' best responses can be strategic complements through a dynamic complementarity effect. The model is used to analyze the impact of adaptation assistance from North to South. It is shown that North's unilateral assistance to South (thus enhancing South's adaptation capacity) can facilitate pollution mitigation in both regions, especially when the assistance is targeted at human capital protection. |
| Keywords: | Climate change, mitigation, adaptation, human capital |
| JEL: | D91 Q54 Q58 |
| Date: | 2014–09–19 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20140126&r=ene |
| By: | Brett W. Jordan (Division of Economics and Business, Colorado School of Mines); Rod Eggert (Division of Economics and Business, Colorado School of Mines); Brent Dixon (Idaho National Laboratory); Brett Carlsen (Idaho National Laboratory) |
| Abstract: | Recently, interest in thorium's potential use in a nuclear fuel cycle has been renewed. Thorium is more abundant, at least on average, than uranium in the earth's crust and, therefore, could theoretically extend the use of nuclear energy technology beyond the economic limits of uranium resources. This paper provides an economic assessment of thorium availability by creating cumulative-availability and potential mining-industry cost curves, based on known thorium resources. These tools provide two perspectives on the economic availability of thorium. In the long term, physical quantities of thorium likely will not be a constraint on the development of a thorium fuel cycle. In the medium term, however, thorium supply may be limited by constraints associated with its production as a by-product of rare earth elements and heavy mineral sands. Environmental concerns, social issues, regulation, and technology also present issues for the medium and long term supply of thorium. |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:mns:wpaper:wp201407&r=ene |
| By: | Gozgor, Giray; Kablamaci, Baris |
| Abstract: | The paper examines a systematic interrelationship between the world oil and agricultural commodity prices, taking the role of the USD and the perceived global market risks into consideration for the period from January 1990 to June 2013. The authors initially determine the significant cross-sectional dependence in a large balanced panel framework for 27 commodity prices, and then apply the second generation panel unit root (PUR) tests. Findings from the PUR tests clearly suggest that there is a strong unit root in agricultural commodity prices. In addition, the empirical findings from the fixed effects panel data, panel co-integration analysis, the Panel-Wald Causality tests, and the common correlated effects mean group estimations strongly show that the world oil price and the weak USD have positive impacts on almost all agri- cultural commodity prices. There are also retained the adjuvant effects of the escalatory perceived global market risk upon most agricultural commodity prices. |
| Keywords: | oil prices, panel data estimations, the VIX |
| JEL: | C23 O13 O24 |
| Date: | 2014–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:58659&r=ene |
| By: | Camila Casas |
| Abstract: | In this paper, I estimate the demand for housing in Bogotá, modeling electricity consumption explicitly to take into account the crossed subsidies included in Colombian utility rates. I use household level data on housing prices, observable dwelling attributes, and demographic variables to recover the willingness to pay for housing characteristics following the three-step estimation procedure suggested by Bajari and Kahn (2005). First, I regress the price of housing against different observable dwelling characteristics to recover the implicit price of each feature. Next, I infer household-specific preference parameters from the utility maximizing first-order conditions, where a household’s utility depends on these observable characteristics. Finally, I analyze the relationship between demographic variables and the taste parameters estimated in the previous step. In order to study the impact of subsidies on households’ housing decisions, I focus on the impact of changes in the price of electricity on the choice of dwelling size. I find that subsidized households choose bigger dwellings than they would in the absence of subsidies, while those who are taxed choose smaller ones. |
| Keywords: | Housing Demand, Hedonic Prices, Subsidies, Stratification. |
| JEL: | H2 H4 I3 R21 |
| Date: | 2014–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:col:000094:012230&r=ene |
| By: | Managi, Shunsuke; Tanaka, Kenta |
| Abstract: | The Great East Japan Earthquake, which occurred on March 11, 2011, triggered the Fukushima nuclear power plant accident. This study estimates the economic damage caused by the radioactive contamination from the plant using a hedonic approach. Our estimation results show that an increase of 1 decreases the land price by 3.39% on average in Fukushima and Miyagi prefectures. Specifically, damage due to the radiation effect is estimated to cost approximately 64.1 billion yen in Fukushima. In addition, our result shows that commercial and business areas are more sensitive than residential areas to the radiation quantity. |
| Keywords: | Disaster,Hedonic model,Nuclear power plant accident, Land use type |
| JEL: | Q52 R19 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59358&r=ene |
| By: | Dávid Csercsik (Game Theory Research Group, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and Pázmány Péter Catholic University) |
| Abstract: | Local routing protocols in scale free networks have been extensively studied. In this paper we consider a wireless contextualization of this routing problem and analyze on the one hand how cooperation affects network efficiency, and on the other hand the stability of cooperation structures. Cooperation is interpreted as local exchange of topological information between cooperating agents, and the payoff of a certain node is defined based on its energy consumption during the routing process. We show that if the payoff of the nodes is the energy saving compared to the all-singleton case, basically coalitions are not stable. We introduce coalitional load balancing and net reward to enhance coalitional stability and thus the more efficient operation of the network. As in the proposed model cooperation strongly affects routing dynamics of the network, externalities will arise and the game is defined in a partition function form. |
| Keywords: | partition function form games, networks, local routing |
| JEL: | C71 L14 L96 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:has:discpr:1413&r=ene |
| By: | Halkos, George; Papageorgiou, George |
| Abstract: | In this paper we model the conflict between the group of polluting firms of a country and the social planer of the same country which attempts to control the volume of emissions generated during the production process. Both players of the game have their own control policies which are the rate of emissions on behalf the polluting firms and the rate of pollution control (e.g. abatement or taxation) on behalf the home country. The common state variable of the model is the number of the polluting firms, which is better to minimized through the country’s control policy, but beneficial to maximized on the polluters’ side. From the game theoretic point of view the model setup is very simple and belongs in to the special class of differential games also called state separable differential games. An important property for these games is that the open-loop Nash equilibrium coincides with the Markovian (closed-loop) equilibrium and in the case of hierarchical moves the analytical solutions are easy obtained. The game proposed here is analyzed for both types of equilibrium, i.e. Nash and Stackelberg. In the simultaneous move game (i.e. the Nash game) we find the equilibrium analytical expressions of the controls for both players as well as the steady state stock of the polluting firms. A sensitivity analysis of the crucial variables of the model takes place. In the hierarchical move game (i.e. the Stackelberg game) we find the equilibrium values of the controls as well as of the state variable. As a result a comparison between the two types of equilibrium for the game takes place. The analysis of the comparison reveals that the conflict is more intensive (since both controls have greater values) for the case in which the polluting firms play as the leader of the hierarchical move game. |
| Keywords: | Pollution control; Environmental Economics; Differential games. |
| JEL: | C61 C62 D43 H21 Q50 Q52 Q53 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:58947&r=ene |
| By: | Aldy, Joseph E. (Harvard University); Pizer, William A. (Duke University) |
| Abstract: | The comparability of domestic actions to mitigate global climate change has important implications for the stability, equity, and efficiency of international climate agreements. We examine a variety of metrics that could be used to evaluate countries' climate change mitigation effort and illustrate their potential application for large developed and developing countries. We also explain how transparent measures of the comparability of effort can contribute to the design of international and domestic climate change policy along several dimensions. For example, such measures can facilitate participation and compliance in an agreement if they can illustrate that all parties are doing their "fair share." Second, these measures can inform the bilateral linking of domestic cap-and-trade programs in a manner akin to how nations negotiate the lowering of trade barriers more generally in trade policy. Third, assessments of the comparability of effort can affect whether to implement and, if necessary, the stringency of unilateral border measures (e.g., a border tax). Finally, such assessments demonstrate the need for a well-functioning policy surveillance regime. |
| Date: | 2014–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp14-006&r=ene |
| By: | Mauritzen, Johannes (Dept. of Business and Management Science, Norwegian School of Economics) |
| Abstract: | Using detailed data of approximately 125,000 solar photovoltaic systems installed in California between 2007 and 2014 I argue that the adoption of solar panels from Chinese manufacturers and the introduction of a leasing model for solar systems are closely intertwined. First, cheaper Chinese panels allowed a leasing model to be profitable for contractors. But an asymmetric information problem exists in the market for solar panels. Solar panels are long-lived productive assets, where quality is important but costly for individual consumers to verify. Consumers can instead be expected to rely on brands and observed reliability. This led to a barrier to entry for cheaper panels from new, primarily Chinese manufacturers. The adoption of a leasing model by several large local installers solved the asymmetric information problem and led to the adoption of Chinese panels and in turn lower overall system prices. |
| Keywords: | Solar panels; asymmetric information problem |
| JEL: | Q00 Q40 |
| Date: | 2014–10–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2014_035&r=ene |
| By: | Elisa (Fondazione Eni Enrico Mattei (FEEM) and Euro-Mediterranean Center on Climate Change, Venice, Italy) |
| Abstract: | The years-long negotiations on an international mechanism for loss and damage (L&D) associated with climate change impacts got to a milestone during the nineteenth session of the UNFCCC Conference of the Parties (COP-19), held in Warsaw in November 2013. The COP established the Warsaw international mechanism, aiming to address L&D associated with the adverse effects of climate change, including extreme events and slow onset events, in vulnerable developing countries (Decision 2/CP.19). The paper performs a Critical Discourse Analysis (CDA) of COP decision 2/CP.19 in order to evaluate its content and reflect on how the mechanism will be implemented. The analysis builds on Fairclough’s (1992) three-dimensional model for CDA, and makes use of a wide range of materials including previous COP decisions, High Level Segment statements and Parties submissions to COP 19, press releases and other relevant documents. The analysis highlights the lack of a common understanding and representation of L&D by developed and developing countries, with this fact ultimately hampering the possibility to define actual tools to address the issue within the mechanism The difficulty to come to a shared meaning on L&D is due to its connection to other controversial discourses under the UNFCCC: those of attribution, liability and compensation. |
| JEL: | F13 F18 F51 K33 Q37 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.84&r=ene |
| By: | Agneta Forslund (Département Sciences Sociales, Agriculture et Alimentation, Espace et Environnement, INRA); Fabrice Levert (Structures et Marchés Agricoles, Ressources et Territoires); Alexandre Gohin (Structures et Marchés Agricoles, Ressources et Territoires, INRA); Chantal Le Mouel (Structures et Marchés Agricoles, Ressources et Territoires, INRA) |
| Abstract: | Cette étude, financée par l'ADEME et dont le Comité de Pilotage était constitué de l’ADEME, de l’INRA et des Ministères en charge de l’Environnement et de l’Agriculture,analyse l’évolution des usages des sols, les changements d'allocation des sols et les émissions de gaz à effet de serre engendrés par le développement de quatre cultures utilisées à la fois pour des besoins alimentaires et pour la production de biocarburants (colza, tournesol, blé betterave) sur le territoire national sur les périodes 1992-2004 et 2006-2010. L’analyse montre qu'il y a eu relativement peu d’impacts de l’évolution des surfaces de ces cultures sur les usages non agricoles (urbain, naturel, boisé). La progression des surfaces de ces quatre cultures a eu un impact principalement limité aux terres agricoles, à travers une redistribution des cultures hors jachère, une reprise sur les terres mises en jachère en 1992 ainsi que des conversions de prairies vers les terres arables. L’ampleur de ces trois types de changements d’occupation des sols varie cependant selon la culture considérée. Au vu du bilan global sur l'évolution des changements d'allocation des sols, la conversion des prairies en terres arables reste l'élément le plus important du développement des biocarburants en France. Le retournement des prairies au profit des cultures a des effets environnementaux à la fois en termes d'émissions de GES, de perte de biodiversité et de pollution de l'eau. Ces effets indirects doivent être pris en compte dans le bilan environnemental du développement des biocarburants. |
| Keywords: | biocarburant, marché agricolefrancegrande culture |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:inr:wpaper:190145&r=ene |
| By: | Osmundsen, Petter (UiS); Emhjellen, Magne (Petoro); Johnsen, Thore (NHH); Kemp, Alexander (University of Aberdeen); Riis, Christian (BI) |
| Abstract: | Petroleum administration can be regarded as a principal-agent problem. The government allocates exploration and production rights to petroleum companies on behalf of the population. The government is the principal and the companies are agents. With the aim of capturing revenue for the state, the government devises a petroleum tax system which takes account of the investment decisions made by the companies, while acknowledging for the fact that the companies may report strategically to the government. An important issue is how tax deductions are to be treated in investment analysis. A discrepancy arises here between assumptions made in some areas of tax theory and the actual investment analyses conducted by the companies. Tax theory has given rise to discussion and controversial tax proposals for the petroleum sector in Norway, Denmark and Australia. It led, for example, to reductions in tax-related depreciation for the Norwegian petroleum industry in May 2013. The article reviews this tax debate and analyses the implications of basing tax design on counter-factual investment behaviour. |
| Keywords: | petroleum taxation; tax design; valuation; corporate behaviour |
| JEL: | F21 G02 H21 H25 H32 L71 M21 |
| Date: | 2014–10–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:stavef:2014_017&r=ene |