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on Energy Economics |
| By: | Wang, Hongbo |
| Abstract: | Renewable Portfolio Standards (RPS) are U.S. state mandates that utilities produce some of their electricity using renewable energy sources in an effort to reduce greenhouse gas emissions. While advocates highlight the potential long-term benefits of RPS, critics argue that RPS will increase electricity prices due to the higher costs of renewable energy generation. However, to date, there are no published empirical studies of the effect of RPS on electricity prices. Using state-level panel data from 1990 to 2011 and the difference-in-differences (DID) method, I find that implementation increases electricity prices when the RPS policy first becomes binding. |
| Keywords: | Renewable Portfolio Standards; State electricity prices |
| JEL: | Q42 Q48 |
| Date: | 2014–10–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59165&r=ene |
| By: | Driouchi, Ahmed; El Alouani, Hajar; Gamar, Alae |
| Abstract: | Abstract The present paper looks at the descriptive side of the economy of oil and energy in the Arab countries. It addresses the contours of these economies in relation to diversification and trading patterns and shows the limited diversification but high concentration of exports towards oil and gas in part of these countries. The paper addresses also the dynamic processes of gas and oil revenues with their time trends. It also attempts linking revenues to international oil prices before tackling the current status of renewable energy. The attained outcomes show clearly how non-oil exporters are exhibiting patterns that are different from the exporting countries of the Gulf. This latter set of economies is benefiting from oil price stability during the past recent years and ensuring thus, a stable revenue formation in comparison with other economies in the region. With regard to renewable energy, non-oil exporting countries are more active in the search of new energy alternatives. |
| Keywords: | Keywords: Oil, Gas and exhaustible sources of energy, trade concentration, other sources of energy |
| JEL: | Q3 Q37 Q4 |
| Date: | 2014–10–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59389&r=ene |
| By: | Bell, William Paul; Wild, Phillip; Foster, John |
| Abstract: | This report primarily aims to provide both dispatch and wholesale spot price forecasts for the proposed hybrid gas-solar thermal plant at Collinsville, Queensland, Australia for its lifetime 2017-47. These forecasts are to facilitate Power Purchase Agreement (PPA) negotiations and to evaluate the proposed dispatch profile in Table 3. The report’s wider appeal is the techniques and methods used to model the Australian National Electricity Market's (NEM) demand and wholesale spot prices for the lifetime of the proposed plant. The solar thermal component of the plant uses Linear Fresnel Reflector (LFR) technology. To facilitate the PPA negotiations, this report produces the half-hourly dispatch of the plant’s gas component and the associated half-hourly wholesale spot prices for the plant’s node on the NEM given the yield from the plant’s solar thermal component and a fixed total dispatch profile shown in Table 3. The total dispatch profile incorporates both gas and solar outputs and differs between weekdays and weekends. Table 3: Proposed plant's total dispatch profile by hour of week _____Time_________________Dispatch (MW)_____________________ Weekdays (8am-10pm) ______ 30 Weekdays (7am-8am) _______ ramp from 0 to 30 Weekends _________________ entire yield of the solar thermal component The half-hourly yield profile for the solar thermal component of the plant is determined in our previous report (Bell, Wild & Foster 2014b). Three profiles are utilised to help to negotiate a PPA: solar thermal yield, gas dispatch and wholesale market spot price. |
| Keywords: | Australian National Electricity Market, NEM, Climate change, Collinsville, electricity demand, Demand management, dispatch forecasting, Electricity, Energy Consumption, Energy economics, Future proofing, LFR, Linear Fresnel Reflector, mitigation, Australian national electricity market, NEM, power purchase agreements, PPA, Queensland, Australia, Renewable energy, solar energy, solar thermal |
| JEL: | O3 Q4 Q5 |
| Date: | 2014–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59648&r=ene |
| By: | Gerard van der Meijden (VU University Amsterdam); Sjak Smulders (Tilburg University, the Netherlands) |
| Abstract: | The energy transition from fossil fuels to alternative energy sources has important consequences for technological change and resource extraction. We examine these consequences by incorporating a non-renewable resource and an alternative energy source in a market economy model of endogenous growth through expanding varieties. During the energy transition, technological progress is non-monotonic over time: it declines initially, starts increasing when the economy approaches the regime shift, and jumps down once the resource stock is exhausted. A moment of peak-oil does no longer necessarily occur, and simultaneous use of the resource and the alternative energy source will take place if the return to innovation becomes too low. |
| Keywords: | Alternative energy sources, endogenous growth, energy transition, non-renewable resources, technological change |
| JEL: | O30 Q32 Q42 Q56 |
| Date: | 2014–08–18 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20140108&r=ene |
| By: | ZhongXiang Zhang (ZhongXiang Zhang, Fudan University, Shanghai (China)) |
| Abstract: | The Chinese leadership in November 2013 determined to embark upon a new wave of comprehensive reforms in China. This is clearly reflected by the key decision of the Third Plenum of the 18th Central Committee of Communist Party of China to assign the market a decisive role in allocating resources. To have the market to play that role, getting the energy prices right is crucial because it sends clear signals to both producers and consumers of energy. While the overall trend of China’s energy pricing reform since 1984 has been moving away from the pricing completely set by the central government in the centrally planned economy towards a more market-oriented pricing mechanism, the pace and scale of the reform differ across energy types. This paper discusses the evolution of price reforms for coal, petroleum products, natural gas and electricity in China, provides some analysis of these energy price reforms, and suggests few areas of reforms could take place in order to have the market to play a decisive role in allocating resources and to help China’s transition to a low-carbon economy. |
| Keywords: | Energy Prices, Tiered Prices, Differentiated Tariffs, Subsidies, Coal, Electricity, Natural Gas, Petroleum Products, Resource Taxes, Desulfurization and Denitrification, State-Owned Enterprises, China |
| JEL: | H23 H71 O13 O53 Q43 Q48 Q53 Q58 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.72&r=ene |
| By: | Markus Groth (Leuphana University Lueneburg, Germany); Jörg Cortekar (Climate Service Center 2.0, Germany) |
| Abstract: | The option of adapting to climate change is becoming more important in climate change policy. Hence, responding to climate change now involves both mitigation to address the cause and adaptation as a response to already ongoing or expected changes. These changes are also of relevance for the energy sector in Germany. An energy sector that in the course of the German “Energiewende”, also has to deal with a fundamental shift in energy supply from fossil fuel to renewable energies in the next decades. Based on a synthesis of the current knowledge regarding the possible influences of climate change on the German energy sector along its value-added chain, the paper points out, that the possible impacts of a changing climate should be taken into account in the upcoming infrastructure projects in the course of the Energiewende. The main question here is, whether adaptation options will be implemented voluntarily by companies or not. The paper argues that this has to be the case, when the measure is a private good. If, on the contrary, the measure is a public good, additional incentives are needed. For the German energy sector, the paper shows, that governmental intervention are for example justifiable regarding measures to adapt the grid infrastructure as a critical infrastructure that needs to be protected against current and future impacts of climate change. |
| Keywords: | adaptation, climate change, critical infrastructures, environmental policy instruments, energy sector, energy transition, market failures, mitigation, private goods, public goods |
| JEL: | A11 H20 H41 L94 Q40 Q48 Q54 Q58 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:lue:wpaper:315&r=ene |
| By: | Xiao, Jingjie |
| Abstract: | A key hurdle for implementing real-time pricing of electricity is a lack of con-sumers’ responses. Solutions to overcome the hurdle include the energy management system that automatically optimizes household appliance usage such as plug-in hybrid electric vehicle charging (and discharging with vehicle-to-grid) via a two-way com-munication with the grid. Real-time pricing, combined with household automation devices, has a potential to accommodate an increasing penetration of plug-in hybrid electric vehicles. In addition, the intelligent energy controller on the consumer-side can help increase the utilization rate of the intermittent renewable resource, as the demand can be managed to match the output proï¬le of renewables, thus making the intermittent resource such as wind and solar more economically competitive in the long run. One of the main goals of this dissertation is to present how real-time retail pricing, aided by control automation devices, can be integrated into the wholesale electricity market under various uncertainties through approximate dynamic programming. What distinguishes this study from the existing work in the literature is that whole-sale electricity prices are endogenously determined as we solve a system operator’s economic dispatch problem on an hourly basis over the entire optimization horizon. This modeling and algorithm framework will allow a feedback loop between electricity prices and electricity consumption to be fully captured. While we are interested in a near-optimal solution using approximate dynamic programming; deterministic linear programming benchmarks are use to demonstrate the quality of our solutions.The other goal of the dissertation is to use this framework to provide numerical ev-idence to the debate on whether real-time pricing is superior than the current flat rate structure in terms of both economic and environmental impacts. For this pur-pose, the modeling and algorithm framework is tested on a large-scale test case with hundreds of power plants based on data available for California, making our ï¬ndings useful for policy makers, system operators and utility companies to gain a concrete understanding on the scale of the impact with real-time pricing. |
| Keywords: | Energy Economics, Electricity Markets, Plug in hybrid vehicles, electric vehicles, mathematical modeling |
| JEL: | C6 Q2 Q4 Q42 Q47 Q48 |
| Date: | 2013–08–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:58696&r=ene |
| By: | Brown, David (University of Alberta, Department of Economics); Sappington, David (University of Florida, Department of Economics) |
| Abstract: | Electricity customers who install solar panels often are paid the prevailing retail price for the electricity they generate. We show that this "net metering" policy typically is not optimal. A payment for distributed generation (w) that is below the retail price of electricity (r) will induce the welfare-maximizing level of distributed generation (DG) when centralized generation and DG produce similar (pollution) externalities. However, w can optimally exceed r when DG entails a substantial reduction in externalities. We demonstrate that the optimal DG policy varies considerably as prevailing production technologies change and that a restriction to net metering policies can both reduce aggregate welfare and have substantial distributional effects. |
| Keywords: | electricity pricing; distributed generation; net metering |
| JEL: | L11 L50 L94 Q40 Q58 |
| Date: | 2014–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2014_012&r=ene |
| By: | Ian Cochran; Romain Hubert; Virginie Marchal; Robert Youngman |
| Abstract: | Public financial institutions (PFIs) are well-positioned to act as a key leverage point for governments’ efforts to mobilise private investment in low-carbon projects and infrastructure. The study identifies the tools, instruments and approaches used by five PFIs to directly support and scale-up domestic private sector investment in sustainable transport, energy-efficiency and renewable energy in OECD countries. Between 2010-2012, these five institutions – Group Caisse des Dépôts in France, KfW Bankengruppe in Germany, the UK Green Investment Bank, the European Investment Bank, and the European Bank for Reconstruction and Development – have provided over 100 billion euros of equity investment and financing for energy efficiency, renewable energy and sustainable transport projects. They use both traditional and innovative approaches to link low-carbon projects with finance through enhancing access to capital; facilitating risk reduction and sharing; improving the capacity of market actors; and shaping broader market practices and conditions. Les institutions financières publiques (IFP) sont particulièrement bien placées pour compléter les efforts des pouvoirs publics visant à mobiliser les investissements privés dans des projets et des infrastructures sobres en carbone. Cette étude identifie les outils, instruments et méthodes dont se servent cinq IFP pour financer et / ou accroître les investissements du secteur privé au niveau national dans les transports durables, l’efficacité énergétique et l’énergie renouvelable dans des pays membres de l’OCDE. De 2010 à 2012, ces cinq institutions – le Groupe Caisse des Dépôts en France, la KfW Bankengruppe en Allemagne, l’UK Green Investment Bank, la Banque européenne d’investissement, et la Banque européenne pour la reconstruction et le développement – ont apporté un total de plus de 100 milliards EUR d’investissements en fonds propres et de financement en faveur de projets d’efficacité énergétique, d’énergies renouvelables et de transports durables. Elles font appel à des méthodes à la fois traditionnelles et nouvelles pour lier des projets aux moyens de financement, en améliorant l’accès aux capitaux ; en facilitant la réduction et le partage des risques ; en renforçant les capacités des acteurs de marché et, dans un cadre plus large, en mettant en place des pratiques et des conditions de marché. |
| Keywords: | climate change, renewable energy, energy efficiency, climate finance, low-carbon, investment, infrastructure, public financial institutions, institutions financières publiques, finance climat, bas carbone, efficacité énergétique, changement climatique, investissement, infrastructure, énergie renouvelable |
| JEL: | G11 G18 G23 G28 O44 Q01 Q54 |
| Date: | 2014–11–06 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:72-en&r=ene |
| By: | Nicholas Apergis (School of Economics and Finance, Curtin University, Perth, Australia); Alper Aslan (Nevsehir Haci Bektas Veli University,Faculty of Economics and Administrative Sciences,50300, Nevsehir, Turkey); Goodness C. Aye (Department of Economics, University of Pretoria); Rangan Gupta (Department of Economics, University of Pretoria) |
| Abstract: | This paper investigates the dynamic relationship between oil prices and growth across the U.S. States using a panel data framework. We use both annual and quarterly data spanning the periods 1973 to 2013 and 1948Q1 to 2013Q4, respectively. Following Hatemi-J (2012), we allow for the presence of asymmetry in the cointegration and causality testing by decomposing oil prices into cumulative sums of positive and negative oil prices. The null hypothesis of no cointegration is rejected. The long-run coefficients are found to be statistically significant across all empirical models, with positive oil prices reducing output, while negative oil prices increasing output. We also find evidence of both short- and long-run bidirectional causality between aggregate oil prices and output. However, there is evidence of unidirectional causality both from positive and negative oil prices to output based on annual data. The quarterly data generated slightly different result, indicating both long- and short-run bidirectional causality between positive and negative oil prices and output. |
| Keywords: | Oil prices, economic growth, asymmetric effects, US States |
| JEL: | C33 O00 Q41 R10 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201459&r=ene |
| By: | Andrea Bastianin; Marzio Galeotti; Matteo Manera |
| Abstract: | According to the Rockets and Feathers hypothesis (RFH), the transmission mechanism of positive and negative changes in the price of crude oil to the price of gasoline is asymmetric. Although there have been many contributions documenting that downstream prices are more reactive to increases than to decreases in upstream prices, little is known about the forecasting performance of econometric models incorporating asymmetric price transmission from crude oil to gasoline. In this paper we fill this gap by comparing point, sign and probability forecasts from a variety of Asymmetric-ECM (A-ECM) and Threshold Autoregressive ECM (TAR-ECM) specifications against a standard ECM. Forecasts from A-ECM and TAR-ECM subsume the RFH, while the ECM implies symmetric price transmission from crude oil to gasoline. We quantify the forecast accuracy gains due to incorporating the RFH in predictive models for the prices of gasoline and diesel. We show that the RFH is useless for point forecasting, while it can be exploited to produce more accurate sign and probability forecasts. Finally, we highlight that the forecasting performance of the estimated models is time-varying. |
| Keywords: | Asymmetries, Forecast Evaluation, Gasoline, Crude Oil, Rockets and Feathers |
| JEL: | C22 C32 C53 Q40 Q47 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bcu:iefewp:iefewp62&r=ene |
| By: | NU. CEPAL. Subsede de México |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col094:37032&r=ene |
| By: | Hyland, Marie; Haller, Stefanie |
| Keywords: | manufacturing |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb2014/3/3&r=ene |
| By: | Afanasyev, Dmitriy; Fedorova, Elena; Popov, Viktor |
| Abstract: | The price-demand relationship in the electricity market is a complicated phenomenon. In order to thoroughly investigate the peculiarities of this relationship, a multi-scale correlation analysis of electricity price and demand is carried out in this research. Using a modified method of socalled time-dependent intrinsic correlation (TDIC) (Chen et al., 2010), based on the complete ensemble empirical mode decomposition with adaptive noise (CEEMDAN) (Torres et al., 2011), and bootstrapping, we investigate the problems of dynamic interconnection between electricity demand and prices over different time scales (i.e. its fine structure). We formulate and test three hypotheses on the type and strength of correlations between them in the short-, medium- and long-runs. In this research we analyze the data from two largest price zones of Russian wholesale electricity market: Europe-Ural and Siberia. These two zones differ from each other by the structures of electricity generation and consumption. It is shown that these two price zones significantly differ in internal price-demand correlation structure over the comparable time scales, and not each of the theoretically formulated hypotheses is true for each of the price zones. This allows us to conclude that the answer to the question whether it is necessary to take into account the influence of demand-side on electricity spot prices over different time scales, is significantly dependent on the structure of electricity generation and consumption on the corresponding market. |
| Keywords: | electricity spot price, electricity demand, price-demand correlation, empirical mode decomposition, time-dependent intrinsic correlation, trend estimation |
| JEL: | C14 C40 C65 L94 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:58827&r=ene |
| By: | Ahdi N. Ajmi (College of Science and Humanities in Slayel, Salman bin Abdulaziz University, Kingdom of Saudi Arabia); Rangan Gupta (Department of Economics, University of Pretoria); Monique Kruger (Department of Economics, University of Pretoria); Nicola Schoeman (Department of Economics, University of Pretoria); Leoné Walters (Department of Economics, University of Pretoria) |
| Abstract: | The aim of this paper is to investigate the causal relationship between agricultural prices in South Africa and global oil prices. A nonlinear Granger causality test based on moment conditions, introduced by Nishiyama et al (2011) is employed and we find that there is indeed a causal relationship between global oil prices and certain South African agricultural commodity prices. The mean price of wheat, sunflower and soya are Granger caused by OPEC basket oil price. OPEC basket oil prices also cause volatility of wheat, sunflower seed and sorghum prices. |
| Keywords: | Agricultural prices; Oil prices; Granger causality; Nonlinearity; South Africa |
| JEL: | C32 Q11 Q40 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201461&r=ene |
| By: | Janda, Karel; Krska, Stepan |
| Abstract: | This paper examines the regulation of distribution system operators (DSOs) focused on the Czech electricity market. It presents an international benchmarking study based on data of 15 regional DSOs including two Czech operators. The study examines the application of yardstick methods using data envelopment analysis (DEA) and stochastic frontier analysis (SFA). We find that the cost efficiency of each of the Czech DSOs is different, which indicates a suitability of introduction of individual efficiency factors in the regulatory process. |
| Keywords: | Regulation, benchmarking, electricity. |
| JEL: | K23 L43 L94 |
| Date: | 2014–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59442&r=ene |
| By: | Kal, Süleyman Hilmi; Arslaner, Ferhat; Arslaner, Nuran |
| Abstract: | There has been a well-known relationship between macro financial fundamentals and oil prices, yet there is also ample evidence that this relationship weakens during some periods. In this paper, we investigated whether the relationship between oil and macro financial fundamentals vary depending on gold price of oil. To achieve this, a Markov model is implemented to the monthly data for the period 1974 - 2010. In the Markov model utilized in this paper, transition probabilities are endogenous and governed by the volatilities of oil, gold, stock market and exchange rate. This allowed us to endogenously model the switching process. Our results provide evidence that the link between oil price and macro financial fundamentals disappears in the periods of inexpensive gold price of oil. Our findings also provide evidence that the volatilities of the variables matter only when gold price of oil is inexpensive. |
| Keywords: | Oil Price; Gold Oil Ratio; Exchange Rates; Interest Rates; Stock Market Yields; Time Series Analysis; Markov Switching Regimes |
| JEL: | C22 E44 G12 |
| Date: | 2013–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:56407&r=ene |
| By: | Liddle, Brantley; Messinis, George |
| Abstract: | This paper tests for a sulfur Kuznets curve by examining the sulfur emissions per capita-GDP per capita relationship individually, for 25 OECD countries over 1950-2005 using a reduced-form, linear model that allows for multiple endogenously determined breaks. This approach addresses several important econometric and modeling issues, e.g., (i) it is highly flexible and can approximate complicated nonlinear relationships without presuming a priori any particular relationship; (ii) it avoids the nonlinear transformations of potentially nonstationary income. The predominant post-1950 income-sulfur emissions relationship—the case for 24 of the 25 countries studied—was either (i) inverted-Vs, where the emissions-income relationship became negative, or (ii) decoupling, where income no longer affected emissions in a long-run, statistically significant way. Seventeen of the 21 transitional breaks uncovered occurred over 1965-1978; hence, in concert with previous work, we conclude that shared timing among countries is important in income-environment transitions. |
| Keywords: | Sulfur emissions; Environmental Kuznets curve; OECD countries; nonlinear flexible form; multiple endogenous breaks; income-emission relationships |
| JEL: | C22 C50 O44 Q53 Q56 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59565&r=ene |
| By: | Hongxiu Li (Department of Economics, University of Waterloo); Horatiu A. Rus (Department of Economics, University of Waterloo) |
| Abstract: | This paper investigates the impact of adaptation on a country's incentive to participate in emission-reducing International Environmental Agreements (IEAs) on climate change. We develop a framework where heterogeneity across countries is introduced with respect to the benefits and costs of both mitigation of emissions and adaptation to reduce the impact of climate change. The paper uses two coalition stability concepts and numerical simulations to look at stable coalitions. We also study the effect of an within-coalition increase in the efficiency of adaptation on emissions and on countries' incentives to cooperate. Our main findings are: first, investment in adaptation technology has a public good feature inside the coalition, compared to being strictly a private good in the non-cooperation case. Second, a large coalition cannot be achieved if countries differ much in terms of vulnerability. Third, cooperation incentives can be enhanced by a coalition which diffuses technological progress on climate change adaptation among its members. |
| JEL: | H41 Q54 Q59 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:wat:wpaper:1408&r=ene |
| By: | Shiyi Chen; Dengke Chen; Wolfgang K. Härdle; |
| Abstract: | International trade has been playing an extremely significant role in China over the last 20 years. This paper is aimed at investigating and understanding the relationship between China’smacro-economy and oil price fromthis newperspective. We find strong evidence to suggest that the increase of China’s price level, resulting fromoil price shocks, is statistically less than that of its main trade partners’. This helps us to understand the confused empirical results estimated within the SVAR framework and sheds light on recent data. More specifically, as for the empirical results, we find China’s output level is positively correlated with the oil price, and oil price shocks slightly appreciate the RMB against the US dollar. Positive correlation between China’s output and oil price shocks presumably results from the drop in China’s relative price induced by oil price shocks, which is inclined to stimulate China’s goods and service exports. The slight appreciation of the RMB could be justified by the drop in China’s relative price, which is indicated by economic theory. Moreover, constructing a simple model, our new perspective also helps us to understand the recent fact that together with the dramatic surge of the world oil price, while the oil imports of the other major countries (especially the largest oil import country US) in the world steadily decline or remain stable, China’s oil imports, in contrast, have kept rising steeply since the year 2004. |
| Keywords: | Oil price shocks, International trade, China’s macro-economy |
| JEL: | F41 Q43 Q48 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2014-063&r=ene |
| By: | Mu, Quan; Zhang, Junjie |
| Keywords: | Social and Behavioral Sciences |
| Date: | 2014–11–03 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:ucsdec:qt1bz8c9ms&r=ene |
| By: | Melolinna, Marko (BOFIT) |
| Abstract: | This paper studies the effects of demand shocks caused by Emerging Asian (EMA) countries on oil prices over the past two decades, using vector autoregression models. The analysis builds on previous work done on identifying different types of oil shocks using structural time series methods. However, uniquely, this paper introduces a commodity demand indicator for EMA economies that is based on data independent of oil production and consumption data, thus properly accounting for oil demand pressures stemming from macroeconomic conditions in the EMA economies and the rest of the world. The analysis strongly suggests that EMA demand shocks have had a persistent and statistically significant effect on the level and variation of global oil prices over the past two decades. This result differs from some of the previous literature and hence proves that the choice of oil demand indicator in an oil-market VAR makes a material difference for the results. Furthermore, tentative evidence suggests that the effect of EMA demand is mainly driven by demand dynamics in China. The results of the benchmark model are robust to different sample periods and to variations in the definition of the oil demand indicators, as well as to an alternative identification strategy based on sign restrictions. |
| Keywords: | macroeconomic shocks; oil markets; sign restrictions; vector autoregression |
| JEL: | C32 E32 Q43 |
| Date: | 2014–09–29 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:bofitp:2014_018&r=ene |
| By: | Ratti, Ronald A.; Vespignani, Joaquin L. |
| Abstract: | This paper investigates the relationship between oil prices and the global economy. In modelling this relationship, a new approach is proposed in which we introduce the use of a factor error correction model to compress data from the largest developed and developing economies. An important feature of this model is that at global level, we find that global money, output and prices are cointegrated, which is supportive of the quantity theory of money. Positive innovation in global oil price is connected with global interest rate tightening. Positive innovation in global money, CPI and outputs is connected with an increase in oil prices while positive innovations in global interest rate are associated with a decline in oil prices. The US, Euro area and China variables are the main drivers of global factors |
| Keywords: | Global interest rate, global monetary aggregates, oil prices, GFVEC |
| JEL: | E0 E00 E02 E4 E40 F0 |
| Date: | 2014–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59407&r=ene |
| By: | Marzio Galeotti; Yana Rubashkina; Silvia Salini; Elena Verdolini |
| Abstract: | We propose the use of a two level random intercept model to measure the degree of environmental policy performance of different countries and to study its determinants. Inspired by the literature on multilevel latent models and Item Response Theory (IRT), this framework treats policy commitment as a latent variable which is estimated conditional on the difficulty of the policy portfolio implemented by each country. We contribute to the study and scoring of environmental and energy policies in three main ways. First, the model results in a ranking of countries which is conditional on the complexity of their chosen policy portfolio. Second, we provide a unified framework in which to construct a policy indicator and to study its determinants through a latent regression approach. The resulting country ranking can thus be cleaned from the effect of economic and institutional observables which affect policy design and implementation. Third, the model estimates parameters which can be used to describe and compare policy portfolios across countries. We apply this methodology to the case of energy efficiency policies in the industrial sectors of 29 EU countries between 2004 and 2011. We conclude by highlighting the future possible applications of this approach, which are not confined to the realm of environmental and energy policy. |
| Keywords: | Energy policy, environmental policy, ranking, policy portfolios |
| JEL: | Q58 O57 C33 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bcu:iefewp:iefewp71&r=ene |
| By: | Honami Sakaguchi (Student of Graduate School of Business Administration, Kobe University); Michiyuki Yagi (Interfaculty Initiative in the Social Sciences, Kobe University); Katsuhiko Kokubu (Graduate School of Business Administration, Kobe University) |
| Abstract: | Corporate disclosure of environmental information has played an important role in the avoidance of dangerous climate change. How firms choose to disclose environmental information about the business opportunities and risks associated with climate change is important to policy makers and investors. In the literature, there are two dominant theories of corporate disclosure: legitimacy theory and voluntary dis-closure theory. Under legitimacy theory, firms are more likely to disclose information in response to their risks; under voluntary disclosure theory, firms are more likely to disclose information in response to their opportunities. In certain industries, if firms disclose environmental information according to legitimacy theory (voluntary disclosure theory), society may be unaware of the true risks (opportunities) of climate change, and society, in these cases, we will need policies that mandate disclosure. Therefore, this study examines the power of legitimacy theory and voluntary disclosure theory to explain corporate disclosure in three industry groupings: manufacturing, non-manufacturing, and energy & utilities. We use Bloomberg’s Carbon Disclosure Project (CDP) dataset of 3,861 firm level observations from 2008-2012, and regress the corporate social disclosure score evaluated by Bloomberg on variables that indicate regulatory and physical risks and opportunities. We find that legitimacy theory does not explain corporate disclosure of regulatory risks in any of the industries and that of physical risk in the energy and utilities industry. In addition, vol-untary disclosure theory does not explain disclosure of regulatory opportunities in the energy & utilities industries. However, voluntary disclosure theory explains disclosure of opportunities in all of the industries. |
| Keywords: | Legitimacy theory, Voluntary disclosure theory, disclosure score, climate change, CDP |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:kbb:dpaper:2014-31&r=ene |
| By: | Ackah, Ishmael |
| Abstract: | The study investigates the effect of economic and non-economic factors on natural gas demand in Ghana at the aggregate and disaggregates levels. The structural time series model is employed as it has the ability of capturing exogenous non-economic factors. The ï¬ndings suggest that both economic and non-economic factors influence natural gas demand. It further reveal that different sectors respond differently to these factors. The study recommends that policies such as natural gas price subsidies should be customised for different sectors to obtain optimal results |
| Keywords: | Natural Gas Demand, Natural Gas, Natural Gas Economics |
| JEL: | Q4 Q41 Q43 |
| Date: | 2014–09–26 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59214&r=ene |
| By: | Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus , via Mersin 10,Turkey;Department of Economics, University of Pretoria, Pretoria, 0002, South Africa.); Shinhye Chang (Department of Economics, University of Pretoria); Rangan Gupta (Department of Economics, University of Pretoria); Vanessa Kasongo (Department of Economics, University of Pretoria); Clement Kyei (Department of Economics, University of Pretoria) |
| Abstract: | This paper investigates causality between oil prices and the prices of agricultural commodities in South Africa. We use daily data covering the period April 19, 2005 to July 31, 2014 for oil prices and the prices of soya beans, wheat, sunflower and corn. The test for Granger causality in conditional quantiles as proposed by Jeong et al., (2012) was employed. Our findings show that the effect of oil prices on agricultural commodity prices varies across the different quantiles of the conditional distribution. The impact on the tails is lower compared to the rest of the distribution. However, the highest impact is not necessarily at the mean. We show that due to nonlinear dependence between oil prices and agricultural commodity prices, regular Granger causality provides misleading results and also fails to characterize the relationship over the entire conditional joint distribution of the variables. |
| Keywords: | Granger causality, South Africa, Nonparametric test, Quantile causality, Commodity prices |
| JEL: | Q02 Q43 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201468&r=ene |
| By: | Roberto Gómez-Calvet (Business Department, European University of Valencia, Valencia, Spain); David Conesa (Statistics and Operational Research Department, Universitat de València, Valencia, Spain); Ana Rosa Gómez-Calvet (Business Finance Department, Universitat de València, Valencia, Spain); Emili Tortosa-Ausina (IVIE, Valencia and Department of Economics, Universidad Jaume I, Castellón, Spain) |
| Abstract: | This article evaluates the evolution of environmental performance in the context of the European Union (EU), over the period 1993–2010. The context is particularly relevant, due to the traditionally high concerns of the EU about these issues, which has triggered off several initiatives and regulations on environmental protection. In this setting, we conduct a two-stage analysis which develops environmental performance indicators in the first stage for each pair country-year, and evaluates its evolution in the second. More specifically, in the first stage we estimate specific efficiencies for three air-pollutants (CO2e, SO2, NOx), along with an eco-efficiency indicator, for which we use the slack-free directional distance functions in the Data Envelopment Analysis framework (as opposed to the more extended intensity ratios), whereas in the second stage we propose using a model of explicit distribution dynamics which takes into account how the entire distributions of these indicators evolve. Our results indicate that the dynamics underlying the evolution of the indicators analyzed are indeed remarkable. Although the eco-efficiency indicator has improved over the last two decades, it has been during the last decade when performance has shown a more convergent path. However, in the case of the more traditional indicators (CO2e, SO2, NOx) the abatement opportunities are still remarkable, especially in the case of SO2e. |
| Keywords: | distribution dynamics, efficiency, energy, environmental performance, European Union |
| JEL: | Q4 Q43 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2014/20&r=ene |
| By: | Rutledge, Emilie |
| Abstract: | This paper proposes that the Rentier State and Resource Curse theories be considered as two elements of the same paradigm which, despite a growing body of contrary empirical evidence, retains a hegemonic influence in political economy discourse. It will be suggested that a number of reasons account for this, not least, the nature and subject of the “rent†itself. Contemporary notions of rent as essentially constituting unearned and thus unwarranted income, are divorced from a more contextually accurate ‘ground rent’ charge levied for extracting depletable sovereign resources is one. Another is the extent to which the political demonisation of OPEC, combined with the West’s concerted policy response of seeking to liberalise the world oil market in the 1980s and 1990s, is abstracted from the discourse. Moreover, by demonstrating that there is little evidence of the deterministic poverty inducing and deleterious socioeconomic outcomes in the ‘archetypal candidate’ countries of the Arabian Gulf, the utility per se of the RS/RC narrative as a conceptual and/or analytical framework is questioned. |
| Keywords: | Economic Development and Natural Resources; Middle East; Oil Rent; Rentier State; Resource Curse. |
| JEL: | N55 O13 O53 Q32 Q43 Q48 |
| Date: | 2014–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59501&r=ene |
| By: | Frédéric Branger (AgroParistech ENGREF and CIRED (France)); Philippe Quirion (CIRED and CNRS (France)) |
| Abstract: | We develop a stochastic model to rank different policies (tax, fixed cap and relative cap) according to their expected total social costs. Three types of uncertainties are taken into account: uncertainty about abatement costs, business-as-usual (BAU) emissions and future economic output (the two latter being correlated). Two parameters: the ratio of slopes of marginal benefits and marginal costs, and the above-mentioned correlation, are crucial to determine which instrument is preferred. When marginal benefits are relatively flatter than marginal costs, prices are preferred over fixed caps (Weitzman’s result). When the former correlation is higher than a parameter- dependent threshold, relative caps are preferred to fixed caps. An intermediate condition is found to compare the tax instrument and the relative cap. The model is then empirically tested for seven different regions (China, the United States, Europe, India, Russia, Brazil and Japan). We find that tax is preferred to caps (absolute or relative) in all cases, and that relative caps are preferred to fixed caps in the US and emerging countries (except Brazil where it is ambiguous), whereas fixed cap are preferred to relative cap in Europe and Japan. |
| Keywords: | Instrument, Price, Quantity, Intensity Target, Regulation, post-Kyoto, Uncertainty, Climate Policy |
| JEL: | Q5 Q58 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.85&r=ene |
| By: | ITO Koichiro; James M. SALLEE |
| Abstract: | This paper analyzes "attribute-based regulations," in which regulatory compliance depends upon some secondary attribute that is not the intended target of the regulation. For example, in many countries, fuel-economy standards mandate that vehicles have a certain fuel economy, but heavier or larger vehicles are allowed to meet a lower standard. Such policies create perverse incentives to distort the attribute upon which compliance depends. We develop a theoretical framework to predict how actors will respond to attribute-based regulations and to characterize the welfare implications of these responses. To test our theoretical predictions, we exploit quasi-experimental variation in Japanese fuel economy regulations, under which fuel-economy targets are downward-sloping step functions of vehicle weight. Our bunching analysis reveals large distortions to vehicle weight induced by the policy. We then leverage panel data on vehicle redesigns to empirically investigate the welfare implications of attribute-basing, including both potential benefits and likely costs. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:14057&r=ene |
| By: | Chu, Hsun; Lai, Ching-Chong; Liao, Chih-Hsing |
| Abstract: | In this paper we investigate the growth effect of environmental taxes when the time preference is endogenously determined by the environmental quality. We find that if people become more patient due to a cleaner environment, raising the environmental tax may reduce pollution and stimulate growth. Moreover, the Pigouvian principle may be inefficient in the presence of an endogenous time preference. |
| Keywords: | endogenous time preference; endogenous growth; the Pigouvian tax |
| JEL: | O11 Q56 Q58 |
| Date: | 2012–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59719&r=ene |
| By: | Yana Rubashkina (Catholic University of Milan); Marzio Galeotti (University of Milan and IEFE-Bocconi); Elena Verdolini (Fondazione Eni Enrico Mattei and CMCC) |
| Abstract: | This paper represents an empirical investigation of the “weak” and “strong” Porter Hypothesis (PH) focusing on the manufacturing sectors of European countries between 1997 and 2009. By and large, the literature has analyzed the impact of environmental regulation on innovation and on productivity generally in separate analyses and mostly focusing on the USA. The few existing studies focusing on Europe investigate the effect of environmental regulation either on green innovation or on performance indicators such as exports. We instead look at overall innovation and productivity impact that are the most relevant indicators for the “strong” PH. This approach allows us to account for potential opportunity costs of induced innovations. As a proxy of environmental policy stringency we use pollution abatement and control expenditures (PACE), which represent one of the few indicators available at the sectoral level. We remedy upon its main drawback, that of potential endogeneity of PACE, by adopting an instrumental variable estimation approach. We find evidence of a positive impact of environmental regulation on the output of innovation activity, as proxied by patents, thus providing support in favor of the “weak” PH in line with most of the literature. On the other front, we find no evidence in favor or against the “strong” PH, as productivity appears to be unaffected by the degree of pollution control and abatement efforts. |
| Keywords: | Environmental Regulation, Innovation, Productivity, Competitiveness, Porter Hypothesis |
| JEL: | Q50 Q52 Q55 Q58 O31 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.80&r=ene |
| By: | Katerina Sherstyuk (University of Hawaii at Manoa); Nori Tarui (University of Hawaii at Manoa); Majah-Leah V. Ravago (University of the Philippines Diliman) |
| Abstract: | Dynamic externalities are at the core of many long-term environmental problems, from species preservation to climate change mitigation. We use laboratory experiments to compare welfare outcomes and underlying behavior in games with dynamic externalities under two distinct settings: traditionally studied games with infinitely-lived decision makers, and more realistic intergenerational games. We show that if decision makers change across generations, resolving dynamic externalities becomes more challenging for two distinct reasons. First, decision makers' actions may be short-sighted due to their limited incentives to care about the future generations' welfare. Second, even when the incentives are perfectly aligned across generations, increased strategic uncertainty of an intergenerational setting may lead to an increased inconsistency of own actions and beliefs about the others, making own actions more myopic. Intergenerational learning through history and advice from previous generations may improve dynamic efficiency, but may also lead to persistent myopic bias. |
| Keywords: | economic experiments, dynamic externalities, intergenerational games, climate change |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:kch:wpaper:sdes-2014-14&r=ene |
| By: | Alexandros Dimitropoulos; Jos N. van Ommeren; Paul Koster; Piet Rietveld† (VU University Amsterdam) |
| Abstract: | This paper presents an approach for the estimation of welfare effects of tax policy changes under heterogeneity in consumer preferences. The approach is applied to evaluate the welfare effects of current tax advantages for electric vehicles supplied as fringe benefits by employers. Drawing on stated preferences of Dutch company car drivers, we assess the short-run welfare effects of changes in the taxation of the private use of these vehicles. We find that the welfare gain of a marginal increase in the taxation of electric company cars is substantial and even outweighs the marginal tax revenue raised. |
| Keywords: | Social welfare, Latent class, Stated preference, Company car, Electric vehicle, Plug-in hybrid |
| JEL: | D12 H23 H24 H31 O33 Q58 R41 |
| Date: | 2014–06–02 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20140064&r=ene |
| By: | Alexandros Dimitropoulos (VU University Amsterdam) |
| Abstract: | We examine the influence of drivers’ environmental concerns on their preferences for different types of plug-in electric vehicles (PEVs). Our empirical approach is built around the results of a large-scale survey among Dutch drivers, where preferences for electric vehicles are elicited through a choice experiment and environmental concerns are reflected in individual responses to Likert-type questions. On this basis, we develop advanced latent class models to study preference heterogeneity and its link to drivers’ socio-demographic background and environmental concerns. We find that environmental concerns are an important predictor of class membership and that highly concerned drivers tend to cluster in classes with a positive stand towards PEVs. High environmental concerns are positively associated with driver’s age and education, while negatively related to d river’s household income. |
| Keywords: | Latent class, Latent variable, Environmental concern, Electric vehicle, Plug-in hybrid |
| JEL: | D12 O33 Q58 R41 |
| Date: | 2014–09–22 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:uvatin:20140128&r=ene |
| By: | Ana Balsa; Juanita Bloomfield; Marcelo Caffera |
| Abstract: | This study explores the impact of air pollution on adverse birth outcomes. The study focuses on the effect of breathable particulate matter with diameter of 10 micrometers or less (PM10) on the likelihood of premature birth and low birth weight (LBW). The study exploits the fact that in 2011 the ashes and dust resulting from the eruption of the Puyehue volcano in Chile substantially increased exposure to PM10 in Montevideo, Uruguay. Using prenatal and birth data from the Perinatal Information System for 2010-2012, it is found that increases in quarterly averages of PM10 concentrations beyond 50 µg/m3 decrease birth weight and increase the likelihood of LBW and prematurity at increasing rates. The results also suggest that the effect of PM10 on birth weight works mainly through a higher likelihood of prematurity, rather than through intrauterine growth retardation. The effects increase with each trimester of pregnancy: exposure during the third trimester is the most dangerous. |
| Keywords: | Youth & Children, Human health, Pollution, Particulate matter, Pollution, Low birth weight, Pre-term birth |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:idb:brikps:86893&r=ene |
| By: | Gregmar Galinato; Hayley Chouinard (School of Economic Sciences, Washington State University) |
| Abstract: | We provide a model of environmental regulation to control transboundary pollution while considering the role of neighboring country regulations and measures of the quality of own and neighboring country government institutions. We apply a Spatial Durbin model to identify the determinants of the environmental regulations of several OECD countries. We do not find evidence of strategic interaction as the regulations of a neighbor do not significantly impact the own country regulations. However, the higher the quality of government institutions in a country, the more stringent the implementation of regulations. Additionally, government institutional quality significantly positively impacts the stringency of regulations in neighboring countries indirectly, possibly through technology choices. |
| Keywords: | Environmental regulations, institutions, spatial model, strategic interaction, spillovers |
| JEL: | H2 Q5 |
| URL: | http://d.repec.org/n?u=RePEc:wsu:wpaper:galinato-12&r=ene |
| By: | Roman Horváth (Institute of Economic Studies, Charles University); Ayaz Zeynalov |
| Abstract: | We examine the effect of natural resource abundance on economic performance during the 1996–2011 period in the 15 independent countries that formerly comprised the Soviet Union. These countries were a largely homogeneous group with respect to institutional development, liberalization and economic performance; however, these countries began to demonstrate marked differences from one another with respect to these factors during the transition, which has resulted in unique cross-section and time variation. Using several panel regression models that address the endogeneity issues, our results suggest that natural resources crowd out manufacturing sector unless the quality of domestic institutions is sufficiently high. Conversely, trade policies do not help convert the natural resource curse into a blessing. |
| Keywords: | natural resource curse, institutions, manufacturing, post-Soviet countries |
| JEL: | O11 O13 Q30 |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:ost:wpaper:341&r=ene |
| By: | Jaime de Melo (Fondation pour les Etudes et Recherches sur le Développement International (FERDI)); Mariana Vijil (DG Treasury, French Ministry for the Economy and Finance and FERDI) |
| Abstract: | At the Davos forum of January 2014, a group of 14 countries pledged to launch negotiations on liberalising trade in ‘green goods’ (also known as `environmental goods’(EGs)), focussing on the elimination of tariffs for an ‘APEC list’ of 54 products. The paper shows that the ‘Davos group’, with an average tariff of 1.8%, has little to offer as countries have avoided submitting products with tariffs peaks for tariff reductions. Even if the list were extended to the 411 products on the ‘WTO list’, taking into account tariff dispersion, their tariff structure on EGs would be equivalent to a uniform tariff of 3.4%, about half the uniform tariff-equivalent for non EGs products. Enlarging the number of participants to low-income countries might be possible as, on average, their imports would not increase by more than 8 percent. However, because of the strong complementarities between trade in Environmental Goods and trade in Environmental Services, these should also be brought to the negotiation table even though difficulties in reaching agreement on their scope are likely to be great |
| Keywords: | Environmental Goods, Environmental Services, Doha Round, APEC, Davos Initiative, Tariff Reductions |
| JEL: | F18 Q56 |
| Date: | 2014–08 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2014.70&r=ene |