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on Energy Economics |
| By: | Ian W.H. Parry; Chandara Veung; Dirk Heine |
| Abstract: | This paper calculates, for the top twenty emitting countries, how much pricing of carbon dioxide (CO2) emissions is in their own national interests due to domestic co-benefits (leaving aside the global climate benefits). On average, nationally efficient prices are substantial, $57.5 per ton of CO2 (for year 2010), reflecting primarily health co-benefits from reduced air pollution at coal plants and, in some cases, reductions in automobile externalities (net of fuel taxes/subsidies). Pricing co-benefits reduces CO2 emissions from the top twenty emitters by 13.5 percent (a 10.8 percent reduction in global emissions). However, co-benefits vary dramatically across countries (e.g., with population exposure to pollution) and differentiated pricing of CO2 emissions therefore yields higher net benefits (by 23 percent) than uniform pricing. Importantly, the efficiency case for pricing carbon’s co-benefits hinges critically on (i) weak prospects for internalizing other externalities through other pricing instruments and (ii) productive use of carbon pricing revenues. |
| Keywords: | Greenhouse gas emissions;Fossil fuels;Energy pricing policy;Energy taxes;Climate policy;carbon pricing; co-benefits; air pollution; fuel taxes; top twenty emitters |
| Date: | 2014–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:14/174&r=ene |
| By: | Jan Abrell; Hannes Weigt (University of Basel) |
| Abstract: | Natural gas plays an important role in the future development of electricity<br />markets as it is the least emission intensive fossil generation option while<br />additionally providing the needed flexibility in plant operation to deal with<br />intermittent renewable generation. As both the electricity and the natural<br />gas market rely on networks, congestion on one market may lead to changes<br />on another. In addition, investments in one market have an impact in the<br />other and may even become substitutes for one another. The objective of this<br />paper is to develop a dynamic model representation of coupled natural gas<br />and electricity network markets to test the potential interaction with respect<br />to investments. The model is tested under simplified conditions as well as<br />for a stylized European network setting. The results indicate that there is<br />a potential for investment-substitution and significant market interactions<br />that warrants the application of coupled models especially with regard to<br />simulations of long term system developments. |
| Keywords: | Electricity network, Natural gas network, Europe, MCP |
| JEL: | L94 L95 Q4 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2014/05&r=ene |
| By: | Yamaura, Koichi; Fewell, Jason; Garay, Pedro |
| Keywords: | Competition, Market Power, Palm Oil, RDE, sustainable energy, International Relations/Trade, Resource /Energy Economics and Policy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169899&r=ene |
| By: | Sijm, Jos; Lehmann, Paul; Chewpreecha, Unnada; Gawel, Erik; Mercure, Jean-Francois; Pollitt, Hector; Strunz, Sebastian |
| Abstract: | The European Council has proposed to stick to a more ambitious GHG target but to scrap a binding RES target for the post-2020 period. This is in line with many existing assessments which demonstrate that additional RES policies impair the cost-effectiveness of addressing a single CO2 externality, and should therefore be abolished. Our analysis explores to what extent this reasoning holds in a secondbest setting with multiple externalities related to fossil and nuclear power generation and policy constraints. In this context, an additional RES policy may help to address externalities for which firstbest policy responses are not available. We use a fully integrated combination of two separate models the top-down, global macro-economic model E3MG and the bottom-up, global electricity sector model FTT:Power - to test this hypothesis. Our quantitative analysis confirms that pursuing an ambitious RES target may mitigate nuclear risks and at least partly also negative non-carbon externalities associated with the production, import and use of fossil fuels. In addition, we demonstrate that an additional RES target does not necessarily impair GDP and other macro-economic measures if rigid assumptions of purely rational behaviour of market participants and perfect market clearing are relaxed. Overall, our analysis thus demonstrates that RES policies implemented in addition to GHG policies are not per se welfare decreasing. There are plausible settings in which an additional RES policy may outperform a single GHG/ETS strategy. Due to the fact, however, that i) policies may have a multiplicity of impacts, ii) the size of these impacts is subject to uncertainties and iii) their valuation is contingent on individual preferences, an unambiguous, "objective" economic assessment is impossible. Thus, the eventual decision on the optimal choice and design of climate and energy policies can only be taken politically. |
| Keywords: | climate policy,energy policy,EU,emissions trading scheme,policy mix,renewables |
| JEL: | C53 Q42 Q43 Q48 Q54 Q58 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:32014&r=ene |
| By: | Steiner, Christopher |
| Abstract: | This paper uses a complicated set of phase-ins and phase-outs of oxygenated motor fuel in the Northeast to determine whether E-10 ethanol-enhanced fuel contributes to acetaldehyde air pollution over the pre-ethanol methyl tertiary-buthyl ether (MTBE) fuel. Oil companies phased out MTBE because of groundwater pollution concerns, and now E-10 is the standard fuel in EPA reformulated gas areas. Using a difference-in-difference setup, I find a small level increase but a large percentage increase in acetaldehyde pollution with E-10. I also compute a cost of the pollution in the single-digit millions of dollars. The findings concur with many scientific papers estimating that the impact of E-10 fuel on acetaldehyde pollution is small but positive. |
| Keywords: | ethanol, air pollution, applied economics, environmental economics, acetaldehyde, Agricultural and Food Policy, Environmental Economics and Policy, Q3, Q5, |
| Date: | 2014–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169289&r=ene |
| By: | Pascal Gourdel (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Maria Lykidi (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris) |
| Abstract: | In the case of a large nuclear set (like the French set), nuclear production needs to be flexible to adjust to the predicted evolutions of the energy demmand. Consequently, the dominant position of nuclear in the national energy mix makes it responsible for the overall equilibrium of the electricity system which is directly intertwined with social welfare. In a previous work, we looked at producers own profits (short-term, inter-temporal) considering the equality between supply and demand. Here, we proceed with a full optimization of the social welfare in an identical framework. Theoretically, the optimal production behaviour that maximizes social welfare is characterized by a constant thermal production and a totally flexible nuclear production given that the nuclear capacity is sufficient. Numerically, the significant amount of nuclear capacities compared with thermal capacities in the French electricity market leads to the same "paradoxical" production behaviour. Therefore, we conclude that social optimum is ensured within our model by investing sufficiently in nuclear capacity. The optimal production scheduling determined by the social welfare maximization problem and the optimal inter-temporal production problem are totally opposite. |
| Keywords: | Electricity power; nuclear power plant; flexibility; nuclear fuel stock; thermal generation; social welfare; total cost minimization |
| Date: | 2014–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01053480&r=ene |
| By: | Zsuzsanna Csereklyei (Geschwister Scholl Institute of Political Science, Ludwig-Maximilians-UniversitŠt Munich); Maria del Mar Rubio Varas (Department of Economics, Universidad Publica de Navarra); David I. Stern (Crawford School of Public Policy, The Australian National University) |
| Abstract: | We summarize what we know about energy and economic growth in a set of stylized facts. We combine analysis of a panel data set of 99 countries from 1971 to 2010 with analysis of some longer run historical data. Our key result is that over the last 40 years there has been a stable cross-sectional relationship between per capita energy use and income per capita with an elasticity of energy use with respect to income of less than unity. This implies that energy intensity has tended to decrease in countries that have become richer but not in others. We also find that over the last two centuries there has been convergence in energy intensity towards the current distribution, per capita energy use has tended to rise, energy quality to increase, and, though evidence is limited, the cost share of energy has declined. |
| Keywords: | economic development, energy intensity, energy efficiency |
| JEL: | Q43 O44 O13 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:een:ccepwp:1417&r=ene |
| By: | T. Anderson, Soren; Kellog, Ryan; W. Salant, Stephen (Resources for the Future) |
| Abstract: | We show that oil production from existing wells in Texas does not respond to price incentives. Drilling activity and costs, however, do respond strongly to prices. To explain these facts, we reformulate Hotelling's (1931) classic model of exhaustible resource extraction as a drilling problem: firms choose when to drill, but production from existing wells is constrained by reservoir pressure, which decays as oil is extracted. The model implies a modified Hotelling rule for drilling revenues net of costs and explains why production is typically constrained. It also rationalizes regional production peaks and observed patterns of price expectations following demand shocks. |
| Keywords: | crude oil prices, oil extraction, decline curve, oil drilling, rig rental rates, exhaustible resourceCreation-Date: 2014-07-30 |
| JEL: | Q3 Q4 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-14-20&r=ene |
| By: | Ronald A. Ratti; Joaquin L. Vespignani |
| 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 age”. 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 growth in 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: | E31 E32 Q43 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2014-69&r=ene |
| By: | Grimm, Michael (University of Passau); Munyehirwe, Anicet (IB&C Rwanda); Peters, Jörg (RWI); Sievert, Maximiliane (RWI) |
| Abstract: | More than 1.3 billion people lack access to electricity. The UN have proclaimed the goal of providing electricity to all by 2030. In recent years, Pico-Photovoltaic kits have become a lower cost alternative to investment intensive grid electrification. Using a randomized controlled trial we examine uptake and impacts of a simple Pico-Photovoltaic kit that barely exceeds the benchmark of what the UN considers as modern energy. We find significant effects on households' budget, productivity and convenience. Despite these effects, the data shows that adoption will be impeded by affordability, suggesting that policy has to consider subsidized dissemination strategies. |
| Keywords: | energy access, household technology adoption, Sub-Saharan Africa, randomized controlled trial |
| JEL: | O13 O18 Q41 |
| Date: | 2014–10 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp8594&r=ene |
| By: | Mathur, Kritika; Sinha, Pankaj |
| Abstract: | Electricity is a commodity and has a characteristic of being non-storable; it must be consumed once it is produced. In India, the Electricity Act (2003) tries to promote competition by unbundling and treating generation, transmission and distribution as separate entities. In order to address the needs of the power sector, the last decade has seen the setting up of markets for bilateral trading of electricity followed by trading of power on power exchanges in 2008. Power exchanges are able to mitigate risks arising from price volatility for the participants to a large extent. Power exchanges offer short term trading of electricity, of which day-ahead electricity trading on power exchanges forms a significant component. Day-ahead electricity markets allow exchange of contracts with delivery of electricity for the twenty four hours of the next day. The study examines the trading of day-ahead electricity contracts in India. |
| Keywords: | power exchanges, day- ahead electricity trading, trading mechanism |
| JEL: | D44 Q41 Q48 |
| Date: | 2014–11–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:59934&r=ene |
| By: | Anindya BHATTACHARYA (The Celestial Earth Consultant, India); Tania BHATTACHARYA (The Celestial Earth Consultant, India) |
| Abstract: | As economic power shifts towards Asia---particularly China, India and the Association of Southeast Asian Nations (ASEAN) ---a robust energy cooperation within this region will help sustain the region's development. Cooperation master plans already in place include interconnecting power grids and gas pipelines, engaging in cross-border power projects and promoting freer trade of energy commodities among the countries. The East Asia Summit region (EAS) pioneers such cooperation not only within the ASEAN region and the Greater Mekong Subregion (GMS) but with nations such as India, Russia, the United States, and Australia as well. This study, though, focuses more on India and how its Look East Policy helps forged trade and other bilateral cooperation with the ASEAN nations, and how Myanmar plays a strategic role in India's energy security. This study also concentrates on a particular energy resource---natural gas---and develops a quantitative assessment model to evaluate India and its neighbouring countries' long-term natural gas demand, corresponding infrastructure requirements, and investment demand. Specifically, it looks at how India’s Look East Policy can help secure the required amount of natural gas from the ASEAN and East Asia region and at what cost. There is nothing new with including Myanmar in a discussion on regional energy cooperation. After all, this is a country with abundant untapped natural resources, including hydro and natural gas. However, very few studies have so far focused on Myanmar’s strategic location and geography and how it can provide the non-energy resources---such as land, water, human resources, and maritime channels for seaborne trade---needed to develop a robust integrated energy market. All these are essential factor inputs for large-scale energy infrastructure projects. This study thus explores Myanmar's role in helping India with the latter's own energy security. Through a three-stage analysis of the regional energy problem, the study demonstrates that India is eventually going to depend more on gas (after coal) for its energy supply. As India’s home-grown gas supply is not sufficient to meet its domestic gas demand, it currently imports more than 75 percent of its requirement from Qatar. Given the growth in future demand, growing supply volatility of Middle East gas, and increasing gas prices (including Asian premium), any dependence on the Middle East's supply makes gas more expensive and vulnerable for India. Also, since more than 27 percent of the landed price of gas and LNG in the country consists of transport cost, it is important to reduce the distance of transport. |
| Keywords: | Energy Market Integration, Natural Gas, India, Myanmar Energy |
| JEL: | Q43 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2014-19&r=ene |
| By: | Hadrich, Joleen; Manning, Dale |
| Abstract: | Current climate policy focuses disproportionately on carbon dioxide emissions but recent developments have begun to recognize the important role of other gases, including methane. As a result, anaerobic digesters (ADs) on dairy farms present an opportunity to reduce greenhouse gas emissions. We quantify the social and private costs and benefits of ADs that have been adopted in California and find that despite high initial costs, large reductions in GHG emissions bring significant social benefits and represent good social investments given a $36 per-ton carbon price. Subsidies that lower the initial private investment cost can help align socially and privately optimal adoption decisions. |
| Keywords: | anaerobic digesters, dairy, West, Agricultural Finance, Environmental Economics and Policy, |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170535&r=ene |
| By: | Ce Wang; Hua Liao; Su-Yan Pan; Lu-Tao Zhao; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology) |
| Abstract: | The fluctuations of China's energy intensity have attracted the attention of many scholars, but fewer studies consider the data quality of official input-output tables. This paper conducts a decomposition model by using the Divisia method based on the input-output tables. Because of the problems with input-output tables and price deflators, we first produce constant prices to deflate the input-output tables. And then we consider different levels of biased technical change for different sectors in the adjusting the input-output table. Finally, we use RAS technique to adjust input-output matrix. Then the decomposition model is employed to empirically analyze the change of China's energy intensity. We compare the decomposition results with and without biased technical change and do sensitive analysis on the level of biased technical change. The conclusions are that during 2002-2007, except crude oil and refined oil, the energy intensity increased and the changes were mostly attributed to the structural change, while the changes in the production technology actually decreased the energy intensity. Furthermore, compared to the decomposition without biased technical change, the degree of the influence from structural change on the changes in energy intensity depends on the level of biased technical change. |
| Keywords: | Biased Technical Change, Divisia Decomposition, Input-Output Analysis, Energy Intensity, China, RAS Technique |
| JEL: | Q40 |
| Date: | 2014–02 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:56&r=ene |
| By: | Ye, Shiyu; Karali, Berna; Ramirez, Octavio A. |
| Abstract: | We apply the Distributional Event Response Model (DERM), which is appropriate in studying relatively slowly-evolving information events, to nineteen years of daily crude oil futures returns and volatility to analyze the pattern of market responses to selected events. The results show that all the events considered have statistically significant effects on crude oil futures price volatility. The U.S. invasion of Iraq in 2003 and the bankruptcy filing of Lehman Brothers in 2008 are found to have the largest impacts on both daily returns and volatility. In addition, the location and duration of event windows vary across different event. Generally, the largest volatility response to an event is observed after several months following the event, suggesting that simply using an event-day dummy variable would hinder discovering the actual market responses to slowly-evolving events. |
| Keywords: | crude oil, distributional event response model (DERM), event study, returns, volatility, Demand and Price Analysis, Institutional and Behavioral Economics, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170207&r=ene |
| By: | Zhao, Xueting; Burnett, J. Wesley; Lacombe, Donald J. |
| Abstract: | This study offers a unique contribution to the literature by investigating the convergence of province-level carbon dioxide emission intensity among a panel of 30 provinces in China over the period 1990-2010. We use a novel, spatial dynamic panel data model to evaluate an empirically testable hypothesis of convergence among provinces. Our results suggest that: (1) CO2 emission intensities are converging across provinces in China; (2) the rate of convergence is higher with the dynamic panel data model than the cross-sectional regression models; and, (3) province-level CO2 emission intensities are spatially correlated and the rate of convergence, when controlling for spatial autocorrelation, is higher than with the non-spatial models. |
| Keywords: | CO2 emission intensity, Convergence, Spatial dynamic panel data, China, Environmental Economics and Policy, Resource /Energy Economics and Policy, C40, Q4, Q54, Q56, R11, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169403&r=ene |
| By: | Ingmar Schlecht; Hannes Weigt (University of Basel) |
| Abstract: | We present a bottom-up electricity market model for Switzerland called Swissmod.<br />It includes a detailed electricity network and hydropower representation. Swissmod<br />captures the features and restrictions of run-of-river, yearly storage and pumped-storage power plants and combines this with a network model of the river and water stream system to take the interdependence of hydraulically coupled hydropower plants into account. In addition, the Swiss electricity network is represented using the DC load <br />ow approach, allowing for spatial market evaluations. The model is developed as a deterministic optimization problem in GAMS. It provides an hourly resolution over a one-year horizon with an approximated representation of the surrounding European electricity markets. The aim of this paper is to outline the model and calibrate it to 2012 data. |
| Keywords: | Switzerland, electricity markets, power ow, hydropower, nodal pricing. |
| JEL: | L94 Q4 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:bsl:wpaper:2014/04&r=ene |
| By: | Jozef Baruník (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic; Institute of Information Theory and Automation, Academy of Sciences of the Czech Republic, Pod Vodarenskou Vezi 4, 182 00, Prague, Czech Republic); Tomáš Køehlík (Institute of Economic Studies, Faculty of Social Sciences, Charles University in Prague, Smetanovo nábreží 6, 111 01 Prague 1, Czech Republic; Institute of Information Theory and Automation, Academy of Sciences of the Czech Republic, Pod Vodarenskou Vezi 4, 182 00, Prague, Czech Republic) |
| Abstract: | In the past decade, the popularity of realized measures and various linear models for volatility forecasting has attracted attention in the literature on the price variability of energy markets. However, results that would guide practitioners to a specic estimator and model when aiming for the best forecasting accuracy are missing. This paper contributes to the ongoing debate with a comprehensive evaluation of multiple-step-ahead volatility forecasts of energy markets using several popular high-frequency measures and forecasting models. To capture the complex patterns hidden to linear models commonly used to forecast realized volatility, this paper also contributes to the literature by coupling realized measures with articial neural networks as a forecasting tool. Forecasting performance is compared across models as well as realized measures of crude oil, heating oil, and natural gas volatility during three qualitatively distinct periods covering the precrisis period, recent global turmoil of markets in 2008, and the most recent post-crisis period. We conclude that coupling realized measures with articial neural networks results in both statistical and economic gains, reducing the tendency to over-predict volatility uniformly during all tested periods. Our analysis favors the median realized volatility, as it delivers the best performance and is a computationally simple alternative for practitioners. |
| Keywords: | artificial neural networks, realized volatility, multiple-step-ahead forecasts, energy markets |
| JEL: | C14 C53 G17 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:fau:wpaper:wp2014_30&r=ene |
| By: | Chugh, Randy; Cropper, Maureen (Resources for the Future) |
| Abstract: | We estimate a model of vehicle choice and miles driven to analyze the impact of fuel conservation policies in the Indian car market. Taxing diesel fuel to equalize diesel and petrol prices would reduce fuel consumption in the new car market by 7 percent and reduce diesel car sales by 26 percent. A tax on diesel cars with the same sales impact would reduce fuel consumption by only 2 percent. The compensating variation per liter of fuel saved is smaller for the fuel tax than for the car tax; however, the car tax has lower deadweight loss per liter of fuel saved. Our estimates of the long-run elasticities of fuel consumption with respect to fuel prices imply that the CAFE standards contemplated by the Indian government would generate a significant rebound effect. Projected fuel savings are 20 percent if consumers do not adjust to the change in operating costs and less than 9 percent once consumers adjust. |
| Keywords: | Indian car market, fuel conservation, fuel taxes |
| JEL: | L9 R48 Q48 |
| Date: | 2014–09–17 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-14-33&r=ene |
| By: | Joachim Schleich (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM), ISI - Fraunhofer Institute for Systems and Innovation Research - a Fraunhofer Institute for Systems and Innovation Research); Bradford Mills (Virginia Polytechnic Institute and State University [Blacksburg] - Virginia Polytechnic Institute and State University); Elisabeth Dütschke (ISI - Fraunhofer Institute for Systems and Innovation Research - a Fraunhofer Institute for Systems and Innovation Research) |
| Abstract: | Abstract: This paper quantifies the direct rebound effects associated with the switch from incandescent lamps (ILs) or halogen bulbs to more energy efficient compact fluorescent lamps (CFLs) or light emitting diodes (LEDs) using a large nationally representative survey of German households. The direct rebound effect is measured as the elasticity of useful lighting demand with respect to changes in energy efficient lamps. In particular, the rebound effect is decomposed into changes in lamp luminosity and burn time. On average, more efficient replace-ment bulbs are 23% brighter and burn about 6.5 minutes per day longer than replaced bulbs. For the most frequent (modal) bulb switch, i.e. the replacement of the main bulb in the living or dining room, luminosity increases by 10% and burn time increases by 9 minutes per day. For the average bulb, the associated total direct rebound effect is estimated at 6.3%. The larger part (around 60%) of this rebound effect results from increases in bulb luminosity. For the modal bulb the total direct rebound effect is smaller at 2.6%, with around 60% attributable to an increase in burn time. Average and modal bulb differences suggest that the magnitude to the rebound effect may decrease with intensity of initial bulb use. The magnitude of the direct rebound and the relative contributions of changes in luminosity and burn time also tend to differ by initial bulb type and by replacement bulb type. Finally, about a third of the bulb switches entail a nega-tive rebound effect, i.e. energy savings are larger than expected if luminosity and burn time remained unchanged, highlighting significant heterogeneity in household responses to the adoption of energy efficient bulbs. |
| Keywords: | rebound effect; lighting; energy efficiency; energy demand |
| Date: | 2014–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-00991732&r=ene |
| By: | Naoyuki Yoshino (Asian Development Bank Institute (ADBI)); Farhad Taghizadeh-Hesary |
| Abstract: | Japan has reached the limits of conventional macroeconomic policy. In order to overcome deflation and achieve sustainable economic growth, the Bank of Japan (BOJ) recently set an inflation target of 2% and implemented an aggressive monetary policy so this target could be achieved as soon as possible. Although prices started to rise after the BOJ implemented monetary easing, this may have been for other reasons, such as higher oil prices. Oil became expensive as a result of the depreciated Japanese yen and this was one of the main causes of the rise in inflation. This paper shows that quantitative easing may not have stimulated the Japanese economy either. Aggregate demand, which includes private investment, did not increase significantly in Japan with lower interest rates. Private investment displays this unconventional behavior because of uncertainty about the future and because Japan’s population is aging. We believe that the remedy for Japan’s economic policy is not to be found in monetary policy. The government needs to implement serious structural changes and growth strategies. |
| Keywords: | Easing of Monetary Policy, the Japanese economy, energy price, Bank of Japan, aging population |
| JEL: | E47 E52 Q41 Q43 |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:eab:macroe:24520&r=ene |
| By: | Khanna, Madhu; Hector, Nunez; David, Zilberman |
| Abstract: | Brazil has pursued a mix of policy interventions in the fuel sector to achieve multiple objectives of economic and social development, promoting biofuels and reducing dependence on oil. We develop a welfare economic framework to analyze the rationale the fuel policy choices in Brazil and to analyze the trade-offs they have engendered in the fuel and sugar sectors. We also examine their distributional impacts on producers and consumers in the sugar, oil and biofuel sectors and on government revenues. Additionally, we undertake a normative analysis for the purpose of comparing the welfare and environmental impacts of existing policies with those justified by the goal of maximizing social welfare and addressing market failure. The ex-post analysis of the outcomes for different stakeholders in the fuel and sugar sectors provides insights on the likely political-economic factors guiding policy choices. We find that the status quo policies are likely to have been motivated by the objectives of exporting oil, raising government revenue and promoting rural development through the sugarcane sector and have had a significant adverse effect on fuel and sugar consumers and aggregate social welfare in Brazil. |
| Keywords: | Political Economy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:169471&r=ene |
| By: | Fratzscher, Marcel; Schneider, Daniel; Van Robays, Ine |
| Abstract: | This paper takes a financial market perspective in examining the relationship between oil prices, the US dollar and asset prices, and it exploits the heteroskedasticity for the identification of causality in a multifactor model. It finds a bidirectional causality between the US dollar and oil prices since the early 2000s. Moreover, both oil prices and the US dollar are significantly affected by changes in equity market returns and risk. By contrast, oil prices did not react to changes in these financial assets before 2001. The paper provides evidence that this may be explained by the increased use of oil as a financial asset over the past decade, which intensified the link between oil and other assets. The model can account well for the strong and rising negative correlation between oil prices and the US dollar since the early 2000s, with risk shocks and the financialisation process of oil prices explaining most of the strengthening of this correlation. JEL Classification: F30, G15 |
| Keywords: | asset prices, exchange rates, identification, oil prices, time-varying correlation, US dollar |
| Date: | 2014–07 |
| URL: | http://d.repec.org/n?u=RePEc:ecb:ecbwps:20141689&r=ene |
| By: | Yuri Quixina (Faculdade de Economia, Universidade do Porto); Álvaro Almeida (CEF.UP and Faculdade de Economia, Universidade do Porto) |
| Abstract: | This paper analyzes the relationship between financial development and economic growth in Angola, an economy heavily dependent on natural resources. We extend existing literature by treating separately the oil and non-oil sectors of the economy. We test for Granger causality between three variables – oil revenues, non-oil GDP and financial development – for the Angolan economy for the period 1995-2012. The results show that the oil sector has been the great engine of Angolan economic growth, since we identified Granger causality from oil revenues to the other two variables, but none of these variables Granger causes oil revenues. On the other hand, financial development does not seem to have a significant role in economic growth in Angola: it does not Granger-cause either oil revenues or non-oil GDP, even though it is Granger-caused by both variables. |
| Keywords: | Financial Development, Economic Growth, Natural Resources, Angola |
| JEL: | E44 O16 O43 Q32 |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:542&r=ene |
| By: | Pizer, William A.; Yates, Andrew J. |
| Abstract: | Links between emission trading programs are not immutable, as highlighted by New Jersey's exit from the Regional Greenhouse Gas Initiative. This raises the question of what to do with existing permits that are banked for future use--choices that have consequences for market behavior in advance of, or upon speculation about, delinking. We consider two delinking policies. One differentiates banked permits by origin, the other treats banked permits the same. We describe the price behavior and relative cost-effectiveness of each policy. Treating permits differently generally leads to higher costs, and may lead to price divergence, even with only speculation about delinking. |
| Date: | 2014–08–28 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-14-28&r=ene |
| By: | John K. Stranlund (Department of Resource Economics, University of Massachusetts Amherst); James J. Murphy (Department of Economics, University of Alaska Anchorage; Institue of State Economy, Nankai University); John M. Spraggon (Department of Resource Economics, University of Massachusetts Amherst) |
| Abstract: | We present results from laboratory emissions markets designed to investigate the effects of price controls and permit banking on limiting permit price risk. While both instruments reduce between-period price volatility and within-period price dispersion, combining price controls and permit banking yields important benefits. Banking alone produces high permit prices in earlier periods that fall over time, but the combined policy produces lower initial prices and lower volatility. However, banking, price controls, and the combination all produce higher between-period emissions volatility. Hence, for emissions markets that seek to control flow pollutants with strictly convex damages, efforts to limit permit price risk can result in higher expected damage. |
| Keywords: | experimental economics, Emissions trading, Cap and trade, Laboratory experiments, Permit markets, Permit banking, Price controls, Price collars |
| JEL: | C91 L51 Q58 |
| Date: | 2014–04 |
| URL: | http://d.repec.org/n?u=RePEc:ala:wpaper:2014-01&r=ene |
| By: | Mariusz Jarmuzek; Diego Mesa Puyo; Najla Nakhle |
| Abstract: | Lebanon is expected to have gas resources in its Mediterranean basin, and these could turn the country into a natural gas producer over the next decade. Lebanon’s economy and institutions will thus need to adapt to the challenges and opportunities that such change will bring. In this paper, we address how Lebanon’s fiscal framework will need to be reformulated to take into account potential resource revenue. Designing a fiscal regime appropriately is an absolute prerequisite to make sure the government can receive a fair share of the resources while investors face appropriate incentives to invest and develop the sector. This step should be followed by setting macro-fiscal anchors and supporting institutions. The prospective framework should initially be focused on ensuring fiscal sustainability and intergenerational equity, given the estimated relatively short horizon of Lebanon’s gas resources. Strong institutional arrangements also need to underpin the prospective framework, to ensure that the pace of resource wealth’s use is set in line with Lebanon’s capacity constraints. |
| Keywords: | Fiscal framework;Lebanon;Fiscal policy;Natural resources;Oil producing countries;fiscal policy, oil-producing countries, resource revenue management, accountability |
| Date: | 2014–10–23 |
| URL: | http://d.repec.org/n?u=RePEc:imf:imfwpa:14/193&r=ene |
| By: | Marisa Beck, Nicholas Rivers, Randall Wigle, Hidemichi Yonezawa (Wilfrid Laurier University) |
| Abstract: | This study investigates the distributional implications of the revenue-neutral carbon tax policy in British Columbia. We use a computable general equilibrium (CGE) model of the Canadian economy and disaggregate households into deciles by annual income using data from a large household expenditure survey. Using the model, we find that the existing BC carbon tax is highly progressive even prior to consideration of the revenue recycling scheme, such that the negative impact of the carbon tax on households with below-median income are smaller than that on households with above-median income. We show that our finding is a result of welfare effects of a carbon tax being determined primarily by the source of a households' income rather than by the destination of its expenditures. Finally, we show that the existing revenue recycling scheme is also progressive. Overall, the tax appears to be highly progressive. |
| Keywords: | carbon taxes, distributional effects, British Columbia, computable general equilibrium analysis |
| JEL: | Q48 Q54 D63 |
| Date: | 2014–09–07 |
| URL: | http://d.repec.org/n?u=RePEc:wlu:lcerpa:0080&r=ene |
| By: | Beatty, Timothy K.M.; Tuttle, Charlotte |
| Keywords: | Food Security, Energy Prices, Income Shocks, Food Security and Poverty, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170546&r=ene |
| By: | Debnath, Deepayan; Binfield, Julian; Whistance, Jarrett |
| Abstract: | Recently, the Environmental Protection Agency (EPA) proposed biofuel requirements for 2014 that suggest the use of ethanol would probably be lower than the volume previously envisioned in the Energy Independence and Security Act (EISA) of 2007. The impact of waiving down the mandate in the U.S., and shrinking the “advanced gap” will mean that both the U.S. and Brazil will export more to other countries. Given the flexibility the EPA has for setting policy, we analyze the impact of two alternative scenarios for mandate waivers on the U.S. domestic biofuel market and its implications for the world ethanol and biodiesel market: (1) overall mandate is waived down to a level which preserves the “advanced gap” at the levels envisioned in the RFS2; (2) overall mandate is achieved by expanding the biodiesel mandate is expanded from 1.28 billion gallons to 1.8 billion gallons. Increasing the advanced gap leads to both an increase in imports, but also an increase in exports of ethanol for the U.S., driven by the fact that the U.S. discriminates on the basis of feedstock where Brazil does not. |
| Keywords: | Global biofuels model, U.S. biofuels mandates, Demand and Price Analysis, International Relations/Trade, Resource /Energy Economics and Policy, Q42, Q48, |
| Date: | 2014–07–28 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:173301&r=ene |
| By: | Sesmero, Juan; McCarty, Tanner |
| Abstract: | Over the past few years cellulosic biofuel production has continually fell short of the mandates set by the Renewable fuel standard. This has continued to happen despite positive predictions in the net present value of a cellulosic biofuel plants and government subsidy/assistance programs. The present study evaluates the impact of alternative policy instruments on the price that firms require to enter the market. Some policies aim at increasing the mean returns on investment without affecting uncertainty (annual subsidy and establishment cost subsidy), others are designed to reduce uncertainty without affecting the mean (long-term production contracts), and finally some instruments affect both (blending mandates and price supports). Results from a parameterized real options model analyzing and comparing the cost effectiveness of different policies show, on a per dollar basis, that not all policies are created equal when it comes to lowering the price premium required for entry into the industry. Our analysis finds that a biofuel price support constitute the most cost-effective policy option. |
| Keywords: | biofuel policy, cost effectiveness, entry, real options, Production Economics, Resource /Energy Economics and Policy, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170598&r=ene |
| By: | William Acworth |
| Abstract: | In response to an imbalance between the demand and supply of permits within the European Union Emissions Trading System (EU ETS), the European Commission has proposed the introduction of a Market Stability Reserve (MSR). The MSR represents a quantity based automatic adjustment mechanism, which is designed to tackle the current surplus and introduce a degree of flexibility, allowing the system to respond to future demand side shocks. While some positive features of the MSR have been highlighted, the design, effectiveness and institutional setting have also come under criticism. |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwrup:23en&r=ene |
| By: | Cropper, Maureen (Resources for the Future); Khanna, Shefali |
| Abstract: | We evaluate the approach currently used by the World Bank to measure exposure to outdoor air pollution and associated economic costs, as reported in the World Development Indicators database. We recommend that current exposure estimates, based on an econometric model, be replaced by estimates used in computing the Global Burden of Disease (GBD). The GBD combines satellite data with chemical transport models to provide global estimates of fine particle exposure. We recommend that the World Bank also use estimates of disability-adjusted life years (DALYs) lost due to outdoor air pollution produced by the GBD. DALYs should continue to be monetized using the value of a statistical life year, which is currently transferred from a US value of a statistical life (VSL) using an income elasticity of one. Going forward, it would be desirable to allow the income elasticity of the VSL to vary with income and to revisit the choice of baseline VSL. |
| Keywords: | air pollution exposure, valuing DALYs, Global Burden of Disease |
| JEL: | Q51 Q53 Q56 |
| Date: | 2014–09–11 |
| URL: | http://d.repec.org/n?u=RePEc:rff:dpaper:dp-14-30&r=ene |
| By: | IWAISAKO Tokuo; NAKATA Hayato |
| Abstract: | Using the framework of structural vector autoregressions (VAR), this paper provides a quantitative assessment of the relative importance of exogenous shocks to Japanese output as measured by aggregate sales, industry sales, and the sales of different firm size groups. We assume four structural shocks, namely, (i) oil supply shock, (ii) oil price fluctuations not related to supply and demand, (iii) world economic activity (aggregate demand shock), and (iv) exchange rate fluctuations not related to other structural shocks. Exogenous variation in oil production has almost no effect, while global economic conditions have a clear positive effect on output. The impact of the exchange rate depends on industry and firm size. Although the appreciation of the yen has a negative impact on the Japanese economy as a whole, it has a clear positive effect on small and medium-sized enterprises in the non-manufacturing sector. The results of this paper suggest that recognizing the difference between fluctuations in the exchange rate and an exchange rate "shock" is important for macroeconomic policy management. In particular, a large fraction of the yen's appreciation following the Lehman Brothers collapse can be explained by the sudden slowdown in global real economic activity and the sharp decline in crude oil price. If we ignore those factors, the negative impact of the yen's appreciation on the Japanese economy will be exaggerated largely. |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rdpsjp:14050&r=ene |
| By: | Paola De Agostini; John Hills; Holly Sutherland |
| Keywords: | deficit, reduction, cuts, fiscal, benefits, recession, crisis, coalition, tax, Social Policy in a Cold Climate, government, universal credit |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:cep:spccwp:10&r=ene |
| By: | Yu, T. Edward; Larson, James A.; English, Burton C.; Boyer, Christopher N.; Castillo-Villar, Krystel K. |
| Keywords: | bioenergy, storage, switchgrass, Agribusiness, Farm Management, Production Economics, Q12, Q42, |
| Date: | 2014–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170518&r=ene |
| By: | Bobenrieth, Eugenio; Wright, Brian; Zeng, Di |
| Abstract: | We empirically address the implications of biofuel policy regarding major grains, to the subsequent evolution of the markets for calories from the three major grains, maize, wheat and rice. The implied market variables, namely, market price, consumption, and stocks, using a structurally estimated model combined with data on current and projected demand shifts, replicate the levels and dynamics of actual market behaviors, including the price rise before and during the 2007-2008 world food price crisis and the price dip at the breakout of the latest financial crisis. Counterfactual market variables constructed by removing mandates and their effects on production suggest that the biofuel mandate is the main driving force of the increase in price levels. |
| Keywords: | commodity price, biofuels, dynamic programing, food security, mandates, numerical simulation, Agricultural and Food Policy, Demand and Price Analysis, Food Security and Poverty, Resource /Energy Economics and Policy, Risk and Uncertainty, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170709&r=ene |
| By: | Birur, Dileep K.; Beach, Robert H. |
| Abstract: | Until recently, India followed a welfare based approach of distributing food grains to its low income group at an issue price, much lower than its market price or procurement price. In September 2013, the Government of India passed the National Food Security Act 2013 (NFSA, also called the Right to Food Act due to its rights based approach). The NFSA entails providing subsidized food grains to nearly 75% of the rural population and 50% of the urban population. The NFSA entitlement is 5 kg of food grains per person per month at issue prices of: 4.8¢ per kg of rice, 3.2¢ per kg of wheat, and 1.6¢ per kg of coarse grains (millets). This policy is regarded as the biggest experiment in the world to achieve food and nutritional security, thought it costs about $22 billion and requires 61.2 million tons of food grains in 2013-14. Though there are NFSA has some direct benefits it also has adverse economy wide implications. In addition to food security, India is also strengthening its energy security, with its National Policy on Biofuels which targets 20% blending of biofuels by 2017. In this study, we examine the economy wide implications of India’s NFSA within the context of global food vs. fuel security challenges, in a recursive dynamic general equilibrium framework. |
| Keywords: | Food and Agricultural Policy Analysis, Agricultural and Food Policy, Food Security and Poverty, International Relations/Trade, Food Security, Biofuels, Computable General Equilibrium, Recursive Dynamic, GTAP., |
| Date: | 2014–05–28 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea14:170715&r=ene |
| By: | Heindl, Peter |
| Abstract: | Dieser Aufsatz gibt einen Überblick über ökonomische Konzepte der Lastenverteilung zur Finanzierung von öffentlichen Gütern als Beitrag zur interdisziplinären Diskussion. Im Mittelpunkt des Interesses stehen dabei Verteilungswirkungen der Umweltpolitik. Zunächst werden zwei Typen von Verteilungsregeln besprochen: das Ability-to-Pay-Prinzip und das Benefit-Prinzip. Anschließend werden die Verteilungswirkungen der Förderung erneuerbarer Energien über das Erneuerbare-Energien-Gesetz (EEG) in Deutschland auf Ebene privater Haushalte besprochen. Wie sich zeigt, wirkt das EEG regressiv und belastet Haushalte mit geringerem Einkommen im Vergleich zu wohlhabenderen Haushalten stärker. Schließlich wird das Problem der Energiearmut besprochen. Zwar fehlt in Deutschland derzeit die empirische Grundlage zur angemessenen Definition des Problems, Indikatoren zur Energiearmut könnten perspektivisch jedoch nützliche Informationen zur Ausgestaltung von Klima- und Energiepolitik bereitstellen. |
| Keywords: | Energiewende,Verteilungswirkungen,Finanzwissenschaft,Energiearmut,Umweltpolitik |
| JEL: | H22 H23 H54 |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:14061&r=ene |