nep-ene New Economics Papers
on Energy Economics
Issue of 2014‒12‒13
27 papers chosen by
Roger Fouquet
London School of Economics

  1. The Impact of Location and Proximity on Consumers’ Willingness to Pay for Renewable and Alternative Electricity: The Case of West Virginia By Nkansah, Kofi; Collins, Alan
  2. The European Climate Policy is Ambitious: Myth or Reality? By Catherine Benjamin; Isabelle Cadoret; Marie-Hélène Hubert
  3. Deregulation, Competition, and Market Integration in China's Electricity Sector By Yanrui WU
  4. An analysis of long-term scenarios for the transition to renewable energy in Greece By Halkos, George; Kevork, Ilias; Galani, Georgia; Tzeremes, Panagiotis
  5. Canada–Renewable Energy: Implications for WTO Law on Green and Not-So-Green Subsidies By Charnovitz, Steve; Fischer, Carolyn
  6. Renewable Energy Policies and Cross-border Investment: Evidence from Mergers and Acquisitions in Solar and Wind Energy By Chiara Criscuolo; Nick Johnstone; Carlo Menon; Victoria Shestalova
  7. The inter-temporal optimization of the operation of the nuclear fuel reservoir in a liberalized electricity market dominated by the nuclear generation By Pascal Gourdel; Maria Lykidi
  8. The dynamic interaction between combustible renewables and waste consumption and international tourism: The case of Tunisia By Ben Jebli, Mehdi; Ben Youssef, Slim; Apergis, Nicholas
  9. The Impact of 'Clean Innovation' on Economic Growth: Evidence from the Transport and Energy Industries' By Ralf Martin
  10. Divisia decomposition method and its application to changes of net oil import intensity By Hua Liao; Zhao-Yi; Ce Wang
  11. The Impacts of Energy Prices on Global Agricultural Commodity Supply By Nigatu, Getachew; Hjort, Kim; Hansen, James; Somwaru, Agapi
  12. Abatement Strategies and the Cost of Environmental Regulation: Emission Standards on the European Car Market By Mathias Reynaert
  13. Are There Gains from Pooling Real-Time Oil Price Forecasts? By Christiane Baumeister; Lutz Kilian; Thomas K. Lee
  14. Combining international cap-and-trade with national carbon taxes By Heindl, Peter; Wood, Peter J.; Jotzo, Frank
  15. The Initial Incidence of a Carbon Tax across US States By Williams III, Roberton C.; Gordon, Hal; Burtraw, Dallas; Carbone, Jared C.; Morgenstern, Richard D.
  16. Oil and civil conflict : can public spending have a mitigation effect ? By Singh, Raju Jan; Bodea, Cristina; Higashijima, Masaaki
  17. Carbon Revenue: Recycling versus Technological Incentives. By Marisa Beck, Randall Wigle
  18. World Polarization in carbon emissions, potential conflict and groups: an updated revision By Duro Moreno, Juan Antonio; Teixidó Figueras, Jordi Josep
  19. Soaring of the Gulf Falcons: Diversification in the GCC Oil Exporters in Seven Propositions By Reda Cherif; Fuad Hasanov
  20. Spillovers between oil and stock markets at times of geopolitical unrest and economic turbulence By Antonakakis, Nikolaos; Chatziantoniou, Ioannis; Filis, George
  21. The Value of Regulatory Discretion: Estimates from Environmental Inspections in India By Esther Duflo; Michael Greenstone; Rohini Pande; Nicholas Ryan
  22. Towards a Global Carbon Dioxide Market: Shadow Pricing Carbon Dioxide Across Countries By Badau, Flavius
  23. Cities and the Environment By Matthew E. Kahn; Randall Walsh
  24. Dynamic Natural Monopoly Regulation: Time Inconsistency, Asymmetric Information, and Political Environments By Ali Yurukoglu; Claire Lim
  25. Contracting in the Presence of Insurance: The Case of Bioenergy Crop Production By Yang, Xi; Miao, Ruiqing; Khanna, Madhu
  26. Biokohle in der Landwirtschaft als Klimaretter? By Isabel Teichmann; Claudia Kemfert
  27. Varieties of knowledge-based bioeconomies By Urmetzer, Sophie; Pyka, Andreas

  1. By: Nkansah, Kofi; Collins, Alan
    Abstract: In 2015, West Virginia will implement a Renewable and Alternative Energy Portfolio Standards Act. Meeting these standards with either natural gas or wind power will generate different welfare impacts across society. In particular, this study examined how energy source and generation proximity influence consumers’ willingness-to-pay (WTP) for electricity. Using choice modelling, residents within two counties with distinct location characteristics (existing coal power plant or wind farm) were asked to choose between a renewable source (wind farm) and an alternative energy source (natural gas power plant). We also seek to determine how residents’ proximity to a hypothetical electricity generation facility (wind farm or natural gas generation source) influences their WTP for renewable and alternative electricity. Results showed that the sampled population in both counties were willing to pay a much higher positive premium to site a natural gas-fired power plant at a distances far from their residence compared to siting wind turbines at a similar distance. Compensation was required to site a natural gas-fired power plant at a moderate distance from an individuals’ residence.
    Keywords: Willingness to Pay, Choice Experiment, Renewable energy, Consumer/Household Economics, Demand and Price Analysis, Environmental Economics and Policy, Institutional and Behavioral Economics, Resource /Energy Economics and Policy,
    Date: 2014
  2. By: Catherine Benjamin (CREM UMR CNRS 6211, University of Rennes 1, France); Isabelle Cadoret (CREM UMR CNRS 6211, University of Rennes 1, France); Marie-Hélène Hubert (CREM UMR CNRS 6211, University of Rennes 1, France)
    Abstract: We investigate the carbon emission trends among the Member States by testing the assumption of -type convergence for per capita CO2 emissions, conditional upon per capita output and energy use per capita. Our results reveal that: EU-15 countries switch to a less carbon intensive economy from the early nineties, e-g, the relation emission growth/income is strictly negative. This result is robust to the inclusion of the new Member States. Thus, we argue that the decline in EU carbon emissions s a long term-trend and not the result of the economic crisis. Then, we discuss the eectiveness of the 20/20/20 climate package and the burden-sharing agreement. Some countries like Germany and Great-Britain can meet their carbon target without putting more eorts. Other historical Member States like France, Luxembourg, Sweden and Belgium can meet their carbon target by decreasing their energy use by 10%, ceteris paribus. Most of the New Member States can reach their target by increasing their energy per capita to the 1990 level while stabilizing their carbon emissions. This implies that their investment in renewable energy should be substantial.
    Keywords: Convergence, Dynamic Panel Data Models, Carbon Dioxide, European-Union, Climate Policy
    JEL: Q42 Q48
    Date: 2014–10
  3. By: Yanrui WU (University of Western Australia)
    Abstract: This report presents an updated and expanded review of reforms in China’s electricity sector. It aims to examine the impact of reforms on competition, deregulation, and electricity market integration in China. The findings are used to draw policy implications for electricity market development, particularly the promotion of energy market integration (EMI).
    Keywords: electricity sector, reforms, unbundling, energy market integration and China
    Date: 2014
  4. By: Halkos, George; Kevork, Ilias; Galani, Georgia; Tzeremes, Panagiotis
    Abstract: This study is focused on the construction of long – term scenarios for the transition to renewable energy. Utilizing European and national targets, the key objective of this work is to investigate how these targets are reflected in both economic and environmental terms. The constructed model via the Long range Energy Alternatives Planning System (LEAP) software describes the impacts of energy supply and demand along with their implications for national long – term policy. Specifically, the research provides a look to the 2030 horizon in the energy and power system in Greece. Three scenarios are generated under different options, baseline (which is based on historical trends), target 2020 (which is based on the European target set in 2020) and target 2030 (which is based on the European target set in 2030). Furthermore, two additional scenarios are developed for the Greek GDP growth; the first one based on the International Monetary Fund (IMF) estimates and the second taking into account the estimates of the Organization for Economic Co-operation and Development (OECD). The results show a substantial shift in the electricity generation mix by 2030, something that has to be reversed into renewable energy solutions.
    Keywords: Climate change; Renewable energy sources; Greek energy system.
    JEL: Q20 Q40 Q41 Q42 Q54
    Date: 2014–11–17
  5. By: Charnovitz, Steve; Fischer, Carolyn (Resources for the Future)
    Abstract: In the first dispute on renewable energy to come to World Trade Organization (WTO) dispute settlement, the domestic content requirement of Ontario’s feed-in tariff was challenged as a discriminatory investment-related measure and as a prohibited import substitution subsidy. The panel and Appellate Body agreed that Canada was violating the GATT and the TRIMS Agreement. But the SCM Article 3 claim by Japan and the European Union remains unadjudicated, because neither tribunal made a finding that the price guaranteed for electricity from renewable sources constitutes a ‘benefit’ pursuant to the SCM Agreement. Although the Appellate Body provides useful guidance to future panels on how the existence of a benefit could be calculated, the most noteworthy aspect of the new jurisprudence is the Appellate Body’s reasoning that delineating the proper market for ‘benefit’ analysis entails respect for the policy choices made by a government. Thus, in this dispute, the proper market is electricity produced only from wind and solar energy.
    Keywords: feed-in tariff, renewable energy, subsidies, international trade, WTO, green growth, local content requirement
    JEL: K33 Q48 Q56 Q58
    Date: 2014–10–30
  6. By: Chiara Criscuolo; Nick Johnstone; Carlo Menon; Victoria Shestalova
    Abstract: The study assesses the role of feed-in tariffs (FITs) and renewable energy certificates (RECs) in creating incentives for cross-border investments and for investments in particular technological portfolios via M&A. The analysis explores the dataset on M&As in alternative energy sources worldwide over 2005-2011. The results suggests that FITs encourage more diversified M&A than RECs. With respect to foreign investment, the study finds a linear relationship between FITs and cross-border M&As in the wind energy sector, but an inverted U-shaped relationship in the solar energy sector. One possible explanation for the latter may lie in reduced policy credibility due to the public finance implications of ‘generous’ FITs. Another possible explanation for this finding concerns the use of high solar FITs by countries whose natural conditions provide little comparative advantage in solar energy, suggesting that low profitability and limited potential of solar energy in those countries might have deterred the entry of foreign investors.
    Keywords: foreign direct investment, renewable energy policy, solar and wind energy, energy portfolio, M&A
    JEL: G34 Q42 Q48
    Date: 2014–10–28
  7. By: Pascal Gourdel (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris); Maria Lykidi (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)
    Abstract: We look at the optimal inter-temporal management of the fuel reservoir of nuclear units in a liberalized electricity market. We use the assumption that nuclear fuel works as a "reservoir" of energy due to the periodical shutdown of nuclear units to reload their fuel. In the medium-term, how a producer sets the nuclear fuel of the reservoir to respond to the variations of seasonal demand in order to maximize its production value on a multi-annual basis? The dynamic nature of the nuclear fuel reservoir highlighted the discontinuity of the price which complicates the resolution of the optimal inter-temporal production problem and even leads to a lack of solutions. Theoretically, at the optimum, nuclear is used to serve baseload and thermal follows demand's variations. Numerically, both nuclear and thermal units operate in load-following mode. Solutions characterized by a constant nuclear production do not exist which shows that the significant share of nuclear in the energy mix does not permit to produce at a constant rate unless further investments in thermal capacity are done. Inter-temporal optimization shows the role of nuclear for ensuring the equilibrium between supply and demand.
    Keywords: Electricity production; nuclear fuel reservoir; inter-temporal optimization; thermal production; merit order price; discontinuity problem
    Date: 2014–01
  8. By: Ben Jebli, Mehdi; Ben Youssef, Slim; Apergis, Nicholas
    Abstract: This paper employs the Autoregressive Distributed Lag (ARDL) bounds methodological approach to investigate the relationship between economic growth, combustible renewables and waste consumption, carbon dioxide (CO2) emissions and international tourism for the case of Tunisia spanning the period 1990-2010. The results from the Fisher statistic of both the Wald-test and the Johansen test confirm the presence of a long-run relationship among the variables under investigation. The stability of estimated parameters has been tested, while Granger causality tests recommend a short-run unidirectional causality running from economic growth and combustible renewables and waste consumption to CO2 emissions, a bidirectional causality between economic growth and combustible renewables and waste consumption and unidirectional causality running from economic growth and combustible renewables and waste consumption to international tourism. In the long-run, the error correction terms confirm the presence of bidirectional causality relationships between economic growth, CO2 emissions, combustible renewables and waste consumption and international tourism. Our long-run estimates show that combustible renewables and waste consumption increases international tourism, and both renewables and waste consumption and international tourism increase CO2 emissions and output. We recommend that: (i) Tunisia should use more combustible renewables and waste energy as this eliminates wastes from especially tourist zones and increases the number of tourist arrivals, leading to economic growth, and (ii) a fraction of this economic growth generated by the increase in combustible renewables and waste consumption should be invested in clean renewable energy production (i.e., solar, wind, geothermal) and energy efficiency projects.
    Keywords: Combustible renewables and waste; Tourism; Autoregressive distributed lag model; Cointegration; Granger causality; Tunisia.
    JEL: C32 O55 Q42 Q43 Q54
    Date: 2014–11–09
  9. By: Ralf Martin
    Abstract: Policies on climate change that encourage 'clean innovation' while displacing 'dirty innovation' could have a positive impact on short-term economic growth while avoiding the potentially disastrous reduction in GDP that could result from climate change over the longer term.
    Keywords: Innovation spill-overs, Climate Change, Growth, Patents, Clean technology, Optimal climate policy
    JEL: O30 O44 Q54 Q55 Q58 H23
    Date: 2014–11
  10. By: Hua Liao; Zhao-Yi; Ce Wang
    Abstract: The existing oil import dependence index cannot exactly measure the economic cost or scales, and it is difficult to describe the economical aspect of oil security. To measure the foreign dependence of one country's economy and reflect its oil economic security, this paper defines the net oil import intensity as the ratio of net import cost to GDP. By using Divisia Index Decomposition, the change of net oil import intensity in five industrialized countries and five newly industrialized countries during 1971¡ª2010 is decomposed into five factors: oil price, oil intensity, oil self-sufficiency, domestic price level and exchange rate. The result shows that the dominating factors are oil price and oil intensity; moreover, the newly industrialized countries have higher net oil import intensity than industrialized countries.
    Keywords: net oil import intensity, Divisia index, decomposition method
    JEL: Q40
    Date: 2013–11
  11. By: Nigatu, Getachew; Hjort, Kim; Hansen, James; Somwaru, Agapi
    Abstract: This study assesses the role of energy prices in determining cross-commodity and cross- country projections of production costs, area harvested and production of four major commodities and ethanol and biofuels production. The analysis is conducted using a dynamic global partial equilibrium model of agricultural trade. By simulating changes in energy prices that might result as a consequence of changes in energy policy, we capture the link between the energy market and the agriculture-biofuels sector and present resulting changes in production in major production regions for corn, soybeans, wheat, and rice. Input costs will increase with higher energy prices, but decline slightly with lower energy prices. The projection indicates that higher energy prices will have significant impact on increasing ethanol production in Brazil while decreasing wheat production in the EU. Production in the US and India is relatively unaffected by change in energy prices.
    Keywords: energy price, cost of production, Production Economics, Resource /Energy Economics and Policy,
    Date: 2014
  12. By: Mathias Reynaert
    Abstract: Emission standards are one of the major policy tools to reduce greenhouse gas emissions from transportation. The welfare e¤ects from this type of regulation depend on how …firms choose to abate emissions: by changing relative prices, by downsizing their flÂeet or by adopting technology. This paper studies the response of fi…rms to a new emission standard in the European car market using panel data covering 1998-2011. The data show that …firms choose to comply with the regulation by adopting new technology. To evaluate the welfare effects of the regulation I estimate a structural model using data from before the policy announcement and explicitly test the ability of the model to explain the observed responses. I …find that, because the abatement is done by technology adoption, consumer welfare increases and overall welfare effects depend on market failures in the technology market. The design of the regulation matters to induce technology adoption.
    JEL: Q48 R48 L62 H23
    Date: 2014–11–11
  13. By: Christiane Baumeister; Lutz Kilian; Thomas K. Lee
    Abstract: The answer as to whether there are gains from pooling real-time oil price forecasts depends on the objective. The approach of combining five of the leading forecasting models with equal weights dominates the strategy of selecting one model and using it for all horizons up to two years. Even more accurate forecasts, however, are obtained when allowing the forecast combinations to vary across forecast horizons. While the latter approach is not always more accurate than selecting the single mostaccurate forecasting model by horizon, its accuracy can be shown to be much more stable over time. The mean-squared prediction error of real-time pooled forecasts is between 3% and 29% lower than that of the no-change forecast and its directional accuracy as high as 73%. Our results are robust to alternative oil price measures and apply to monthly as well as quarterly forecasts. We illustrate how forecast pooling may be used to produce real-time forecasts of the real and the nominal price of oil in a format consistent with that employed by the U.S. Energy Information Administration in releasing its short-term oil price forecasts, and we compare these forecasts duringkey historical episodes.
    Keywords: Econometric and statistical methods; International topics
    JEL: Q43 C53
    Date: 2014
  14. By: Heindl, Peter; Wood, Peter J.; Jotzo, Frank
    Abstract: This paper examines the effects of combining an international cap-and-trade scheme with national carbon taxes. We consider a two-country stochastic partial equilibrium model with log-normally distributed uncertainty. The situation is analogous to the situation where European countries impose national carbon taxes in addition to the EU emissions trading. The allowance price in the joint cap-and-trade scheme depends on the tax rate, the relative size of countries and abatement options, the magnitude of uncertainty, and correlation of abatement costs. In most cases, the additional tax will not lead to additional production of the public good beyond the fixed targets. The additional tax results in higher costs of abatement to the country introducing the additional tax, and higher costs overall.
    Keywords: prices vs. quantities,linking,cap-and-trade,carbon tax,uncertainty,EU Emissions Trading Scheme
    JEL: Q53 H23 H41
    Date: 2014
  15. By: Williams III, Roberton C. (Resources for the Future); Gordon, Hal (Resources for the Future); Burtraw, Dallas (Resources for the Future); Carbone, Jared C.; Morgenstern, Richard D. (Resources for the Future)
    Abstract: Carbon taxes introduce potentially uneven cost burdens across the population. The distribution of these costs is especially important in affecting political outcomes. This paper links dynamic overlapping-generations and microsimulation models of the United States to estimate the initial incidence of a carbon tax across states. Geographic differences in incidence are driven primarily by differences in sources of income. Differing patterns of energy use also matter but are relatively less important. The use of the carbon tax revenue plays an important role, particularly in determining how different income sources are affected, as: (1) using carbon tax revenue to cut capital taxes disproportionately benefits states with large shares of capital income; (2) returning the revenue via lump-sum transfers favors relatively low-income states; and (3) returning the revenue via cuts in labor taxes provides a relatively even distribution of cost across states. In general, geographic differences in incidence are substantially smaller than the differences across income groups.
    Keywords: carbon tax, distribution, incidence, tax swap, states, geography, climate change
    JEL: H22 H23 Q52
    Date: 2014–10–07
  16. By: Singh, Raju Jan; Bodea, Cristina; Higashijima, Masaaki
    Abstract: This paper explores the conditions under which public spending could minimize violent conflict related to oil wealth. Previous work suggests that oil can lead to violent conflict because it increases the value of the state as a prize or because it undermines the state's bureaucratic penetration. Yet, little has been said on how oil wealth could be used to prevent the onset of violent conflict through public spending by buying off citizens and elites, increasing state legitimacy by providing basic services, or strengthening the military and security apparatus. The empirical analysis (148 countries over 1960-2009) shows that higher levels of military spending are associated with lower risk of small- and large-scale conflict onset in countries rich in oil and gas. By contrast, in economies with little natural resources, increases in military spending are associated with a higher risk of conflict. Welfare expenditure is associated with lower risk of small-scale conflict, irrespective of the level of oil revenue. However, general government spending does not appear to have any robust mitigating effects.
    Keywords: Post Conflict Reconstruction,Peace&Peacekeeping,Population Policies,Social Conflict and Violence,Post Conflict Reintegration
    Date: 2014–11–01
  17. By: Marisa Beck, Randall Wigle (Wilfrid Laurier University)
    Abstract: This paper addresses a number of issues about the disposition of the funds generated by the Alberta Specified Gas Emitters Regulation (SGER), focusing on the allocation of funds among three competing broad categories of expenditures: 1. revenue recycling via tax reductions, 2. support for developing new technologies, and 3. support for adoption of existing technologies.
    Keywords: Carbon policy; Alberta; Canada
    JEL: O31 O38 Q54
    Date: 2014–01–13
  18. By: Duro Moreno, Juan Antonio; Teixidó Figueras, Jordi Josep
    Abstract: Typically, conflicts in world environmental negotiations are related, amongst other aspects, to the level of polarization of the countries in groups with conflicting interests. Given the predictable relationship between polarization and conflict, it would seem logical to evaluate the degree to which the distribution of countries – for example, in terms of their CO2 emissions per capita – would be structured through groups which in themselves are antagonistic, as well as their evolution over time. This paper takes the concept of polarization to explore this distribution for the period 1992-2010, looking at different analytic approaches related to the concept. Specifically, it makes a comparative evaluation of the results associated with endogenous multi-polarization measures (i.e. EGR and DER indices), exogenous measures (i.e. Z-K or multidimensional index) and strict bipolarization measures (i.e. Wolfson’s measure). Indeed, the interest lies not only in evaluating the global situation of polarization by comparing the different approaches and their temporal patterns, but also in examining the explanatory capacity of the different proxy groups used as a possible reference for designing global environmental policy from a group premise. JEL codes: D39; Q43; Q56. Key words: polarization; carbon emissions; conflict;
    Keywords: Energia -- Aspectes econòmics, Desenvolupament sostenible, Grups de pressió, Emissions atmosfèriques, Anhídrid carbònic, Distribució de rendes, 33 - Economia,
    Date: 2014
  19. By: Reda Cherif; Fuad Hasanov
    Abstract: A key priority for the Gulf Cooperation Council (GCC) countries is to create a dynamic non-oil tradable sector to support sustainable growth. Since export diversification takes a long time, it has to start now. We argue that the failure to diversify away from oil stems mainly from market failures rather than government failures. To tackle market failures, the government needs to change the incentive structure for workers and firms. Experiences of oil exporters that managed to diversify suggest that a focus on competing in international markets and an emphasis on technological upgrade and climbing the “quality ladder†are crucial.
    Keywords: Export diversification;Nonoil sector;Cooperation Council for the Arab States of the Gulf;Oil exporting countries;Cross country analysis;natural resources, oil countries, growth, development, exports
    Date: 2014–09–24
  20. By: Antonakakis, Nikolaos; Chatziantoniou, Ioannis; Filis, George
    Abstract: In this study we examine the dynamic structural relationship between oil price shocks and stock market returns and volatility for a sample of both net oil-exporting and net oil-importing countries between 1995:09 and 2013:07. We accomplish that, by extending the Diebold and Yilmaz (2012) dynamic spillover index using structural forecast error variance decomposition. The results for both stock market returns and volatility suggest that spillover effects vary across different time periods, and that this time{varying character is aligned with certain developments that take place in the global economy. In particular, aggregate demand shocks appear to act as the main transmitters of spillover effects to stock markets during periods characterised by economic-driven events, while supply-side and oil-specific demand shocks during periods of geopolitical unrest. Furthermore, differences regarding the directions and the strength of spillover effects can be reported both between and within the net oil-importing and net oil-exporting countries. These results are of particular importance to investors and portfolio managers, given the recent financialisation of the oil market.
    Keywords: Oil price shocks, Stock market, Volatility, Spillover index, Structural Vector Autoregression, Geopolitical unrest, Economic crisis
    JEL: C32 C51 G11 G15 Q41 Q43
    Date: 2014–11–05
  21. By: Esther Duflo; Michael Greenstone; Rohini Pande; Nicholas Ryan
    Abstract: In collaboration with a state environmental regulator in India, we conducted a field experiment to raise the frequency of environmental inspections to the prescribed minimum for a random set of industrial plants. The treatment was successful when judged by process measures, as treatment plants, relative to the control group, were more than twice as likely to be inspected and to be cited for violating pollution standards. Yet the treatment was weaker for more consequential outcomes: the regulator was no more likely to identify extreme polluters (i.e., plants with emissions five times the regulatory standard or more) or to impose costly penalties in the treatment group. In response to the added scrutiny, treatment plants only marginally increased compliance with standards and did not significantly reduce mean pollution emissions. To explain these results and recover the full costs of environmental regulation, we model the regulatory process as a dynamic discrete game where the regulator chooses whether to penalize and plants choose whether to abate to avoid future sanctions. We estimate this model using original data on 10,000 interactions between plants and the regulator. Our estimates imply that the costs of environmental regulation are largely reserved for extremely polluting plants. Applying the cost estimates to the experimental data, we find the average treatment inspection imposes about half the cost on plants that the average control inspection does, because the randomly assigned inspections in the treatment are less likely than normal discretionary inspections to target such extreme polluters.
    JEL: D22 L51 Q56
    Date: 2014–10
  22. By: Badau, Flavius
    Keywords: shadow price, distance function, non-market valuation, carbon market, carbon dioxide, Environmental Economics and Policy, International Development, International Relations/Trade,
    Date: 2014
  23. By: Matthew E. Kahn; Randall Walsh
    Abstract: This paper surveys recent literature examining the relationship between environmental amenities and urban growth. In this survey, we focus on the role of both exogenous attributes such as climate and coastal access as well as endogenous attributes such as local air pollution and green space. A city's greenness is a function of both its natural beauty and is an emergent property of the types of households and firms that locate within its borders and the types of local and national regulations enacted by voters. We explore four main issues related to sustainability and environmental quality in cities. First, we introduce a household locational choice model to highlight the role that environmental amenities play in shaping where households locate within a city. We then analyze how ongoing suburbanization affects the carbon footprint of cities. Third, we explore how the system of cities is affected by urban environmental amenity dynamics and we explore the causes of these dynamics. Fourth, we review the recent literature on the private costs and benefits of investing in "green" buildings. Throughout this survey, we pay careful attention to empirical research approaches and highlight what are open research questions. While much of the literature focuses on cities in the developed world, we anticipate that similar issues will be of increased interest in developing nation's cities.
    JEL: Q4 Q5 R1 R3 R4
    Date: 2014–09
  24. By: Ali Yurukoglu (Stanford University); Claire Lim (Cornell University)
    Abstract: This paper studies time inconsistency, asymmetric information, and political ideology in natural monopoly regulation of electricity distribution companies. Empirically, more conservative political environments have higher regulated rates of return and worse operational efficiency as measured by electricity lost in distribution. Capital investment improves reliability in a cost effective manner. We estimate a dynamic game theoretic model of utility regulation featuring investment and asymmetric information. Under-investment due to time inconsistency is severe. Conservative regulators improve welfare losses due to time inconsistency, but worsen losses due to asymmetric information.
    Date: 2014
  25. By: Yang, Xi; Miao, Ruiqing; Khanna, Madhu
    Keywords: Contract, Insurance, Bioenergy Crop, Resource /Energy Economics and Policy, Q42,
    Date: 2014
  26. By: Isabel Teichmann; Claudia Kemfert
    Abstract: In Anbetracht des Klimawandels stehen wir vor großen Herausforderungen, Mittel und Wege zu finden, die Emissionen von Treibhausgasen wie Kohlendioxid (CO2), Methan (CH4) und Lachgas (N2O) zu reduzieren beziehungsweise diese Gase aus der Atmosphäre zu entfernen. Es wird verstärkt diskutiert, inwieweit aus Bio¬masse gewonnene Biokohle einen Beitrag zum Klimaschutz leisten kann, indem sie zur Kohlenstoffspeicherung in landwirtschaftlichen Boden eingearbeitet wird. Während einige Forscher und Interessensvertreter der Biokohle ein großes Poten¬zial zuschreiben und ihre Aufnahme in den internationalen Katalog der anrechen¬baren Treibhausgasvermeidungsstrategien fordern, betonen andere den mangeln¬den Kenntnisstand über die Wirkung von Biokohle im Boden und stellen ihre Ge-fahren in den Vordergrund.
    Date: 2014
  27. By: Urmetzer, Sophie; Pyka, Andreas
    Abstract: Governments around the world seek for strategies to overcome the reliance on fossil resources and provide solutions for the most challenging contemporary global issues: food shortage, depletion of natural resources, environmental degradation and climate change. A very recent and widely diffused proposition is to transform economic systems into bio-based economies, which are based on new ways of intelligent and efficient use of biological resources and processes. If taken seriously, such endeavour calls for the creation and diffusion of new knowledge as basis for innovation and behavioural change on various levels and therefore often is referred to as knowledge-based bioeconomy. In the current debate, the requirement for innovation is mostly seen in the advance of the biotechnology sector. However, in order to fulfil the requirement of sustainability, which implicitly is connected with the bio-based economy, the transformation towards a bioeconomy requires a fundamental socio-economic transition and must comprise changes in technology as well as in markets, user practices, policy, culture and institutions. To illustrate a nation's capability for this transition, we refer to the concept of national innovation systems in its broad approach. With the help of an indicator-based multivariate analysis we detect similarities and dissimilarities of different national systems within the European Union as basis for a transition towards a knowledge-based bioeconomy. The analysis allows to compare the different strategies and to identify bottlenecks as well as success factors and promising approaches in order to design policy instruments to foster this imperative transformation.
    Date: 2014

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