nep-ene New Economics Papers
on Energy Economics
Issue of 2014‒12‒19
thirty papers chosen by
Roger Fouquet
London School of Economics

  1. Assessing the Role of Renewable Energy Policies in Landfill Gas Energy Projects By Li, Shanjun; Kyul Yoo, Han; Shih, Jhih-Shyang; Palmer, Karen; Macauley, Molly K.
  2. A nonparametric approach for evaluating long-term energy policy scenarios: An application to the Greek energy system By Halkos, George; Tzeremes, Nickolaos; Tzeremes, Panagiotis
  3. Exploring the Implications of Oil Prices for Global Biofuels, Food Security, and GHG Mitigation By Cai, Yongxia; Beach, Robert H.; Zhang, Yuquan
  4. Shale oil and gas booms: Consequences for agricultural and biofuel industries By Taheripour, Farzad; Tyner, Wallce E.
  5. Energy poverty and solid fuels use in rural China: Analysis based on national population census By Xin Tang; Hua Liao
  6. The Initial Incidence of a Carbon Tax across Income Groups By Williams III, Roerton C.; Gordon, Hal; Burtraw, Dallas; Jared C. Carbone; Morgenstern, Richard D.
  7. What Does the Convenience Yield Curve Tell Us about the Crude Oil Market? By Ron Alquist; Gregory Bauer; Antonio Diez de los Rios
  8. (How) does sectoral detail affect the robustness of policy insights from energy system models? The refining sector's example. By Claire Nicolas; Valérie Saint-Antonin; Stéphanie Tchung-Ming
  9. Impact of International Oil Price Shocks on Consumption Expenditures in ASEAN and East Asia By Dayong ZHANG; David C. Broadstock
  10. Recommendation of Draft Revised Standard Calorific Value and Carbon Emission Factor for Fossil Fuel Energy Sources in Japan: 2013 FY revised standard calorific value and carbon emission factor (Japanese) By KAINOU Kazunari
  11. Solar PV Technology Adoption in the United States: An Empirical Investigation of State Policy Effectiveness By Crago, Christine; Chernyakhovskiy, Ilya
  12. Belt and Suspenders and More: The Incremental Impact of Energy Efficiency Subsidies in the Presence of Existing Policy Instruments By Houde, Sebastien; Aldy, Joseph E.
  13. Environmental attitude and the demand for green electricity in the context of supplier choice: A case study of the New Zealand retail electricity market By Ndebele, Tom; Marsh, Dan
  14. Effectiveness of the Easing of Monetary Policy in the Japanese Economy, Incorporating Energy Prices By Yoshino, Naoyuki; Taghizadeh-Hesary, Farhad
  15. Abatement strategies and the cost of environmental regulation: Emission standards on the European car market By REYNAERT, Mathias
  16. What can we learn about shale gas development from land values? Opportunities, challenges, and evidence from Texas and Pennsylvania By Weber, Jeremy G.; Hitaj, Claudia
  17. The Labor Market Impacts of the 2010 Deepwater Horizon Oil Spill and Offshore Oil Drilling Moratorium By Aldy, Joseph E.
  18. An Empirical Analysis of Residential Energy Efficiency Adoption by Housing Types and Occupancy By Hellman Miller, Kelly; Colantuoni, Francesca; Lasco Crago, Christine
  19. Analysing Mechanisms for Meeting Global Emissions Target - A Dynamical Systems Approach By Ranganathan, Shyam; Bali Swain, Ranjula
  20. Do Trade and Investment Flows Lead to Higher CO2 Emissions? Some Panel Estimation Results By Debashis Chakraborty; Sacchidananda Mukherjee
  21. Achieving Low Emissions Growth for Rice Cultivation in Vietnam: A Role for Behavioural Constraints By Narayan, Tulika; Belova, Anna
  22. Better Growth, Helping the Paris COP-out? Fallacies and Omissions of the New Climate Economy Report By Clive L. Spash
  23. Using Copula to Test Dependency between Energy and Agricultural Commodities By Koirala, Krishna H.; Mishra, Ashok K.; Mehlhorn, Joey
  24. Assessing the Design of Three Pilot Programs for Carbon Trading in China By Munnings, Clayton; Morgenstern, Richard; Wang, Zhongmin; Liu, Xu
  25. Adjusting Productivity for Pollution in Selected Asian Economies By Thai-Thanh Dang; Annabelle Mourougane
  26. School attendance and poverty in an oil boom context in Chad By Aristide MABALI; Bobdingam BONKERI
  27. Does obesity matter for the Environment? Evidence from Vehicle Choices and Driving By Jeon, Hocheol
  28. Business models for sustainable technologies: Exploring business model evolution in the case of electric vehicles By René Bohnsack; Jonatan Pinkse; Ans Kolk
  29. The Impact of Short Term Exposure to Ambient Air Pollution on Cognitive Performance and Human Capital Formation By Victor Lavy; Avraham Ebenstein; Sefi Roth
  30. Obtaining superior wind power predictions from a periodic and heteroscedastic Wind Power Prediction Tool By Ambach, Daniel; Croonenbroeck, Carsten

  1. By: Li, Shanjun; Kyul Yoo, Han; Shih, Jhih-Shyang (Resources for the Future); Palmer, Karen (Resources for the Future); Macauley, Molly K. (Resources for the Future)
    Abstract: Methane is the second most prevalent greenhouse gas and has a global warming potential at least 28 times as high as carbon dioxide. Municipal solid waste landfills are reported to be the third-largest source of anthropogenic methane emissions in the United States, responsible for 18 percent of emissions in 2011. Capturing landfill gas for use as an energy source for electricity or heat produces alternative energy as well as environmental benefits. A host of federal and state policies encourage the development of landfill-gas-to-energy projects. Our research provides the first systematic economic assessment of the role these policies play in adoption decisions. Results suggest that renewable portfolio standards and investment tax credits have contributed to the development of these projects, accounting for 13 of 277 projects during our data period from 1991 to 2010. These policy-induced projects have led to 12.5 million metric tons of carbon dioxide–equivalent reductions in greenhouse gas emissions and a net benefit of $52.59 million.
    Keywords: renewable energy, landfill methane, renewable portfolio standards, investment tax credit
    JEL: Q48 Q53
    Date: 2014–07–08
  2. By: Halkos, George; Tzeremes, Nickolaos; Tzeremes, Panagiotis
    Abstract: This paper by using the system of LEAP (Long range Energy Alternatives Planning System) constructs four different energy scenarios for the Greek transport, energy and industry sectors. By projecting the renewable energy use for the years 2020 and 2030 and the associated resulting carbon dioxide emissions, the paper constructs through nonparametric analysis efficiency measures evaluating the different energy policy which can be adopted. As a result it provides a quantitative measure of future policy performance under different energy consumption scenarios. The results reveal that the largest policy challenge for the Greek authorities will be the energy usage of the Greek industry since it is robust towards the adoption of renewable energy sources. It appears that under the four different policy scenarios the Greek industry sector will not be able to meet the environmental targets set by the Greek government. Finally, the analysis reveals that the targets for 2020 and 2030 can be met for the energy sector however for transport can only be met for the year 2030.
    Keywords: Climate change; Renewable energy sources; Greek energy system; linear programming; nonparametric analysis.
    JEL: C60 C67 Q40 Q53 Q54 Q58
    Date: 2014–11
  3. By: Cai, Yongxia; Beach, Robert H.; Zhang, Yuquan
    Abstract: Efforts to satisfy global energy demand and improve food security while simultaneously taking action to mitigate climate change pose many key challenges for the world. In this study, the Applied Dynamic Analysis of the Global Economy (ADAGE), a computable general equilibrium (CGE) model, is applied to examine the impact of oil price on biofuel expansion, and subsequently, on food supply/price, land use change and climate mitigation potential, when both first and second generation biofuel feedstocks are considered. The results indicate despite a continued increase in land productivity and energy efficiency, increases in population and economic growth lead to a global increase in agriculture production, rising food, agriculture, biofuels, and energy prices, and land conversion from the other four land types to cropland in the REF scenario from 2010 to 2040. Oil price plays an important role in biofuel expansion. Globally, higher oil price leads to the expansion of biofuel production, increasing its share in total liquid fuel consumption in the private transportation sector. Consequently, more land is allocated for biofuel production, reducing global agriculture output and increasing agricultural consumption prices. Although emissions from land-use change increase, the overall emissions including fossil fuel emissions decreases. Regions display different patterns on biofuel expansions, land-use change, prices for food/agriculture and energy/biofuels, and GHG emissions.
    Keywords: Biofuels, Computable General Equilibrium, Oil Price, Food security, GHG Mitigation, Agricultural and Food Policy, Environmental Economics and Policy, Food Security and Poverty, Resource /Energy Economics and Policy,
    Date: 2014–08
  4. By: Taheripour, Farzad; Tyner, Wallce E.
    Abstract: This paper examines and quantifies the consequences of increases in supplies of oil and gas from shale resources for the US economy and its agricultural and biofuel industries using a computable general equilibrium modeling framework under alternative economic conditions and emissions reduction policies. It shows that increases in supplies of oil and gas from shale resources generate enormous gains for the US economy. The question is do we use it all for higher economic growth or do we allocate part of it for reducing future global warming. This paper shows that we can sacrifice about 43% of the gains to reduce GHG emissions by 27%. Finally, the results of this paper indicate that in the presence of shale resources elimination of biofuel mandates negatively affect biofuels and crop industries. However, the impact is not huge because using shale resources increases national income and that generates a higher demand for food (including livestock product) which eventually prevents a big fall in demand for crops.
    Keywords: Shale Resources, Biofuels, Agriculture, General Equilibrium, Emissions Reduction, Environmental Economics and Policy, Resource /Energy Economics and Policy, C68, D60, F18, Q10, Q20, Q40,
    Date: 2014
  5. By: Xin Tang; Hua Liao
    Abstract: China has basically achieved ubiquity of electricity access in rural areas during the latest three decades. However, solid fuels are still widely used in the rural areas, which is currently the main issue impinging upon energy poverty in China. There about 490 million rural residents in China using solid fuels for cooking. Based on national population census data, this research evaluates the current situation and long-term trend of solid fuel use for cooking in rural China. Firstly, over three-fourths of all rural households depend on solid fuels to meet their cooking demand, whilst in urban area and township this figure is as low as 8 % and 36 % respectively. Secondly, solid fuel use was linked closely to rural household income, i.e., those regions with low per capita household income use more solid fuel. Furthermore, rural households using solid fuel declined by 17 percent from 2000 to 2010, albeit with some significant regional differences. Finally, the proportion of rural residents using clean fuels remained low, and the proportion using gas remained nearly constant over last 10 years in many provinces. Improving access to affordable and reliable energy services for cooking remains a great challenge China need to address.
    Keywords: Energy Poverty, Solid Fuels, Cooking, Population Census, Rural Households, China
    JEL: Q40
    Date: 2014–05
  6. By: Williams III, Roerton C. (Resources for the Future); Gordon, Hal (Resources for the Future); Burtraw, Dallas (Resources for the Future); Jared C. Carbone; Morgenstern, Richard D. (Resources for the Future)
    Abstract: Carbon taxes efficiently reduce greenhouse gas emissions but are criticized as regressive. This paper links dynamic overlapping-generation and microsimulation models of the United States to estimate the initial incidence. We find that while carbon taxes are regressive, the incidence depends much more on how carbon tax revenue is used. Recycling revenues to cut capital taxes is efficient but exacerbates regressivity. Lump-sum rebates are less efficient but much more progressive, benefiting the three lower income quintiles even when ignoring environmental benefits. A labor tax swap represents an intermediate option, more progressive than a capital tax swap and more efficient than a rebate.
    Keywords: carbon tax, distribution, incidence, tax swap, income quintiles, climate change
    JEL: H22 H23 Q52
    Date: 2014–08–07
  7. By: Ron Alquist; Gregory Bauer; Antonio Diez de los Rios
    Abstract: Using the prices of crude oil futures contracts, we construct the term structure of crude oil convenience yields out to one-year maturity. The crude oil convenience yield can be interpreted as the interest rate, denominated in barrels of oil, for borrowing a single barrel of oil, and it measures the value of storing crude oil over the borrowing period. We show that the convenience yield curve is well explained by a level and a slope factor. Consistent with the theory of storage, convenience yields have predictive power over future crude oil inventories, production, global real economic activity and the price of oil.
    Keywords: Asset Pricing, International topics
    JEL: C C5 C53 G G1 G12 G13 Q Q4 Q43
    Date: 2014
  8. By: Claire Nicolas; Valérie Saint-Antonin; Stéphanie Tchung-Ming
    Abstract: In this research, we rekindle an old debate by questioning the impact on mitigating policy evaluation of detailing a subsector in a global energy-transportation model. We chose the refining sector because it is a relevant case of a sector for which representation widely differs across models and because it offers a unique set of complex joint production in the energy sector. To investigate whether the level of detail in the description of the refinery impacts optimal mitigation options, we take the example of a long-term, national, linear programming based, energy-transport system model (TIMES based). We found that the refinery description used in the energy system model matters when trying to evaluate energy or climate policy applied to the transportation sector. It impacts the policy costs but also the technology trajectories chosen at the optimum. Essentially, the balance between energy efficiency and carbon intensity of transport may be affected by the accuracy of the description of the pivotal refining sector. Consequently, increasing this sector accuracy level should not only be motivated by the wish to gain wider quantitative insights on potential evolution of the energy system but also by the wish to improve the robustness of the model outcomes.
    Keywords: Energy modeling, Refinery modeling, Parsimony, Level of details.
    JEL: C60 Q47 Q54
    Date: 2014
  9. By: Dayong ZHANG (Research Institute of Economics and Management Southwestern University of Finance and Economics, Chengdu); David C. Broadstock (Research Institute of Economics and Management Southwestern University of Finance and Economics, Chengdu)
    Abstract: This paper examines the impact of international oil shocks on consumption expenditure in selected ASEAN and East Asia economies. By including oil shocks into a standard macroeconomic model of consumption theory, one sees the response of consumption to the changes in the international oil price. Empirical results show that oil shocks do affect consumption and there are asymmetrical effects. There are clear differences in the level and direction of the impacts on each of the ASEAN and East Asia economies. These implications shed light on how the idea of regional energy market integration can be a way to share risks and optimise resource allocation. Nonetheless, given the clear disparity and similarity in sub-groups, integration should be implemented while allowing for differentiation in terms of the role each country plays.
    Keywords: oil shocks, consumption expenditure, permanent income hypotesis ASEAN/East Asia, energy market integration
    JEL: Q4 G12 G14
    Date: 2014
  10. By: KAINOU Kazunari
    Abstract: Here the author quantified Japanese standard Gross Calorific Value and Carbon Emission Factor for various fossil fuels used in Japan upon the request of the Ministry of Economy, Trade and Industry and the Ministry of the Environment under the cooperation of relevant industrial organizations by the request of these Ministries, using real measured physical and chemical data and calorific value in 2013.<br /><br />The revised standard values have several unique natures compared to the current one as follows;<br />- The standard values are comprehensive and clearly traceable from the real measurement data of physical, chemical characteristics and calorific value of fuels and the data process and treatment.<br />- The gross calorific value and carbon emission factors are simultaneously measured from the same samples in a consistent manner, different from the current standard values.<br />- The interpolation and approximation equations are estimated using these data and that enabled estimation for minor energy sources and adjustment of small changes of physical, chemical characteristics for major energy sources.<br /><br />As a result, highly accurate and up to date standard gross calorific value and carbon emission factor are measured for various fossil fuels used in Japan listed in the current standard. So the author recommends the revision of the standard values.<br /><br />Moreover, based on the revision works, the author proposes several changes and amendments of energy origin CO₂ emission quantification and estimation process in Japanese greenhouse gas inventory systems under the UNFCCC.
    Date: 2014–10
  11. By: Crago, Christine; Chernyakhovskiy, Ilya
    Abstract: State policy incentives for solar power have grown significantly in the past several years. This paper uses county level panel data to investigate whether state policy incentives are effective in increasing residential solar PV capacity. Empirical findings show that tax incentives, rebates, solar-specific mandates, and loan financing programs are important drivers of residential PV adoption. These results suggest that policy incentives play a significant role in encouraging wider use of solar energy. Results also point to a significant positive relationship between hybrid vehicle sales and residential PV adoption, indicating the importance of pro-environmental preference as a predictor of solar PV demand.
    Keywords: Renewable energy, solar, photovoltaic, policy, technology adoption, Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2014
  12. By: Houde, Sebastien; Aldy, Joseph E. (Resources for the Future)
    Abstract: The effectiveness of investment subsidies depends on the existing array of regulatory and information mandates, especially in the energy efficiency space. Some consumers respond to information disclosure by purchasing energy-efficient durables (and thus may increase the inframarginal take-up of a subsequent subsidy), while other consumers may locate at the lower bound of a minimum efficiency standard (and a given subsidy may be insufficient to change their investment toward a more energy-efficient option). We investigate the incremental impact of energy efficiency rebates in the context of regulatory and information mandates by evaluating the State Energy Efficient Appliance Rebate Program (SEEARP) implemented through the 2009 American Recovery and Reinvestment Act. The design of the program-–Federal funds allocated to states on a per capita basis with significant discretion in state program design and implementation-–facilitates our empirical analysis. Using transaction-level data on appliance sales, we show that most program participants were inframarginal due to important short-term intertemporal substitutions where consumers delayed their purchases by a few weeks. We find evidence that some consumers accelerated the replacement of their old appliances by a few years, but overall the impact of the program on long-term energy demand is likely to be very small. Our estimated measures of cost-effectiveness are an order of magnitude higher than estimated for other energy efficiency programs in the literature. We also show that designing subsidies that reflect, in part, underlying attribute-based regulatory mandates can result in perverse effects, such as upgrading to larger, less energy-efficient models.
    Keywords: subsidies, energy efficiency, Energy Star, stimulus
    JEL: Q48 Q58 H31
    Date: 2014–09–24
  13. By: Ndebele, Tom; Marsh, Dan
    Abstract: There is growing interest in non-market valuation research to explore the importance of attitudes and perceptions in explaining heterogeneity of preferences among consumers. Previous research on environmental attitude (EA) and its influence on preferences has been criticised for the non-systematic way in which researchers have measured EA. This paper investigates the effect of environmental attitude on the demand for green electricity in New Zealand, identifies groups (latent classes) with homogenous preferences, and estimates willingness (WTP) for “green” electricity in the context of supplier choice or switching. The New Ecological Paradigm (NEP) Scale is used to measure EA, and we examine the effect of using sub-scales of the NEP Scale on posterior class membership probabilities. To generate the data required for this research, an online choice experiments survey targeting residential electricity bill payers in New Zealand was conducted in February 2014. A usable sample of 224 respondents was achieved. Data was analysed using a latent class framework in which the integration of EA with stated choice is either direct via the utility function as interactions with the attribute levels of alternatives or as a variable in the class membership probability model. We identify three latent classes with different preferences for the attributes of electricity suppliers. A typical respondent with a high NEP Scale score is willing to pay on average $12.80 more per month on their power bill to secure a 10% increase in electricity generated from renewable energy sources compared to respondents with low NEP scores. Furthermore, the results suggest that the sub-scales of the NEP Scale are less accurate in assigning respondents to environmental classes and that the sub-scale with 5 items is less accurate than the sub-scale with 10 items.
    Keywords: electricity suppliers, choice experiments, “green” electricity, willingness to pay, latent class model, New Ecological Paradigm Scale, environmental attitude, New Zealand, Agribusiness, Demand and Price Analysis, Environmental Economics and Policy, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods,
    Date: 2014–08
  14. By: Yoshino, Naoyuki (Asian Development Bank Institute); Taghizadeh-Hesary, Farhad (Asian Development Bank Institute)
    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: monetary policy; energy; oil prices; japanese economy
    JEL: E47 E52 Q41 Q43
    Date: 2014–11–10
  15. By: REYNAERT, Mathias
    Abstract: Emission standards are one of the major policy tools to reduce greenhouse gas emissions from transportation. The welfare effects from this type of regulation depend on how ?firms choose to abate emissions: by changing relative prices, by downsizing their fl?eet 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 ?rms choose to comply with the regulation by adopting new technology. To evaluate the welfare e¤ects 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 fi?nd 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.
    Date: 2014–11
  16. By: Weber, Jeremy G.; Hitaj, Claudia
    Abstract: We glean information about shale gas development by studying farm real estate values over time. Looking at the Barnett Shale (Texas) and the northeastern part of the Marcellus Shale (Pennsylvania and New York), we find that development caused appreciation in both areas but the effect was much larger in the Marcellus. There, quantile regressions reveal that farms at the 50th and 75th quantiles experienced substantial appreciation, suggesting broader ownership of oil and gas rights by surface owners. In both regions, most appreciation occurred when land was leased for drilling, not when drilling and production boomed. The higher values then persisted through the last year of our study, 2012, indicating a net positive effect of shale gas development on landed properties. Compared to agriculturally-intensive farms, the effect of development was greater for farms with limited agricultural sales and whose owners had a primary occupation other than farming. A correlation between farm type and the presence of oil and gas rights may explain the difference, a possibility that underscores the value of information on oil and gas right ownership when studying the effect of shale gas development on property values.
    Keywords: natural gas, land values, oil and gas rights, Barnett Shale, Marcellus Shale, Land Economics/Use, Resource /Energy Economics and Policy, Q32, Q51, Q15,
    Date: 2014–05
  17. By: Aldy, Joseph E. (Resources for the Future)
    Abstract: In 2010, the Gulf Coast experienced the largest oil spill, the greatest mobilization of spill response resources, and the first Gulf-wide deepwater drilling moratorium in US history. Taking advantage of the unexpected nature of the spill and drilling moratorium, I estimate the net effects of these events on Gulf Coast employment and wages. Despite predictions of major job losses in Louisiana – resulting from the spill and the drilling moratorium – I find that Louisiana coastal parishes, and oil-intensive parishes in particular, experienced a net increase in employment and wages. In contrast, Gulf Coast Florida counties, especially those south of the Panhandle, experienced a decline in employment. Analysis of accommodation industry employment and wage, business establishment count, sales tax, and commercial air arrival data likewise show positive economic activity impacts in the oil-intensive coastal parishes of Louisiana and reduced economic activity along the Non-Panhandle Florida Gulf Coast.
    Keywords: oil spill, employment, wages, ecenomic shocks
    JEL: J30 J64 Q40
    Date: 2014–08–22
  18. By: Hellman Miller, Kelly; Colantuoni, Francesca; Lasco Crago, Christine
    Abstract: Uncertainties about future levels of energy availability and concern for climate change have raised public interest in energy efficiency and conservation. In particular, efficiency gains in the residential sector, which accounts for about 22% of energy end-use in the United States has the potential to yield large benefits for society. In this research we conduct an empirical analysis to investigate the likelihood of adoption of energy efficiency (EE) measures in the residential sector. We consider heterogeneity of occupants and homeowners based on their demographic characteristics, as well as the structural characteristics of housing units, weather parameters and geographical characteristics. Our empirical results shed light on (1) the drivers of EE adoption for households, (2) the extent to which EE adoption differs between homeowners and landlords, and (3) the extent to which EE adoption differs among types of housing (utility-included vs. utility-excluded rent, owner occupied).
    Keywords: Energy efficiency, Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2014
  19. By: Ranganathan, Shyam (Department of Mathematics); Bali Swain, Ranjula (Department of Economics)
    Abstract: Global emissions beyond 44 gigatonnes of carbondioxide equivalent (GtCO2e) in 2020 can potentially lead the world to an irreversible climate change. Employing a novel dynamical system modeling approach, we predict that in a business-asusual scenario, it will reach 61 GtCO2e by 2020. Testing estimated parameters, we nd that limiting the burden of emission reduction to the top 25 global emitters, does not increase their encumbrance. In absence of emission cuts, technology and preferences for environmental quality have to improve by at least 2.6 percent and 3.5 percent if the emission target has to be met by 2020.
    Keywords: Sustainable Development Goals; dynamical systems; Bayesian; greenhouse gases
    JEL: C51 C52 C53 C61 Q01 Q50
    Date: 2014–10–31
  20. By: Debashis Chakraborty (Indian Institute of Foreign Trade, New Delhi, India); Sacchidananda Mukherjee (National Institute of Public Finance and Policy, New Delhi, India)
    Abstract: Over the last decade cross-country trade and investment flows have increased considerably, which is often linked to climate change concerns. The present analysis attempts to understand the influence of trade and investment flows on CO2 emissions through panel data model estimation for a set of 181 countries over 1990-2009. The empirical findings confirm that both in case of lower and higher income countries, higher merchandise trade growth in general and service and merchandise export growth in particular leads to the higher CO2 emission growth in their territories. Both FDI inward and outward stock is found to be positively related to CO2 emission, reflecting a complementary relationship between the two. The empirical results indicate that the composition, scale and technology effects significantly influence the trade-climate change interrelationship
    Keywords: environment and trade, foreign direct investment, climate change; democracy
    JEL: F21 Q56
    Date: 2013–08
  21. By: Narayan, Tulika; Belova, Anna
    Abstract: To support low-emission development strategies (LEDS) in the agriculture sector in Vietnam, this paper estimates marginal abatement cost curves (MACC) for mitigation options for rice cultivation in Vietnam: short-duration rice variety, draining of rice fields and reduced use of fertilizer or alternate wetting and drying (AWD). The MACC, which show the average cost of reducing total greenhouse gas emissions by one unit in rice cultivation in Vietnam, are the first attempt at using representative data on rice management practices and their costs are realized by farmers on the field. Typically, these estimates are usually developed using expert judgment and assuming perfect adoption of the technology. In addition, the MACC uses with region-specific estimates of carbon emissions from rice fields. Furthermore, when estimating the potential for potential for carbon emissions abatement from alternative management practices, we consider the behavioral constraints in adopting management practices, rather than just focusing on the technical potential. Among these potential mitigation options, in the South (An Giang Province), the largest percentage area is under low fertilizer and short-duration variety, followed by short duration with AWD. In the North (Thai Binh Province), majority of the area is under low fertilizer and short-duration variety. In the North, low fertilizer and short-duration variety appear to be production cost-reducing options, but do not have as much mitigation potential compared to alternate wetting and drying (AWD). However, AWD is a production cost-increasing option, implying that farmers may need a financial incentive to adopt AWD. Furthermore, farmers have trouble adopting AWD given its complexity. Therefore, when accounting for adoption constraints for AWD the abatement potential reduces significantly for AWD. This implies that the Government of Vietnam will have to focus on areas and communities that are more likely to adopt these technologies: farmers with ability to control irrigation and farmers with deeper pockets and access to high value markets. In the South, the use of short-duration variety had higher emissions. Short-duration varieties lead to lower methane (CH4) emissions but can have higher nitrous oxide (N2O) emissions. The explanation for this outcome is that the South has more rain and hotter temperatures, which can lead to higher nitrous oxide emissions. Thus, the short-duration variety needs to be revisited as a mitigation option in the South. In particular, this option needs to be combined with reduced fertilizer use to be an effective mitigation option. The application of organic amendments and crop residue management were not practiced much in the South. Therefore, these options could be not be analyzed. Overall, only AWD was a viable option, which is why we did not generate MACCs for the South.
    Keywords: MACC, Marginal Abatement Cost Curve, Rice Cultivate, Climate change mitigation., Agricultural and Food Policy, Crop Production/Industries, Environmental Economics and Policy, Farm Management, International Development,
    Date: 2013
  22. By: Clive L. Spash
    Abstract: The debate over how to address greenhouse gas emissions reduction remains unresolved. The basic conflict between the environment and economic growth is fundamental to the problem but is something now being denied. Green Growth has been put forward as resolving the issue in a report backed by people working at the highest levels in international community from organisations such as the World Bank, United Nations, OECD, and IEA, who combine their knowledge with five ex-heads of state, experts from the banking and finance world and a committee of economics professors. This powerful elite has stated that all the countries of the world can have better growth and a better climate, and indeed strong growth is how to reduce poverty. This paper analyses the synthesis report proposing this “new climate economy” and exposes how the climate issue is framed in a narrow reductionist fashion that fails to address the fundamental contradictions of a growth economy and its model of development. The paper covers the framing of the debate, getting the prices right, energy and material throughput, growth versus human health and the environment, the ethics of a growth society, and the conflicts between corporate interests, government and civil society. One conclusion is that planning is back on the agenda, but this raises serious questions of governance that are not being addressed. Another is that little can be expected from the Conference of the Parties (COP) on climate change as long as they ignore the wider implications of the growth society, its institutions and structure.
    Keywords: Climate change, greenhouse gas emissions reduction, Green Growth, climate economics, governance, public policy, poverty, development, corporations, externality theory, energy policy, Stern
    Date: 2014
  23. By: Koirala, Krishna H.; Mishra, Ashok K.; Mehlhorn, Joey
    Abstract: Paper removed at the request of the author. Please contact Ashok Mishra if questions (
    Keywords: Energy prices, agricultural commodity prices, copula, dependency, Clayton Copula, Crop Production/Industries, Demand and Price Analysis, C32, Q43, Q47,
    Date: 2014–05–28
  24. By: Munnings, Clayton (Resources for the Future); Morgenstern, Richard (Resources for the Future); Wang, Zhongmin (Resources for the Future); Liu, Xu
    Abstract: China started seven carbon cap-and-trade pilot programs in order to inform the development of a future national cap-and-trade market. This paper assesses the design of three of the longer-running cap-and-trade pilot programs in Guangdong, Shanghai and Shenzhen. Based on extensive stakeholder interviews and a detailed literature review we formulate a series of recommendations to improve the design of these three pilots, including: strengthening the legal foundations for the cap-and-trade pilots, incorporating achievement of goals established by the cap-and-trade pilots into the performance reviews of participating government officials and executives of state-owned entities, further clarifying the cap-setting process, increasing the transparency of the cap, reducing or eliminating within-compliance period adjustments to enterprise-level allowance allocation, gradually moving away from free allocation toward auctioning, reforming enforcement policy, and adopting a symmetric safety valve to manage prices. By making these recommendations, we hope to shed light on ways that Chinese regulators might adapt cap and trade, a fundamentally market-based tool, to China's economy that has many non-market features.
    Keywords: emissions trading, carbon, China
    JEL: Q48 Q54 Q58
    Date: 2014–10–16
  25. By: Thai-Thanh Dang; Annabelle Mourougane
    Abstract: Multifactor productivity (MFP) is increasingly used in economic policy, not least to compute potential output. Most measures are based on a standard production function combining labour and capital, but do not incorporate the negative by-products of the production process such as air pollution that could have deleterious effect on health and productivity in the medium to long term (see for instance OECD (2014)). The failure to account for the costs of environmental damages and the benefits associated with emission reduction impart a bias to standard measures of MFP. Ignoring these dimensions can give a misleading idea of growth prospects over the medium to long term...
    Date: 2014–08–21
  26. By: Aristide MABALI (Conseil des Investisseurs Privés au Bénin (CIPB)); Bobdingam BONKERI
    Abstract: Oil resources have enabled Chad to increase public financing for education and to achieve high economic growth rates. Regarding these policies to supporting the education sector, we assume that the standard of living of households does not explain the school attendance. We test empirically this hypothesis using data from the MICS conducted in 2010 and Education Statistical Yearbooks. Using a bivariate probit model, the results show that school attendance and child labor depend of households’ standard of living after controlling for other relevant characteristics. In particular, a child from a non-poor household has a lower (higher) probability to be involved in the child labor (enrolled in school) compared to a child from a poor household. Although these results are classical in the economic literature, they are rather surprising in the case of Chad regarding the priority given to education by authorities. We identify four possible explanations, (i) the low level of these investments compared to international standards; (ii) the loss of public expenditures, caused by institutional factors; (iii) the misallocation of educational infrastructures and human resources by region and (iv) an inequity sharing of spin-offs of economic growth induced by oil resources. These results raise the issue of the sustainability of the Chadian economy after oil.
    Keywords: labor, Poverty, oil resources, Chad
    JEL: Q33 J82 I28
    Date: 2014–10
  27. By: Jeon, Hocheol
    Abstract: The rising rate of obesity has become a prominent social concern in the U.S. and through-out the world. Several recent literature examines how obesity influences households driving or vehicle choice behavior. While the results in prior studies are compelling, the studies suffer from two shortcomings. First, the researches rely on aggregate data (national or county level), rather than individual level observations, potentially masking important factors determining individual choices on vehicles and driving. Second, while they are able to establish a link between obesity and vehicle choice or driving, linking vehicle choice in turn to overall emissions requires information regarding vehicle miles driven. The objective of this study is to address these two limitations using household observations from the Panel Study of Income Dynamics (PSID), jointly modeling the impact of obesity on the vehicle choice and vehicle miles traveled (VMT). In particular, we investigate the impact of obesity and overweight by employing both reduced-form (linear panel model) and structural model (joint discrete/continuous choice model). Our empirical study suggests that the comprehensive impacts of obesity and overweight on gasoline consumption are little or ambiguous. In other words, the effect of the policy to reduce the rate of obesity and overweight are not as rosy as prior studies expect.
    Keywords: Obesity and Overweight, VMT, Fuel Economy, Environmental Economics and Policy, Health Economics and Policy,
    Date: 2014–05
  28. By: René Bohnsack (University of Amsterdam Business School - University of Amsterdam Business School); Jonatan Pinkse (MTS - Management Technologique et Strategique - Grenoble École de Management (GEM)); Ans Kolk (Amsterdam Business School - University of Amsterdam)
    Abstract: Sustainable technologies challenge prevailing business practices, especially in industries that depend heavily on the use of fossil fuels. Firms are therefore in need of business models that transform the specific characteristics of sustainable technologies into new ways to create economic value and overcome the barriers that stand in the way of their market penetration. A key issue is the respective impact of incumbent and entrepreneurial firms' path-dependent behaviour on the development of such new business models. Embedded in the literature on business models, this paper explores how incumbent and entrepreneurial firms' path dependencies have affected the evolution of business models for electric vehicles. Based on a qualitative analysis of electric vehicle projects of key industry players over a five-year period (2006-2010), the paper identifies four business model archetypes and traces their evolution over time. Findings suggest that incumbent and entrepreneurial firms approach business model innovation in distinctive ways. Business model evolution shows a series of incremental changes that introduce service-based components, which were initially developed by entrepreneurial firms, to the product. Over time there seems to be some convergence in the business models of incumbents and entrepreneurs in the direction of delivering economy multi-purpose vehicles.
    Keywords: Sustainable technology; business models, evolution; path dependencies; electric vehicles
    Date: 2014
  29. By: Victor Lavy; Avraham Ebenstein; Sefi Roth
    Abstract: Cognitive performance is critical to productivity in many occupations and potentially linked to pollution exposure. We evaluate this potentially important relationship by estimating the effect of pollution exposure on standardized test scores among Israeli high school high-stakes tests (2000-2002). Since students take multiple exams on multiple days in the same location after each grade, we can adopt a fixed effects strategy estimating models with city, school, and student fixed effects. We focus on fine particulate matter (PM2.5) and carbon monoxide (CO), which are considered to be two of the most dangerous forms of air pollution. We find that while PM2.5 and CO levels are only weakly correlated with each other, both exhibit a robust negative relationship with test scores. We also find that PM2.5, which is thought to be particularly damaging for asthmatics, has a larger negative impact on groups with higher rates of asthma. For CO, which affects neurological functioning, the effect is more homogenous across demographic groups. Furthermore, we find that exposure to either pollutant is associated with a significant decline in the probability of not receiving a Bagrut certificate, which is required for college entrance in Israel. The results suggest that the gain from improving air quality may be underestimated by a narrow focus on health impacts. Insofar as air pollution may lead to reduced cognitive performance, the consequences of pollution may be relevant for a variety of everyday activities that require mental acuity. Moreover, by temporarily lowering the productivity of human capital, high pollution levels lead to allocative inefficiency as students with lower human capital are assigned a higher rank than their more qualified peers. This may lead to inefficient allocation of workers across occupations, and possibly a less productive workforce.
    JEL: I21 J24
    Date: 2014–10
  30. By: Ambach, Daniel; Croonenbroeck, Carsten
    Abstract: The Wind Power Prediction Tool (WPPT) has successfully been used for accurate wind power forecasts in the short to medium term scenario (up to 12 hours ahead). Since its development about a decade ago, a lot of additional stochastic modeling has been applied to the interdependency of wind power and wind speed. We improve the model in three ways: First, we replace the rather simple Fourier series of the basic model by more general and flexible periodic Basis splines (Bsplines). Second, we model conditional heteroscedasticity by a threshold-GARCH (TGARCH) model, one aspect that is entirely left out by the underlying model. Third, we evaluate several distributional forms of the model's error term. While the original WPPT assumes gaussian errors only, we also investigate whether the errors may follow a Student's t-distribution as well as a skew t-distribution. In this article we show that our periodic WPPT-CH model is able to improve forecasts' accuracy significantly, when compared to the plain WPPT model.
    Date: 2014

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