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on Energy Economics |
| By: | Cortés Borda, Daniel Enrique ; Ruíz Hernández, Antonio ; Guillén Gosálbez, Gonzalo ; Llop Llop, Maria ; Guimerà Manrique, Roger ; Sales Pardo, Marta |
| Abstract: | Global warming mitigation has recently become a priority worldwide. A large body of literature dealing with energy related problems has focused on reducing greenhouse gases emissions at an engineering scale. In contrast, the minimization of climate change at a wider macroeconomic level has so far received much less attention. We investigate here the issue of how to mitigate global warming by performing changes in an economy. To this end, we make use of a systematic tool that combines three methods: linear programming, environmentally extended input output models, and life cycle assessment principles. The problem of identifying key economic sectors that contribute significantly to global warming is posed in mathematical terms as a bi criteria linear program that seeks to optimize simultaneously the total economic output and the total life cycle CO2 emissions. We have applied this approach to the European Union economy, finding that significant reductions in global warming potential can be attained by regulating specific economic sectors. Our tool is intended to aid policymakers in the design of more effective public policies for achieving the environmental and economic targets sought. |
| Keywords: | Escalfament global, Unió Europea, Països de la, Canvis climàtics -- Aspectes econòmics -- Unió Europea, Països de la, 33 - Economia, 504 - Ciències del medi ambient, |
| Date: | 2014 |
| URL: | http://d.repec.org/n?u=RePEc:urv:wpaper:2072/246959&r=ene |
| By: | Stuermer, Martin (Federal Reserve Bank of Dallas ) |
| Abstract: | My paper provides long-run evidence on the dynamic effects of supply and demand shocks on mineral commodity prices. I assemble and analyze a new data set of price and production levels of copper, lead, tin, and zinc from 1840 to 2010. Price fluctuations are primarily driven by demand rather than supply shocks. Demand shocks affect the price persistently for up to five-teen years, whereas the effect of mineral supply shocks persists for a maximum of five years. My paper shows that price surges caused by rapid industrialization are a recurrent phenomenon throughout history. Mineral commodity prices return to their declining or stable trends in the long run. |
| Keywords: | Mineral commodity markets; prices; non-renewable resources; SVAR |
| JEL: | E30 N50 Q31 Q33 |
| Date: | 2014–12–12 |
| URL: | http://d.repec.org/n?u=RePEc:fip:feddwp:1414&r=ene |
| By: | Coglianese, John ; Davis, Lucas W ; Kilian, Lutz ; Stock, James H |
| Abstract: | Traditional least squares estimates of the responsiveness of gasoline consumption to changes in gasoline prices are biased toward zero, given the endogeneity of gasoline prices. A seemingly natural solution to this problem is to instrument for gasoline prices using gasoline taxes, but this approach tends to yield implausibly large price elasticities. We demonstrate that anticipatory behavior provides an important explanation for this result. We provide evidence that gasoline buyers increase gasoline purchases before tax increases and delay gasoline purchases before tax decreases. This intertemporal substitution renders the tax instrument endogenous, invalidating conventional IV analysis. We show that including suitable leads and lags in the regression restores the validity of the IV estimator, resulting in much lower and more plausible elasticity estimates. Our analysis has implications more broadly for the IV analysis of markets in which buyers may store purchases for future consumption. |
| Keywords: | Anticipation; Forward-looking behavior; Gasoline market; Gasoline tax; IV; Price elasticity of demand |
| JEL: | C23 Q41 Q43 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10430&r=ene |
| By: | Maximilian Mueller (WHU–Otto Beisheim School of Management ); Denis Schweizer (Concordia University ); Volker Seiler (University of Paderborn ) |
| Abstract: | Rare earth elements (REEs) have become increasingly important because of their relative scarcity and worldwide increasing demand, as well as China’s quasi-monopoly of this market. REEs are virtually not substitutable, and they are essential for a variety of high- tech products and modern key technologies. This has raised serious concerns that China will misuse its dominant position to set export quotas in order to maximize its own profits at the expense of other rare earth user industries (wealth transfer motive). In fact, export restrictions on REEs were the catalyst for the U.S. to lodge a formal complaint against China in 2012 at the WTO. This paper analyzes possible wealth transfer effects by focusing on export quota announcements (so-called MOFCOM announcements) by China, and the share price reactions of Chinese REE suppliers, U.S. REE users, and the rest of the world REE refiners. Overall, we find limited support for the view of a wealth transfer in connection with MOFCOM announcements only when disentangling events prior to and post the initiation of the WTO trial, consistent with the trial triggering changes to China’s REE policy and recent announcement to abolish quotas. We do find, however, that extreme REE price movements have a first order effect on all companies in the REE industry consistent with recent market trends to enable hedging against REE price volatility. |
| Keywords: | Announcement Effects, Event Study, Rare Earths Elements, WTO |
| JEL: | F13 F52 G14 Q31 Q34 Q37 Q38 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:pdn:ciepap:88&r=ene |
| By: | Rodrigo Harrison ; Roger Lagunoff |
| Date: | 2015–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:cla:levarc:786969000000001019&r=ene |
| By: | Paul David (Stanford University ); Adriaan van Zon (SBE Maastricht University and United Nations University ) |
| Abstract: | This paper reports research focused on the inter-temporal resource allocation requirements of a program of technological changes that would halt global warming by completing the transition to a "green" production regime (i.e., zero net CO2-emissions) within the possibly brief finite interval that remains before Earth’s climate is driven beyond a catastrophic tipping point. We formulate a multi-phase, just-in-time transition model incorporating carbon-based and carbon-free technical options that require physical embodiment in durable production facilities, and whose performance attributes can be enhanced by investment in directed R&D. Transition paths indicating the best ordering and durations of the distinct phases during which intangible and tangible capital formation is taking place and capital stocks of different types are being utilized in production (or scrapped when replaced types embodying socially more efficient technologies) are obtained as optimal solutions for each of a trio of related models in which the global macro-economy’s dynamics are coupled with the dynamics of the climate system. The climate-integrated (annual) discrete-time endogenous growth models envisage the implementation of different technology policy options, but, for comparability of their solutions, all three are calibrated to emulate the same global settings of the "transition planning" problem. Our dynamic integrated requirements analysis modeling (DIRAM) approach exposes the sensitivity of the specifics of alternative "tech fix" transition paths to parametric variations in key exogenous specifications. Of particular interest among the latter is the conjectured location of a pair of successive climate "tipping points", the first of which initiates higher expected rates of damage to the carbon-fueled capital stock due to more frequent extreme weather events being driven by the rising mean global temperature. The second, far more dangerous tipping point (at a still higher MGT) corresponds to the lowest conjectured level of atmospheric CO2 concentration that could trigger an irreversible climate catastrophe. Having to stop short of that point, in effect sets a "minimal regret" carbon budget for the optimal transition to a sustainable phase of global economic growth. Sensitivity analysis results are displayed to show how varying the catastrophic tipping point (and its implied carbon budget) alters the transition dynamics in each of the three models. |
| Keywords: | global warming, tipping point, catastrophic climate instability, extreme weather- related damages, R&D, directed technical change, capital-embodied technologies, optimal sequencing, multi-phase optimal control, sustainable endogenous growth |
| JEL: | Q54 Q55 O31 O32 O33 O41 O44 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:sip:dpaper:15-002&r=ene |
| By: | Paul Collier ; Tony Venables |
| Abstract: | Climate policy requires that much of the world's reserves of fossil fuels remain unburned. This paper makes the case for implementing this directly through policy to close the global coal industry. Coal is singled out because of its high emissions intensity, low rents per unit value, local environmental costs and sheer scale. Direct supply policy - the sequenced closure of coal mines - may lead to less policy leakage (across countries and time) than other policies based on demand or price management. It also has the advantage of involving relatively few players and leading to clear-cut and observable outcomes. Appropriately sequenced closure of the world coal industry could, we suggest, create the moral force needed to mobilize collective international action. |
| Keywords: | climate change, coal, cap and trade, supply policy |
| JEL: | Q3 Q4 Q54 |
| Date: | 2014–02–05 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-132&r=ene |
| By: | Tao Hong ; Pu Wang |
| Abstract: | Electric load forecasting is a fundamental business process and well-established analytical problem in the utility industry. Due to various characteristics of electricity demand series and the business needs, electric load forecasting is a classical textbook example and popular application field in the forecasting community. During the past 30 plus years, many statistical and artificial intelligence techniques have been applied to short term load forecasting (STLF) with varying degrees of success. Although fuzzy regression has been tried for STLF for about a decade, most research work is still focused at the theoretical level, leaving little value for practical applications. A primary reason is that inadequate attention has been paid to the improvement of the underlying linear model. This application-oriented paper proposes a fuzzy interaction regression approach to STLF. Through comparisons to three models (two fuzzy regression models and one multiple linear regression model) without interaction effects, the proposed approach shows superior performance over its counterparts. This paper also offers critical comments to a notable but questionable paper in this field. Finally, tips for practicing forecasting using fuzzy regression are discussed. |
| Keywords: | Load forecasting; Fuzzy regression; Interaction regression |
| JEL: | C22 C53 Q41 Q47 |
| Date: | 2013–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:wuu:wpaper:hsc1314&r=ene |
| By: | Andrew B. Whitford |
| Abstract: | One important effect of price shocks in the United States has been increased political attention paid to the structure and performance of oil and natural gas markets, along with some governmental support for energy conservation. This paper describes how price changes helped lead the emergence of a political agenda accompanied by several interventions, as revealed through Granger causality tests on change in the legislative agenda. |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1502.07265&r=ene |
| By: | Beghin, John ; Bureau, Jean-Christophe ; Gohin, Alex |
| Abstract: | We assess the impact of a potential TTIP bilateral free trade agreement on the EU and US bio-economies (feedstock, biofuels, by-products, and related competing crops) and major trade partners in these markets. The analysis develops a multi-market model that incorporates bilateral trade flows (US to EU, EU to US, and similarly with third countries) and is calibrated to OECD-FAO baseline for 2013–2022 to account for recent policy decisions. The major policy reforms from a TTIP involve tariff and TRQ liberalization and their direct contractionary impact on US sugar supply, EU biofuel production, and indirect negative effect on US HFCS production. EU sugar and isoglucose productions expand along with US ethanol and biodiesel and oilseed crushing. EU sugar would flow to the US, US biofuels and vegetable oil to the EU. We further quantify nontariff measures (NTM) affecting these trade flows between the EU and the US. EU oilseed production contracts, and EU crushing expands with improving crushing margins following reduced NTM frictions. Our analysis reveals limited net welfare gains with most net benefits reaped by Brazil and not the two trading partners of the TTIP. |
| Keywords: | TTIP, bilateral trade agreement, biofuel, ethanol, biodiesel, sugar, nontariff measure, International Relations/Trade, Resource /Energy Economics and Policy, F13, Q17, Q42, Q48, |
| Date: | 2014–11 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iats14:197153&r=ene |
| By: | Baumeister, Christiane ; Kilian, Lutz |
| Abstract: | Some observers have conjectured that the decline in the price of oil after June 2014 resulted from positive oil supply shocks in the second half of 2014. Others have suggested that a major shock to oil price expectations occurred when in late November 2014 OPEC announced that it would maintain current production levels despite the steady increase in non-OPEC oil production. Both conjectures are perfectly reasonable ex ante, yet we provide quantitative evidence that neither explanation appears supported by the data. We show that more than half of the decline in the price of oil was predictable in real time as of June 2014 and therefore must have reflected the cumulative effects of earlier oil demand and supply shocks. Among the shocks that occurred after June 2014, the most influential shock resembles a negative shock to the demand for oil associated with a weakening economy in December 2014. In contrast, there is no evidence of any large positive oil supply shocks between June and December. We conclude that the difference in the evolution of the price of oil, which declined by 44% over this period, compared with other commodity prices, which on average only declined by about 5%-15%, reflects oil-market specific developments that took place prior to June 2014. |
| Keywords: | Oil demand; Oil price declines; Oil supply; OPEC; Shale oil |
| JEL: | C53 Q43 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:10404&r=ene |
| By: | Gribkovskaia, Victoria (Dept. of Business and Management Science, Norwegian School of Economics ) |
| Abstract: | The Nordic electricity market experienced extremely high prices during the winter 2009/2010. Using real data from the peak price hours the zonal solution from the Nordic market is replicated and compared to the nodal price solution when the central grid and its physical characteristics are explicitly modelled. Demand elasticity is introduced to the bid curves and its effect on prices and network utilisation is studied for the nodal solution. The sensitivity of the zonal solution to the changes in aggregate transfer capacities is investigated. The results demonstrate that better system utilisation is possible without capacity expansion. Nodal pricing solutions compared to the actual zonal pricing mechanism give insights into how the system functions in strained capacity situations and what hinders a more efficient system utilisation. |
| Keywords: | Nordic power market; effects of pricing; demand elasticity; transmission capacities; nodal pricing; zonal pricing |
| JEL: | Q00 |
| Date: | 2015–02–13 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:nhhfms:2015_009&r=ene |
| By: | Gerhard Toews ; Alexander Naumov |
| Abstract: | We propose a simple structural model of the upstream sector in the oil and gas industry to study the determinants of costs with a focus on its relationship with the price of oil. We use the real oil price, data on global drilling activity and costs of drilling to estimate a three-dimensional VAR model. We use short run restrictions to decompose the variation in the data into three structural shocks. We estimate the dynamic effects of these shocks on drilling activity, costs of drilling and the real price of oil. Our main results are that (i) a 1% increase (decrease) int he oil price increases (decreases) global drilling activity by 1% and costs of drilling by 0.5% with a lag of a year; and (ii) shocks to drilling activity and costs of drilling do not affect the price of oil permanently. |
| Keywords: | Natural Resource Extraction, Crude Oil Price, Upstream Cost |
| JEL: | Q31 |
| Date: | 2015–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-152&r=ene |
| By: | Pan He (ETH Zurich ); Marcella Veronesi (Department of Economics (University of Verona) ) |
| Abstract: | Adopting renewable energy technologies has been seen as a promising way to reduce CO2 emissions and deforestation. This paper investigates how social networks may affect renewable energy technology adoption. We distinguish two channels through which social networks may play a role: (i) the diffusion of information; and (ii) the diffusion of behavior. Most empirical studies fail to quantitatively separate the diffusion of information and behavior in social networks. We conduct a survey on biogas technology adopting in rural China to identify individuals’ egocentric information networks. We find that both the diffusion of information and behavior drive farmers’ technology adoption. Farmers with larger egocentric information networks and a larger fraction of known adopters are more likely to adopt the biogas technology. In addition, we collect data on several attributes of alters to explore the composition of social networks. We find heterogeneous social network effects across different types of alters. Alters who have close relationships with egos such as friends and relatives or that are trusted by egos affect egos’ adoption through the diffusion of information, while less trusted alters such as government officials affect egos’ adoption through their adoption behavior. |
| Keywords: | Social networks, renewable energy, technology adoption, information diffusion, behavior diffusion, biogas, China |
| JEL: | D83 D85 Q55 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:ver:wpaper:06/2015&r=ene |
| By: | Meng, Bo ; Peters, Glen ; Wang, Zhi |
| Abstract: | This paper integrates two lines of research into a unified conceptual framework: trade in global value chains and embodied emissions. This allows both value added and emissions to be systematically traced at the country, sector, and bilateral levels through various production network routes. By combining value-added and emissions accounting in a consistent way, the potential environmental cost (amount of emissions per unit of value added) along global value chains can be estimated. Using this unified accounting method, we trace CO2 emissions in the global production and trade network among 41 economies in 35 sectors from 1995 to 2009, basing our calculations on the World Input–Output Database, and show how they help us to better understand the impact of cross-country production sharing on the environment. |
| Keywords: | Developing countries, China, Developed countries, International trade, Trade policy, Air pollution, Environmental problems, Environmental policy, Value-added, Embodied emissions, Global value chains |
| JEL: | E01 F1 F14 F18 Q5 Q56 |
| Date: | 2015–01–13 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper486&r=ene |
| By: | Anis Omri ; Nejah ben mabrouk ; Amel Sassi-Tmar |
| Abstract: | This paper investigates the causal relationship among energy consumption (i.e., nuclear energy and renewable |
| Keywords: | Nuclear energy, Renewable energy, Economic growth, Simultaneous-equation models. |
| Date: | 2015–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2015-623&r=ene |
| By: | Ali Raza Cheema (Pakistan Institute of Development Economics, Islamabad ); Attiya Yasmin Javid (Pakistan Institute of Development Economics, Islamabad ) |
| Abstract: | This study evaluates the link between disaggregate energy consumption (coal, petroleum, electricity, renewable energy consumption), economic growth and environment for Asian Developing countries. Cointegration tests verify long run relationship among energy consumption and growth, energy consumption and environment degradation along with trade openness and financial development as control variables. To find long run elasticities fully modified OLS is used, which confirms that all forms of disaggregate energy consumption explain positive and significant impact on economic growth. Results also show that all forms of disaggregate energy use more pollute environment (except coal consumption) and also validate the existence of Environmental Kuznets curve. Important policy implication is that government needs to promote renewable energy sector because its increase economic growth and its impact on environment degradation is low as compare to other sources. Investment in renewable energy sector is beneficial for private and public sector after conducting cost and benefit analysis. |
| Keywords: | Disaggregate Energy Consumption, Economic Growth, CO2 Emissions, Environmental Kuznets Curve |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pid:wpaper:2015:115&r=ene |
| By: | Gawel, Erik ; Korte, Klaas ; Tews, Kerstin |
| Abstract: | [Energiewende und Sozialverträglichkeit] Neben vielen anderen Gestaltungsfragen der Energiewende steht auch deren Sozialverträglichkeit gegenwärtig intensiv in der Diskussion. Dabei wird eine Vielzahl an Kritikpunkten insbesondere gegen die Förderung erneuerbarer Energien im Stromsektor, vor allem deren Refinanzierung über eine Umlage auf den Stromverbrauch, vorgetragen. Neben der Frage der „richtigen“ Ausgestaltung der Energiewende kann grundsätzlich auch die Verteilung der dadurch ausgelösten Kosten und Nutzen in einer sozialen Marktwirtschaft nicht vernachlässigt werden. Über Kosten und Nutzen der Energiewende für die Gesellschaft darf mithin nicht nur mit Blick auf ihre angemessene Höhe diskutiert werden (vgl. hierzu etwa Gawel et al. 2012); auch deren Verteilung zwischen Individuen, Gruppen und Regionen zählt zu den Herausforderungen einer verantwortbaren Politik. Insbesondere die Verteilung der Lasten der Energiewende darf weder intransparent erfolgen noch im Widerspruch zu grundlegenden Gerechtigkeitswertungen stehen (Gawel et al. 2014, S. 38; Tews 2013, S. 13 ff.). In der aktuellen Debatte kann jedoch neben bedenkenswerten Kritikpunkten auch vielfach schlichte Mythenbildung beobachtet werden: Gerade die am prominentesten kritisierten angeblichen sozialen Schieflagen erweisen sich bei näherer Betrachtung als verkürzt dargestellt, haltlos oder gar als Skandalisierung von Selbstverständlichkeiten. Dies offenbart zugleich ein bedenkliches Auseinanderfallen von ernstlichen sozialen Herausforderungen der Energiewende und den öffentlich vorzugsweise diskutierten Kritikpunkten. Zwei der am hartnäckigsten und am lautesten kritisierten Punkte sollen im vorliegenden Beitrag näher betrachtet werden: Beide kritisieren die Förderung der erneuerbaren Energien über das Erneuerbare-Energien-Gesetz (EEG), gleichsam das Herzstück der Energiewende-Governance, als sozial ungerecht und fügen so der allgemeinen EEG-Kritik eine soziale Dimension hinzu. Mythos 1 geht dahin, dass die EEG-Förderung ein herausgehobener Strompreistreiber und als solcher sozial ungerecht sei (Abschnitt II.1). Mythos 2 legt ferner nahe, dass von der EEG-Förderung vor allem oder ausschließlich „Reiche“ profitierten und das EEG damit ein machtvolles Umverteilungsinstrument von unten nach oben verkörpere (II.2). Dem bei der öffentlichen, aber auch akademischen EEG-Kritik z. T. üblichen gewordenen hohen Erregungston entsprechend („Kosten-Tsunami“ (Frondel et al. 2010; Haucap 2011), „energiepolitische Geisterfahrt“ (Sinn 2012, S. 54), „Politikkatastrophe“ (Weimann 2008)) ist in diesem Zusammenhang gar von einer „tickenden sozialpolitischen Zeitbombe“ (Frondel/Sommer 2014) die Rede. Auch wenn diese in der verteilungspolitischen EEG-Debatte vorgetragenen Kritikpunkte so kaum überzeugen können und jedenfalls keine Veranlassung geben, die Klima-, Umwelt- und Energiepolitik gegen sozial- und verteilungspolitische Anliegen grundsätzlich auszuspielen, so fragt sich doch, inwieweit die Energiewendepolitik auch auf die Verteilungswirkungen höherer Energiepreise einzugehen hat (III.). Ein Fazit (IV.) beschließt diesen Beitrag. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:22015&r=ene |
| By: | David Banister ; Philippe Crist ; Stephen Perkins |
| Abstract: | “Green growth” and transport combines several different concepts that are central to sustainable mobility, including sustainable economic activity, reduced environmental impact and sustained growth in high quality jobs. It attempts to balance the importance of economic growth, with environmental damage and social priorities through assessing positive actions that can be taken by a wide variety of public and private stakeholders. It has arisen out of the concern over the use of non-renewable resources in transport, increasing emissions of carbon and other pollutants, and the expected levels of growth in mobility over the next 40 years. But it also acknowledges the importance of transport to the economy, and its role in helping to create jobs, improving levels of productivity and output, and in promoting agglomeration benefits. This means that transport should be efficient, but at the same time make less demand on the environment through less use of resources, through recycling and reuse of materials, and through embracing a life cycle perspective... |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envddd:2015/1-en&r=ene |
| By: | Tao Hong |
| Abstract: | When turning on the switch, people expect the light would be on. However, the business to keep the lights on is not that straightforward. This paper offers a practical overview of energy forecasting, an important task that electric utilities have been doing every day for over a century. |
| Keywords: | Energy forecasting; Electricity price forecasting; Load forecasting; Smart grid |
| JEL: | Q41 Q47 |
| Date: | 2013–12–31 |
| URL: | http://d.repec.org/n?u=RePEc:wuu:wpaper:hsc1315&r=ene |
| By: | Erdenebat Bataa ; Marwan Izzeldin ; Denise Osborn |
| Abstract: | Using a new iterative algorithm that tests for possible breaks in the coefficients and residual variances of recursively identified structural equations, we examine changes in the parameters of the oil market model of Kilian (2009). Our analysis reveals breaks in the coefficients of the oil production and price equations, together with volatility shifts in all equations. In particular, the medium term response of production to aggregate demand shocks increases after 1980 and the price response to supply shocks is more persistent from the mid-1990s. All variables evidence changes in the relative contributions of individual shocks to their forecast error variances. |
| Keywords: | Oil price shocks, multiple breaks, breaks in SVAR |
| JEL: | E42 Q43 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:75761696&r=ene |
| By: | Ramos, Ana ; Labandeira, Xavier ; Löschel, Andreas |
| Abstract: | The residential building sector is a major driver of current and future energy consumption and associated emissions, which can be potentially mitigated through significant energy-efficiency (EE) improvements in both emerging and developed countries. Yet, there are several persistent barriers that hinder the attainment of EE improvements in this area. Using data from a 2008 national representative survey of Spanish households, this paper is interested in the determinants of EE-related decisions. In particular, a discrete-choice model empirically analyzes whether proenvironmental households are more likely to invest in EE and to adopt daily energysaving habits. We show that households with eco-friendly behaviors are more likely to investment in well-differentiated EE measures as well as to steer daily habits towards energy savings. However, no effects are found for households with environmental attitudes based on stated willingness to pay to protect the environment. In addition to this, households belonging to higher income groups and education levels are more likely to invest in EE but not to adopt energy-saving habits; while households with older members are less likely to invest in EE and show fewer eco-friendly habits. |
| Keywords: | energy efficiency,investment,behavior,habits |
| JEL: | Q41 Q48 Q58 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cawmdp:80&r=ene |
| By: | Anna Grodecka ; Karlygash Kuralbayeva |
| Abstract: | What is the optimal instrument design and choice for a regular attempting to control emissions by private agents in face of uncertainty arising from business cycles? In applying Weitzman's result [Prices vs. quantities, Review of Economic Studies, 41 (1974), 477-491] to the problem of greenhouse gas emissions, the price-quantity literature has shown that, under uncertainty about abatement costs, price instruments (carbon taxes) are preferred to quantity restrictions (caps on emission), since the damages from climate change are relatively flat. On the other hand, another recent piece of academic literature has highlighted the importance of adjusting cabon taxes to business cycle fluctuations in a procyclical manner. In this paper, we analyze the optimal design and the relative performance of price versus quantity instruments in the face of uncertainty stemming from business cycles. Our theoretical framework is a general equilibrium real business cycle model with a climate change externality and distortionary fiscal policy. First, we find that in an infinitely flexible control environment, the carbon tax fluctuates very little and is approximately constant, whilst emissions fluctuate a great deal in response to a productivity shock. Second, we find that a fixed price instrument is advantageous over a fixed quantity instrument due to the cyclical behavior of abatement costs, which tend to increase during expansions and decline during economic downturns. Our results suggest that the cabon tax is approximately constant over business cycles due to "flat" damages in the short-run and thus procyclical behavior as suggested by other studies cannot be justified merely on the gorunds of targeting the climate externality. |
| Keywords: | carbon tax, cap-and-trade, business cycles, distortionary taxes, climate change |
| JEL: | E32 H23 Q54 Q58 |
| Date: | 2014–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-137&r=ene |
| By: | Edmond Baranes (LAMETA and Labex Entreprendre, University of Montpellier 1 ); Julien Jacqmin (LAMETA, University of Montpellier 1 ); Jean-Christophe Poudou (LAMETA, University of Montpellier 1 ) |
| Abstract: | This paper studies the links between non-renewable and intermittent renewable energy sources in the production of electricity. We argue that the relationship between the price of natural gas and investments in solar and wind capacity is represented by a bell-shaped curve, as opposed to being linear. Hence, for relatively low natural gas prices, the two modes of production are substitutes. After a price threshold is reached, the two are complementary. A theoretical model explains this as the trade-off resulting from two forces: the input price differential of these two modes of production and the risks related to the unpredictable nature of renewable energy. Using U.S. state-level data from 1998 to 2012, we find that this relationship is robust to various empirical specifications. |
| Keywords: | Renewable energy production, natural gas, factor complementarity, electricity production. |
| JEL: | D22 D24 Q41 Q42 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2015.02&r=ene |
| By: | Lucas Bretschger ; Lin Zhang |
| Abstract: | There is widespread concern that an international agreement on stringent climate policies will not be reached because it would imply too high costs for fast growing economies like China. To quantify these costs we develop a general equilibrium model with fully endogenous growth. The framework includes disaggregated industrial and energy sectors, endogenous innovation, and sector-specific investments. We find that the implementation of Chinese government carbon policies until 2020 causes a welfare reduction of 0.3 percent. For the long run up to 2050 we show that welfare costs of internationally coordinated emission reduction targets lie between 3 and 8 percent. Assuming faster energy technology development, stronger induced innovation and rising energy prices in the reference case reduces welfare losses significantly. We argue that increased urbanization raises the costs of carbon policies due to altered consumption patterns. |
| Keywords: | Carbon policy, China, Endogeneous growth, Induced innovation, Urbanization |
| JEL: | Q54 O41 O53 C68 |
| Date: | 2014–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-143&r=ene |
| By: | Le, Thai-Ha |
| Abstract: | This study analyses the effects of oil price and macroeconomic shocks on the Malaysian housing market using a SVAR framework. The specification of the baseline model is based on standard economic theory. The Gregory-Hansen (GH) cointegration tests reveal that there is no cointegration among the variables of interest. Results from performing Toda-Yamamoto (TY) non-Granger causality tests show that oil price, labor force and inflation are the leading factors causing movements in the Malaysian housing prices in the long run. The findings from estimating generalized impulse response functions (IRFs) and variance decompositions (VDCs) indicate that oil price and labor force shocks explain a substantial portion of housing market price fluctuations in Malaysia. |
| Keywords: | housing market fluctuations,oil price shocks,macroeconomic shocks,Malaysia |
| JEL: | Q43 O18 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20158&r=ene |
| By: | Klinedinst, Mark |
| Abstract: | The project to create an experimental “clean coal” plant in Mississippi is funded by electric utility customers in the poorest state in the United States. The incentives for the project come from the industry capturing the Public Service Commission of Mississippi. The controversial incentives stipulate that the Southern Company can earn a return on money spent to create electrical infrastructure, even if the experimental plant never produces any electricity. The Southern Company’s Kemper County Mississippi “Radcliffe” Plant, originally estimated to cost about $1.2 billion, is approaching $6 billion dollars, is still not operational, and may never be a profitable facility. Despite this, over 180,000 of America’s poorest citizens are expected to foot the bill. Although this is one of the most intense examples of corporate welfare, the “Radcliffe” Plant is hardly the only current case in the utility industry. The “Public Service Commission” of Mississippi facilitated this large transfer of income from ratepayers to investors in this monopoly. |
| Keywords: | utility, public service commission, coal, rate, electric |
| JEL: | A1 L5 Q38 Q4 |
| Date: | 2014–11–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62214&r=ene |
| By: | Claudio Baccianti ; Andreas Löschel |
| Abstract: | The European Union has implemented demand push and technology pull policies to foster innovation on the energy and resource efficiency of capital goods. The state of the art of general equilibrium modelling applied to environmental policy rarely treats product and process innovation separately and product quality is, in the best case, exogenous. We develop a dynamic multi-sector CGE model that distinguishes between R&D-based process innovation for all firms, endogenous product innovation in the capital good sector and adoption decisions with respect to the installation of new capital vintages in the rest of the economy. Our results support the previous literature in finding that aggregate innovation declines following an energy tax but whereas process innovation is reduced, product innovation actually rises. We find that demand pull policies are less effective than product-related R&D subsidies to reduce aggregate energy intensity. |
| Keywords: | Ecological innovation, Economic growth path, Industrial policy, Innovation, Innovation policy, Intangible assets, New technologies, Sustainable growth |
| JEL: | O31 O40 O41 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfewop:y:2015:m:2:d:0:i:85&r=ene |
| By: | Lucas Bretschger ; Alexandra Vinogradova |
| Abstract: | Climate physics predicts that the intensity of natural disasters will increase in the future due to climate change. One of the biggest challenges for economic modeling is the inherent uncertainty of climate events, which crucially affects consumption, investment, and abatement decisions. We present a stochastic model of a growing economy where natural disasters are multiple and random, with damages driven by the economy's polluting activity. We provide a closed-form solution and show that the optimal path is characterized by a constant growth rate of consumption and the capital stock until a shock arrives, triggering a downward jump in both variables. Optimum mitigation policy consists of spending a constant fraction of output on emissions abatement. This fraction is an increasing function of the arrival rate, polluting intensity of output, and the damage intensity of emissions. A sharp response of the optimum growth rate and the abatement share to changes in the arrival rate and the damage intensity justifies more stringent climate policies as compared to the expectation-based scenario. We subsequently extend the baseline model by adding climate-induced fluctuations around the growth trend and stock-pollution effects, demonstrating robustness of our results. In a quantitative assessment of our model we show that the optimal abatement expenditure at the global level may represent 0.9% of output, which is equivalent to a tax of $71 per ton carbon. |
| Keywords: | Climate policy, uncertainty, natural disasters, endogenous growth |
| JEL: | O10 Q52 Q54 |
| Date: | 2014–08–04 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-145&r=ene |
| By: | Joseph S. Shapiro ; Reed Walker |
| Abstract: | Between 1990 and 2008, emissions of the most common air pollutants from U.S. manufacturing fell by 60 percent, even as real U.S. manufacturing output grew substantially. This paper develops a quantitative model to explain how changes in trade, environmental regulation, productivity, and consumer preferences have contributed to these reductions in pollution emissions. We estimate the model's key parameters using administrative data on plant-level production and pollution decisions. We then combine these estimates with detailed historical data to provide a model-driven decomposition of the causes of the observed pollution changes. Finally, we compare the model-driven decomposition to a statistical decomposition. The model and data suggest three findings. First, the fall in pollution emissions is due to decreasing pollution per unit output within narrowly de ned products, rather than to changes in the types of products produced or changes to the total quantity of manufacturing output. Second, the implicit pollution tax that rationalizes rm production and abatement behavior more than doubled between 1990 and 2008. Third, environmental regulation explains 75 percent or more of the observed reduction in pollution emissions from manufacturing. |
| JEL: | F18 H23 Q56 |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:15-03&r=ene |
| By: | Byrnes, Liam ; Brown, Colin ; Wagner, Liam ; Foster, John |
| Abstract: | Governments and utilities are struggling to respond to the increasing costs of energy supply in remote networks while still meeting social objectives of access and availability. Due to vast distances and sparse population, remote Australian communities are generally electrified by distributed networks using diesel generation. This is expensive, environmentally damaging and fails to exploit vast renewable resources available. These communities are often regarded as “low hanging fruit” from a renewable energy deployment perspective. This paper examines why picking that fruit is not straightforward. In Western Australia, the local electricity distribution utility responsible for remote networks, developed a scheme to incentivise renewable energy deployment in remote communities. This scheme aims to facilitate renewable energy deployment from the “bottom up” by providing a feed-in tariff capped at $0.50/kWh, to reduce the supply cost and environmental damage from diesel generation. This incentive is designed to encourage communities to fund installation. However, to date, there has been limited deployment of renewables in remote communities. The viability of renewable energy in three indigenous communities in the Kimberley region of Western Australia all connected to isolated, diesel powered networks is assessed. Both the potential benefits that can arise across remote communities as well as the barriers to deployment are considered. Renewable energy installation is found to benefit the utility but can also benefit communities subject to their cost of capital and to the imposition of connection charges. However a range of barriers are frustrating deployment and a dynamic and adaptive approach that recognises local challenges and provides the communities with a pathway to installation is needed. |
| Keywords: | Rural Electrification; Electricity; Energy Policy; Energy Economics |
| JEL: | O18 Q40 Q42 Q48 |
| Date: | 2015–01–20 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:61929&r=ene |
| By: | Martin L. Weitzman |
| Abstract: | This paper posits the conceptually useful allegory of a futuristic "World Climate Assembly" that votes on global carbon emissions via the basic principle of majority rule. Two variants are considered. One is to vote on a universal price (or tax) that is internationally harmonized, but the proceeds from which are domestically retained. The other is to vote on the overall quantity of total worldwide emissions, which are then distributed for free (via a pre-decided fractional subdivision formula) as individual allowance permits that are subsequently marketed in an international cap-and-trade system. The model of the paper suggests that the majority-voted price is likely to be less distortionary and easier to enact than the majority-voted total quantity of permits. While the study is centered on a formal model, the tone of the policy discussion resembles more an exploratory think piece. |
| JEL: | F51 H41 Q54 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:20925&r=ene |
| By: | Radoslaw (Radek) Stefanski |
| Abstract: | I develop a unique database of international fossil-fuel subsidies by examining country-specific patterns in carbon emission-to-GDP ratios, known as emission-intensities. For most but not all countries, intensities tend to be hump-shaped with income. I construct a model of structural-transformation that generates this hump-shaped intensity and then show that deviations from this pattern must be driven by distortions to sectoral-productivity and/or fossil-fuel prices. Finally, I use the calibrated model to measure these distortions for 170 countries for 1980-2010. This methodology reveals that fossil-fuel price-distortions are large, increasing and often hidden. Furthermore, they are major contributors to higher carbon-emissions and lower GDP. |
| Date: | 2014–04–02 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-134&r=ene |
| By: | Asche, Frank (UiS ); Osmundsen, Petter (UiS ); Øglend, Atle (UiS ) |
| Abstract: | This paper investigates the economic value of trade when prices of transportation services are endogenous to cross-market price spreads. This is relevant for liquefied natural gas (LNG) exports. LNG transportation capacity is limited in the short-run, and long lead-times are involved in extending the transportation infrastructure. We establish empirically that LNG transportation costs have been endogenous to regional gas prices spreads. As such, transportation service providers have been able to capture part of the price spread. We proceed to develop a method to value LNG exports under conditions of endogenous transportation costs and market integration. We use this method to quantify the effect of endogenous transportation costs on the value of LNG exports from the US to Japan. Our analysis shows that when transportation costs are correctly treated as endogenous, the LNG export benefit can drop by as much as 20-50% relative to the case of exogenous cost. |
| Keywords: | Oil; natural gas; peak load pricing; regime switching; price dynamics |
| JEL: | F13 Q27 Q48 |
| Date: | 2015–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:stavef:2015_004&r=ene |
| By: | Tomomi Miyazaki (Graduate School of Economics, Kobe University ) |
| Abstract: | This paper examines the effects of Japanese fiscal policy after the 2008 global financial crisis using a mixed vector autoregression/event study approach. We focus on the effects of stimulus packages with environmental benefits. The empirical results show that a tax break and subsidy program designed to promote the adoption of eco-friendly cars helped stimulate automobile production, while a similar program intended to promote the purchase of energy-efficient appliances had no effect on appliance production. |
| Keywords: | Fiscal policy effectiveness in Japan; Environmental stimulus package; Eco Subsidy |
| JEL: | E23 E62 H30 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:koe:wpaper:1508&r=ene |
| By: | Alexander James ; Brock Smith |
| Abstract: | Over the past decade, the production of shale oil and gas significantly increased in the United States. This paper uniquely examines how this energy boom has affected regional crime rates throughout the United States. There is evidence that, as a result of the ongoing shale-energy boom, shale-rich counties experienced faster growth in rates of both property and violent crimes including rape, assault, murder, robbery, burglary, larceny and grand-theft auto. These results are particularly robust for rates of assault, and less so for other types of crimes. Policy makers should anticipate these effects and invest in public infrastructure accordingly. |
| Keywords: | Natural Resources, Hydraulic Fracturing, Crime, Resource Curse |
| Date: | 2014–07–05 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-140&r=ene |
| By: | Rick Van der Ploeg ; Armon Rezai |
| Abstract: | We use the Euler equation to put forward a back-on-the-envelope rule for the global carbon tax based on a two-box carbon cycle with temperature lag, and a constant elasticity of marginal damages with respect to GDP. This tax falls with time impatience and intergenerational inequality aversion and rises with population growth and prudence. It also falls with growth in living standards if inequality aversion is large enough or marginal damages do not react much to GDP. It rises in proportion with GDP if marginal climate damages are proportional to output and has a flat time profile if they are additive. The rule also allows for mean reversion in climate damages. The rule closely approximates the true optimum for our IAM of Ramsey growth, scarce fossil fuel, energy transitions and stranded assets dsepite it using the more complicated DICE carbon cycle and temperature modules. The simple rule gets close to the social optimum even if damages are much more convex than in DICE. |
| Keywords: | simple rule, SCC, Ramsey growth, optimal energy transitions, stranded assets, intergenerational inequality aversion, climate damage specification |
| Date: | 2015–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-150&r=ene |
| By: | shafaai, Shafizal ; Masih, Mansur |
| Abstract: | Financialisation of crude oil and its frequent inclusion into investment portfolios raise the demand for analysis of crude oil and stock market indices relationship at various time scales. In this paper, the relationships between crude oil and stock markets in three Islamic stock market indices and three non-Islamic indices are examined by using a time-scale decomposition based on the theory of wavelets. This study employs daily closing price data of Brent crude oil index and the six stock market indices. The oil and stock return series are first decomposed into different time components and then their relationships are investigated over different time scales through wavelet’s estimated correlations. We also characterized the crude oil and stock market relationship for different timescales in an attempt to disentangle the possible existence of comovement during the global financial crisis. The results mainly show evidence of significant time scale effects on the behavior of the oil-stock market links, and that investors should consider these effects when diversifying their portfolios of stocks into the oil asset. The paper specifies the investment horizons that should be considered to maximize diversification properties of crude oil. These findings also have important implications for risk management, monetary policies to control oil inflationary pressures and fiscal policy in oil-exporting countries. |
| Keywords: | wavelet analysis, stock markets, crude oil |
| JEL: | C22 C58 G15 |
| Date: | 2013–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62363&r=ene |
| By: | Alexander James |
| Abstract: | A surprising feature of resource-rich economies is slow growth. It is often argued that natural-resource production impedes development by creating market or institutional failures. This paper establishes an alternative explanation - a slow-growing resource sector. A declining resource sector is disproportionately reflected in resource-dependent countries. Additionally, there is little evidence that resource dependence impedes growth in non-resource sectors. More generally, this paper illustrates the importance of considering industry composition in cross-country growth regressions. |
| Keywords: | Resource Dependence, Economic Growth, Resource Curse |
| JEL: | Q2 Q3 O1 |
| Date: | 2014–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-147&r=ene |
| By: | Tao Hong |
| Abstract: | Energy forecasting is one of those areas of great importance to electric grid that gets little attention - even from power industry insiders. But you need to know how to make the best of your forecasting process. Here are 13 tips to get you started. |
| Keywords: | Energy forecasting; Forecast accuracy; Forecast combination; Load forecasting |
| JEL: | C53 Q41 Q47 |
| Date: | 2014–10–30 |
| URL: | http://d.repec.org/n?u=RePEc:wuu:wpaper:hsc1413&r=ene |
| By: | Sebastien Pouliot (Center for Agricultural and Rural Development (CARD) ); Bruce A. Babcock (Center for Agricultural and Rural Development (CARD) ) |
| Abstract: | Past studies that examine the impact of ethanol mandates on fuel prices make the assumption that ethanol and gasoline are perfect substitutes because they are both sources of energy in transportation fuels. These studies, however, have been of limited use in informing current policy debates because the short- to medium-run reality is one of strong regulatory and infrastructure rigidities that restrict how ethanol can be consumed in the United States. Our objective here is to improve understanding of how these rigidities change the findings of existing studies. We accomplish this by estimating the impacts of higher ethanol mandates using a new open-economy, partial equilibrium model of gasoline, ethanol, and blending whereby motorists buy one of two fuels: E10, which is a blend of 10 percent ethanol and 90 percent gasoline, or E85 which is a high ethanol blend. The model is calibrated to recent data to provide current estimates. We find that the effects of increasing ethanol mandates that are physically feasible to meet on the price of E10 are close to zero. This result is robust to different gasoline supply elasticities and gasoline export demand elasticities. The impact of the size of the corn harvest on E10 prices is much larger than the effects of mandates. Increased mandates can have a large effect on the price of E85 if the mandates are increased to levels that approach consumption capacity. These findings show that concern about the consumer price of fuel do not justify a reduction in feasible ethanol mandates. |
| Keywords: | Biofuel, Ethanol, Gasoline, Mandate. JEL codes: Q18, Q41, Q42. |
| Date: | 2014–09 |
| URL: | http://d.repec.org/n?u=RePEc:ias:cpaper:14-wp551&r=ene |
| By: | Ghassan, Hassan B. ; Banerjee, Prashanta K. |
| Abstract: | The purpose of this paper is to analyze the dynamics of crude oil prices of OPEC and non-OPEC countries using threshold cointegration. To capture the long run asymmetric price transmission mechanism, we develop an error correction model within a threshold cointegration and CGARCH errors framework. The empirical contribution of our paper specifies the cointegrating relation between OPEC price and non-OPEC prices and estimates how and to what extent the respective prices adjust to eliminate disequilibrium. The finding exhibits that the conditional volatility of variance has long run memory feature and the shocks on the long run component do not adjust quickly. The OPEC producers could not drive down (up) crude oil prices with equivalent speeds for all participants in the market. The slow adjustment of OPEC process of positive discrepancies to the long run equilibrium indicates that OPEC does not prefer modest oil prices. While, the rapid adjustment of non-OPEC process signifies their preference of modest oil prices after oil price increases. These differences of speeds show evidence for competitive behaviors between OPEC and non-OPEC countries. |
| Keywords: | Asymmetric Adjustment, Cointegration, CGARCH, Conditional Variance, OPEC Prices. |
| JEL: | C22 C51 E30 Q40 |
| Date: | 2013–10–13 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62168&r=ene |
| By: | Zahran, Sammy ; Iverson, Terrence ; McElmurry, Shawn ; Weilar, Stephan |
| Abstract: | Lead is a neurotoxin with developmentally harmful effects in children. In the United States, over half of the current flow of lead into the atmosphere is attributable to lead-formulated aviation gasoline (avgas), used in a large fraction of piston-engine aircraft. Deposition of lead from avgas may pose a health risk to children proximate to airport facilities that service lead-emitting aircraft. Extrapolating from epidemiological evidence on the health and human capital costs of lead poisoning, various public interest firms have petitioned the EPA to find endangerment from and regulate lead emitted by piston-engine aircraft. In the absence of sufficient empirical evidence linking avgas to blood lead levels (BLLs) in children, the EPA has ruled against petitions to find endangerment. To address an EPA request for more evidence, we constructed a novel dataset that links time and spatially referenced blood lead data from 1,043,391 children to 448 nearby airports in Michigan, as well as a subset of airports with detailed data on the volume of piston-engine aircraft traffic. Across a series of tests, and adjusting for other known sources of lead exposure, we find that child BLLs: 1) increase dose-responsively in proximity to airports, 2) decline measurably in children residing in neighborhoods proximate to airports in the months after 9-11, and 3) increase dose-responsively in the flow of piston-engine aircraft traffic. To quantify the policy relevance of our results, we provide a conservative estimate of the social damages attributable to avgas consumption. |
| Keywords: | Child Health; Lead Exposure; Blood Lead Levels; Aviation Gasoline |
| JEL: | I12 I18 J13 Q51 Q53 |
| Date: | 2014–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62238&r=ene |
| By: | Wei, Chu ; Löschel, Andreas ; Liu, Bing |
| Abstract: | In the context of soaring demand for electricity, mitigating and controlling greenhouse gas emissions is a great challenge for China's power sector. Increasing attention has been placed on the evaluation of energy efficiency and CO2 abatement potential in the power sector. However, studies at the micro-level are relatively rare due to serious data limitations. This study uses the 2004 and 2008 Census data of Zhejiang province to construct a non-parametric frontier in order to assess the abatement space of energy and associated CO2 emission from China's coal-fired power enterprises. A Weighted Russell Directional Distance Function (WRDDF) is applied to construct an energy-saving potential index and a CO2 emission-abatement potential index. Both indicators depict the inefficiency level in terms of energy utilization and CO2 emissions of electric power plants. Our results show a substantial variation of energy-saving potential and CO2 abatement potential among enterprises. We find that large power enterprises are less efficient in 2004, but become more efficient than smaller enterprises in 2008. State-owned enterprises (SOE) are not significantly different in 2008 from 2004, but perform better than their non-SOE counterparts in 2008. This change in performance for large enterprises and SOE might be driven by the "top-1000 Enterprise Energy Conservation Action" that was implemented in 2006. |
| Keywords: | Energy-saving potential,CO2 abatement potential,Weighted Russell Directional Distance Function,Coal-fired power enterprise |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cawmdp:78&r=ene |
| By: | Brenda Lopez Cabrera ; Franziska Schulz ; ; |
| Abstract: | Electricity load forecasts are an integral part of many decision-making pro- cesses in the electricity market. However, most literature on electricity load forecasting concentrates on deterministic forecasts, neglecting possibly impor- tant information about uncertainty. A more complete picture of future demand can be obtained by using distributional forecasts, allowing for a more efficient decision-making. A predictive density can be fully characterized by tail mea- sures such as quantiles and expectiles. Furthermore, interest often lies in the accurate estimation of tail events rather than in the mean or median. We pro- pose a new methodology to obtain probabilistic forecasts of electricity load, that is based on functional data analysis of generalized quantile curves. The core of the methodology is dimension reduction based on functional principal components of tail curves with dependence structure. The approach has sev- eral advantages, such as flexible inclusion of explanatory variables including meteorological forecasts and no distributional assumptions. The methodol- ogy is applied to load data from a transmission system operator (TSO) and a balancing unit in Germany. Our forecast method is evaluated against other models including the TSO forecast model. It outperforms them in terms of mean absolute percentage error (MAPE) and achieves a MAPE of 2.7% for the TSO. |
| Keywords: | Electricity, Load forecasting, FPCA |
| JEL: | G19 G29 G22 Q14 Q49 Q59 |
| Date: | 2014–05 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2014-030&r=ene |
| By: | Alain Ayong Le Kama ; Aude Pommeret |
| Abstract: | In this paper we focus on a long-term dynamic analysis of the optimal adaptation/mitigation mix in the presence of a pollution threshold above which adaptation is no longer efficient. We account for accumulation in abatement capital, greenhouse gases, and adaptation capital in order to better capture the arbitrage between abatement and adaptation investments. Pollution damages arise from the emissions due to the country consumption but also from the emissions of the rest of the world (ROW). A pollution threshold is then introduced, above which adaptation is no longer efficient. We obtain that if this threshold is lower than the steady-state level of pollution, there is no way for the modeled economy to avoid it. In particular, such a situation will appear if the ROW's emissions are high. Next step is then to introduce another type of investment allowing for lower ROW pollution ie. emissions eduction abroad through CDM for instance. We obtain that CDM may be a means to avoid a pollution threshold above which adaptation becomes of no use. |
| Keywords: | Credit Risk, Credit Scoring, Auto Loans, Logistic Regression. |
| JEL: | Q5 Q52 Q56 Q58 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2015-2&r=ene |
| By: | Jacobsen, Mark |
| Keywords: | Architecture, Arts and Humanities, Education, Engineering |
| Date: | 2014–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:uctcwp:qt3fx8p8q7&r=ene |
| By: | Montaud, Jean-Marc ; Pécastaing, Nicolas |
| Abstract: | The Clean Development Mechanism (CDM) under the Kyoto Protocol constitutes a major tool in the fight against climate change; it is also an important foreign direct investment funding opportunity for Southern countries. Yet, few studies have focused on the economic impact of CDM on host countries. This study attempts such an assessment in Peru, using a computable general equilibrium (CGE) model that accounts for both the productive and regional dualism of the national economy. The numerical simulation of macroeconomic shocks generated by current and future CDM projects reveals the significant potential impact of such investments in terms of employment, growth, and regional imbalance in this developing country. |
| Keywords: | clean development mechanism,development,dualism,computable general equilibrium,Peru |
| JEL: | C68 O11 Q56 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20156&r=ene |
| By: | Ujjayant Chakravorty ; Marie-Helene Hubert ; Michel Moreaux ; Linda Nostbakken |
| Abstract: | More than 40% of US corn is now used to produce biofuels, which are used as substitutes for gasoline in transportation. Biofuels have been blamed universally for recent increases in world food prices. Many studies have shown that these energy mandates in the US and EU may have a large (30-60%) impact on food prices. In this paper we use a partial equilibrium framework to show that demand-side effects - in the form of population growth and income-driven preferences for meat and dairy products rather than cereals - may play as much of a role in raising food prices as biofuel policy. By specifying a Ricardian model with a differential land quality, we find that a significant amount of new land will be converted to farming which is likely to cause a modest increase in food prices. However, biofuels may increase aggregate world carbon emissions, due to leakage from lower oil prices and conversion of pasture and forest land for farming. |
| Keywords: | Clean Energy, Food Demand, Land Quality, Renewable Fuel Standards, Transportation |
| JEL: | Q24 Q32 Q42 |
| URL: | http://d.repec.org/n?u=RePEc:tuf:tuftec:0805&r=ene |
| By: | Sahbi Farhani |
| Abstract: | This paper uses panel cointegration techniques to examine the causal relationship between renewable energy consumption, economic growth and CO2 emissions for a group of 12 MENA countries covering the annual period 1975-2008. The Granger-causality results indicate that there is no causal relationship between these variables in short run except a unidirectional causality running from renewable energy consumption to CO2 emissions. However, we find unidirectional causality running from economic growth and CO2 emissions to renewable energy consumption in long run. With panel FMOLS and DOLS estimates, we find that only CO2 emissions have an impact on renewable energy consumption. These results indicate that MENA countries don’t find the best policy which can control the regulation of the renewable energy prices, which can help to take into account the stability in the economic growth structure, and which can also mitigate pollutant emissions. |
| Keywords: | Renewable energy consumption, Economic growth, CO2 emissions, MENA countries |
| JEL: | C33 Q43 |
| Date: | 2015–02–10 |
| URL: | http://d.repec.org/n?u=RePEc:ipg:wpaper:2015-612&r=ene |
| By: | Zhe Yu ; Shanjun Li ; Lang Tong |
| Abstract: | The diffusion of electric vehicles (EVs) is studied in a two-sided market framework consisting of EVs on the one side and EV charging stations (EVCSs) on the other. A sequential game is introduced as a model for the interactions between an EVCS investor and EV consumers. A consumer chooses to purchase an EV or a conventional gasoline alternative based on the upfront costs of purchase, the future operating costs and the availability of charging stations. The investor, on the other hand, maximizes his profit by deciding whether to build charging facilities at a set of potential EVCS sites or to defer his investments. The solution of the sequential game characterizes the EV-EVCS market equilibrium. The market solution is compared with that of a social planner who invests in EVCSs with the goal of maximizing the social welfare. It is shown that the market solution underinvests EVCSs, leading to slower EV diffusion. The effects of subsidies for EV purchase and EVCSs are also considered. |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1502.03840&r=ene |
| By: | Asjad Naqvi |
| Abstract: | Economic policy in the EU faces a trilemma of solving three challenges simultaneously - growth, distribution, and the environment. In order to assess policies that address these issues simultaneously, economic models need to account for both sector-sector and sector-environment feedbacks within a single framework. This paper presents a multi-sectoral stock- flow consistent (SFC) macro model where a demand-driven economy consisting of multiple institutional sectors -firms, energy, households, government, and financial - interacts with the environment. The model is calibrated for the EU region and five policy scenarios are evaluated; low consumption, a capital stock damage function, carbon taxes, higher share of renewable energy, and technological shocks to productivity. Policy outcomes are tracked on overall output, unemployment, income and income distributions, energy, and emission levels. Results show that investment in mitigation technologies allows for absolute decoupling and ensures that the above three issues can be solved simultaneously. |
| Keywords: | Ecological macroeconomics, stock-ow consistent, growth, distribution, environment, European Union |
| JEL: | E12 E17 E23 E24 Q52 Q56 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:feu:wfeppr:y:2015:m:2:d:0:i:18&r=ene |
| By: | Ivan Haščič ; Miguel Cárdenas Rodríguez ; Raphaël Jachnik ; Jérôme Silva ; Nick Johnstone |
| Abstract: | This study uses a unique dataset of investment flows to analyse the role of two categories of public interventions (finance and policies) in mobilising flows of private climate finance worldwide and in the more specific context of flows to and in developing countries. The objectives are threefold. First, the paper presents ‘observed’ ratios of total private to public finance in selected climate-related sectors. Second, it seeks to understand the determinants of private climate finance flows by analysing the role of key public finance (bilateral, domestic and multilateral) and public policy instruments (feed-in tariffs, renewable energy quotas, the Clean Development Mechanism), while taking into account a number of market and country conditions. For reasons of data availability, the focus of this econometric analysis is on a subset of six renewable energy sectors (wind, solar, biomass, small hydro, marine and geothermal). Finally, the paper assesses the likely mobilisation impact of past public interventions in these six sectors, and draws a comparison with approaches that ignore the role of policy as well as country and market conditions.<P> Results suggest that both public finance and public policies have played an important role in private finance mobilisation globally. In the context of finance to and in developing countries, the results highlight the currently untapped potential of domestic public policies to increase mobilisation. The methodology proposed in this report is an initial attempt to estimate private climate finance mobilisation empirically. It should be seen as a first step towards developing more comprehensive methodologies for analysing and estimating private finance mobilisation in the global climate policy context. |
| Keywords: | renewable energy, climate change, investment, private finance, leverage, mobilisation, public interventions, estimation |
| JEL: | G3 H23 L94 O3 Q42 Q48 Q54 Q55 Q58 |
| Date: | 2015–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:80-en&r=ene |
| By: | Coria, Jessica (Department of Economics, School of Business, Economics and Law, Göteborg University ); Kyriakopoulou, Efthymia (Department of Economics, School of Business, Economics and Law, Göteborg University ) |
| Abstract: | In this paper we analyze the e¤ects of environmental policies on the size distribution of firms. We model a stationary industry where the observed size distribution is a solution to the profit maximization problem of heterogeneous firms that di¤er in terms of their energy efficiency. We compare the equilibrium size distribution under emission taxes, uniform emission standards, and performance standards. Our results indicate that, unlike emission taxes and performance standards, emission standards introduce regulatory asymmetries favoring small firms. These asymmetries cause significant detrimental effects on total output and total welfare, yet lead to reduced emissions and help preserve small businesses. |
| Keywords: | Environmental regulations; energy efficiency; size distribution; emission taxes; emission standards; performance standards |
| JEL: | L25 Q55 Q58 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0614&r=ene |
| By: | ITO Koichiro ; IDA Takanori ; TANAKA Makoto |
| Abstract: | Firms and governments often use moral suasion and economic incentives to influence intrinsic and extrinsic motivations for various economic activities. To investigate the persistence of such interventions, we randomly assigned households to moral suasion and dynamic pricing that stimulate energy conservation during peak demand hours. Using household-level consumption data for 30-minute intervals, we find significant short-run effects of moral suasion, but the effects diminish quickly after repeated interventions. Economic incentives produce larger and persistent effects, which induce habit formation after the final interventions. While each policy produces substantial welfare gains, economic incentives provide particularly large gains when considering persistence. |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:15014&r=ene |
| By: | Juan Casado-Asensio ; Shannon Wang ; Katlego Moilwa ; Anna Drutschinin |
| Abstract: | Embracing green growth can secure strong, stable and sustainable development. Green growth recognises and integrates the value of natural capital into economic decision-making and development planning, which is critical to avoid natural capital depletion, the worst of climate change and social and national security risks (OECD, 2013). This is particularly true for developing countries, because of their dependence on natural assets and acute exposure and vulnerability to environmental risks, ranging from air, water and soil pollution, as well as natural resource scarcity and extreme weather events exacerbated by climate change. A green growth policy framework recognises and aims to address both micro- and macro-level pressures that countries face to grow their economies, while also managing environmental risks. In poorer developing countries, micro-level pressures may include lack of access to basic services such as shelter, fuel, water; while macro-level pressures are threats to stable livelihoods due to... |
| Date: | 2014–12–23 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envddd:2014/3-en&r=ene |
| By: | Halkos, George ; Paizanos, Epameinondas |
| Abstract: | This paper examines the effect of economic policy on air quality using US quarterly data from 1973 to 2013. In particular, we analyze the short-run as well as the long-run interactions between fiscal and monetary policy with CO2 emissions, employing time series techniques of co-integration, Granger multivariate causality and vector error-correction modeling. To take into account possible variations of the effect of economic policy according to the sources of pollution, we distinguish between industrial and residential inflicted CO2 emissions. In addition, we construct the impulse responses to three linear combinations of fiscal shocks, corresponding to the three scenarios of deficit-spending, deficit-financed tax cuts and a balanced budget spending expansion. Policy implications from the results vary depending on the source of CO2 emissions. |
| Keywords: | Fiscal policy; monetary policy; environment. |
| JEL: | E52 E62 Q53 Q54 Q56 |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62001&r=ene |
| By: | Steinbuks, Jevgenijs ; Satija, Gaurav ; Zhao, Fu |
| Abstract: | This study seeks to understand how materials scarcity and competition from alternative uses affects the potential for widespread deployment of solar electricity in the long run, in light of related technology and policy uncertainties. Simulation results of a computable partial equilibrium model predict a considerable expansion of solar electricity generation worldwide in the near decades, as generation technologies improve and production costs fall. Increasing materials scarcity becomes a significant constraint for further expansion of solar generation, which grows considerably slower in the second half of the coming century. Solar generation capacity increases with higher energy demand, squeezing consumption in industries that compete for scarce minerals. Stringent climate policies hamper growth in intermittent solar photovoltaics backed by fossil fuel powered plants, but lead to a small increase in non-intermittent concentrated solar power technology. By the end of the coming century, solar electricity remains a marginal source of global electricity supply even in the world of higher energy demand, strict carbon regulations, and generation efficiency improvements. |
| Keywords: | Energy Production and Transportation,Climate Change Mitigation and Green House Gases,Environment and Energy Efficiency,Energy and Environment,Climate Change Economics |
| Date: | 2015–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7178&r=ene |
| By: | Müller, Jakob R. ; Holstenkamp, Lars |
| Abstract: | Nach den starken Zuwächsen in den vergangenen Jahren ist die Gründungsdynamik im Bereich der Energiegenossenschaften im Jahr 2014 zum Erliegen gekommen. Zum Ablauf des Jahres 2014 waren 973 Energiegenossenschaften in den Genossenschaftsregistern eingetragen. Insgesamt wurden im Jahr 2014 66 Energiegenossenschaften neu in die Register eingetragen, von denen jedoch nur 29 auch im Jahr 2014 gegründet wurden. Im Jahr 2013 wurden noch 104 Energiegenossenschaften neu gegründet und 172 in den Genossenschaftsregistern registriert. Unter den Neugründungen befinden sich schwerpunktmäßig Energieproduktionsgenossenschaften, gleichauf mit Nahwärmenetzgenossenschaften. |
| Keywords: | Energiegenossenschaften, Gründungen |
| JEL: | L31 Q42 Q49 |
| Date: | 2015–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62072&r=ene |
| By: | Kesternich, Martin |
| Abstract: | Recent contributions to the theoretical and experimental literature suggest that minimum participation rules (MPRs) are able to reduce free-riding incentives and may facilitate cooperation (or at least coordination) at the extensive margin of international environmental agreements. Based on a dataset from a world-wide survey among delegates in international climate negotiations, this paper assesses preferences for different MPRs for a future climate treaty among key players. The empirical findings provide evidence that small countries with low bargaining power rather opt for large minimum membership requirements while industrialized countries push forward the idea of a small carbon club of the largest emitters only. In contrast, delegates from countries in transition try to keep emission thresholds rather low which would allow a future agreement to come into force without their signature. |
| Keywords: | international climate negotiations,minimum participation rules |
| JEL: | C72 C92 H41 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:15009&r=ene |
| By: | Lucas Bretschger ; Christos Karydas |
| Abstract: | We study the effects of greenhouse gas emissions on optimum growth and climate policy by using an endogenous growth model with polluting non-renewable resources. Climate change harms the capital stock. Our main contribution is to introduce and extensively explore the naturally determined time lag between greenhouse gas emissions and the damages due to climate change, which proves to be crucial for the trasition of the ecnomy towards its steady state. The social optimum and the optimal abatement policies are fully characterized. The inclusion of a green technology delays optimal resource extraction. The optimal tax rate on emissions is proportional to ouptut. Poor understanding of the emissions diffusion process leads to suboptimal carbon taxes and suboptimal growth and resource extraction. |
| Keywords: | Non-Renewable Resource Dynamics, Pollution Diffusion Lag, Optimum Growth, Clean Energy, Climate Policy |
| JEL: | Q54 O11 Q52 Q32 |
| Date: | 2014–08–01 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:wpaper:oxcarre-research-paper-144&r=ene |
| By: | Kitov, Ivan |
| Abstract: | We present a five-year revision of an empirical study started in 2007. Seven years ago, we found two three distinct periods characterized by sustainable linear trends in the difference between the headline consumer price index (CPI) and the core CPI in the USA. Then we revealed similar behavior in the differences between the CPI and indices of various consumer expenditure categories. We estimated the duration of these trends which varies in a wide range from 5 years to more than 20 years. The transition periods to new trends span shorter intervals of 2 to 5 years. The transition is characterized by a higher level of volatility in the studied CPI differences. In April 2009, we introduced a simple quantitative model representing the evolution of motor fuel price (a subcategory of the consumer price index of transportation) relative to the core CPI as a linear function of time. Under our framework, all price deviations from this linear trend are transient and the price must return to the sustainable trend. The model predicted that oil price would fall to $30-$60 per barrel in 2016, which is very close to the current price. The behavior of actual oil and motor fuel price since 2010 has shown that this prediction is accurate in both amplitude and trajectory shape – a good support for the credibility of our empirical mode. We conclude that the concept of price decomposition into a short-term (oscillating) and long-term (linear trend) components deserves a deeper theoretical consideration of the driving forces behind linear time trends and can be used as a workhorse for a wide spectrum of commodity investors. According to the model, the price of crude oil will be falling to the level of $30 per barrel during the next 6 years and motor fuel will follow up the oil price. Moreover, the periodicity of the related normalized difference indicates that this low-price level may extend into the second half of the 2020s. The secular fall in energy prices may induce a lengthy period of very low inflation. |
| Keywords: | CPI, PPI, crude oil, motor fuel, price, prediction, USA |
| JEL: | E31 E37 |
| Date: | 2015–02–23 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:62338&r=ene |
| By: | G. Bampinas (Department of Economics, University of Macedonia, Greece ); T. Panagiotidis (Department of Economics, University of Macedonia, Greece; The Rimini Centre for Economic Analysis, Italy ) |
| Abstract: | We examine the causal relationship between crude oil and gold spot prices before and after the recent financial crisis. In the pre-crisis period, causality is linear and unidirectional, running from oil to gold. In the post-crisis period, a bidirectional nonlinear causality relationship emerges. Volatility spillover transpires as the source of nonlinearity during this period. The time path of the causal linkages both for the returns and the levels (cointegration) was assessed via dynamic bootstrap causality analysis. We find that the causal linkage from gold to oil is time dependent and that the non-Granger causality null hypothesis rejection rate increased considerably in the post-financial crisis period. The probability of gold Granger causing oil in the short-run increases by more than 30% during the recent financial and Euro crisis. |
| Date: | 2015–02 |
| URL: | http://d.repec.org/n?u=RePEc:rim:rimwps:15-04&r=ene |