nep-ene New Economics Papers
on Energy Economics
Issue of 2015‒03‒27
29 papers chosen by
Roger Fouquet
London School of Economics

  1. The Burden of Germany’s Energy Transition – An Empirical Analysis of Distributional Effects By Manuel Frondel; Stephan Sommer; Colin Vance
  2. Renewable Energy Sources and their Reflection on Regional Economic Growth in the Czech republic By Vukica Janković; Helena Mitwallyova
  3. Renewable energy enterprises and regional parameters By Nikos Apostolopoulos; Panagiotis Liargovas
  4. Beer, Wood, and Welfare By Michael Grimm; Jörg Peters
  5. Power Plant Waste Heat Recovery for Household Heating Using Heat Pumps By Dosa, Ion
  6. Non-Competitive Potential in the Iranian Electricity Market By Ali Nazemi; Anahita Farsaee
  7. Analysing the sensitivity of electricity system operational costs to deviations in supply and demand By Joan Batalla-Bejerano; Elisa Trujillo-Baute
  8. "Economic Evaluation of Power Source Mix: Simulation toward 2023" (in Japanese) By Keiji Saito; Hiroshi Ohashi
  9. EL PROBLEMA REGULATORIO EN LA DISTRIBUCIÓN GASÍFERA COLOMBIANA By Camila Andrea Jaramillo Arenas; Jeison David Montañez Estupiñan; Nathalia Montoya González
  10. Local Employment Impact from Competing Energy Sources: Shale Gas Versus Wind Generation in Texas By Peter R Hartley; Kenneth B Medlock III; Ted Temzelides; Xinya Zhang
  11. The Role of Innovative Development in Unconventional Hydrocarbon Exploitation in the Context of the Shale Gas Revolution in the USA By Grinets, Irina; Kaznacheev, Peter
  12. The Algerian political and economical reforms After the “Arab Spring†By Keltouma BOUFATAH
  13. The Effects of Oil Price on Turkish Economic Growth By AyÅŸen Edirneligil; Mehmet Mucuk
  14. Alternative Track of Energy in Egypt By yasmine Gharieb; Zeinab Ibrahim
  15. Contrasting Paradigms of Energy Security: Which Way for the Future? An Ecological Economics Perspective By Filippos Proedrou
  16. Asymmetric industrial energy prices and international trade By Misato Sato; Antoine Dechezlepretre
  17. Cost-effectiveness as Energy Policy Mechanisms: The Paradox of Technology-neutral and Technology-specific Policies in the Short and Long Term By Paulo Henrique de Mello Santana
  18. Understanding New Resource Projects By Kenneth W Clements; Jiawei Si; Thomas Simpson
  19. Resources for conflict: Constraint or wealth? By Kyung Hwan Baik; Subhashish M. Chowdhury; Abhijit Ramalingam
  20. The use and future of biofuels By Hasan AYDOGAN; Mario HIRZ; Helmut BRUNNER
  21. The effects of Air Pollution on Health Status in Great Britain By Giovanis, Eleftherios; Ozdamar, Oznur
  22. Valuing the Effects of Air and Noise Pollution on Health Status in Turkey By Ozdamar, Oznur; Giovanis, Eleftherios
  23. Optimal Environmental Regulation on International Joint Ventures in Developing Countries By Eun-Mo Yang; Young-Han Kim
  24. Tradable Emission Permits, Capital Mobility and Cross-border Pollution: A Welfare Ranking By Nikos Tsakiris; Panos Hatzipanayotou; Michael S. Michael
  25. Climate change impacts and implications for tourism in protected areas By Remus Ion Hornoiu
  26. A risk perspective on market integration and the reform of support of renewables in Germany By Pahle, Michael; Schweizerhof, Henriette
  27. Evaluation of bonus-malus systems for reducing car fleet CO2 emissions in Sweden By Habibi, Shiva; Beser Hugosson, Muriel; Sundbergh , Pia; Algers, Staffan
  28. Can Trade be good for the environment? By Lapan, Harvey E.; Sikdar, Shiva
  29. Economic Liberalization and Environmental Degradation in India: A Causal Analysis of Interventions By Avik Sinha; Joysankar Bhattacharya

  1. By: Manuel Frondel; Stephan Sommer; Colin Vance
    Abstract: Germany’s energy transition has been accompanied by a near doubling of power prices for private households since the outset of the new millennium. Millions of poor households and those that are close to the poverty threshold are likely to suffer from these increases in electricity cost. Focusing on low-income households, this paper illustrates the distributional implications of Germany’s energy transition by investigating their electricity cost burden between 2006 and 2012, using data from the German Residential Energy Consumption Survey (GRECS). Our estimates suggest that in 2012, on average, households at poverty risk allocated 5.5% of their income to power and, hence, paid nearly as much for covering their electricity consumption as for heating purposes. Given Germany’s ambitious targets to expand the share of costly renewable technologies in electricity consumption, which has broad support among the electorate, it is to be expected that households’ expenditure for power will increase in the upcoming years. This raises the urgent question of how to mitigate the regressive impact of further increasing electricity prices on poor households. Direct cash transfers are suggested here as a non-distortionary instrument for easing the burden of high prices, one that is directly targeted at those endangered by energy poverty.
    Keywords: Energy transition; feed-in tariff; German Residential Energy Consumption Survey
    JEL: Q21 Q28 Q47
    Date: 2015–02
  2. By: Vukica Janković (University of Economics, Prague); Helena Mitwallyova (University of Economics, Prague)
    Abstract: Paper explore relation betweeen energy and regional development and more precisly the influence of renewable energy installation and production on regional economic growth in the Czech Republic. The Czech Republic has long tradition in energy sector, more than 100 years of stable and self –sufficient energy production. The base of energy sector consist of energy production from coal, followed by nuclear energy as a second impotant energy resource. Renewable energy sources have the relatively small share in total energy mix, compared to the other EU member states. Their faster commercial production and usage have been existing from the resent history, after the accession of the Czech Republic into the European Union. Supported by tha state, renewable energy power has fast growth, which caused different influence through regions of the Czech Republic.
    Keywords: renewable energy resources, Czech Republic, regional growth
    JEL: O44 Q01
    Date: 2014–10
  3. By: Nikos Apostolopoulos (University of Peloponnese); Panagiotis Liargovas (University of Peloponnese)
    Abstract: This paper is devoted to Greece's national competitiveness in relation to renewable energy production enterprises from solar. Applying Porter's diamond model on renewable energy enterprises, we should take into account regional or local factors due to the dependency of those companies on natural recourses. After all, Porter maintains that national and regional factors jointly promote a competitive advantage. The analysis should be spread to lower levels than the national one, because renewable energy production companies, either at the stage of installation or at the stage of operation, are fully affected by the locality. Measuring or analyzing national competitiveness of this kind of enterprises is not always easy because there are essential differences from other types of industrial activity. In this paper, specific regional data are also incorporated in the analysis of the diamond model conditions, which affect national competitiveness. Through Porter's diamond model we can adopt a multidimensional approach towards this subject related to factor conditions, strategy, related industries, demand and governance.Hence, the purpose of this paper is to examine solar energy production enterprises through a twofold interpenetrated framework. Thus, on the one hand, the aim is to highlight the significant role of regional parameters when analyzing the competitive advantage of renewable energy enterprises in Greece by applying Porter’s diamond model, and on the other hand to implement the aforementioned model in the case of solar energy enterprises taking into account all possible regional parameters.
    Keywords: regional; energy; enterprises
    Date: 2014–05
  4. By: Michael Grimm; Jörg Peters
    Abstract: Local beer breweries in Burkina Faso absorb a considerable amount of urban woodfuel demand. We assess the woodfuel savings caused by the adoption of improved brewing stoves by these micro-breweries and estimate the implied welfare effects through the woodfuel market on private households as well as the environmental effect. We find substantial wood savings among the breweries and, subsequently, huge welfare gains for households and reductions in CO2-emissions. Since woodfuel is predominantly used for cooking by the poorer strata, the intervention under study is an example for a green growth intervention with pro-poor welfare gains – something green growth strategies should look for.
    Keywords: Burkina Faso; demand for woodfuel; green growth; impact evaluation; improved stoves; technology adoption
    JEL: D2 D6 I3 O3
    Date: 2015–02
  5. By: Dosa, Ion
    Abstract: This paper presents a model of a power plant condenser cooling circuit which has in addition to the classical cooling scheme heat pumps for waste heat recovery. Major source of loss for a thermal power plant is the heat rejected by the condenser which can be up to 48.9% of thermal energy at turbine inlet, depending on technology used for power generation. Heat rejected by the cooling water of condenser will end up in the environment through the use of a cooling tower or directly in rivers depending on the cooling scheme employed, producing thermal pollution. Based on the mathematical model, a study on the effect of heat recovery using power plant waste heat as heat source for heat pumps was carried out. The reference heat source temperature for the heat pump was 5 °C, while the condenser cooling water temperature at outlet was in the range of 22.96 °C in April to 14.99 °C in December. As expected high cooling water temperatures at condenser outlet will generate the highest practical COP which is 3.35 comparative to 2.84 for the reference case. Accordingly the smallest amount of work that needs to be supplied to the heat pump is 8.359 kW comparative to 9.861 kW for the reference case, resulting 1.502 kW savings. For the heating period from October to April the worst case scenario is for the temperatures in December when temperature of water at the outlet of condenser was minimal 14.99 °C. Even in this case, practical COP is 3.11 higher than 2.84 for reference case, and the amount of savings with the work supplied to heat pump is 0.869 kW. In closed loop operation, the temperature of returned water at the steam condenser inlet can be theoretically 5 °C (temperature at the outlet of heat pump evaporator) with all the benefits resulting from proper condenser cooling.
    Keywords: waste heat, heat recovery, heat pump, condenser cooling
    JEL: C63
    Date: 2014–02
  6. By: Ali Nazemi (University of Economic Sciences); Anahita Farsaee (University of Economic Sciences)
    Abstract: The electricity markets worldwide have distinctive particularities due to some political and historical reasons. However, principal guidelines of market design remain very similar. The Iranian electricity market has been inaugurated as a pay-as-bid market in 2004. Although the Iranian electricity market has had positive consequences, the economic discussion about proper market design and architecture is in its infancy. The main goal of this paper is analyzing market power and efficiency in the Iranian electricity market.Generally, in spite of the fact that Iranian electricity market is not a high concentrated market, it has potential for non-competitive results. Analyzing results and other facts of the market shows that the most important reason for this is the urgent shortage of supply threshold in this market, rather than the extent of concentration in the industry.
    Keywords: market power, efficiency, Iranian Electricity Market
    JEL: D49
    Date: 2014–07
  7. By: Joan Batalla-Bejerano (Rovira i Virgili University & Chair of Energy Sustainability & IEB (UB) – FUNSEAM); Elisa Trujillo-Baute (University of Warwick & Chair of Energy Sustainability & IEB (UB) – FUNSEAM)
    Abstract: Increasing renewable penetration has given rise to a series of challenges as regards the ability of electricity systems to balance supply and demand, particularly with high levels of intermittent renewable generation. This new scenario requires a detailed quantitative assessment of the way in which the electricity system might both deliver and accommodate higher levels of RES-E generation and of the associated economic costs for the consumer. The estimations reported in this paper for the Spanish electricity system stress the importance of demand imbalance when accounting for the cost of balancing services, in contrast with previous studies that have focused their attention more specifically on supply effects.
    Keywords: Electricity market design, balancing services, renewable energy, electricity demand and supply deviations
    JEL: L51 Q41 Q42 Q47
    Date: 2015
  8. By: Keiji Saito (Faculty of Economics, University of Tokyo); Hiroshi Ohashi (Faculty of Economics, University of Tokyo)
    Abstract: This paper simulates the power source mix of Japanese electricity in the year of 2023 based on the information publicly available from electricity companies and electric power system council. It evaluates eight scenarios based on three important parameters for the Japanese electricity market: demand growth, penetration rates of renewable energy sources, and utilization rates of nuclear power. The paper employs a grid model that replicates power flow among the nine supply areas covering Japan, except for the area of Okinawa. The paper calculates future costs of electricity supply and emissions of carbon dioxides for each of the eight scenarios. It also assesses the impact of future PV penetration with an emphasis of the Kyus hu area, where the impact appears most severe.
    Date: 2015–03
  9. By: Camila Andrea Jaramillo Arenas; Jeison David Montañez Estupiñan; Nathalia Montoya González
    Abstract: En Colombia se presenta un fuerte problema de abastecimiento de gas natural al interior del país ya que este importante recurso todavía no llega a muchas zonas del país. Se observa que el problema se da principalmente por los las fallas en la infraestructura, la cual permite la distribución y el trasporte de gas. La deficiencia en la regulación en cuanto a fijación de tarifas y la implementación del cargo de confiabilidad ha generado la no existencia de estímulos suficientes para la inversión en las estructuras necesarias que permiten el acceso al servicio a todos los ciudadanos del país.
    Keywords: Abastecimiento, distribución, infraestructura, regulación, inversión.
    JEL: L91 L51 E22
    Date: 2015–03–16
  10. By: Peter R Hartley (Rice University and University of Western Australia); Kenneth B Medlock III (Rice University); Ted Temzelides (Rice University); Xinya Zhang (Rice University)
    Abstract: The rapid development of both wind power and of shale gas has been receiving significant attention both in the media and among policy makers. Since these are competing sources of electricity generation, it is informative to investigate their relative merits regarding job creation. We use a panel econometric model to estimate the historical job-creating performance of wind versus that of shale oil and gas. The model is estimated using monthly county level data from Texas from 2001 to 2011. Both first-difference and GMM methods show that shale-related activity has brought strong employment to Texas: 77 short-term jobs or 6.4 full-time equivalent (FTE) jobs per well. Given that 5482 new directional/fractured wells were drilled in Texas in 2011, this implies that about 35000 FTE jobs were created in that year alone. We did not, however, find a corresponding impact on wages. Our estimations did not identify a non-negligible impact from the wind industry on either employment or wages.
    Date: 2014
  11. By: Grinets, Irina (Russian Presidential Academy of National Economy and Public Administration, School of public policy, Center for raw materials economy); Kaznacheev, Peter (Russian Presidential Academy of National Economy and Public Administration, School of public policy, Center for raw materials economy)
    Abstract: Due to the recent drop in oil prices, there is a strong interest in the influence of the shale revolution on the global supply and demand of hydrocarbon fuels. Consequently, the attention of many economists and industry analysts is drawn to the technological, institutional and regulatory aspects of hydrocarbon production from shale deposits in the USA. The authors analyze factors facilitating the shale gas revolution in the USA, and find that in addition to the obvious factors, such as high prices for gas at the beginning of the 2000s, an important underlying factor was the high level of institutional development in the USA. This was characterized by a legal system that recognized property rights in mineral resources, the existence of a wide variety of business entities operating in the oil and gas sector (including small businesses), and a favorable tax regime. The article presents the results of econometric modeling that traces the USA’s transition from almost exclusively extracting conventional gas to the extraction of unconventional gas.
    Keywords: unconventional gas, shale gas revolution, innovative development, institutions
    Date: 2014–12
  12. By: Keltouma BOUFATAH (Faculty of Economic Science, University Abou Bekr Belkaid Tlemcen)
    Abstract: The Algerian government won a third term in 2009 was boycotted by some political parties. After the “Arab Spring†protests swept neighboring Tunisia and Libya, this introduced some political and economical reforms, including an end to state-of-emergency restrictions that had lasted almost two decades. The socialist model adopted after Algeria gained its independence from France in 1962 has hampered development. Formal-sector unemployment remains persistently high, and there is a housing shortage. Algeria is the world’s sixth-largest exporter of natural gas and has the world’s 10th-largest natural gas reserves and 16th-largest oil reserves. in 2010 The government began a five-year, $286 billion program to modernize infrastructure and appears to be trying to attract foreign and domestic private investment and to diversify the economy . The Problematique is what is the vantages and the inconvignants of theses reforms?
    Keywords: Arab Spring, The Algerian government, reforms, program investment, economy
    Date: 2014–10
  13. By: AyÅŸen Edirneligil (Selcuk University); Mehmet Mucuk (Selcuk University)
    Abstract: Although the oil price is determined by demand and supply, it is also affected by lots of variables such as economic, political and technical conditions. On the other hand, fluctuations in oil price have also effect on macroeconomic stability. Oil price has an important role in Turkey, since Turkey is a country that has external dependency in energy sources. The purpose of this paper is to examine the effects of oil prices on Turkish economic growth. In this respect, the relationship between variables will be analyzed by using annual data between the years 1980-2013. For analyzing variables, it will be used Johansen Cointegration Test, Impulse-Response Function, and Variance Decomposition tests.
    Keywords: Oil price, Economic growth, Turkish Economy
    JEL: A10 E00 E21
    Date: 2014–10
  14. By: yasmine Gharieb (Faculty of Economics and Political sciences- Cairo University); Zeinab Ibrahim (Faculty of Economics and Political Sciences- Cairo University)
    Abstract: Bioenergy is considered an important source of energy in modern era that ensures the preservation of environment and achieves sustainable development. Moreover, it preserves the triple bottom line which cares about all aspects of environmental and social as well as economic aspects of development. Bioenergy is considered a wide field of generating energy from different treated material using different types of technology, while Egypt is now going for a National Program to sustain energy through the treatment of animal, agriculture and even human waste. This is initiated through the Bioenergy for Sustainable Rural Development Project which works on several levels, the first level includes household units which depend on the anaerobic fermentation from the waste of animal, in which methane gas is produced to replace butane gas; used in homes. The second level includes the production of gas from poultry farm units aiming to solve the diesel crisis in which both large poultry farms and those small ones, relaying on the cylinders, need the diesel. And finally, the third level which includes generation of electricity from rice straw. So, the goal of the study is to present an analysis of the Egyptian experience in the production of Bioenergy in addition to achieving sustainable development and ways for overcoming the obstacles that hindered the application of this experience previously.
    Keywords: Egypt- Renewables- biomass- biogas- Sustainable Rural Development- Bioenergy Technology(BET)
    JEL: Q16 Q42 Q50
    Date: 2014–05
  15. By: Filippos Proedrou (American College of Thessaloniki (ACT) / International Hellenic University)
    Abstract: This paper argues that mainstream discourse on energy security is premised upon the assumption of infinite growth and for this reason focuses upon the political, security and economic aspects of energy security. Consequently, it fails to provide satisfactory answers to the global environmental, energy, economic, geopolitical, and developmental challenges. The emerging alternative paradigm, to the contrary, makes a strong case for disentangling prosperity from growth and studies how a substantial retreat of energy consumption is not only feasible, but will also efficiently address the sustainability challenge and enhance overall energy security. It also suggests how it can alleviate geopolitical and developmental tensions. Ultimately, the paper poses the fundamental question of how valid our assumptions are to lead us into a better, and sustainable, future.
    Keywords: Energy security paradigm, ecological economics, development, growth, sustainability
    JEL: F50 Q01 Q50
    Date: 2014–12
  16. By: Misato Sato; Antoine Dechezlepretre
    Abstract: This paper measures the response of bilateral trade flows to differences in industrial energy prices across countries. Using a panel for the period 1996-2011 including 42 countries, 62 sectors and covering 60% of global merchandise trade, we estimate the short-run effects of sector-level energy price asymmetry on trade. We find that changes in relative energy prices have a statistically significant but very small impact on imports. On average, a 10% increase in the energy price difference between two country-sectors increases imports by 0.2%. The impact is larger for energy-intensive sectors. Even in these sectors however, the magnitude of the effect is such that changes in energy price differences across time explain less than 0.01% of the variation in trade flows. Simulations based on our model predict that a †40-65/tCO2 price of carbon in the EU ETS would increase Europe’s imports from the rest of the world by less than 0.05% and decrease exports by 0.2%.
    Keywords: energy prices; international trade; carbon taxes
    JEL: F14 F18 Q56
    Date: 2015–03
  17. By: Paulo Henrique de Mello Santana (Universidade Federal do ABC and Regional Research Institute, West Virginia University)
    Abstract: When choosing policy mechanisms to design and deploy energy policies, policymakers typically seek cost-effective ones, linking cost effectiveness to the lowest cost of support for RES-E generation and/or consumer costs. The objectives of this paper are to analyze the cost-effectiveness of renewable portfolio standards (RPS), feed-in tariffs (FIT) and auctions in the short and long term, considering both technology-neutral and technology-specific approaches. Results show that RPS and auctions are more cost-effective than feed-in tariffs (FIT) in the short term if cost-effectiveness is defined as minimizing consumer costs. Also, if one or more emerging technologies with higher levelized life cycle costs (LCC), low cumulative production and high experience elasticity are considered in the pool of RES-E policy design, a technology-neutral approach in the short-term could lock out these emerging technologies, avoiding a long term LCC reduction. In this case, a technology-specific policy used in the short-term would reflect lower total generation policy costs in the long term if compared with a technology-neutral policy in both short and long term. This paper calls this phenomenon the paradox of technology-neutral and technology-specific policies in the long term. Considering the results, this paper suggests a mix of technology-neutral and technology-specific policies using RPS or auction mechanisms to promote RES-E.
    Keywords: energy policy, feed-in tariff, auctions, renewable portfolio standard, cost-effectiveness
    JEL: Q49 O33 D44 Q29 Q52
    Date: 2015–03
  18. By: Kenneth W Clements (Business School, University of Western Australia); Jiawei Si (Business School, University of Western Australia); Thomas Simpson (Business School, University of Western Australia)
    Abstract: The surge in new resource projects has been a prominent feature of the recent strong performance of the Australian economy, with mining and energy investment accounting for almost one-half of all private investment. Although the current round of resource investment has now peaked, as resource cycles tend to repeat themselves, there is an ongoing need to carefully understand the available information sources. In this paper we (i) analyse the factors determining the generation of projects; (ii) investigate cost escalation as projects progress through the investment pipeline, from the initial planning stages to completion; and (iii) use a specially developed panel of matched projects from three widely followed, but under-researched, data sources to analyse the biases, the degree of independence and timeliness of each source. This information is of use to policy makers who have to closely monitor these developments, to analysts following the resources sector, and to project proponents wanting to identify projects most likely to succeed and to know the typical cost profile of a project.
    Date: 2014
  19. By: Kyung Hwan Baik (Sungkyunkwan University); Subhashish M. Chowdhury (University of East Anglia); Abhijit Ramalingam (University of East Anglia)
    Abstract: We investigate the effects of the availability of resources that can be expended in conflict on conflict intensity. We run a between-subjects Tullock contest in which we vary the contest budget from Low to Medium to High, while keeping the Nash equilibrium bid the same. We find an 'inverted U-shaped' relationship between resource availability and conflict intensity. While standard error correction models can explain the first part of the relationship by attributing resources as constraint, they do not apply in the latter part. We further run a Wealth treatment in which the budget remains Medium, but a fixed payment independent of the contest outcome is provided. The level of conflict in the Wealth and the High treatment are not different. We conclude that the resources for conflict can have both a constraint as well as a wealth effect. When initial resources are scarce, they act as a constraint. As more resources become available, the constraint loosens up and conflict intensity increases. However, when resources are abundant, they are viewed as wealth and conflict intensity decreases.
    Keywords: conflict, experiment, wealth effect, resource constraint
    JEL: C72 C91 D72 D74
    Date: 2015–03
  20. By: Hasan AYDOGAN (Selcuk University, Technology Faculty, Mechanical Engineering Department); Mario HIRZ (Graz University of Technology, Institute of Automotive Engineering); Helmut BRUNNER (Graz University of Technology, Institute of Automotive Engineering)
    Abstract: Being one of the most primary inputs of everyday life and the industrial world, energy has been used in various ways since the first existence of human beings. When we look at the types of energy used today, we can see that the mainly used types of fuels are fossil based. CO2 is emitted as a result of the combustion of fossil-based fuels. The increasing amounts of CO2 in the atmosphere create a greenhouse effect. Biofuels have been becoming prevalent rapidly because of constantly gaining economic value and concordantly having less negative effects on the environment. All plant and animal based substances with carbohydrate compounds as main components are biofuel resources.This study includes an examination of the different kinds of biofuels and their effects regarding environmental-related aspects.
    Keywords: biofuels, energy, environment
    JEL: Q40 Q49 Q42
    Date: 2014–10
  21. By: Giovanis, Eleftherios; Ozdamar, Oznur
    Abstract: This study explores the effects of air pollution on self-reported health status. Moreover, this study explores the willingness to pay for improving the air quality in UK. The estimates are based on data from the British Household Panel Survey (BHPS). The effects of air pollution on individuals’ health status are estimated and their monetary value is calculated. In particular, two main air pollutants are examined; ground-level ozone (O3) and carbon monoxide (CO). Moreover, various approaches are followed. The first approach refers to panel Fixed Effects regressions and specifically the Probit adapted Ordinary Least Squares (POLS) and the “Blow-Up and Cluster” (BUC) estimator. The second approach is the dynamic system Generalized Methods of Moments (GMM), while the last approach is the Generalized Ordered Probit with Random Effects model. The annual monetary values for ground level O3 range between £128-£149 for a drop of one unit, while the respective values for the CO range between £122-£141. In addition, the marginal willingness to pay (MWTP) for avoiding an inpatient day in hospital for a one unit reduction in pollution is £29. In the case where the fee of £20 per stay, proposed by a former Health minister in UK, will be implemented then the MWTP ranges between £530-£570. Based on the elective (planned) and non-elective (unplanned) inpatient stay cost per day which is £2,749 and is £2,197 respectively a 5 and 4 unit respectively decrease in air pollutants will lead to a MWTP equal to the inpatient day cost. Lastly, depending on the health status of the individual the MWTP for the number of General Practitioners (GP) ranges between £10-£60.
    Keywords: Air pollution, Environmental valuation, Health Status, Life satisfaction approach
    JEL: I31 Q51 Q53 Q54
    Date: 2014–10
  22. By: Ozdamar, Oznur; Giovanis, Eleftherios
    Abstract: This study explores the determinants of health status in Turkey. Moreover, this study explores the willingness to pay for reducing the air and noise pollution. The estimates are based on data from the annual Income and Living Conditions Survey (ILCS) in Turkey which took place in period 2006-2012. The effects of air and noise pollution on individuals’ health status and whether an individual suffers from chronic illness are estimated and their monetary value is calculated. This is the first study which examines the effects of noise and air pollution in Turkey using a great variety of econometric models as ordered Logit and binary Logit models for cross sectional data. Moreover using a pseudo panel data created based on age and region cohorts various panel data econometric approaches are followed. Regarding the health status the first model is the adapted Probit fixed effects, the “Blow-Up and Cluster” (BUC) and Ferrer-i-Carbonell and Frijters (FCF) estimators to account for intercept heterogeneity. The second approach is the Random Effects Generalized Logit Model to account for slope heterogeneity. Finally, two and three stage least squares instrumental variables approaches are followed using wind direction and regional complaint rates on air and noise pollution as instruments. Income and education are the most important determinants of health status. Based on the favoured estimates individuals who reported problems with air and noise pollution are willing to pay for air and noise quality improvement more by 20.00-21.00 Turkish Liras (TL) and 22.80-25.00 TL respectively than the individuals than did not report any complaint. Finally, the MWTP values of air and noise pollution effects on wages, working hours lost, house rents and expenses and moving dwelling are calculated.
    Keywords: Air pollution, Environmental valuation, Health Status, Noise, Pseudo-Panel
    JEL: I31 Q51 Q53 Q54
    Date: 2014–11
  23. By: Eun-Mo Yang (Sungkyunkwan University); Young-Han Kim (Sungkyunkwan University)
    Abstract: This paper examines how environmental regulation affects the FDI strategies of parent firms in developing countries (the South) and developed countries (the North) when there are differences in the abatement technology and R&D efficiency between these countries. If there are more lenient regulations, it is more attractive to form a JV in the South. However, southern governments opt for lenient regulation when the abatement technology of the North, while not good, is still superior to that of the South. Furthermore, the welfare of the developing country is optimal when forming a domestic JV. This paper focused on FDI strategies in terms of the welfare of the South, with a view to being able to provide better policy modeling for the developing countries.
    Keywords: Emission standard; R&D; Developing country; Environmental regulation
    JEL: F18 F23 Q56
    Date: 2014–12
  24. By: Nikos Tsakiris; Panos Hatzipanayotou (Athens University of Economics and Business); Michael S. Michael
    Abstract: We construct a general equilibrium model of two regions with cross-border pollution and capital mobility. To control pollution governments issue either intra-regionally or inter-regionally tradable emissions permits. We examine two issues. First, can the non-cooperative and cooperative equilibrium of either intra or inter-regionally tradable emission permits be equally welfare efficient? Second, at Nash equilibrium, which permits regime, and under what conditions, welfare dominates the other? For a comprehensive examination of these issues, we compare the results to when emission taxes control pollution. We highlight the role of capital mobility and cross-border pollution in all three policy regimes.
    Keywords: Cross-border pollution, Tradable emission permits, Capital Mobility, Welfare ranking
    JEL: F18 F21 H21
    Date: 2015–03–23
  25. By: Remus Ion Hornoiu (Bucharest University of Economic Studies, Romania)
    Abstract: Tourism, as a distinct field of activity, is strongly linked to climate change: in a positive way - by providing the necessary resources and factors to reduce the action of climate change through the use of alternative energy technologies with low environmental impact, and the controlled development of tourist flows – and a negative one – through energy consumption, visitors transportation, the quantities of waste. Among the solutions mentioned, the present research has focused on protected areas since the argument was less debated in the scientific literature, but also in business practice. As the main service providers regarding ecosystems and biological resources, protected areas meet the requirements to preserve species worldwide and are vulnerable to climate change. Tourism in protected may became a tourist travel motive more prominent in the future as the natural environment and the species from protected areas are threatened by climate change. Therefore, the paper explains different climate change impacts and implications for tourism in protected areas. The research field proposed aimed to assess the direct and indirect impact of climate changes for tourism in protected areas. The objectives were related to: determine the level of importance of different modifications in the structure of the major components of tourism in protected area under the direct climate change impact; indicate the importance level of changes in natural characteristics of environments which could influence negative tourism by reducing the perceived attractiveness of a protected area, under indirect climate change impact; highlight the importance level of modifications, induced by indirect climate change impact, in socioeconomic environment of local communities in protected areas which could affect tourism. Based on the research findings were elaborated proposals for an appropriate strategy in the field of climate change mitigation . This work was supported by the project “Excellence academic routes in the doctoral and postdoctoral research – READ†co-funded from the European Social Fund through the Development of Human Resources Operational Programme 2007-2013, contract no. POSDRU/159/1.5/S/137926.
    Keywords: tourism; protected areas; climate change; impact
    JEL: Q26 Q56 L83
    Date: 2014–12
  26. By: Pahle, Michael; Schweizerhof, Henriette
    Abstract: After more than a decade of supporting power from renewable energy (RE) through guaranteed feed-in tariffs, the German Government has initiated reforms to integrate RE into the market. To eventually achieve market integration requires that RE investors carry power market risks, in particular the power price risk. At the same time however, under the current financial structure higher risks are likely to have a negative impact on the bankability of new RE projects, which by extension may endanger further deployment and the achievement of renewable targets with it. Against this background we take a risk perspective to assess the past and upcoming EEG reforms, with the aim of developing a proposal to gradually shift risk towards RE investors without endangering project finance. To that end we first discuss the case for more market risk and classify the specific respective risks for RE, analyze how they have been allocated so far, and find that past policy reforms have initiated only a marginal transfer of revenue risks to renewables. On that basis we argue that more ambitious steps in this direction need to be taken, for which regulatory complexity and reform outcome uncertainty suggest a continuous and transparent transition rather than a grand all-at-once intervention. We outline and discuss two elements that could be at the center of it: First, a support framework that creates incentives for RE projects to increasingly take risks, for which we propose a cascading risk auction mechanism that prioritizes “more risky” projects. Second, design options for (a) “more risky” support contracts and (b) risk transfer in power purchase contracts, which if standardized could help to develop and establish suitable risk mitigation and management approaches on the side of financers. While this paper does not deliver a fully spelled-out action plan for these elements, it provides a basic sketch and identifies the main research gaps that should be filled for implementing it. Giving the long lead times of reforms and the need to think ahead that arises from it, we are sure that this proposal can make an important contribution to the next EEG reform in Germany expected for 2016/2017.
    Keywords: Germany,renewable support,risk
    JEL: D81 Q28 Q42 Q58
    Date: 2015–02
  27. By: Habibi, Shiva (KTH); Beser Hugosson, Muriel (KTH); Sundbergh , Pia (Trafa); Algers, Staffan (KTH)
    Abstract: Early 2014, an official Swedish government investigation report (FFF-report) was released proposing a policy package to promote a Fossil Free Fleet in Sweden by 2050. One objective of this policy package is to design a bonus-malus system that pushes the Swedish fleet composition towards the EU objectives of the average CO2 emissions of 95 g/km for new cars by 2021. The proposed scenarios address cars bought by private persons as well as by companies. These scenarios differ in designs for registration tax, vehicle circulation tax, clean car premiums, company car benefits tax and fuel tax. We use the Swedish car fleet model system to predict the effects of the proposed scenarios on the Swedish car fleet composition. Also, we build a simple supply model to predict future supply. Our model results show that none of the three proposed scenarios is actually successful enough to meet the Swedish average CO2 emissions target of 95 g/km in 2020. The average CO2 emissions in two of these scenarios are actually higher than in the business as usual scenario. Relative to a business as usual scenario the number of ethanol and gas cars is reduced in the other scenarios which are negative results in terms of fossil fuel independence. Also, the bonus-malus system gives a positive net result in terms of budget effects showing that car buyers choose to pay the malus for a car with higher emissions rather than to be attracted by the bonus of a car with lower emissions.
    Keywords: Bonus-malus; CO2 emission policies; Car fleet modeling; Vehicle supply model
    JEL: R40
    Date: 2015–03–23
  28. By: Lapan, Harvey E.; Sikdar, Shiva
    Keywords: Strategic environmental policy; leakage eect; intra-industry trade; transboundary pollution.
    JEL: F F18 H H23 Q Q56
    Date: 2014–09–23
  29. By: Avik Sinha (Indian Institute of Management Indore); Joysankar Bhattacharya (Indian Institute of Management Indore)
    Abstract: Considering the context of India, economic liberalization plays a major role in industrialization and environmental degradation, at the same time. India’s fossil fuel based energy-led economic growth and consequential carbon emissions are largely influenced by economic liberalization. In this paper, we have considered the twenty years per and post liberalization (1971-2010) and by formulation of an error correction model, we have demonstrated by the established causal associations among economic growth, drivers of growth, and negative consequences of growth undergo changes. This demonstration is based on three constructs associated with economic liberalization, namely industrialization, energy efficiency, and rural-urban migration. Analysis of missing feedback link in Environmental Kuznets Curve hypothesis using contextual interventions is the primary contribution of this paper in ecological economics literature.
    Keywords: Fossil Fuel, CO2 Emission, Economic Liberalization, Environmental Kuznets Curve, India, Vector error correction
    JEL: Q53 Q56 Q59
    Date: 2014–10

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