nep-ene New Economics Papers
on Energy Economics
Issue of 2015‒05‒02
forty-six papers chosen by
Roger Fouquet
London School of Economics

  1. Economic Growth, Coal Demand, Carbon Dioxide Emissions: Empirical Findings from India with Policy Implications By Mita Bhattacharya; Hooi Hooi Lean; Sankar Bhattacharya
  2. Prospect of China's energy conservation and emission reduction during the remaining years of the 12th Five-Year Plan period By Ke Wang; Yingnan Liu
  3. The emission reduction effect and economic impact of an energy tax vs. a carbon tax in China : a dynamic CGE model analysis By Zou, Lele; Xue, Jinjun; Fox, Alan; Meng, Bo; Shibata, Tsubasa
  5. Cost trajectories of low carbon electricity generation technologies in the UK: A study of cost uncertainty By Peter G. Levi; Michael G. Pollitt
  6. Modelling Renewable Energy Economy in Ghana with Autometrics By Ackah, Ishmael; Asomani, Mcomari
  7. Capacity market design options: a dynamic capacity investment model and a GB case study By Daniel Hach; Chi Kong Chyong; Stefan Spinler
  8. Security of Supply, Capacity Auctions and Interconnectors By David Newbery
  9. Energy and the Environment: a cold climate for climate change policies? By Jonathan Colmer; Antoine Dechezleprêtre; Ralf Martin
  10. Targeted carbon tariffs - Carbon leakage and welfare effects By Christoph Böhringer; Brita Bye; Taran Fæhn; Knut Einar Rosendahl
  11. The Role of Distribution Network Operators in Promoting Cost-Effective Distributed Generation: Lessons from the United States for Europe By Karim L. Anaya; Michael G. Pollitt
  12. Integrating Distributed Generation: Regulation and Trends in Three Leading Countries By Karim L. Anaya; Michael G. Pollitt
  13. Market Power Rents and Climate Change Mitigation: A Rationale for Coal Taxes? By Philipp M. Richter; Roman Mendelevitch; Frank Jotzo
  14. The Economics of Forest Carbon Sequestration Revisited: A Challenge for Emissions Offset Trading By G. Cornelis van Kooten
  15. Welfare and Distributional Implications of Shale Gas By Catherine Hausman; Ryan Kellogg
  16. Price Volatility and Demand for Oil: A Comparative Analysis of Developed and Developing Countries By Andrew Jobling; Tooraj Jamasb
  17. Automobile Pollution Control in Brazil By Claudio Ferraz; Ronaldo Seroa da Motta
  18. Energy Codes and the Landlord-Tenant Problem By Maya M. Papineau
  19. The Role of News-Based Uncertainty Indices in Predicting Oil Markets: A Hybrid Nonparametric Quantile Causality Method By Mehmet Balcilar; Stelios Bekiros; Rangan Gupta
  20. Strategic investment and international spillovers in natural gas markets By Robert A. Ritz
  21. Carbon dioxide emissions in the short run: The rate and sources of economic growth matter By Paul J. Burke; Md Shahiduzzaman; David I. Stern
  22. The U.S. Electricity Industry After 20 Years of Restructuring By Severin Borenstein; James Bushnell
  23. Institutional adaptation to cooling water scarcity in the electricity sector under global warming By Klaus Eisenack
  24. Modeling pollution and economic growth: the effect of a lethal threshold By Asuka Oura; Yasukatsu Moridera; Koichi Futagami
  25. The benefits of integrating European electricity markets By David Newbery; Goran Strbac; Ivan Viehoff
  26. A Theory-Based Discussion of International Technology Funding By Hübler, Michael
  27. Accumulation with Malnutrition - The Role of Status Seeking Behavior By Sugata Marjit; Lei Yang
  28. Public Engagement in Electricity Network Development: A Case Study of the Beauly–Denny Project in Scotland By Wenche Tobiasson; Christina Beestermöller; Tooraj Jamasb
  29. Carbon policy and the structure of global trade By Edward J. Balistreri; Christoph Bohringer; Thomas F. Rutherford
  30. Transition towards renewable energy supply in Croatia By Vidakovic, Neven
  31. The political settlement and oil in Uganda By Sam Hickey; Badru Bukenya; Angelo Izama; William Kizito
  32. Climate policies with private information: The case for unilateral action By Carsten Helm; Franz Wirl
  33. Growth, Pollution, and Life Expectancy: China from 1991-2012 By Guojun He; Maoyong Fan; Maigeng Zhou; Avraham Ebenstein; Michael Greenstone; Peng Yin
  34. The Climate Policy Hold-Up: Green Technologies,Intellectual Property Rights, and the Abatement Incentives of International Agreements By Goeschl, Timo; Perino, Grischa
  35. The Effect of Air Pollution on Mortality in China: Evidence from the 2008 Beijing Olympic Games By Guojun He; Maoyong Fan; Maigeng Zhou
  36. Theoretical foundations of fiscal gap as a long-term fiscal sustainability indicator and its estimates for Russia By Evgeny Goryunov; Sergey Sinelnikov-Murylev; Laurence J. Kotlikoff
  37. Pushing the Tipping in International Environmental Agreements By Lorenzo Cerda Planas
  38. The Social Cost of Carbon with Economic and Climate Risks By Yongyang Cai; Kenneth L. Judd; Thomas S. Lontzek
  39. Petroleum Concessions with Extendible Options: Investment Timing and Value Using Mean Reversion and Jump Processes for Oil Prices By Marco Antônio Guimarães Dias; Katia Maria Carlos Rocha
  40. Irreversible Investment with Embodied Technological Progress By Bruno de Oliveira Cruz; Aude Pommeret
  41. Transnational capital and the political settlement of Ghana’s oil economy By Giles Mohan; Kojo Pumpuni Asante
  42. Sustainability, Resource Efficiency and Competitiveness. An Assessment of Resource Efficiency Policies in the European Union. By Florian Flachenecker
  43. Towards Complete Balance Sheets in the National Accounts: The case of Mineral and Energy Resources By Paul Schreyer; C. Obst
  44. Environmental livelihood security in Southeast Asia and Oceania: a water-energy-food-livelihoods nexus approach for spatially assessing change. By Biggs, E. M.; Boruff, B.; Bruce, E.; Duncan, J. M. A.; Haworth, B. J.; Duce, S.; Horsley, J.; Curnow, Jayne.; Neef, A.; McNeill, K.; Pauli, N.; Van Ogtrop, F.; Imanari, Y.
  45. The Timing of Development and the Optimal Production Scale: a Real Option Approach to Oilfield E&P By Katia Rocha; Marco Antonio Guimarães Dias; José Paulo Teixeira
  46. The Future of Development Aid in a Globalizing World with Climate Change By Hübler, Michael

  1. By: Mita Bhattacharya; Hooi Hooi Lean; Sankar Bhattacharya
    Abstract: Coal is the primary source of energy and predominantly used for electricity generation in India. For an emerging economy like India, the demand-supply gap is widening in Coal sector with economic growth. Considering both sides of market, we establish long run dynamics between economic growth, coal demand and carbon dioxide (CO2) emissions. Unidirectional causality is found between growth and CO2 emissions, and bi-directional causality between GDP and coal consumption. Elasticity of coal consumption with respect to economic growth increases from 0.205 to 0.631 from short to long run; while elasticity of CO2 emissions with respect to coal consumption decreases from 0.915 to 0.148 from short to long run. In increasing demand environment, we suggest more investment in cleaner coal technologies, reducing regulatory constraints in the coal sector, and exploring alternative sources of energy will help India for energy security and sustainable development in the long run.
    Keywords: India, Coal Consumption, CO2 Emissions, Economic Growth, Cleaner Coal Technology
    JEL: Q43 Q48 Q56
    Date: 2014–10
  2. By: Ke Wang; Yingnan Liu
    Abstract: China has set controlling greenhouse gas (GHG) emissions as a key task and an essential part of economic development and industrial upgrading for energy saving and climate change mitigation. Energy conservation has been given great attention since the beginning of the 11th Five-Year Plan (FYP) period (2006-2010), and in 2011, specific goals have been made for reduction of energy intensity and carbon intensity for the 12th FYP period (2011-2015). In this study, according to the regional data of the first two years of the 12th FYP period, current situations of energy conservation and emission reduction in China and its provinces were analyzed. Recommendations for 2013-2015 are discussed based on continuing goals, economic and natural conditions. Shifting of energy consuming structure is primarily discussed as one of the main approaches, and alternate methods of energy restructure are suggested due to the limitation of natural resources in China.
    Keywords: Carbon intensity, China, Emission reduction, Energy conservation, Energy intensity, Five-Year Plan
    JEL: Q47 Q54
    Date: 2014–09–10
  3. By: Zou, Lele; Xue, Jinjun; Fox, Alan; Meng, Bo; Shibata, Tsubasa
    Abstract: Chinese government commits to reach its peak carbon emissions before 2030, which requires China to implement new policies. Using a CGE model, this study conducts simulation studies on the functions of an energy tax and a carbon tax and analyzes their effects on macro-economic indices. The Chinese economy is affected at an acceptable level by the two taxes. GDP will lose less than 0.8% with a carbon tax of 100, 50, or 10 RMB/ton CO2 or 5% of the delivery price of an energy tax. Thus, the loss of real disposable personal income is smaller. Compared with implementing a single tax, a combined carbon and energy tax induces more emission reductions with relatively smaller economic costs. With these taxes, the domestic competitiveness of energy intensive industries is improved. Additionally, we found that the sooner such taxes are launched, the smaller the economic costs and the more significant the achieved emission reductions.
    Keywords: China, Energy policy, Environmental policy, Taxation, Climatic change, Econometric model, Economic conditions, Energy tax, Carbon tax, Climate change, CGE model, Energy intensive industry
    JEL: C13 C15 E37 J21 K32 Q54 C54 O44
    Date: 2015–01
  4. By: Jon Stern
    Abstract: This paper discusses the changing role of electricity system operators in Britain. Until 2008, the UK electricity system operator was the key co-ordinator for a liberalized electricity generation market. However, since 2008, the British electricity system operator has, under the Energy Market Reform, primarily become a delivery agency for technology-specific generation within a planned electricity system. This paper discusses the transformation in the role of the British electricity system operator since 2008 and analyses the relationship between this change and the development of EU energy and climate change policy. The paper concludes with a discussion of the alternative views of the EU energy policy – the EU Commission has been proposing much increased interconnection to encourage multi-country regional markets, linking those markets into a Single European Electricity Market. Conversely, the UK, Germany and some other Member States have been promoting their national markets based on large-scale investment on national renewables with sizeable budgetary subsidies, supported by capacity payments. The role of the national electricity system operator is central to this debate with its functions very different in the two models.
    Keywords: System operator, climate change policy, electricity liberalization, renewable generation, EU energy policy
    JEL: L94 K23 H76
    Date: 2015–04–20
  5. By: Peter G. Levi; Michael G. Pollitt
    Abstract: Cost uncertainty has latterly come to be presented in the UK’s Department of Energy and Climate Change (DECC) Levelised Cost of Electricity (LCOE) estimates using sensitivities; ‘high’ and ‘low’ figures presented alongside central estimates. This presentation of uncertainty is limited in its provision of context, and of an overall picture of how costs and uncertainty vary over time. Two analyses are performed using the published DECC cost estimates for three electricity generation technologies – nuclear, offshore wind and Carbon Capture and Storage (CCS). The first analysis analyses cost trajectories from selected DECC LCOE estimates and presents them alongside contextual data, resulting in contextual cost landscapes. The second evaluates the associated temporal estimate uncertainty in the decade 2020-2030; an approach aimed at capturing the temporal consistency of estimates, alongside variations in magnitude. Nuclear estimates are found to be both the most consistent and lowest in magnitude. Offshore wind and CCS suffer from comparatively large cost and uncertainty premiums. The implications for the direction of policy are then discussed in the context of conflicting past experience and hidden costs.
    Keywords: cost projections; nuclear; wind power; carbon capture and storage
    JEL: L94
    Date: 2015–04–20
  6. By: Ackah, Ishmael; Asomani, Mcomari
    Abstract: Renewable energy consumption has been identified as a potential solution to the intermittent power supply in Ghana. Recently, a Renewable Energy Act has been passed which has a target of 10% of renewable energy component in Ghana’s energy mix by 2020. Whilst effort is been made to enhance supply through feed in tariffs, education and tax reduction on renewable energy related equipment, there is the need to understand the drivers of renewable energy demand. In this study, the general unrestricted model through Autometrics is used to estimate the determinants of renewable energy demand in Ghana. The results indicate that both economic factors and non-economic affect the demand for renewable energy. In addition, the underlying energy demand trend exhibits energy using behaviour. The study recommends that economic factors such as consumer subsidies should be considered when promoting renewable energy demand.
    Keywords: Renewable energy, energy consumption, Autometrics, Ghana
    JEL: Q2 Q21 Q4 Q41 Q42 Q43
    Date: 2015–04–15
  7. By: Daniel Hach; Chi Kong Chyong; Stefan Spinler
    Abstract: Rising feed-in from renewable energy sources decreases margins, load factors, and thereby profitability of conventional generation in several electricity markets around the world. At the same time, conventional generation is still needed to ensure security of electricity supply. Therefore, capacity markets are currently being widely discussed as a measure to ensure generation adequacy in markets such as France, Germany, and the United States (e.g., Texas), or even implemented for example in Great Britain. We assess the effect of different capacity market design options in three scenarios: 1) no capacity market, 2) a capacity market for new capacity only, and 3) a capacity market for new and existing capacity. We compare the results along the three key dimensions of electricity policy – affordability, reliability, and sustainability. In a Great Britain case study we find that a capacity market increases generation adequacy since it provides incentives for new generation investments. Furthermore, our results show that a capacity market can lower the total bill of generation because it can reduce lost load and the potential to exercise market power. Additionally, we find that a capacity market for new capacity only is cheaper than a capacity market for new and existing capacity because it remunerates fewer generators in the first years after its introduction.
    Keywords: Capacity mechanism, capacity market, dynamic capacity investment model, generation adequacy, conventional electricity generation investment, renewable energy sources
    JEL: Q48 L94 L98 C44 D81
    Date: 2015–04–20
  8. By: David Newbery
    Abstract: Energy policy aims to deliver security, sustainability and affordability, but politicians treat security of supply as over-riding. Absent market and regulatory failures, liberalized energy-only electricity markets might deliver adequate capacity. Ambitious targets for subsidized renewables and policy uncertainty have undermined the commercial case for the investment needed to handle increased intermittency and raised concerns for capacity adequacy. In response Britain now holds annual capacity auctions. The paper examines the case for, criticisms of, and the outcome of the first auction, criticizing the decision to ignore the contribution that interconnectors make to security of supply.
    Keywords: capacity markets, renewables, procurement volume, interconnectors
    JEL: L94 D44
    Date: 2015–04–21
  9. By: Jonathan Colmer; Antoine Dechezleprêtre; Ralf Martin
    Abstract: The UK's main political parties have all pledged to combat climate change whatever the result of the general election. Yet according to a new report from the CEP, much of the discussion is largely rhetoric, with limited focus on actionable policy commitments. The report's authors explain how UK climate policy consists of a patchwork of instruments addressing greenhouse gas emissions from a variety of sources and resulting in a diverse menu of carbon prices. And while the country's recent record on cutting carbon emissions seems impressive at first glance, much of it has been a result of the reduction in economic activity in the Great Recession.
    Keywords: energy, climate change, environment, #ElectionEconomics
    Date: 2015–04
  10. By: Christoph Böhringer (Carl von Ossietzky Universität Oldenburg, Institut für Volkswirtschaftslehre & ZenTra); Brita Bye (Statistics Norway, Research Department); Taran Fæhn (Statistics Norway, Research Department); Knut Einar Rosendahl (Norwegian University of Life Sciences, School of Economics and Business)
    Abstract: Climate effects of unilateral carbon policies are undermined by carbon leakage. To counteract leakage and increase global cost-effectiveness carbon tariffs can be imposed on the emissions embodied in imports from non-regulating regions. We present a theoretical analysis on the economic incentives for emission abatement of producers subjected to carbon tariffs. We quantify the impacts of different carbon tariff designs by an empirically based multi-sector, multi-region CGE model of the global economy. We find that firm-targeted tariffs can deliver much stronger leakage reduction and higher efficiency gains than tariff designs operated at the industry level. In particular, because the exporters are able to reduce their carbon tariffs by adjusting emissions, their competitiveness and the overall welfare of their economies will be less randomly and less adversely affected than in previously studied carbon tariff regimes. This beneficial distributional impact could facilitate a higher degree of legitimacy and legality of carbon tariffs.
    Keywords: carbon leakage, border carbon adjustment, carbon tariffs, computable general equilibrium (CGE)
    JEL: Q43 Q54 H2 D61
    Date: 2015–04
  11. By: Karim L. Anaya; Michael G. Pollitt
    Abstract: We explore the different competitive mechanisms applied by electric utilities from the USA in promoting cost-effective Distribution Generation (DG) resources and the challenges that they face due to the increase in DG connections. Case studies from California, Oregon, Colorado and New York are discussed. The case studies refer to two kinds of competitive mechanisms: Request for Proposals (RFP) and auctions (Renewable Auction Mechanism). The study proposes an auction design with a focus on the UK context and examines the role of energy regulators in auction mechanisms. We think that the experience described in the four case studies can be replicated by Distribution System Operators (DSOs) in Europe, however unbundling rules established in the EC third package need to be taken into consideration.
    Keywords: electricity auctions, distributed generation, renewable energy, third energy package
    JEL: D44 L51 L94 Q28 Q48
    Date: 2014–04–20
  12. By: Karim L. Anaya; Michael G. Pollitt
    Abstract: We explore trends in the deployment and integration of distributed generation in Germany, Denmark and Sweden. In particular, we examine the regulation of renewable energy generation with a focus on grid access and connection mechanisms. The high rate of distributed generation penetration in these countries is the result of early support given to the expansion of renewable energy generation – mainly wind and solar - within their respective national policies. Germany and Denmark are the countries with the most sophisticated support schemes, which have shown changes over time. In terms of connections, Germany is the country with the most favourable connection regime. It provides not only priority connection but also priority use of the grid to generation units that produce electricity from renewable energy sources. Sweden guarantees equal treatment among different technologies (i.e. a non-discrimination principle) and is thus the least favourable. High connection costs have been observed, especially in Germany and Denmark. The costs of network upgrades are usually socialised across customers. The use of smart solutions combined with novel business models might allow more efficient use of the current distribution electricity infrastructure. Hence, integration issues should be taken into consideration in order to avoid expansion of distributed generation in a way that unnecessarily raises total system costs, via high connection costs.
    Keywords: distributed generation, renewable energy, support schemes, connection arrangements
    JEL: H25 L94 L98 Q48
    Date: 2014–04–20
  13. By: Philipp M. Richter; Roman Mendelevitch; Frank Jotzo
    Abstract: In this paper we investigate the introduction of an export tax on steam coal levied by an individual country (Australia), or a group of major exporting countries. The policy motivation would be twofold: generating tax revenues against the background of improved terms-of-trade, while CO2 emissions are reduced. We construct and numerically apply a two-level game consisting of an optimal policy problem at the upper level, and an equilibrium model of the international steam coal market (based on COALMOD-World) at the lower level. We find that a unilaterally introduced Australian export tax on steam coal has little impact on global emissions and may be welfare reducing. On the contrary, a tax jointly levied by a "climate coalition" of major coal exporters may well leave these better off while significantly reducing global CO2 emissions from steam coal by up to 200 Mt CO2 per year. Comparable production-based tax scenarios consistently yield higher tax revenues but may be hard to implement against the opposition of disproportionally affected local stakeholders depending on low domestic coal prices.
    Keywords: Export tax, steam coal, supply-side climate policy, carbon leakage, Australia, Mathematical Program with Equilibrium Constraints (MPEC)
    JEL: Q48 F13 Q58 Q41 C61
    Date: 2015
  14. By: G. Cornelis van Kooten
    Abstract: This paper provides an overview of the role that forestry activities play in mitigating climate change. The emphasis is on a comparison of carbon offset credits and a carbon tax/subsidy scheme for incentivizing reductions in the release of CO2 emissions and increase in sequestration of atmospheric CO2 through forestry. In addition to traditional issues related to additionality, leakages, and the transaction costs of determining and verifying how many carbon offsets are created, we investigate the importance of good governance and contracts. There are three options available to a public or private forestland owner for creating carbon offsets once tree reach maturity: (1) avoid or delay harvest; (2) harvest timber and use sawmill, logging and other residuals to generate electricity; and (3) sustainably manage the forest and carbon fluxes (i.e., post-harvest wood product carbon pools and avoided emissions from substituting wood for non-wood in construction or wood bioenergy for fossil fuels) to maximize net revenues. Delaying harvests or avoiding deforestation are considered important but outside the domain of a tax/subsidy or cap-and-trade scheme. With respect to bioenergy, the analysis suggests that, if there is a carbon dividend, it is likely to be small even if the life cycle of carbon is appropriately taken into account. Further, if there is some urgency to mitigate climate change, the use of wood bioenergy is more likely to result in a carbon debt, even with respect to coal, because of the need to weight CO2 according to when it is released to and removed from the atmosphere. Only holistic commercial forest management that is sustainable and incentivizes sequestration of carbon assures efficient mitigation of climate change. We demonstrate this by investigating carbon fluxes derived from an integrated forest management model and confirm this result more generally on the basis of a Faustmann rotation age model thatexplicitly includes benefits of storing carbon.
    Keywords: climate change mitigation and forestry; carbon offsets and taxes; carbon life-cycle analysis; biomass energy; wood products versus cement and steel; discounting; governance and corruption
    JEL: H23 Q23 Q42 Q54 G15
    Date: 2015–04
  15. By: Catherine Hausman; Ryan Kellogg
    Abstract: Technological innovations in horizontal drilling and hydraulic fracturing have enabled tremendous amounts of natural gas to be extracted profitably from underground shale formations that were long thought to be uneconomical. In this paper, we provide the first estimates of broad-scale welfare and distributional implications of this supply boom. We provide new estimates of supply and demand elasticities, which we use to estimate the drop in natural gas prices that is attributable to the supply expansion. We calculate large, positive welfare impacts for four broad sectors of gas consumption (residential, commercial, industrial, and electric power), and a negative impact for producers, with variation across regions. We then examine the evidence for a gas-led "manufacturing renaissance" and for pass-through to prices of products such as retail natural gas, retail electricity, and commodity chemicals. We conclude with a discussion of environmental externalities from unconventional natural gas, including limitations of the current regulatory environment. Overall, we find that between 2007 and 2013 the shale gas revolution led to an increase in welfare for natural gas consumers and producers of $48 billion per year, but more data are needed on the extent and valuation of the environmental impacts of shale gas production.
    JEL: D12 L60 L71 Q41 Q53
    Date: 2015–04
  16. By: Andrew Jobling; Tooraj Jamasb
    Abstract: During the past three decades the global oil market has seen significant price volatility. Literature to date has not analysed the cross-country effect of the recent episode of price instability. Previous studies have either not considered this period or have not utilised panel data techniques and therefore have not provided a comparative analysis of developed and developing countries. This paper explores the income and price elasticities between these two country groups and discusses the economic implication of the results. We use a panel data analysis accounting for income and price asymmetry and apply the dynamic fixed-effects methodology to separate panels for developed and developing countries for the period 1980-2012. Sixteen countries are included in this analysis which account for over 65% of total global oil consumption. A particular focus is on the income and substitution effects. The results indicate heterogeneous response to oil price shocks. Developing countries have an income effect 6.3 times stronger than developed countries. The substitution effect in developed countries is 2.1 times stronger than in developing countries. Policy recommendations include the pursuing of oil-efficiency improving technology, and ensuring that regional consumption pattern variations are considered in policy formation.
    Keywords: Oil price, oil demand, income effect, price effect
    JEL: Q37 Q41 Q43
    Date: 2015–04–21
  17. By: Claudio Ferraz; Ronaldo Seroa da Motta
    Abstract: Air pollution concentrations have been rapidly increasing in the major urban areas of Brazil caused mainly by the increasing use of vehicles. In the presence of this negative externality, environmental regulation is required. Car emission control policies in Brazil have relied basically on mandatory emission standards and subsidies for specific cleaner technology resulting in substantial decrease of car emission rates. Nevertheless, car sale taxes, differentiated by vehicles’ size and fuel, have also influenced car emission patterns. This paper analyzes the compliance trend of the Brazilian fleet with environmental standards between 1992 and 1997. We find that larger automobiles had the fastest compliance schedule while popular models adjusted very slowly. Also gasoline-fueled models had a faster adjustment pattern than ethanol cars. Additionally, we analyze the current relationship between pollution emissions and car characteristics in order to orient policy formulation. We find a positive relationship between emissions rates and horse power, concluding that although the current value added-sale car tax is not environmental harmful, a tax differentiating clean from dirty models, within each tax bracket, could create substantial incentives for emission control in the future. A concentração da poluição do ar tem crescido rapidamente nas grandes regiões metropolitanas do Brasil devido, principalmente, ao crescente uso de veículos automotivos. Na presença desta externalidade negativa, a regulação ambiental faz-se necessária. A política de controle de emissões de poluentes automotivos no Brasil, implementada basicamente com uso de mecanismos de comando e controle e incentivo fiscal, resultou em redução significativa na emissão média de poluentes nos carros novos. Não obstante, o imposto (IPI) sobre a venda de automóveis, diferenciado por combustíveis e potência, também influenciou na evolução das emissões de poluentes. Este trabalho analisa a evolução do atendimento às metas de emissão de poluentes veiculares da legislação ambiental entre 1992 e 1997. Os resultados indicam que os carros grandes, que obtiveram incentivo fiscal, tiveram ajuste mais rápido enquanto os carros populares realizaram ajuste mais lento. Além disso, carros a gasolina ajustaram sua tecnologia mais rápido do que os carros a álcool. Adicionalmente, analisamos a relação entre emissões e características dos automóveis novos vendidos em 1997. Os resultados indicam a existência de uma relação positiva entre taxas de emissão e potência. Concluímos que, embora a atual estrutura do IPI não esteja em oposição aos carros mais limpos, a adoção de alíquotas diferenciadas dentro de cada categoria, menor para os mais limpos e maior para os mais sujos, criaria incentivos para que o controle das emissões de poluentes veiculares fosse realizado de forma mais custo-efetiva.
    Date: 2015–01
  18. By: Maya M. Papineau (Department of Economics, Carleton University)
    Abstract: I estimate the energy efficiency premium in unlabeled office buildings by exploiting variation in mandatory building energy standard implementations, as a result of the U.S. 1992 Energy Policy Act. A more stringent energy code leads to rent and price premiums of approximately 4% and 9%, respectively. Significant heterogeneity in the rent premium is observed based on who pays the utility bills, as would be expected absent asymmetric information about energy conservation characteristics among real estate market participants. The rent and price premiums are larger in hotter, more humid climates, and are consistent with full capitalization of the energy savings from a more stringent standard.
    Keywords: energy efficiency; landlord-tenant; energy standards; real estate
    JEL: D82 Q48 R33
    Date: 2015–04–10
  19. By: Mehmet Balcilar (; Stelios Bekiros (; Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: We emphasize the role of news-based economic policy and equity market uncertainty indices as robust drivers of oil price fluctuations. In that, we utilizea new hybrid nonparametric quantile causality methodology in order to investigate whether EPU and EMU uncertainty measures incorporate critical predictability for oil market returns and volatility. Based on an updated daily database spanning January 1986 to December 2014, we find that both measures present strong predictability over the entire distribution of oil around the median, yet more importantly for volatility forecastability covers the entire distribution except minor divergences in the tails. Therefore, an inherent heterogeneity is observed and an asymmetric pattern over the distribution of oil returns and its volatility exists with respect to uncertainty predictability.
    Keywords: Uncertainty, Oil markets, Volatility, Quantile causality
    JEL: C32 C53 Q41
    Date: 2015–04
  20. By: Robert A. Ritz
    Abstract: This paper presents a game-theoretic analysis of multimarket competition with capacity investments, applied to international gas markets. It identifies a strategic advantage of «focused» pipeline gas producers (e.g., Gazprom) over «diversified» multimarket exporters of liquefied natural gas (e.g., Qatar). Based on this, the paper examines the spillover impacts of the Fukushima nuclear accident onto European gas markets, both in the short- and longer-term. It also discusses Russia’s gas export strategy, especially the 2014 deals with China. More generally, the analysis shows how a less efficient oligopolist can be more profitable, and speaks to policy discussions about «security of supply» in energy markets.
    Keywords: Competitive advantage, corporate diversification, liquefied natural gas (LNG), supply security, strategic investment
    JEL: D43 F12 L25 L95
    Date: 2015–04–21
  21. By: Paul J. Burke; Md Shahiduzzaman; David I. Stern
    Abstract: This paper investigates the short-run effects of economic growth on carbon dioxide emissions from the combustion of fossil fuels and the manufacture of cement for 189 countries over the period 1961–2010. Contrary to what has previously been reported, we conclude that there is no strong evidence that the emissions-income elasticity is larger during individual years of economic expansion as compared to recession. Significant evidence of asymmetry emerges when effects over longer periods are considered. We find that economic growth tends to increase emissions not only in the same year, but also in subsequent years. Delayed effects – especially noticeable in the road transport sector – mean that emissions tend to grow more quickly after booms and more slowly after recessions. Emissions are more sensitive to fluctuations in industrial value-added than agricultural value-added, with services being an intermediate case. On the expenditure side, growth in consumption and in investment have similar implications for national emissions. External shocks have a relatively large emissions impact, and the short-run emissions-income elasticity does not appear to decline as incomes increase. Economic growth and emissions have been more tightly linked in fossil-fuel rich countries.
    Keywords: Economic growth, emissions, pollution, business cycle, asymmetry, sector
    JEL: Q56 O44 E32
    Date: 2015–04
  22. By: Severin Borenstein; James Bushnell
    Abstract: Prior to the 1990s, most electricity customers in the U.S. were served by regulated, vertically-integrated, monopoly utilities that handled electricity generation, transmission, local distribution and billing/collections. Regulators set retail electricity prices to allow the utility to recover its prudently incurred costs, a process known as cost-of-service regulation. During the 1990s, this model was disrupted in many states by "electricity restructuring," a term used to describe legal changes that allowed both non-utility generators to sell electricity to utilities — displacing the utility generation function — and/or "retail service providers" to buy electricity from generators and sell to end-use customers — displacing the utility procurement and billing functions. We review the original economic arguments for electricity restructuring, the potential winners and losers from these changes, and what has actually happened in the subsequent years. We argue that the greatest political motivation for restructuring was rent shifting, not efficiency improvements, and that this explanation is supported by observed waxing and waning of political enthusiasm for electricity reform. While electricity restructuring has brought significant efficiency improvements in generation, it has generally been viewed as a disappointment because the price-reduction promises made by some advocates were based on politically-unsustainable rent transfers. In reality, the electricity rate changes since restructuring have been driven more by exogenous factors — such as generation technology advances and natural gas price fluctuations — than by the effects of restructuring. We argue that a similar dynamic underpins the current political momentum behind distributed generation (primarily rooftop solar PV) which remains costly from a societal viewpoint, but privately economic due to the rent transfers it enables.
    JEL: L51 L94 L97
    Date: 2015–04
  23. By: Klaus Eisenack (University of Oldenburg, Deparment of Economics)
    Abstract: This paper studies institutional change as a response to anticipated changes in the natural environment. Power plants occasionally need to be curtailed during heat waves, causing economic losses and putting electricity supply at risk. This problem likely exacerbates due to global warming, so that institutional arrangements<br>for cooling water management may require adaptation. The papers compares different arrangements with a transaction cost analysis. If heat waves only increase in intensity, long-term and site specific temperature caps perform comparatively best. Otherwise, total costs can be reduced by a specific contract between the environmental<br>regulator and electricity producers (the minimum power plant concept), or a dynamic heat load plan. The paper highlights economies of scale in transaction costs, and shows how institutional change can depend on the speed of exogenous changes. The general considerations are illustrated by taking the German Rhine<br>catchment as an example.
    Keywords: cascading externalities, electricity, environmental regulation, institutional<br>change, transaction costs, water use conflict
    JEL: D23 Q25 Q41 Q54
    Date: 2015–01
  24. By: Asuka Oura (Graduate School of Economics, Osaka University); Yasukatsu Moridera (Graduate School of Economics, Osaka University); Koichi Futagami (Graduate School of Economics, Osaka University)
    Abstract: The accumulation of pollution negatively impacts human health. Extreme increases in pollution, in particular, may have lethal implications for human beings|and, indeed, all living organisms. This paper thus devises a new model of economic growth that takes into account these lethal effects of accumulated pollution via a pollution threshold to show two key results. First, if an abatement technology is relatively inefficient, there exists a stationary steady state in which consumption and pollution stop growing. Second, if the abatement technology is sufficiently efficient, there exists a path along which pollution decreases at an accelerating rate until finally reaching zero. In this case, consumption grows at a constant rate.
    Keywords: Endogenous growth, Pollution disutility, Pollution abatement
    JEL: O44 Q52
    Date: 2015–04
  25. By: David Newbery; Goran Strbac; Ivan Viehoff
    Abstract: The European Commission’s Target Electricity Model aims to integrate EU electricity markets. This paper estimates the potential benefit to the EU of coupling interconnectors to increase the efficiency of trading day-ahead, intra-day and sharing balancing services efficiently across borders. Further gains are possible by eliminating unscheduled flows and avoiding the curtailment of renewables with better market design. In the short run the gains could be as high as €3.3 billion/yr, more than 100% of the current gains from trade. About one-third of this total comes from day-ahead coupling and another third from shared balancing.
    Keywords: electricity market coupling, interconnectors, balancing, benefits
    JEL: D61 F15 L51 L94
    Date: 2015–04–21
  26. By: Hübler, Michael
    Abstract: Climate policy negotiations identi ed international technology funding as a means of achieving carbon emissions reductions in developing countries. Such funds are now being realized. This paper is probably the first theory-based discussion of international technology funding. It sets up a Ramsey model of a developing economy including imports of capital and embodied technologies from abroad. Going beyond a scale, technique and composition effect, it disentangles five resulting economic effects and four technology-related policy levers and their interactions. It then discusses their role in designing an international technology fund with the aim to reduce emissions effciently. The paper concludes that it is ineffcient to address emissions reductions independent of the technological absorptive capacity and other aspects of economic development. Therefore, it opts for an integrated technology funding scheme.
    Keywords: technology fund, climate policy, economic development
    JEL: F21 O11 O33 O47
    Date: 2014–04
  27. By: Sugata Marjit (CTRPFP, Centre for Studies in Social Sciences, Calcutta, India); Lei Yang (Hong Kong Polytechnic University, Hong Kong)
    Abstract: This paper investigates the optimal environmental policy (the mix of emissions tax and R&D subsidy) when two firms, producing differentiated products, compete in the output market over time. Firms compete over supply schedules, which encompasses a continuum of market structures from Bertrand to Cournot. While production generates environmentally damaging emissions, firms can undertake R&D, which has the sole purpose of reducing emissions. In addition to characterising the optimal policy, we examine how the optimal tax and subsidy and the optimal level of abatement change as competition intensifies, as the dynamic parameters change and as the investment in abatement technology changes. In this setting, increased competition no longer necessarily leads to an increase in welfare. Instead, there are two forces. Competition increases welfare through its impact on the final goods price. However, lower prices result in larger quantities and more pollution. Our contribution is to show that the impact depends on the extent of the market, and the nature of preferences and technology.
    Keywords: Status,Consumption pattern,Inequality,Growth
    JEL: C13 C14 C51 D01 D12 O40
    Date: 2015–04–24
  28. By: Wenche Tobiasson; Christina Beestermöller; Tooraj Jamasb
    Abstract: Ambitious renewable energy targets and an aging infrastructure necessitate a substantial upgrading and expansion of the electricity transmission networks around Europe and beyond. Although vital for the functioning of the economy, grid development projects are often met by public opposition, which increase costs and lengthy planning processes. The current planning processes have proven ineffective at resolving the conflicts among stakeholders, indicating the need for a new approach. We analyse these issues from an Economic perspective, outlining the economic characteristics of transmission developments and public engagement. We identify previously overlooked features of the planning process that are contributing to the rise in conflicts, public opposition and prolonged project realisation. The Scottish Beauly-Denny high voltage transmission development is discussed in detail and our findings indicate a need for increased engagement with local communities at an earlier stage of planning. Trust between communities, developers and government is important for future negotiations and can be achieved through transparency, specific education and set guidelines for stakeholder engagement in the planning process.
    Keywords: Electricity transmission, public engagement, property rights
    JEL: L94 L98 D23 P48
    Date: 2015–04–21
  29. By: Edward J. Balistreri (Division of Economics and Business, Colorado School of Mines); Christoph Bohringer (Department of Economics, University of Oldenburg); Thomas F. Rutherford (University of Wisconsin)
    Abstract: Alternative perspectives on the structure of international trade have important implications for climate policy and its interaction with global markets. In this paper we consider carbon policy in the context of three important alternative trade formulations. First, is a neo-classical model based on trade in homogeneous products, which is the natural context for considering competitive effects of trade and environmental policy. Second is a model based on regionally differentiated goods consistent with the Armington assumption adopted in the policy simulation literature. Finally, we consider a monopolistic-competition model, consistent with Melitz (2003), which is the focus of many contemporary theoretic investigations in international trade. These structures have important implications for carbon leakage and the spatial distribution of energy-intensive production. Furthermore, predictions about the transmission of policy burdens to non-participating countries are critically dependent on the assumed structure of trade.
    Keywords: Heterogeneous firms, carbon leakage, competitive effects
    Date: 2015–04
  30. By: Vidakovic, Neven
    Abstract: This paper analyses the current state of the renewable energy in Croatia and proposes what can be done to speed up the process of transition towards the increase in consumption of renewable energy in Croatia. The process of transition is analyzed from the perspective of three main participants who are relevant for the process: academic researches, government as policy makers and investors. The paper finds that the academic research has done a significant progress towards renewable energies and has thoroughly researched many opportunities for renewable energies in Croatia, but lack of clearly defined government policies has hindered investors and new projects. In several cases the policies are obsolete or undefined. There is a need for fast and focused government action. Because of the short time span, large scale strategies should be avoided and project-focused policies should be implemented. This paper proposes several actions which could be implemented in a short time span to make the Croatian transition towards renewable energy faster.
    Keywords: renewable energy, strategy, economic policies
    JEL: H23 H54 Q28
    Date: 2014–07
  31. By: Sam Hickey; Badru Bukenya; Angelo Izama; William Kizito
    Abstract: The capacity and commitment of Uganda to govern its oil in developmental ways has generally been discussed through a ‘new institutionalist’ prism that focuses on the dangers of the ‘resource curse’. This paper argues that the developmental potential of oil in Uganda can be more insightfully understood through a political settlements framework which goes beyond a focus on institutional form to examine deeper forms of politics, power and ideas. Drawing on in-depth primary research, we focus in particular on the extent to which the interplay of interests and ideas within the ruling coalition in Uganda has enabled it to protect its national interest during negotiations with international oil companies. However, our reading of the underlying dynamics within Uganda’s political settlement suggests that the impressive levels of elite commitment and bureaucratic capacity displayed to date are unlikely to withstand the intensified pressures that will accompany the commencement of oil flows.
    Date: 2015
  32. By: Carsten Helm (University of Oldenburg, Department of Economics); Franz Wirl
    Abstract: Countries often have private information about their willingness to pay for protecting the climate system and their cost of emission reductions. We use a principal-agent model to re-examine the economic case for unilateral action by individual countries, in our case of the principal. We ?nd that the incentive structure that arises in an incomplete information framework can motivate (i) unilateral action before contract negotiations, (ii) optimal contracts in which the principal accepts higher marginal abatement costs for herself, as well as (iii) overcompliance by the principal after the contract has been negotiated. Multilateral externalities and type-dependent outside options, which are characteristic for climate policies, play a crucial role to explain these results.
    Keywords: unilateral action, voluntary action, unilateral commitment, private information, multilateral externalities, international environmental agreements, type-dependent outside options
    JEL: D82 Q54 H87
    Date: 2015–04
  33. By: Guojun He (Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Maoyong Fan (Department of Economics, Ball State University); Maigeng Zhou (National Center for Chronic and Noncommunicable Disease Control and Prevention, Chinese Center for Disease Control and Prevention); Avraham Ebenstein (Department of Economics, Hebrew University of Jerusalem); Michael Greenstone (Department of Economics, University of Chicago; National Bureau of Economic Research (NBER)); Peng Yin (National Center for Chronic and Noncommunicable Disease Control and Prevention, Chinese Center for Disease Control and Prevention)
    Abstract: This paper examines the relationship between income, pollution, and mortality in China from 1991-2012. Using first-difference models, we document a robust positive association between city-level GDP and life expectancy. We also find a negative association between city-level particulate air pollution exposure and life expectancy that is driven by elevated cardiorespiratory mortality rates. The results suggest that while China's unprecedented economic growth over the last two decades is associated with health improvements, pollution has served as a countervailing force.
    Keywords: growth, pollution, life expectancy, China
    JEL: Q13 P28 Q28 Q53
    Date: 2015–02
  34. By: Goeschl, Timo; Perino, Grischa
    Abstract: The success of global climate policies over the coming decades depends on the diffusion of 'green' technologies. This requires that international environmental agreements (IEAs) and trade-related intellectual property rights (TRIPs) interact productively.Using a simple and tractable model, we highlight the strategic reduction in abatement commitments on account of a hold-up effect. In anticipation of rent extraction by the innovator signatories might abate less than non-signatories turning the IEA 'brown'. Self-enforcing IEAs have fewer signatories and diffusion can reduce global abatement under TRIPs. Countries hosting patent holders extract rents from TRIPs, but may be better off without them.
    Keywords: International climate policy; diffusion of innovations; intellectual property rights; hold-up problem.
    Date: 2015–04–20
  35. By: Guojun He (Department of Economics, Hong Kong University of Science and Technology; Institute for Emerging Market Studies, Hong Kong University of Science and Technology); Maoyong Fan (Department of Economics, Ball State University); Maigeng Zhou (National Center for Chronic and Noncommunicable Disease Control and Prevention, Chinese Center for Disease Control and Prevention)
    Abstract: By exploiting exogenous variation in air quality during the 2008 Beijing Olympic Games, we estimate the effect of air pollution on mortality in China. We find that a 10-μg/m^3 (roughly 10%) decrease in PM_10 concentrations reduces monthly standardized all-cause mortality by 6.63%. The mortality reduction during the Olympics is mainly driven by fewer cardiocerebrovascular and respiratory deaths. Extrapolating our results to all urban areas in China, we estimate that the economic benefits from averted pre-mature deaths would range from 380 billion to 6 trillion Yuan annually if PM_10 concentrations were reduced to the WHO guideline level of 20 μg/m^3.
    Keywords: air pollution, mortality, particulate matter, 2008 Beijing Olympic Games
    JEL: Q53 I15 I18
    Date: 2015–01
  36. By: Evgeny Goryunov (Gaidar Institute for Economic Policy); Sergey Sinelnikov-Murylev (Russian Foreign Trade Academy); Laurence J. Kotlikoff (Boston University)
    Abstract: Fiscal gap is an indicator of long run sustainability of government finance. It is used for assessment of the extent to which current fiscal policy is able to keep government budget solvent in the longer period. Fiscal gap is derived from intertemporal budget constraint which connects flows of budget outlays and receipts aggregated along decades. Fiscal gap is defined as a sum of current government debt and present value of future primary deficit flow. In order to get an estimate of Russia’s general government fiscal gap we consider three scenarios which are based on different assumptions regarding demographic trends, productivity growth, extractable reserves of oil and natural gas, long term price of oil and natural gas etc. Estimated value of fiscal gap is positive in all three scenarios which implies that current fiscal policy cannot provide budget sustainability in the long run. There are two major factors of the budget imbalances: rising health and pension expenditures due to demographics trends and shrinking role of tax revenues from energy sector due to extraction stagnation. Fiscal gap value under intermediate scenario is equal to 1613 trln 2014 rubles or 13,6% of present value of GDP which is close to fiscal gap in several advanced economies. This study is an extension of (Goryunov et al., 2013) one made by a group of authors headed by Laurence J. Kotlikoff.
    Keywords: fiscal gap, fiscal sustainability, fiscal policy, budget constraints, budget sustainability
    JEL: E62 H51 H52 H55 H62 H63 H68 J11
    Date: 2015
  37. By: Lorenzo Cerda Planas (Paris School of Economics - Centre d'Economie de la Sorbonne)
    Abstract: This paper intends to provide an alternative approach to the formation of International Environmental Agreements (IEA). The existing consensus within the literature is that there are either too few signatories or that the emissions of signatories are almost the same as business as usual (BAU). I start from a well-known model (Barrett 1997), adding heterogeneity in countries' marginal abatement costs (low and high) and in damages suffered (or corresponding environmental concern). I also allow for technological transfers and border taxes. I show that using either mechanism one at a time, does not change the results. But if both are used in a strategic manner, a grand (and abating) coalition can be reached, while minimizing transfers
    Keywords: Self-enforcing environmental agreements; border tax; tipping
    JEL: F53 C63 C72 F18 Q58 O32
    Date: 2015–03
  38. By: Yongyang Cai; Kenneth L. Judd; Thomas S. Lontzek
    Abstract: There is great uncertainty about future climate conditions and the appropriate policies for managing interactions between the climate and the economy. We develop a multidimensional computational model to examine how uncertainties and risks in the economic and climate systems affect the social cost of carbon (SCC)---that is, the present value of the marginal damage to economic output caused by carbon emissions. The SCC is substantially increased by economic and climate risks at both current and future times. Furthermore, the SCC is itself a stochastic process with significant variation; for example, the basic elements of risk incorporated into our model cause the SCC in 2100 to be, with significant probability, ten times what it would be without those risks. We have only imprecise information about what parameter values are best for approximating reality. To deal with this parametric uncertainty we perform extensive uncertainty quantification and show that these findings are robust for a wide range of alternative specifications. More generally, this work shows that large-scale computing can enable economists to examine substantially more complex and realistic models for the purposes of policy analysis.
    Date: 2015–04
  39. By: Marco Antônio Guimarães Dias; Katia Maria Carlos Rocha
    Abstract: The owner of a petroleum exploration concession in Brazil has an investment option until the expiration date fixed by the governmental agency, which can be extended by additional cost. The value of these rights and the optimal investment timing are calculated by solving a stochastic optimal control problem of an American call option with extendible maturities. The uncertainty of the oil prices is modeled as a mix diffusion-jump process. Normal information arrival generates continuous mean-reverting process for oil prices, whereas a random abnormal information generates a discrete jump of random size. Comparisons are performed with the popular geometric Brownian process and also the quantification and analysis of alternative timing policies for the petroleum sector. O detentor da concessão de exploração de petróleo no Brasil tem uma opção de investimento até uma data de expiração fixada pela agência governamental, a qual pode estender mediante um custo adicional. O valor desses direitos e a política ótima de investimento são calculados resolvendo um problema de controle ótimo estocástico de uma opção americana de compra com maturidades estendíveis. A incerteza do preço do óleo é modelada como um processo de difusão misto (reversão à média + saltos). Informações normais geram um processo contínuo de reversão à média para o preço do óleo, porém choques aleatórios produzem saltos discretos e estocásticos. Comparações com o tradicional movimento geométrico browniano são realizadas bem como quantificações e análises de políticas alternativas ótimas para o setor de petróleo.
    Date: 2015–01
  40. By: Bruno de Oliveira Cruz; Aude Pommeret
    Abstract: In this paper, we propose to explain capital accumulation in a stochastic framework by taking into account the two main motives for investment. Specifically, firms invest to expand capacity and to replace old machines. The model considers irreversible investment under uncertainty and embodied technological progress. It is shown to be consistent with the following empirical observations: Investment is lumpy and infrequent at the firm level; firms can invest even if they have not reached full capacity and technological progress is largely investment specific. We extend the paper of Pindyck (1988), by introducing embodied technological progress. To produce firms use irreversible capital, perfectly flexible labor, and energy whose price is stochastic. Capital and energy are complementary. We show that uncertainty makes firms to postpone investment, increasing the age of the oldest machine and reducing the proportion of new machines in the total stock of capital. We provide an exercise with tax credit to acquire new machines; it is shown that under the hypothesis of embodiment and uncertainty, the tax credit is not effective. Implicitamente, nas teorias de investimento assume-se que as firmas devam utilizar toda capacidade instalada para investir. Entretanto, tal predição é inconsistente com a observação empírica. O objetivo deste trabalho é o de estender a literatura de investimento irreversível sob incerteza, tornando-a consistente com tal fato, além de duas outras constatações empíricas: O progresso tecnológico incorporado em novas máquinas, a infrequência e a os picos de investimento em nível micro. Além de ser consistente com tais evidências empíricas, a reposição de novas máquinas é adiada pelo aumento da incerteza. Mostra-se ainda que se o progresso tecnológico incorporado e incerteza são consideradas no modelo, a concessão de créditos tributários é ineficaz para estimular o investimento.
    Date: 2015–01
  41. By: Giles Mohan; Kojo Pumpuni Asante
    Abstract: Ghana’s recent status as an oil producer focuses attention on the relationship between domestic politics and transnational actors. While the political settlements literature is useful for focusing on how elite coalitions shape the governance of natural resources, it is not explicit about the role of transnational factors in shaping and enabling these coalitions. As such there is a tendency to downplay the significance of transnational-national interactions and national-local dynamics. This paper analyses the changing nature of the political settlement in Ghana pre- and post-oil and the role that transnational actors play in reshaping the coalitions which underpin and reproduce the overall settlement. We find that the discovery of oil has not radically altered the nature of Ghana’s political settlement, which remains of a competitive clientelist form within which institutional functioning and policy actors are heavily influenced by the need of political elites to secure success in increasingly tightly-fought elections. These tendencies and the ongoing structural inequalities between transnational capital and the sovereign state have resulted in oil licences being negotiated on terms favouring external actors. Through primary data collected from key informant interviews and case studies we show that power lies with the external actors albeit through the elite brokerage of contracts. Within these bargaining processes we see parts of the Ghanaian state acting strongly and effectively to serve both the interests of domestic elites and transnational capital. The combined effect of competitive clientelism and new sources of foreign capital is that structural issues and longer term planning decisions are largely deprioritised in favour of shorter-term gains.
    Date: 2015
  42. By: Florian Flachenecker
    Abstract: Addressing high and volatile natural resource prices, uncertain supply prospects, reindustrialization attempts and environmental damages related to resource use, resource efficiency has evolved into a highly debated proposal among academia, policy makers, firms and international financial institutions (IFIs). In 2011, the European Union (EU) declared resource efficiency as one of its seven flagship initiatives in its Europe 2020 strategy. This paper contributes to the discussions by assessing its key initiative, the Roadmap to a Resource Efficient Europe (EC 2011 571), following two streams of evaluation. In a first step, resource efficiency is linked to two theoretical frameworks regarding sustainability, (i) the sustainability triangle (consisting of economic, social and ecological dimensions) and (ii) balanced sustainability (combining weak and strong sustainability). Subsequently, both sustainability frameworks are used to assess to which degree the Roadmap follows the concept of sustainability. It can be concluded that it partially respects the sustainability triangle as well as balanced sustainability, primarily lacking a social dimension. In a second step, following Steger and Bleischwitz (2009), the impact of resource efficiency on competitiveness as advocated in the Roadmap is empirically evaluated. Using an Arellano–Bond dynamic panel data model reveals no robust impact of resource efficiency on competiveness in the EU between 2004 and 2009 – a puzzling result. Further empirical research and enhanced data availability are needed to better understand the impacts of resource efficiency on competitiveness on the macroeconomic, microeconomic and industry level. In that regard, strengthening the methodologies of resource indicators seem essential. Last but certainly not least, political will is required to achieve the transition of the EU-economy into a resource efficient future.
    Keywords: sustainability, resource efficiency, competitiveness, dynamic panel data model, European Union.
    JEL: Q38 Q51 Q56 Q58 C23
    Date: 2015–04
  43. By: Paul Schreyer; C. Obst
    Abstract: Despite its importance, regular measurement of the value of natural resources at national level is still in its infancy and often disconnected from valuation approaches for other assets. We show that there exists a consistent approach towards valuation that applies to subsoil assets and produced capital alike. We further align accounting in physical and monetary terms and construct standard volume and price indexes of energy and mineral resources with an application to Australia. Finally, we examine the link between our measure of subsoil wealth and indicators of sustainability. Overall, this paper demonstrates how the bodies of work on capital theory, index number measurement and growth accounting on the one hand, and valuation and measurement of natural resources on the other can be aligned. From a practical accounting perspective this alignment should aid in the implementation of broader measures of wealth at national level which are required for policy and analysis.<BR>En dépit de leur importance dans l’estimation des richesses d’un pays, les ressources naturelles commencent à peine à être prises en compte de façon systématique et sont bien souvent évaluées indépendamment des autres actifs. Dans ce rapport, nous verrons qu’il existe une approche cohérente pouvant s’appliquer aussi bien à l’évaluation des richesses du sous-sol qu’à celles du capital produit. Nous combinerons comptabilités physique et monétaire et définirons un indice des prix et du volume de l’énergie et des ressources naturelles avec une application à l’Australie. Enfin, nous examinerons le lien entre notre mesure des richesses du sous-sol et les indicateurs de développement durable. Nous démontrerons qu’il est possible d’aligner, d’un côté, les travaux sur la théorie du capital, la mesure des indices et la comptabilité de la croissance et, de l’autre, la valorisation et la mesure des ressources naturelles. Concrètement, cet alignement devrait permettre de mesurer plus précisément l’étendue des richesses au niveau national, et donc offrir une meilleure analyse servant de base aux politiques mises en place.
    Date: 2015–04–07
  44. By: Biggs, E. M.; Boruff, B.; Bruce, E.; Duncan, J. M. A.; Haworth, B. J.; Duce, S.; Horsley, J.; Curnow, Jayne.; Neef, A.; McNeill, K.; Pauli, N.; Van Ogtrop, F.; Imanari, Y.
    Keywords: Environmental sustainability; Environmental management; Ecological factors; Biodiversity; Living standards; Water security; Energy conservation; Food security; Climate change; Temperature; Precipitation; Cyclones; Agriculture; Farmland; Demography; Urbanization; Sociocultural environment; Gender; Community management; Institutions; Political aspects; Remote sensing; Natural disasters; Monitoring; Sustainable development; Assessment; Southeast Asia; Oceania
    Date: 2014
  45. By: Katia Rocha; Marco Antonio Guimarães Dias; José Paulo Teixeira
    Abstract: Petroleum exploration in Brazil is performed throughout a bidding process coordinated by the National Petroleum Agency (NPA), where the exploration and production (E&P) firms need to evaluate concessions performing financial and economic analyses routinely. Since oil is a public resource with economic and strategic value for the country, the governmental agency should have control over the financial and economic pricing techniques. The E&P firm holds the investment opportunity to develop a delineated oilfield. The oilfield development investment plan shall be presented to NPA until a specific date or the oilfield rights returns back to NPA. The oilfield can be developed up to a specific time through three mutually exclusive alternatives representing the oilfield production and exploration scale. The developed oilfield is proportional to the price of oil, which evolves according to a stochastic differential equation. The E&P firm considers three mutually exclusive alternatives of scale to exploit the oilfield, with different investment costs. The investment opportunity is analogous to an American call option with finite time to maturity and payoff equal to that of the developed oilfield (underlying asset) minus the development cost of the optimal alternative (exercise price). We obtain the investment opportunity value and the optimal development rule for the oilfield, i.e., the optimal development timing and the optimal production scale as function of the current oil price and the economic uncertainty of the market. A exploração de campos de petróleo no Brasil é realizada mediante um processo de licitação de blocos pela Agência Nacional de Petróleo (ANP), nos quais os concessionários utilizam diversas técnicas financeiras e econômicas para o apreçamento dos ativos em questão. Sendo esses recursos bens públicos e de fundamental valor econômico e estratégico para o país, cabe à agência governamental ter o domínio e controle necessários para compreender a análise de viabilidade econômica de seus ativos públicos, visando a uma eficiência maior e melhor nesse processo. A firma de exploração e produção (E&P), ganhadora do processo de concessão, detém a opção de desenvolver um campo de petróleo já delimitado. O plano de desenvolvimento do campo deve ser apresentado à ANP até uma data específica, ou os direitos de exploração retornam à agência. A firma de E&P considera três alternativas mutuamente exclusivas de diferentes custos de investimento para explorar o campo, que representam a escala de produção desse campo. O valor do campo desenvolvido é proporcional ao preço do óleo que evolui segundo uma equação diferencial estocástica. A oportunidade de investimento no desenvolvimento do campo é análoga a uma opção americana finita cujo payoff é o valor do campo desenvolvido (valor do ativo), subtraído do custo da alternativa ótima de desenvolvimento (preço de exercício). Obtemos o valor da oportunidade de investimento e a regra ótima de desenvolvimento do campo, ou seja, o momento ótimo de desenvolvimento e a escala ótima de produção como função do preço corrente do óleo e de sua incerteza de mercado.
    Date: 2015–01
  46. By: Hübler, Michael
    Abstract: This essay reviews the state of knowledge about the connection of climate change and development aid in a globalizing world and makes three contributions. First, it opts for an integrated treatment of short-term aid, striving for the urgent fulfillment of basic human needs, and long-term aid, striving for economic development and self-dependence. Against the background of environmental degradation and climate change, it opts for an integrated treatment of the human-society-economy dimension and the biodiversity-nature-earth dimension as well. Second, it proposes a “global insurance for survivalâ€, for which everybody on earth is eligible. Besides, it advocates the creation of a direct link between foreign aid and foreign direct investment, associated with international technology diffusion. Economic activities should be backed up by a global legal system focusing on labor, the environment and innovation. Within this system, everybody should be able to claim against firms at an international court. The legal system relaxes intellectual property rights of life-essential and environmentally friendly products in order to enhance technology diffusion. Third, this essay suggests to finance the integrated system of development aid via a globally unified tax imposed on all people and firms on earth above a threshold income level. As a central novel element, the allocation of aid project funding occurs on a market base with the help of a certificate trading system. This mechanism achieves efficiency and flexibility across the aid dimensions identified in the first step.
    Keywords: foreign aid, foreign direct investment, absorptive capacity, certificate trading
    JEL: H23 F23 F35
    Date: 2014–12

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