nep-ene New Economics Papers
on Energy Economics
Issue of 2015‒07‒04
thirty papers chosen by
Roger Fouquet
London School of Economics

  1. Heterogeneous Preferences and Investments in Energy Saving Measures By Urs Fischbacher; Simeon Schudy; Sabrina Teyssier
  2. Investing in the cheapest form of energy: efficiency practices of SMEs in rural Ghana. By Ackah, Ishmael
  3. The Price Effect of Building Energy Ratings in the Dublin Residential Market By Ronan C. Lyons; Sean Lyons; Sarah Stanley
  4. Environmental efficiency of energy, materials, and emissions By Yagi, Michiyuki; Hidemichi, Fujii; Hoang, Vincent; Managi, Shunsuke
  5. Social Rate of Return to R&D on Various Energy Technologies: Where Should We Invest More? A Study of G7 Countries. By Roula Inglesi-Lotz
  6. The economics of policy instruments to stimulate wind power in Brazil By Landis,Florian; Timilsina,Govinda R.
  7. Quantifying the impact s of wind power generation in the day-ahead market: The case of Denmark By Li, Yuanjing
  8. Institutional entrepreneurship in the emerging renewable energy field; incumbents versus new entrants By Smink; Joost Koch; Eva Niesten; Simona Negro; Marko Hekkert
  9. On the transition from nonrenewable energy to renewable energy By Yacoub Bahini; Cuong Le Van
  10. User-technology interactions in the construction of user-driven configurations – lessons from Dutch civic energy communities By Wouter Boon; Gerben de Vries; Alexander Peine
  11. Renewable Energy Subsidies and Countervailing Duties: A study on U.S.-China solar products trade war (Japanese) By YOMOGIDA Morihiro
  12. Biogas : clean energy access with low-cost mitigation of climate change By Somanathan,E.; Bluffstone,Randall
  13. Russia’s Oil and Gas Sector in 2014 By Yuri Bobylev
  14. Producers, Politicians, Warriors, and Forecasters: Who's Who in the Oil Market? By Medel, Carlos
  15. Oil and Unemployment in a New-Keynesian Model By Verónica Acurio Vásconez
  16. What if oil is less substitutable? A New-Keynesian Model with Oil, Price and Wage Stickiness including Capital Accumulation By Verónica Acurio Vásconez
  17. Macroeconomıc Analysıs And Graphıcal Interpretatıon Of Azerbaıjan Economy In 1991-2012 By Suleymanov, Elchin; Aliyev, Khatai
  18. Oil and Regional Development in Chad: Impact Assessment of Doba Oil Project on the Poverty in Host Region By Aristide MABALI; Moundigbaye MANTOBAYE
  19. Macroeconomıc Analysıs And Graphıcal Interpretatıon Of Azerbaıjan Economy In 1991-2012 By Suleymanov, Elchin; Aliyev, Khatai
  20. Can Oil Prices Help Predict US Stock Market Returns: An Evidence Using a DMA Approach By Naser, Hanan; Alaali, Fatema
  21. Oil – The Earth’s blood, a paper on how to recover its critical declining prices by using a hedge vaccine through a leading core of countries termed as VIRUS. By Cazotto, Gabriel
  22. Who will be affected by rising energy prices? Map of energy expenditures of Poles By Maciej Lis; Agata Miazga
  23. Volatility Spillovers Between Energy and Agricultural Markets: A Critical Appraisal of Theory and Practice By Chia-Lin Chang; Yiying Li; Michael McAleer
  24. Working Paper 03-15 - 2030 Climate and Energy Framework for Belgium - Impact assessment of a selection of policy scenarios up to 2050 By Danielle Devogelaer; Dominique Gusbin
  25. Scenario analysis on greenhouse gas emissions reduction in Southeast Balkans' energy system By Halkos, George; Tzeremes, Panagiotis
  26. Aid and Growth Evidence from Firm-level Data By Ehrhart, Hélène; Chauvet, Lisa
  27. Inequality in emissions: Evidence from Indonesian households By Mohammad Iqbal Irfany
  28. Heterogenous preferences for environmental quality, decentralized policy and first-best efficiency By Marcelo Arbex; Christian Trudeau
  29. Beneficial Leakage: The Effect of the Regional Greenhouse Gas Initiative on Aggregate Emissions By Harrison Fell; Peter Maniloff
  30. On the relevance of ideological identification and environmental values for beliefs and attitudes toward climate change: An empirical cross country analysis By Andreas Ziegler

  1. By: Urs Fischbacher; Simeon Schudy; Sabrina Teyssier
    Abstract: We investigate whether risk, time, environmental, and social preferences affect single family homeowners’ investments in energy efficient renovations and energy quality of their house using established experimental measures and questionnaires. We find that homeowners who report to be more risk taking are more likely to have renovated their house. Pro-environmental and future-oriented renovators, i.e. renovators with lower discount factors, live in homes with higher energy efficiency. Controlling for the energy efficiency of houses, we further find that energy consumption as measured by heating and energy costs are lower for future-oriented and pro-environmental individuals. Social preferences measured in a dictator and a generosity game play a mixed role for investments in energy efficiency and energy consumption.
    Keywords: Risk Preferences, Time Preferences, Environmental Preferences, Social Preferences, Energy Efficiency, Artefactual Field Experiment
    Date: 2015
  2. By: Ackah, Ishmael
    Abstract: Efficiency has been identified as the cheapest and cleanest source of fuel. Whilst effort has been made in the advanced countries to promote technology and efficiency, little is known about efficiency in emerging economies in Africa. The purpose of this study is to identify the energy efficiency practices of SMEs in rural Ghana and also examine the barriers to energy efficiency practices. First, a descriptive analysis was used to examine the barriers and energy efficiency indicators. Finally, autometrics is used to examine the relationship between energy efficiency and productivity at the aggregate level. The study finds that lack of information on energy efficiency practices is the most important barrier to energy efficiency. On the practices, methods such as putting off electrical appliances when not in use or when closed, using new electrical appliances and using less appliances to achieve the same goal are some of the common ones adopted by SMEs in rural Ghana. The study recommends that the Ghana Energy Commission should intensify its energy efficiency education and extend this to rural areas.
    Keywords: Efficiency, Small and Medium Scale Enterprises (SMEs), autometrics, Energy Consumption
    JEL: Q2 Q20 Q21 Q4 Q42
    Date: 2015–05–14
  3. By: Ronan C. Lyons (Department of Economics, Trinity College Dublin; Spatial Economics Research Centre, London School of Economics); Sean Lyons (Economic & Social Research Institute (Dublin); Department of Economics, Trinity College Dublin); Sarah Stanley
    Abstract: This paper is an empirical study of the relationship between the energy performance rating of residential homes in the Dublin market between 2009 and 2014 and their market prices, controlling for building type, size, age, and location. Initial results suggest that energy efficiency has a significant, positive relationship with list price. A 50-point improvement in the Energy Performance Indicator (kWh/m2/yr) is associated with a 1.5% higher list price. Alternatively, using the Building Energy Rating metric, a one-point improvement in the 15-point scale from G to A1 yields a list price increase of 1%. This mirrors findings for efficiency price premiums on a nationwide basis from Hyland et al. (2013). We also find that it is important to include controls for the age of the dwelling to avoid biased energy efficiency estimates in the hedonic model.
    Keywords: domestic building energy ratings; hedonic valuation; Ireland
    JEL: Q51 R31 Q58
    Date: 2015–06
  4. By: Yagi, Michiyuki; Hidemichi, Fujii; Hoang, Vincent; Managi, Shunsuke
    Abstract: This study estimates the environmental efficiency of international listed firms in 10 worldwide sectors from 2007-2013 by applying an order-m method, a non-parametric approach based on free disposal hull with subsampling bootstrapping. Using a conventional output of gross profit and two conventional inputs of labor and capital, this study examines the order-m environmental efficiency accounting for the presence of each of 10 undesirable inputs/outputs and measures the shadow prices of each undesirable input and output. The results show that there is greater potential for the reduction of undesirable inputs rather than bad outputs. On average, total energy, electricity, or water usage has the potential to be reduced by 50%. The median shadow prices of undesirable inputs, however, are much higher than the surveyed representative market prices. Approximately 10% of the firms in the sample appear to be potential sellers or production reducers in terms of undesirable inputs/outputs, which implies that the price of each item at the current level has little impact on most of the firms. Moreover, this study shows that the environmental, social, and governance activities of a firm do not considerably affect environmental efficiency.
    Keywords: Data envelopment analysis; Environmental efficiency; Shadow price; Free disposal hull; Linear programming
    JEL: C14 D24 Q50
    Date: 2015–05–23
  5. By: Roula Inglesi-Lotz (Department of Economics, Democritus University of Thrace, Greece)
    Abstract: The severity of investment in Research and Development (R&D) in the energy sector is undisputable especially considering the benefits of new technologies to sustainability, security and environmental protection. However, the nature and potential of various energy technologies that are capable to improve the energy and environmental conditions globally is a challenging task for governments and policy makers that have to make decisions on the allocation of funds in R&D. To do so, the optimal resource allocation to R&D should be determined by estimating the social rate of return for R&D investments. This paper aims to estimate the social rate of return of R&D on various energy applications and technologies such as energy efficiency, fossil fuels, renewable energy sources, and nuclear for the G7 countries. The results show that primarily R&D investment on Energy Efficiency technologies and Nuclear are the ones that yield high social benefits for all G7 countries while exactly the opposite holds for Fossil fuels.
    Date: 2015–06
  6. By: Landis,Florian; Timilsina,Govinda R.
    Abstract: Large-scale deployment of renewable energy technologies, such as wind power and solar energy, has been taking place in industrialized and developing economics mainly because of various fiscal and regulatory policies. An understanding of the economy-wide impacts of those policies is an important part of an overall analysis of them. Using a perfect foresight computable general equilibrium model, this study analyzes the economy-wide costs of achieving a 10 percent share of wind power in Brazil?s electricity supply mix by 2030. Brazil is in the midst of an active program of wind capacity expansion. The welfare loss would be small, 0.1 percent of total baseline welfare in the absence of the 10 percent wind power expansion. The study also finds that, in the case of Brazil, production subsidies financed through increased value-added tax would have superior impacts on welfare and greenhouse gas mitigation, compared with a consumption mandate where electricity utilities are allowed to pass the increased electricity supply costs directly to consumers. These two policies would impact various production sectors differently to achieve the wind power expansion targets: the burden of the mandate falls mostly on electricity-intensive production and consumption, whereas the burden of the subsidy is distributed toward goods and services with higher value added.
    Keywords: Energy Production and Transportation,Environment and Energy Efficiency,Climate Change Mitigation and Green House Gases,Climate Change Economics,Energy and Environment
    Date: 2015–06–30
  7. By: Li, Yuanjing
    Abstract: This paper investigates the impacts of intermittent wind power generation in Denmark on the Nordic day-ahead system price and its volatility in the Nord Pool electricity market, by applying an ARMA-GARCH model, accounting for market coupling and the counterbalance effect from hydropower in Norway and Sweden. As a result, we found that wind generation dampens spot prices, consistently with the merit order effect, and also reduces price volatility in the Nordic day-ahead market. The results shed lights on the importance of market coupling and interactions between wind power and hydropower in the Nordic system through cross-border exchanges, which play an essential role in price stabilization. The analysis on intermittency shows that the market signals or the magnitude of price and volatility reductions depend on the initial level of wind generation. Finally, the Danish experience and the Nordic market structure suggest a way out to handle wind intermittency by interplaying with hydropower at the same time relyingon the functioning of an integrated electricity market.
    Keywords: Wind power; day-ahead price; volatility; GARCH; Denmark;
    JEL: C32 L94 L52
    Date: 2015–06
  8. By: Smink; Joost Koch; Eva Niesten; Simona Negro; Marko Hekkert
    Abstract: An underexplored issue in the institutional entrepreneurship (IE) literature is the difference between incumbents and new entrants in promoting institutional change for innovative technologies. We study the IE activities: cooperation, framing, and political tactics in the case of biomethane development in the Netherlands, during 2006-2012. While for decades biogas farmers have been unable to build a supporting institutional framework, incumbents recently arranged substantial government support. Our theoretical contribution lies in defining dimensions of the three core IE activities. We present empirical evidence that new entrants and incumbents employ all three activities, but in distinct ways. Thus, the incumbents’ IE activities lead to more substantial institutional change than new entrants’ activities. As a consequence, production shifts from electricity to gas and the scale of installations increases. We conclude that incumbents can accelerate institutional change, however their focus on large-scale installations makes it difficult for biogas farmers to contribute to biomethane production.
    Keywords: Sustainability transitions, Institutional entrepreneurship, renewable energy, incumbents, new entrants
    Date: 2015–06
  9. By: Yacoub Bahini (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS); Cuong Le Van (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics, VCREME - VanXuan Center of Research in Economics, Management and Environment - VanXuan Center of Research in Economics, Management and Environment, IPAG - Business School)
    Abstract: In this paper we use the CMM model (Chakravorty et al., 2006) in discrete time and obtain more results concerning the exhaustion time of Non-Renewable Resource (NRE), the dynamic regimes of energy prices, of the stocks of pollution. We show that NRE is exhausted in finite time and is directly influenced by the initial stock of NRE and the costs of NRE and RE. Higher is the initial stock of NRE, far is the time of exhaustion of NRE. Higher is the cost of NRE (resp. the difference of unit costs between RE and NRE), far is the time of exhaustion of NRE. Furthermore, we show that the abatement intervenes, when necessary, not more than two periods. We also show that, when the unit extraction cost of RE is not very high, the stocks of emissions will never be binding if and only if, the initial stock of NRE is less than a critical value.
    Date: 2015–05
  10. By: Wouter Boon; Gerben de Vries; Alexander Peine
    Abstract: In this research, we explore user innovations in five Dutch civic energy communities. We show how these user innovations where embedded in a wider community process around realizing desired socio-technical change, and how the rationale, conditions and competences needed to identify and implement user innovations are shaped by this wider process. This interplay of collective learning and implementing user innovations requires a variety of preparatory efforts by community members, that may be of a seminal importance to the eventual nature and success of new socio-technical arrangements. Moreover, it is suggested that the dynamics found here result from a specific user logic that may be characteristic more generally for user communities innovating in configurational settings, i.e. combining and tinkering with innovative as well as mundane technological devices into a local and tailored configurations.
    Keywords: user innovation, user-led technological change, user communities, civic energy communities, configurations
    Date: 2015–06
  11. By: YOMOGIDA Morihiro
    Abstract: This paper investigates the U.S.-China trade war on solar products and analyzes a recent proposal on altering World Trade Organization (WTO) rules to avoid such trade dispute on renewable energy products. First, we examine the international trade structure of solar products between the United States and China and find that vertical specialization arises: the United States exports capital goods and intermediate goods to China and China exports final goods to the United States. Second, by using the official reports of the U.S. Department of Commerce and the U.S. International Trade Commission, we examine the U.S. government's investigation of countervailing duties on solar products from China. Chinese producers could evade duties on imports to the United States by reconfiguring their supply chains. We examine how the U.S. government plugged a loophole in its import duties. We also show how the Chinese government retaliated to the U.S. restrictions on imports of solar products from China. Third, we conduct a theoretical investigation of a recent proposal on the revision of the WTO rules on subsidies and countervailing duties on green products. Mattoo and Subramanian (2013) proposed altering WTO rules on green subsidies because subsidies for green goods such as solar products improve the environment by reducing greenhouse gases, and countervailing duties curtail such environmental benefits of green subsidies. We examine whether or not Mattoo and Subramanian's argument hold in a standard competitive model of trade with environmental externalities. We find that their argument does not necessarily hold. In fact, the United States' countervailing duties against China's solar products could raise environmental benefits for both countries.
    Date: 2015–06
  12. By: Somanathan,E.; Bluffstone,Randall
    Abstract: With data from the nearly 6,000 households in the Nepal Living Standards Survey of 2010?11, this paper finds that the mean reduction in household firewood collection associated with use of a biogas plant for cooking is about 1,100 kilograms per year from a mean of about 2,400 kilograms per year. This estimate is derived by comparing only households with and without biogas in the same village, thus effectively removing the influence of many potential confounders. Further controls for important determinants of firewood collection, such as household size, per capita consumption expenditure, cattle ownership, and unemployment are used to identify the effect of biogas adoption on firewood collection. Bounds on omitted variable bias are derived with the proportional selection assumption. The central estimate is much smaller than those in the previous literature, but is still large enough for the cost of adopting biogas to be significantly reduced via carbon offsets at a modest carbon price of $10 per ton of CO2e when using central estimates of emission factors and global warming potentials of pollutants taken from the scientific literature.
    Keywords: Energy Production and Transportation,Renewable Energy,Climate Change Mitigation and Green House Gases,Energy and Environment,Environmental Economics&Policies
    Date: 2015–06–30
  13. By: Yuri Bobylev (Gaidar Institute for Economic Policy)
    Abstract: Oil and gas comprise the main sector of the Russian economy that continues to play a key role in shaping the state budget revenues and the balance of trade. In 2013, against the background of continuing high global prices for oil and gas, petroleum production in Russia reached its highest level since 1990, and the export of oil and petroleum products reached a historic high. However, there was then a slowdown in petroleum production and a worsening of conditions for its production. In 2013, in order to create appropriate conditions for the further development of the oil and gas sector legislative solutions were adopted involving tax incentives for the development of resources where oil recovery was difficult, the differentiation of gas production taxation and the application of a special tax regime for deposits being developed on the continental shelf, together with a liberalisation of the export of liquefied natural gas (LNG)
    Keywords: Russian economy; oil world prices; oil production structure; oil and gas exports; tax regulation of the oil and gas sector;
    JEL: L71 L72
    Date: 2014
  14. By: Medel, Carlos
    Abstract: To what extent geopolitical tensions in major oil-producer countries and unexpected news related to the Organisation of the Petroleum Exporting Countries (OPEC) affect oil price? What are the effects of non-market externalities in oil price? Are oil price forecasters aware or affected by such externalities when making their predictions? In this article, I analyse the influence of these events on oil price by means of Granger causality, using an unique measure accounting for these events (2001-12). I found evidence favouring OPEC countries'-related news as an oil price driver, influencing short-term forecasts, and reducing the consensus when unanticipated news are available.
    Keywords: Oil-producer countries; OPEC; Oil price; Granger causality
    JEL: C12 C22 E66 Q41
    Date: 2015–06–26
  15. By: Verónica Acurio Vásconez (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)
    Abstract: The effects of oil shocks in inflation and growth have been widely discussed in the literature, however few have focused on the impact of oil price increases on unemployment. In order to shed some light on this problem, this paper develops a medium scale Dynamic Stochastic General Equilibrium model (DSGE) that allows for oil utilization in production and consumption as in Acurio-Vásconez (2015); unemployment as in Mortensen & Pissarides (1994); and staggered nominal wage contracting as in Gertler & Trigari (2009). It then analyzes the effects of oil price increases on the economy. The model recovers most of the well-known stylized facts observed after the oil shock in the 2000s'. A sensitivity analysis shows that the reduction of the bargaining power of households to negotiate wage contracts reduces the impact of an oil shock in unemployment, without affecting negatively GDP. However, it also shows that the reduction of bargaining power, together with wage flexibility strongly reduces the increase in unemployment after an oil shock, but causes a decrease in real wages, which reduces household income and affects GDP.
    Abstract: Les effets des chocs pétroliers sur l'inflation et la croissance ont été largement étudiés dans la littérature, cependant peu d'études ont traité l'impact de l'augmentation du prix du pétrole sur le chômage. Afin de faire la lumière sur la question, cet article développe un modèle d'équilibre général dynamique stochastique (DSGE) de taille moyenne où : le pétrole est utilisé en production et consommation comme dans Acurio-Vásconez (2015) ; le chômage est introduit comme dans Mortensen & Pissarides (1994) ; et les salaires nominales sont construits comme dans Gertler & Trigari (2009). On analyse ensuite les effets de l'augmentation du prix du pétrole dans l'économie. Le modèle récupère la plupart des effets stylisés observés après le choc pétrolier des années 2000. L'étude de sensibilité montre que la réduction du pouvoir de négociation salariale des ménages permet d'atténuer l'impact positif du choc pétrolier sur le chômage, sans affecter négativement le PIB. Cependant, il montre aussi que la réduction du pouvoir de négociation ensemble avec la flexibilisation des salaires réduit l'augmentation du chômage après un choc pétrolier, mais il provoque une diminution des salaires réels, ce qui réduit le revenu des ménages et impacte le PIB.
    Date: 2015–05
  16. By: Verónica Acurio Vásconez (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS)
    Abstract: The recent literature on fossil energy has already stated that oil is not perfectly substitutable to other inputs, considering fossil fuel as a critical production factor in different combinations. However, the estimations of substitution elasticity are in a wide range between 0.004 and 0.64. This paper addresses this phenomenon by enlarging the DSGE model developed in Acurio-Vásconez et al. (2015) by changing the Cobb-Douglas production and consumption functions assumed there, for composite Constant Elasticity of Substitution (CES) functions. Additionally, the paper introduces nominal wage and price rigidities through a Calvo setting. Finally, using Bayesian methods, the model is estimated on quarterly U.S. data over the period 1984:Q1-2007:Q3 and then analyzed. The estimation of oil's elasticity of substitution are 0.14 in production and 0.51 in consumption. Moreover, thanks to the low substitutability of oil, the model recovers and explains four well-known stylized facts after the oil price shock in the 2000's: the absent of recession, coupled with a low persistent increase in inflation rate, a decrease in real wages and a low price elasticity of oil demand in the short run. Furthermore, ceteris paribus, the reduction of nominal wage rigidity amplifies the increase in inflation and the decrease in consumption. Thus in this model more wage flexibility does not seem to attenuate the impact of an oil shock.
    Abstract: La littérature récente sur énergie a déjà établit que le pétrole n'est pas parfaitement substituable aux autres facteurs, en considérant l'énergie fossile comme étant un facteur de production critique en différentes combinaisons. Cependant, les valeurs estimées de l'élasticité de substitution se trouvent dans un large rang, entre 0.004 et 0.64. Cet article évoque ce phénomène en élargissant le modèle DSGE développe en Acurio Vásconez et al. (2015) en modifiant les fonctions de production et consommation supposées Cobb-Douglas par des fonctions à élasticité de substitution constante (CES). Cet article introduit aussi des rigidités de salaire et des prix à la Calvo. Finalement, en utilisant des techniques Bayésiennes, le modèle est estimé sur les données trimestrielles aux Etats-Unis, pour la période 1984:Q1 - 2007:Q3 et après analysé. L'estimation de l'élasticité de substitution du pétrole est 0.14 dans le secteur productif et 0.51 pour les ménages. De plus, grâce à la faible substituabilité du pétrole, ce modèle récupère et explique quatre fait stylisés observés après le choc pétrolier des années 2000 : l'absence de récession, jumelée avec une faible mais persistante augmentation du taux d'inflation, une décroissance des salaires réels et une faible élasticité de prix de la demande de pétrole dans le court terme. En outre, le modèle montre que, ceteris paribus, la réduction de la rigidité des salaires nominales amplifie l'augmentation de l'inflation et la diminution de la consommation. Donc dans ce modèle, plus de flexibilité de salaires ne semble pas atténuer l'impact d'un choc pétrolier.
    Date: 2015–05
  17. By: Suleymanov, Elchin; Aliyev, Khatai
    Abstract: The aim of this research is to analyze macroeconomic performance and discuss transition indicators in Azerbaijan economy for 1991-2012. After regaining independence in 1991, Azerbaijan implemented economic transition process toward market economy. In first years of independence serious economic recession was observed. However, after 1995, restructuring of the economy was started. In this sense, signing “Contract of the Century” was a turning point toward oil based high speed economic growth or oil boom period. Thus, by opening “Baku-Tbilisi-Ceyhan” pipeline in 2005, Azerbaijan’s macroeconomic indicators experienced with considerable growth for following years. On the other hand, Azerbaijan officially declared the end of economic transition process in its economy in 2009. Here, the author discusses political-economic and economic process in whole period as well as analyzes macroeconomic performance with and without oil & gas contribution. In addition, the author questions if economic transition was ended in Azerbaijan economy. After all, it is concluded that oil & gas production has serious impact over macroeconomic indicators and transition indicators for Azerbaijan implies the end of economic transition partly, not totally.
    Keywords: Azerbaijan economy, macroeconomic analysis, oil & gas, economic transition
    JEL: E0 E00 Q4 Q43
    Date: 2015–05–19
  18. By: Aristide MABALI; Moundigbaye MANTOBAYE
    Abstract: In 2003, Chadian authorities passed the Law N° 001/PR/1999, establishing rules for allocating and managing the expected oil royalties from the Doba Oil project. The oil producing region’s share amounts to 5% of oil revenues under this law in addition to other benefits related to its status in order to mitigate negative effects of the oil project. Many field studies attempted to assess poverty situation in this region. Yet, no rigorous method of impact assessment has been employed. The goal of this paper is to evaluate the poverty profile in this region, by combining a double difference estimator with propensity score matching methods. Using data from the «Survey on Consumption and the Informal Sector in Chad» carried out in 2003 and 2011, our results tend to show that the monetary poverty increased in the oil producing region compared to control regions. We find no evidence that the nonmonetary poverty decreased in the producing region, as the important investments in social infrastructures could have implicitly suggested. In addition, we notice that household expenditures for temptation goods increased in this region compared to the others. Finally, we observe that there are spillover effects. Especially the neighboring regions of the oil producing region are more likely to experience poverty. These results raise the issue of the efficiency of the law and of its enlargement to newly discovered oil fields.
    Keywords: oil resources, Poverty, Impact evaluation, and Chad
    JEL: C22 I32
    Date: 2015–06
  19. By: Suleymanov, Elchin; Aliyev, Khatai
    Abstract: The aim of this research is to analyze macroeconomic performance and discuss transition indicators in Azerbaijan economy for 1991-2012. After regaining independence in 1991, Azerbaijan implemented economic transition process toward market economy. In first years of independence serious economic recession was observed. However, after 1995, restructuring of the economy was started. In this sense, signing “Contract of the Century” was a turning point toward oil based high speed economic growth or oil boom period. Thus, by opening “Baku-Tbilisi-Ceyhan” pipeline in 2005, Azerbaijan’s macroeconomic indicators experienced with considerable growth for following years. On the other hand, Azerbaijan officially declared the end of economic transition process in its economy in 2009. Here, the author discusses political-economic and economic process in whole period as well as analyzes macroeconomic performance with and without oil & gas contribution. In addition, the author questions if economic transition was ended in Azerbaijan economy. After all, it is concluded that oil & gas production has serious impact over macroeconomic indicators and transition indicators for Azerbaijan implies the end of economic transition partly, not totally.
    Keywords: Azerbaijan economy, macroeconomic analysis, oil and gas, economic transition
    JEL: D00 O5 O53 Q4 Q40 Q43
    Date: 2015–03
  20. By: Naser, Hanan; Alaali, Fatema
    Abstract: Crude oil price behaviour has fluctuated wildly since 1973 which has a major impact on key macroeconomic variables. Although the relationship between stock market returns and oil price changes has been scrutinized excessively in the literature, the possibility of predicting future stock market returns using oil prices has attracted less attention. This paper investigates the ability of oil prices to predict S&P 500 price index returns with the use of other macroeconomic and financial variables. Including all the potential variables in a forecasting model may result in an over-fitted model. So instead, dynamic model averaging and dynamic model selection are applied to utilize their ability of allowing the best forecasting model to change over time while parameters are also allowed to change. The empirical evidence shows that applying the DMA/DMS approach leads to significant improvements in forecasting performance in comparison to other forecasting methodologies and the performance of these models are better when oil prices are included within predictors.
    Keywords: Bayesian methods, Econometric models, Macroeconomic forecasting, Kalman filter, Model selection, Dynamic model averaging, Stock returns predictability, Oil prices
    JEL: C11 C53 G17 Q43
    Date: 2015–01–19
  21. By: Cazotto, Gabriel
    Abstract: This paper introduces the description of whom are the main concerns about the currently and critical decline of oil prices, and how this countries, named as VIRUS, could turn out to be a “vaccine” into resulting on a hedge to correct and return to economic viable prices on the commodity. It uses as methodology the acceptance of five main regions or countries as the main characters on the supply and demand of crude oil globally, using a hedge through observation of old prices through a sextic polynomial equation to determine the price to be used into an econometric equation to forecast the hedge price scenario that could help the recovery of the global oil prices at mid-term, taking also into consideration a possible decline over the shale gas demand of the USA due environment question over fracking
    Keywords: crude oil prices; oil demand and supply; main oil producers; financial hedge; hedge price forecast.
    JEL: C53 Q21 Q40 Q43
    Date: 2015–07–01
  22. By: Maciej Lis; Agata Miazga
    Abstract: Facing rising energy prices, what are expected to be an outcome of climate package, some household groups will reduce other expenditure in order to satisfy the energy consumption needs. According to Eurostat statistics, energy prices in Poland are lower than in other EU member states, but relatively high when compared to prices of other goods and services. On the basis of the 2013 Polish Household Budget Survey, we analyse determinants of energy prices. We demonstrate that electricity spending is stronger related to household characteristics, whereas heating expenditures to building characteristics. We show that increasing electricity prices affect mainly the most populous households, in particular large families. Contrary, changes in heating prices affect mostly residents of old, large houses, in small towns and in the countryside. Therefore, limiting the energy inefficiency of non-insulated buildings and more education about energy saving are crucial to minimize the social cost of climate policy.
    Keywords: energy expenditures, electricity expenditures, heating expenditures, household expenditures, energy prices, energy efficiency
    JEL: D12 Q41 Q48
    Date: 2015–06
  23. By: Chia-Lin Chang (Department of Applied Economics, Department of Finance, National Chung Hsing University, Taiwan); Yiying Li (Department of Quantitative Finance National Tsing Hua University, Taiwan); Michael McAleer (Econometric Institute, Erasmus School of Economics, Erasmus University Rotterdam and Tinbergen Institute, The Netherlands, Department of Quantitative Economics, Complutense University of Madrid, and Institute of Economic Research, Kyoto University.)
    Abstract: Energy and agricultural commodities and markets have been examined extensively, albeit separately, for a number of years. In the energy literature, the returns, volatility and volatility spillovers (namely, the delayed effect of a returns shock in one asset on the subsequent volatility or covolatility in another asset), among alternative energy commodities, such as oil, gasoline and ethanol across different markets, have been analysed using a variety of univariate and multivariate models, estimation techniques, data sets, and time frequencies. A similar comment applies to the separate theoretical and empirical analysis of a wide range of agricultural commodities and markets. Given the recent interest and emphasis in bio-fuels and green energy, especially bio-ethanol, which is derived from a range of agricultural products, it is not surprising that there is a topical and developing literature on the spillovers between energy and agricultural markets. Modelling and testing spillovers between the energy and agricultural markets has typically been based on estimating multivariate conditional volatility models, specifically the BEKK and DCC models. A serious technical deficiency is that the Quasi-Maximum Likelihood Estimates (QMLE) of a full BEKK matrix, which is typically estimated in examining volatility spillover effects, has no asymptotic properties, except by assumption, so that no statistical test of volatility spillovers is possible. Some papers in the literature have used the DCC model to test for volatility spillovers. However, it is well known in the financial econometrics literature that the DCC model has no regularity conditions, and that the QMLE of the parameters of DCC has no asymptotic properties, so that there is no valid statistical testing of volatility spillovers. The purpose of the paper is to evaluate the theory and practice in testing for volatility spillovers between energy and agricultural markets using the multivariate BEKK and DCC models, and to make recommendations as to how such spillovers might be tested using valid statistical techniques. Three new definitions of volatility and covolatility spillovers are given, and the different models used in empirical applications are evaluated in terms of the new definitions and statistical criteria.
    Keywords: Energy markets, Agricultural markets, Volatility and covolatility spillovers, Univariate and multivariate conditional volatility models, BEKK, DCC, Definitions of spillovers.
    JEL: C22 C32 C58 G32 O13 Q42
    Date: 2015–06
  24. By: Danielle Devogelaer; Dominique Gusbin
    Abstract: On October 17, 2014, the Federal Planning Bureau published the fifth edition of its triennial long-term energy outlook. The report describes a Reference scenario up to 2050 and demonstrates the large discrepancy between this Reference scenario and what is necessary to be on track for the EU 2030 Climate/Energy Framework as well as for the low-carbon economy by 2050, hence the need for additional policies and measures. This observation led to the writing of this paper in which three policy driven scenarios that are compatible both with the 2030 and 2050 greenhouse gas emission reduction challenge outlined by the European Council are being scrutinised. The analysis encompasses environmental, energy system, economic and social impacts.
    Keywords: Long-term energy projections, Energy policy, Renewable energy sources, Greenhouse gas emissions
    JEL: C6 O2 Q4
    Date: 2015–04–29
  25. By: Halkos, George; Tzeremes, Panagiotis
    Abstract: This paper by using the Long range Energy Alternatives Planning System (LEAP) evaluates the progress towards sustainability with long-term scenarios for the energy map of Southeast Balkans, particularly the three countries of Bulgaria, Greece and Romania. The main objective of this work is to examine and compare scenarios based on organizations reports, so that countries achieve the objectives of the European Commission (abating 40% of greenhouse gas emissions by 2030 and 80-95% by 2050) and finally to observe the contribution of each country to reducing greenhouse gas (GHG) emissions. The results reveal that the main challenge for the Southeast Balkans policy makers will be the energy policies associated with the renewable energy usage. It appears that under the seven different energy policy scenarios the higher the participation of renewable energy the higher the reduction of GHG emissions.
    Keywords: LEAP software; Renewable energy sources; Scenario analysis; Bulgaria; Greece; Romania.
    JEL: Q20 Q40 Q41 Q42 Q50 Q54 Q58
    Date: 2015
  26. By: Ehrhart, Hélène; Chauvet, Lisa
    Abstract: This paper explores the impact of foreign aid on firms growth for a panel of 5,640 firms in 29 developing countries, 11 of which in Africa. Using the World Bank Enterprise Surveys data and controlling for fi rms fixed e ffects, we fi nd a positive impact of foreign aid on sales growth. This result is robust to various checks, notably to the instrumentation of aid. We then identify the main infrastructure obstacles to rms growth and examine whether foreign aid contributes to relaxing those constraints. We nd that electricity and transport are perceived as important constraints which tend to decrease the growth rate of fi rms, as well as the utilization of their productive capacity. Evidence on the impact of aid on infrastructure obstacles suggests that total aid and aid to the energy sector tend to decrease electricity obstacles. We also show that transport aid projects, geo-localized at the region level, tend to decrease the transport obstacles.
    Keywords: Foreign aid; Firms growth; Infrastructures constraints;
    JEL: F35 O16 O50
    Date: 2015–06
  27. By: Mohammad Iqbal Irfany (Georg-August-University Göttingen)
    Abstract: Although the literature on emission inequality is abundant, this study will differentiate itself by focusing on emission inequalities at the household level due to the disparity in household expenditure profiles. We further separate measures on emission inequality based on household characteristics as well as decompose it into sources of emission. Employing a common application for analyzing inequalities, results show that as per capita expenditure increases, within quintiles emission inequality tends to decline until the middle quintiles but then further increases in expenditure level and worsens emission inequality until the richest household. The decomposition of inequality based on emission sources suggests that energy-transportation dominantly contributes of the overall emission inequality.
    Keywords: carbon footprint; household; inequality
    JEL: O12 O13 D12 D63
    Date: 2015–06–25
  28. By: Marcelo Arbex (Department of Economics, University of Windsor); Christian Trudeau (Department of Economics, University of Windsor)
    Abstract: We model a federation consisting of two jurisdictions. Their representative agents choose their level of consumption, obtained through pollution-inducing production that also generate a negative externality on the neighbor. Agents in different regions value consumption vs. nature differently. We show that even with a decentralized policy we can obtain first-best efficiency by choosing a combination of pollution tax (that depends solely on externality parameters) and lump-sum transfers (that also depend on the initial stocks of nature). Strikingly, optimal policies are invariant with preferences. Numerically we explore further the relationship among preferences for consumption versus nature, pollution externality and government policies.
    Keywords: Externalities, pollution tax, lump-sum transfers, environmental preferences, first-best efficiency, strategy-proofness.
    JEL: D62 H23 Q53 Q58
    Date: 2015–06
  29. By: Harrison Fell (Division of Economics and Business, Colorado School of Mines); Peter Maniloff (Division of Economics and Business, Colorado School of Mines)
    Abstract: Subglobal and subnational policies aimed at reducing greenhouse gases are often thought to be less effective than more geographically comprehensive policies as production, and thus emissions, of trade exposed industries may move from the regulated to the unregulated regions. This so-called leakage may negate all emission reductions from the regulated regions and, even worse, may lead to an overall increase in emissions if the unregulated regions have equally or more emissions intensive production. However, if the unregulated regions have less emissions intensive production, the regional regulation may prompt more switching to the relatively cleaner producers than would otherwise occur, creating a type of beneficial leakage. We use detailed electricity generation and transmission data to show that this might be the case for the Regional Greenhouse Gas Initiative (RGGI), a CO$_2$ cap-and-trade program for the electricity sector in select Northeastern U.S. states. We find evidence that electricity generation did leak out of the RGGI region to surrounding state, but electricity generation in the non-capped jurisdictions is less emissions intensive than in the RGGI region, resulting in a net decrease in aggregate emissions. Back-of-the-envelope calculations suggest that one-quarter of apparent emissions reductions actually leaked but that this served to reduce total combined emissions by an additional one percent.
    Date: 2015–06
  30. By: Andreas Ziegler (University of Kassel)
    Abstract: Based on unique data from representative computer-based surveys among more than 3400 citizens, this paper empirically examines the determinants of climate change beliefs, the support of publicly financed climate policy, and the (stated)willingness to pay a price premium for climate-friendly products in three countries which are key players in international climate policy, namely the USA, Germany (as largest country in the European Un-ion), and China. Our econometric analysis focuses on the effect of ideological identification and especially considers the interrelationship between a right-wing or a left-wing orientation and environmental values. Our estimation results imply that environmental aware-ness is in all three countries the major factor for beliefs and attitudes toward climate change. In Germany, citizens with a conservative, but not social or green orientation significantly less often support the considered climate policy and particularly have a significantly lower willingness to pay a price premium, whereas ideological differences are negligible for climate change beliefs. In contrast, a right-wing orientation has significantly negative effects on all beliefs and attitudes toward climate change in the USA. Furthermore, an increasing environmental awareness decreases ideological differences in the support of publicly financed climate policy in Germany and the USA and especially in general climate change beliefs and beliefs in anthropogenic climate change in the USA. Our estimation results suggest alternative strategies such as specific communication campaigns in order to reduce the climate change skepticism in conservative and right-wing circles in the USA and to increase the support of climate policies among such population groups.
    Keywords: Climate change beliefs, climate policy, price premium for climate-friendly products, ideological identification, environmental values, econometric analysis
    JEL: Q54 Q58 A13
    Date: 2015

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