nep-ene New Economics Papers
on Energy Economics
Issue of 2015‒08‒01
thirty-six papers chosen by
Roger Fouquet
London School of Economics

  1. Do Building Energy Codes Have a Lasting Effect on Energy Consumption? New Evidence From Residential Billing Data in Florida By Matthew J. Kotchen
  2. Safer or Cheaper? Household Safety Concerns, Vehicle Choices, and the Costs of Fuel Economy Standards By Choi, Young-Young; Liu, Yizao; Huang, Ling
  3. Feedback, Social Nudges, and Energy Conservation By Hunter, Elizabeth; Crago, Christine; Spraggon, John
  4. Diffusion of Green Technology: A Survey By Allan, Corey; Jaffe, Adam B; Sin, Isabelle
  5. Wind Turbine Shutdowns and Upgrades in Denmark: Timing Decisions and the Impact of Government Policy By Cook, Jonathan A.; Lin, C.-Y. Cynthia
  6. Plug-in vehicles and the future of road infrastructure funding in the United States By Dumortier, Jerome; Kent, Matthew; Payton, Seth
  7. Fuelwood Source Substitution and Shadow Prices in Western Kenya By Murphy, David M. A.; Berazneva, Julia; Lee, David R.
  8. Food versus Fuel: Examining Tradeoffs in the Allocation of Biomass Energy Sources to Domestic and Productive Uses in Ethiopia By Mekonnen, Dawit; Bryan, Elizabeth; Alemu, Tekie; Ringler, Claudia
  9. Impacts on poverty of removing fuel import subsidies in Nigeria By Siddig,Khalid; Minor,Peter J.; Grethe,Harald; Aguiar,Angel; Walmsley,Terrie Louise
  10. Efficiency of Wind Power Production and its Determinants By Pieralli, Simone; Ritter, Matthias; Odening, Martin
  11. Should We Give Up After Solyndra? Optimal Technology R&D Portfolios under Uncertainty By Mort Webster; Karen Fisher-Vanden; David Popp; Nidhi Santen
  12. The Disparate Influence of State Renewable Portfolio Standards (RPS) on U.S. Renewable Electricity Generation Capacity By Maguire, Karen; Munasib, Abdul
  13. Welfare Implications of the Renewable Fuel Standard with a Revenue Neutral Carbon Tax By Skolrud, Tristan D.; Galinato, Gregmar I.
  14. Regionally-varying and Regionally-uniform Electricity Pricing Policies Compared across Four Usage Categories By Cho, Seong-Hoon; Kim, Taeyoung; Kim, Hyun J.; Park, Kihyun; Roberts, Roland K.
  15. Impact Assessment of Time of Use Pricing for Electricity: Evidence from a Natural Experiment in Ontario By Kim, Hyungkwan; Preckel, Paul V.; Eales, James S.; Gotham, Douglas; Liu, Andrew L.
  16. Short- and Long-Run Analysis of Factors Affecting Electricity Consumption in Sub-Saharan Africa By Michieka, Nyakundi M.
  17. The Effect of the Energy Boom on Schooling Decisions in the U.S. By Zuo, Na; Schieffer, Jack
  18. Disentangling the Links between Energy and Agricultural Markets: The Shale Gas Phenomenon By Pérez-Domínguez, Ignacio; Araujo-Enciso, Sergio-René; Santini, Fabien
  19. Temporal displacement of environmental crime. Evidence from marine oil pollution By Vollaard, Ben
  20. Projecting the effect of oil price regimes on biofuel markets By Nigatu, Getachew; Hjort, Kim; Somwaru, Agapi; Hansen, James
  21. Petroleum Industry's Economic Contribution to North Dakota in 2013 By Bangsund, Dean A.; Hodur, Nancy M.
  22. The Contribution of Energy Extraction Activities to Farm Household Wellbeing: Oil, Gas, and Wind Lease and Royalty Income By Williamson, James M.; Doye, Damona
  23. North Dakota Lignite Energy Industry's Contribution to the State Economy for 2013 and Projected for 2014 By Coon, Randal C.; Bangsund, Dean A.; Hodur, Nancy M.
  24. Biogas3: Sustainable and Economical Production of Biogas from Food Waste of European Agrifood Industry By Berruto, Remigio; Boero, Valter; Busato, Patrizia; Calvo, Angela; Sopegno, Alessandro; Venudo, Lorenzo; Rossi, Daniele; Gomez, Paz; Ruiz, Begoña; Kachniarz, Małgorzata
  25. Econometric Analysis of Motorists’ Preference for Ethanol in Motor Fuel By Liao, Kenneth; Pouliot, Sebastien
  26. Quantifying Social Preferences toward Woody Biomass Energy Generation in Montana, USA By Campbell, Robert; Venn, Tyron; Anderson, Nathaniel
  27. Identifying Factor Substitution and Energy Intensity in the U.S. Agricultural Sector By Suh, Dong Hee
  28. Energy Price Transmission and Retail Milk Prices By Li, Xun; Lopez, Rigoberto A.
  29. Biomass Contracts for Ethanol Production: The Role of Farmer’s Risk Preferences By Wamisho, Kassu; De Laporte, Aaron; Ripplinger, David
  30. What is the Social Value of Second Generation Biofuels? By Hertel, Thomas W; Steinbuks, Jevgenijs; Tyner, Wallace E.
  31. Investment risk in bioenergy crops By Skevas, Theodoros; Swinton, Scott M.; Tanner, Sophia; Sanford, Gregg; Thelen, Kurt
  32. Prices versus Quantities versus Hybrids in the Presence of Co-pollutants By Stranlund, John K.; Son, Insung
  33. Strategic Review: Implications of Proposals to Date for Mitigation Contributions By Sara Moarif
  34. Consumer Heterogeneity and Gasoline Price Response: Implications for Optimal Tax policy By Okwelum, Edson
  35. Do Improvements in Environmental Performance have an Adverse Impact on Employment? By Stark, Camila; Khanna, Madhu; Bi, Xiang
  36. The Economic Climate: Establishing Consensus on the Economics of Climate Change By Howard, Peter H.; Sylvan, Derek

  1. By: Matthew J. Kotchen
    Abstract: This paper provides an ex post evaluation of how changes to a building energy code affect energy consumption. Using residential billing data for electricity and natural gas over 11 years, the analysis is based on comparisons between residences constructed just before and just after a building code change in Florida. While an earlier study using 3 years of data for the same residences showed savings for both electricity an natural gas, new results show an enduring savings for natural gas only. These findings underscore the importance of accounting for age versus vintage effects and all sources of energy consumption when conducting evaluations of building codes. More broadly, the results provide a counterpoint to the growing literature casting doubt on whether ex ante forecasts of energy efficiency policies and investments can provide useful information about actual energy savings. Indeed, more than a decade after Florida's energy code change, the measured energy savings still meets or exceeds the forecasted amount.
    JEL: Q4 Q48
    Date: 2015–07
  2. By: Choi, Young-Young; Liu, Yizao; Huang, Ling
    Abstract: In this paper, we formulate and estimate a mixed logit model of consumer vehicle choices with micro-level data to examine the effect of safety concerns on their vehicle choices, especially on the preference for various vehicle characteristics linked to vehicle safety (MPG, weight, size, etc). Further, using the demand estimates, we simulate consumers’ vehicle choices under alternative fuel economy standards that will result in new product offerings from automakers. We then calculate and compare the welfare change for consumers with different safety concerns. The estimation results suggest that consumers’ safety concerns have significant impacts on their vehicle choices and their preference over safety-related vehicle characteristics.
    Keywords: Corporate Average Fuel Economy (CAFE) standards, a mixed logit, traffic safety, fuel economy, consumers' vehicle choices, Demand and Price Analysis, Industrial Organization, Resource /Energy Economics and Policy,
    Date: 2015
  3. By: Hunter, Elizabeth; Crago, Christine; Spraggon, John
    Abstract: In the context of climate change and heightened concerns about our energy future, academics and policy makers have taken an interest in the different motivational factors influencing individuals’ energy use. One area of particular interest is the role of information and other non-financial motivators: When traditional financial incentives are not appropriate, can contextualized information programs be used to encourage energy conservation? In our research we conduct an experiment to examine the effect of feedback and social nudges on the energy consumption of renters in utility-inclusive contracts. A sample of 64 households at a University of Massachusetts Amherst family housing complex was selected to participate in this experiment. These residents pay utility-inclusive rent and previously had no means of gaining access to information regarding their personal energy consumption. Households were randomly divided into a control and two treatment groups. During the first phase of the experiment, both treatment groups received weekly Home Energy Reports [HERs] with feedback pertaining to their electricity consumption and its associated financial cost. During the second phase of the experiment both treatment groups continued to receive these HERs as before but with one distinction: households in one of the treatment groups received additional information as to how their electricity consumption compared to the electricity consumption of others in the complex (a social nudge). Analysis of this experiment suggests that feedback on own electricity usage reduced electricity consumption on average by 1.9%, while the social nudge increased electricity consumption by 3.6%. Further investigation into the cause of this positive effect on electricity consumption from social contextualization reveals that this figure was driven by low-consumers of electricity, who subsequently increased their electricity consumption upon receiving the social nudge.
    Keywords: energy efficiency, energy conservation, social nudge, social norms, feedback, field experiment, boomerang effect, split incentives, Resource /Energy Economics and Policy,
    Date: 2015
  4. By: Allan, Corey; Jaffe, Adam B; Sin, Isabelle
    Abstract: This paper surveys the existing literature on diffusion of environmentally beneficial technology. Overall, it confirms many of the lessons of the larger literature on technology diffusion: diffusion often appears slow when viewed from the outside; the flow of information is an important factor in the diffusion process; networks and organisations can matter; behavioural factors such as values and cognitive biases also play a role. With respect to policy instruments, there is some evidence that the flexibility of market-based instruments can have a beneficial impact on technology diffusion, but there are also numerous cases in which regulations have forced the adoption of new technologies. There would be significant benefit to increased investment in studies that look at questions such as the role of information provision, networks and framing issues in households’ and firms’ adoption decisions.
    Keywords: Technology diffusion, technology transfer, policy instruments, green technology, Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies, O33, Q55, Q56,
    Date: 2014–03
  5. By: Cook, Jonathan A.; Lin, C.-Y. Cynthia
    Abstract: Shutting down and/or upgrading existing productive assets are important economic decisions for the owners of those assets and are also the fundamental decisions that underlie the development of new, growing industries. This paper develops a dynamic structural econometric model of wind turbine owners' decisions about whether and when to add new turbines to a pre-existing stock, scrap an existing turbine, or replace old turbines with newer versions (i.e., upgrade). We apply our model to owner-level panel data for Denmark over the period 1980-2011 to estimate the underlying profit structure for wind producers and evaluate the impact of technology and government policy on wind industry development. Our structural econometric model explicitly takes into account the dynamics and interdependence of shutdown and upgrade decisions and generates parameter estimates with direct economic interpretations. Results from the model indicate that the growth and development of the Danish wind industry was primarily driven by government policies as opposed to technological improvements. The parameter estimates are used to simulate counterfactual policy scenarios in order to quantify the effectiveness of the Danish feed-in-tariff and replacement certificate programs. Results show that both of these policies significantly impacted the timing of shutdown and upgrade decisions made by turbine owners and accelerated the development of the wind industry in Denmark.
    Keywords: wind energy, dynamic structural econometric model, Environmental Economics and Policy, Industrial Organization, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, Q42, L90,
    Date: 2015
  6. By: Dumortier, Jerome; Kent, Matthew; Payton, Seth
    Abstract: In the United States, the road infrastructure funding is declining due to an increase in fuel efficiency and the non-adjustment of fuel taxes to inflation. Propositions to tax plug-in vehicles have been proposed or implemented in several states. Those propositions are contrary to policies to promote the sale of fuel efficient vehicles. This paper assesses (1) the magnitude of the decline in federal fuel tax revenue caused by plug-in vehicles and (2) quantifies the amount of revenue that could be generated from a federal plug-in vehicle registration fee. We find that the contribution of plug-in vehicles to the decline of the federal fuel tax revenue is at most 1.56% and that the majority of the shortfall can be attributed to the non-adjustment of the fuel tax rate by 2040. An additional tax of $50-$200 per plug-in vehicle per year in the reference case would generate $188-$745 million in 2040 which represents an increase of 1.7% - 6.7% in federal fuel tax revenue compared to no tax. The lesson for policy makers is that plug-in vehicles do not contribute significantly to the funding shortfall in the short- and medium-run and a supplemental tax would generate a small percentage of additional revenue.
    Keywords: Plug-in hybrid vehicles, battery electric vehicles, gasoline tax, diesel tax, fuel consumption, Highway Trust Fund, taxation, Environmental Economics and Policy, Resource /Energy Economics and Policy, H23, C63, Q38, Q47,
    Date: 2015–04–21
  7. By: Murphy, David M. A.; Berazneva, Julia; Lee, David R.
    Abstract: Deforestation in Sub-Saharan Africa remains a substantial problem. Increasing scarcity of fuelwood can be significant burden to households, as fuelwood is a key component of the energy profile of a rural Sub-Saharan household. However, households do not only collect their fuelwood from off-farm, but also produce it on-farm and purchase it from the market. This paper studies substitution between fuelwood sources for rural Kenyan households. Conducting analysis using shadow prices for household fuelwood in a non-separable theoretical framework, we find that strict gender divisions in household labor contribute to a lack of substitution between fuelwood sources. Because fuelwood production on the farm is more sustainable than off-farm collection, gender divisions inhibit reforestation efforts in this area. This paper finds a direct linkage between women and environmental well-being, and concludes that reforestation efforts in SSA will likely be ineffective until labor substitution between genders increase.
    Keywords: Fuelwood, Biomass, Energy, Shadow Price, Gender, Consumer/Household Economics, Environmental Economics and Policy, International Development, Land Economics/Use, Resource /Energy Economics and Policy,
    Date: 2015–05–22
  8. By: Mekonnen, Dawit; Bryan, Elizabeth; Alemu, Tekie; Ringler, Claudia
    Abstract: This paper explores the tradeoffs between domestic and productive uses of biomass energy sources in the Nile Basin of Ethiopia using a non-separable farm household model where labor and other input allocations to energy collection and farming are analyzed simultaneously. We estimate a system of five structural equations using three stages least squares and find that use of dung as a domestic fuel source has a negative impact on agricultural productivity while, use of fuelwood is associated with increased productivity. In particular, on-farm production of fuelwood appears to provide many benefits for crop productivity and labor savings, by making fuelwood collection easier and more convenient for households. The results show that households remain reliant on multiple sources of traditional biomass fuels and that these are largely complementary. At the same time, rural households have limited options to meet their domestic energy needs, and most lack access to modern fuels and technologies. The discussion suggests ways of making domestic energy collection more efficient through policy interventions aimed at the promotion of agroforestry and increasing access to new energy-efficient technologies.
    Keywords: agriculture, energy, fuelwood, gender, tradeoffs, Agricultural and Food Policy, Environmental Economics and Policy, Farm Management, Food Security and Poverty, International Development, Productivity Analysis, Resource /Energy Economics and Policy,
    Date: 2015
  9. By: Siddig,Khalid; Minor,Peter J.; Grethe,Harald; Aguiar,Angel; Walmsley,Terrie Louise
    Abstract: The petroleum sector contributes substantially to the Nigerian economy; however, the potential benefits are diminished because of the existence of significant subsidies on imports of petroleum products. Subsidies on imported petroleum products are considered to be an important instrument for keeping fuel prices, and hence the cost of living, low. The costs of these subsidies, however, have risen dramatically in recent years along with increased volatility in world petroleum and petroleum product prices and increased illegal exportation of subsidized petroleum products into neighboring countries. Removing the subsidy on fuel is one of the most contentious socioeconomic policy issues in Nigeria today. In this paper, an economy-wide framework is used to identify the impact of removing the fuel subsidy on the Nigerian economy and investigate how alternative policies might be used to meet socioeconomic objectives related to fuel subsidies. The results show that although a reduction in the subsidy generally results in an increase in Nigeria?s gross domestic product, it can have a detrimental impact on household income, and in particular on poor households. Accompanying the subsidy reduction with income transfers aimed at poor households or domestic production of petroleum products can alleviate the negative impacts on household income.
    Keywords: Transport Economics Policy&Planning,Energy Production and Transportation,Economic Theory&Research,Emerging Markets,Markets and Market Access
    Date: 2015–07–24
  10. By: Pieralli, Simone; Ritter, Matthias; Odening, Martin
    Abstract: This article examines the efficiency of wind energy production. Using non-convex efficiency analysis, we quantify production losses for 19 wind turbines in four wind parks across Germany. In a second stage regression, we adapt the linear regression results of Kneip, Simar, and Wilson (2014) to explain electricity losses by means of a bias-corrected truncated regression analysis. The results show that electricity losses amount to 27% of the maximal producible electricity. Most of these losses are from changing wind conditions, while 6% are from turbine errors.
    Keywords: wind energy, efficiency, free disposal hull, bias correction, Environmental Economics and Policy, Production Economics, Productivity Analysis, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, D20, D21, Q42,
    Date: 2015
  11. By: Mort Webster; Karen Fisher-Vanden; David Popp; Nidhi Santen
    Abstract: Global climate change and other environmental challenges require the development of new energy technologies with lower emissions. In the near-term, R&D investments, either by government or the private sector, can bring down the costs of these lower emission technologies. However, the results of R&D are uncertain, and there are many potential technologies that may turn out to play an effective role in the future energy mix. In this paper, we address the problem of allocating R&D across technologies under uncertainty. Specifically, given two technologies, one with lower costs at present, but the other with greater uncertainty in the returns to R&D, how should one allocate the R&D budget? We develop a multi-stage stochastic dynamic programming version of an integrated assessment model of climate and economy that represents endogenous technological change through R&D decisions for two substitutable non-carbon backstop technologies. Using the model, we demonstrate that near-term R&D into the higher cost technology is justified, and that the amount of R&D into the high cost technology increases with both the variance in the uncertainty in returns to R&D and with the skewness of the uncertainty. We also present an illustrative case study of wind and solar photovoltaic technologies, and show that poor R&D results in early periods do not necessarily mean that investment should not continue.
    JEL: O38 Q42 Q48 Q54 Q55
    Date: 2015–07
  12. By: Maguire, Karen; Munasib, Abdul
    Abstract: Several papers have used panel data analyses to examine the effectiveness of U.S. state-level Renewable Portfolio Standards (RPS) in promoting renewable capacity development, but the findings are inconclusive. Estimation of average treatment effects, however, can mask the fact that RPS policies across states are disparate and the treatment states are heterogeneous. We use the Synthetic Control Method (SCM) to conduct individual case studies of the early adopter states. Our findings indicate that the impact of RPS varied across states. We find Texas to be unique among these early adopters in that RPS in Texas has led to increased renewable capacity.
    Keywords: Renewable portfolio standard (RPS), renewable energy, wind energy, synthetic control method (SCM), Environmental Economics and Policy, Resource /Energy Economics and Policy, Q4, Q42, Q48, H7,
    Date: 2015
  13. By: Skolrud, Tristan D.; Galinato, Gregmar I.
    Keywords: Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2015
  14. By: Cho, Seong-Hoon; Kim, Taeyoung; Kim, Hyun J.; Park, Kihyun; Roberts, Roland K.
    Abstract: The objective of our research is to predict how electricity demand varies spatially between status quo regionally-uniform electricity pricing and hypothetical regionally-varying electricity pricing across usage categories. We summarize the empirical results of a case study of electricity demand in South Korea with three key findings and their related implications. First, the price elasticities of electricity demand differ across usage categories. Specifically, electricity demands for manufacturing and retail uses were price inelastic and close to unit elastic, respectively, while those for agricultural and residential uses were not statistically significant. This information is important in designing energy policy, because higher electricity prices could reduce electricity demands for manufacturing and retail uses, resulting in slower growth in those sectors. Second, spatial spillovers in electricity demand vary across uses. Understanding the spatial structure of electricity demand provides useful information to energy policy makers for anticipating changes in demand across regions via regionally-varying electricity pricing for different uses. Third, simulation results suggest that spatial variations among electricity demands by usage category under a regionally-varying electricity-pricing policy differ from those under a regionally-uniform electricity-pricing policy. Differences in spatial changes between the policies provide information for developing a realistic regionally-varying electricity-pricing policy according to usage category.
    Keywords: Elasticities of electricity demand, Regionally-varying electricity pricing, Spatial spillovers, Resource /Energy Economics and Policy, C33, L94, Q4,
    Date: 2015
  15. By: Kim, Hyungkwan; Preckel, Paul V.; Eales, James S.; Gotham, Douglas; Liu, Andrew L.
    Keywords: Electricity, Energy, Smart Grid, Smart Meter, TIme-of-Use, Demand management, Ontario, Demand and Price Analysis, Resource /Energy Economics and Policy,
    Date: 2015
  16. By: Michieka, Nyakundi M.
    Abstract: This paper explores the causal relationship between electricity consumption, GDP, trade openness, financial development, and industry using a Vector Error Correction Model for five Sub-Saharan countries. Results indicate that in the long run, all series exert an influence on electricity consumption in Cote D’Ivioire and Zambia. Short run estimates reveal causality running from financial development and GDP to electricity consumption in Cote D’Ivioire and South Africa. A modified version of Granger Causality developed by Toda and Yamamoto (1995) found no causality in electric power consumption for Kenya. Since these countries differ economically, politically, and geographically, no universal policy implication can be surmised.
    Keywords: Electricity consumption, VECM, Sub-Saharan Africa, Resource /Energy Economics and Policy, C32, O13, O47, O55, Q43, Q48,
    Date: 2015
  17. By: Zuo, Na; Schieffer, Jack
    Keywords: Energy boom, Schooling decisions, High school graduation rate, High school enrollment rate, Community/Rural/Urban Development, Environmental Economics and Policy, Labor and Human Capital, Public Economics,
    Date: 2015
  18. By: Pérez-Domínguez, Ignacio; Araujo-Enciso, Sergio-René; Santini, Fabien
    Abstract: Technological developments in recent years, especially the 'fracking' technique, have allowed for a economically profitable extraction of shale gas, evolving into an increasingly important source of energy in the United States. Agriculture is increasingly more linked energy markets, traditionally through the input side (i.e. energy and fertilizer costs), but since the 2000s also through the production of biofuels. To analyse the potential effects on agricultural markets of the 'shale gas boom', a scenario analysis is carried out with the Aglink-Cosimo model. This scenario depicts a situation where the North America (US and Canada) benefits from certain energy price advantage versus the rest of the world. Our analysis shows a sizeable gain in competitiveness for US crop producers, with average production costs in the US decreasing considerably over the baseline period. These lower costs of production are expected to trigger lower producer prices and higher production, especially for energy intensive crops such as maize, sorghum and sugar beet. However, the presence of uncertainty regarding the future development of crude oil prices can considerably affect these margins.
    Keywords: shale gas, agriculture, fertilizer markets, energy, modelling, Agricultural and Food Policy, Demand and Price Analysis,
    Date: 2015–07–26
  19. By: Vollaard, Ben (Tilburg University, Center For Economic Research)
    Abstract: The probability of conviction commonly varies across different circumstances due to imperfect monitoring. Evidence of whether and how offenders exploit gaps in monitoring provides insight into the process by which deterrence is produced. We present an empirical test of temporal displacement of illegal discharges of oil from shipping, a major source of ocean pollution, in response to a monitoring technology that features variation in the probability of conviction by time of day. After sunset and before sunrise, evidence collected using airborne radar day-round becomes contestable in court because the nature of an identified spot cannot be verified visually. Using data from surveillance flights<br/>above the Dutch part of the North Sea during 1992-2011, we only find evidence for temporal displacement after 1999, with further tightening of the regulations. By that time, the overall level of discharges had been reduced considerably, making the observed temporal displacement relatively small in absolute levels.
    Keywords: deterrence; pollution; environmentel crime
    JEL: K32 K42
    Date: 2015
  20. By: Nigatu, Getachew; Hjort, Kim; Somwaru, Agapi; Hansen, James
    Abstract: Disclaimer: The views expressed are the authors’ and do not necessarily represent those of the Economic Research Service or the US Department of Agriculture.
    Keywords: oil price, projection, biofuels, Agricultural and Food Policy, Resource /Energy Economics and Policy,
    Date: 2015
  21. By: Bangsund, Dean A.; Hodur, Nancy M.
    Keywords: Demand and Price Analysis, Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy,
    Date: 2015–03
  22. By: Williamson, James M.; Doye, Damona
    Abstract: In 2012, farm households reported receiving a total of $1.8 billion in lease and royalty income from energy production activities, making up about 1% of farm household total income. Payments are highly concentrated, primarily on large farms and in the South and Midwest. Though relatively few farms have energy lease and royalty income (3 percent), it can be an important source of income, particularly for older farmers; for farmers over 65 who receive royalty income, it is the largest single source of income.
    Keywords: Oil and gas royalties, farm income, shale, energy extraction., Agricultural Finance, Community/Rural/Urban Development, Resource /Energy Economics and Policy,
    Date: 2015
  23. By: Coon, Randal C.; Bangsund, Dean A.; Hodur, Nancy M.
    Keywords: Production Economics, Resource /Energy Economics and Policy,
    Date: 2014–06
  24. By: Berruto, Remigio; Boero, Valter; Busato, Patrizia; Calvo, Angela; Sopegno, Alessandro; Venudo, Lorenzo; Rossi, Daniele; Gomez, Paz; Ruiz, Begoña; Kachniarz, Małgorzata
    Abstract: The purpose of this work is to promote the sustainable production of renewable energy from the biogas obtained from agrifood waste in small‐scale concepts for pursuing energy self‐sufficiency. Stakeholders were interviewed and two different questionnaires were offered: the first for agrifood industries, the second for biogas plants and component providers. Information obtained was elaborated to have a view of wastage amounts in agrifood sector and get information of available small‐scale biogas plants. Obtained data were used in different project phases: for Smallbiogas calibration (a web application to facilitate small‐scale biogas plant business plan setup), plant models calibration and to write Biogas3 Handbook. The activities of this work were based on Biogas3 project, co‐funded by the Intelligent Energy Europe Programme of the European Union Contract N° IEE‐13‐477.
    Keywords: Food Waste, Small‐scale, Biogas, Renewable Energies, Web Applications, Tool for Farmers, Agribusiness,
    Date: 2015–05
  25. By: Liao, Kenneth; Pouliot, Sebastien
    Abstract: This study uses E85 sales data to estimate motorists’ preference for ethanol. We apply a theoretical choice model linking the volume of E85 sold by a station to the underlying distribution of willingness to pay for E85 instead of traditional gasoline (E10) among motorists with flexible-fuel vehicles (FFVs). We estimate the model using instrumental variables techniques to control for the endogeneity of prices. We find that the average flex motorist switches to E85 when it is discounted by $0.57 per gallon in energy-equivalent dollars, but preferences are diverse, and about 11 percent of motorists choose E85 when the two fuels are priced equally in energy-adjusted terms. Our estimates of the demand for E85 provide new evidence of the potential demand for ethanol beyond the E10 blend wall.
    Keywords: Renewable fuels, alternative fuels, biofuels, ethanol, E85, flexible-fuel vehicles, consumer choice, imperfect substitutes, Demand and Price Analysis, Resource /Energy Economics and Policy, Q42, R41,
    Date: 2015
  26. By: Campbell, Robert; Venn, Tyron; Anderson, Nathaniel
    Abstract: A significant amount of the forestland in Montana is in need of mechanical forest restoration treatments, which can improve forest health and reduce wildfire risk, but can be expensive to implement and produce little merchantable timber. One option for disposal of the small diameter material produced by these treatments is to utilize it to produce energy, which can offset some fossil fuel use and facilitate the treatment of more acres of forest. However the harvest and utilization of woody biomass for energy generation can have negative effects on air quality and forest health as well. This study used a choice modeling nonmarket valuation survey to quantify the preferences of residents of Montana toward the potential effects of harvesting woody biomass from public forests during restoration treatments and utilizing the biomass to generate energy.
    Keywords: Nonmarket Valuation, Choice Modeling, Biomass Energy, Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2015
  27. By: Suh, Dong Hee
    Keywords: Production Economics, Productivity Analysis, Research and Development/Tech Change/Emerging Technologies, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy,
    Date: 2015
  28. By: Li, Xun; Lopez, Rigoberto A.
    Abstract: This paper estimates the pass-through between diesel fuel and retail milk prices at the product brand level, based on a random coefficient logit demand model along with a market channel marginal cost function in order to estimate energy price pass-through rates to the consumer. It takes into account the partial and net impact of energy prices through the multi-market effects on other inputs. It also exploits a natural experiment of energy hyperinflation and the great recession in 2008. Empirical results show that energy prices (e.g., diesel price) significantly impact the retail prices of milk products and are, therefore, an important determinant of food price inflation. Pass-through rates are estimated to be in the range from 0.15 to approximately 0.50 before March 2008 and from 0.09 to 0.19 after March 2009, with an average of 0.26. This indicates that a $1.00 per gallon increase in diesel prices would on average result in a 26¢ per gallon increase in the retail price of milk. Statistical test indicates pass-through rates before March 2008 are significantly higher than that after March 2008. Interestingly, private label brands have the lowest energy (diesel) pass-through rates, implying that compared to manufacturer brands, private label prices are more insulated from energy price shocks.
    Keywords: food, milk, energy, pricing, pass-through, Agribusiness, Agricultural and Food Policy, Demand and Price Analysis, Industrial Organization, Marketing, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, D22, L66, Q13, Q41,
    Date: 2015
  29. By: Wamisho, Kassu; De Laporte, Aaron; Ripplinger, David
    Abstract: This study analyze what contracting terms provides sufficient incentives for farmer’s to enter into a contract to produce energy beets for biofeul production. A stated choice experiment was designed to elicit farmer’s preferences to grow energy beet under alternative contractual arrangements. A latent class rank-ordered logit [LCROL] model is used to empirically analyze the effects of contract attributes, farmer’s risk preferences, and farm characteristics on willingness to adopt energy beet. The results shows that the way the contract mechanism is designed significantly affects farmer’s preference to rank contract alternatives. Few risk perception factors extracted from farmer’s response play a role on the preference of contracts.
    Keywords: Contracts, Energy Beets, Ethanol, Risk Preferences, Rank Order Logit Model, Agribusiness, Industrial Organization, Institutional and Behavioral Economics, Resource /Energy Economics and Policy,
    Date: 2015–07
  30. By: Hertel, Thomas W; Steinbuks, Jevgenijs; Tyner, Wallace E.
    Abstract: What are second generation (2G) biofuel technologies worth to global society? A dynamic, economic model is used to assess the impact on crops, livestock, biofuels, forestry, and environmental services, as well as GHG emissions of introducing 2G biofuels technology. Under baseline conditions, this to amounts to $64.2 billion at today’s population or an increase of roughly 0.3% in the valuation of the world’s land resources. Under GHG regulation this global valuation more than doubles, whereas a flat energy price scenario essentially eliminates the value of 2G technology to society.
    Keywords: Environmental Economics and Policy, Land Economics/Use, Resource /Energy Economics and Policy,
    Date: 2015
  31. By: Skevas, Theodoros; Swinton, Scott M.; Tanner, Sophia; Sanford, Gregg; Thelen, Kurt
    Abstract: Perennial, cellulosic bioenergy crops represent a risky investment. The potential for adoption of these crops depends not only on mean net returns, but also on the associated probability distributions and on the risk preferences of farmers. Using six-year observed crop yield data from highly productive and marginal sites in the southern Great Lakes region and assuming risk neutrality, we calculate expected breakeven biomass yields and prices compared to a base case of corn. Next we develop Monte Carlo budget simulations of stochastic output prices and yields. Crop yield simulations decompose risk into three components: crop establishment survival, time to maturity, and mature yield variability. Results reveal that corn with grain and stover removal is the least risky investment option, and it dominates all perennial systems considered across a wide range of constant absolute risk aversion levels. Perennial bioenergy crops have a higher potential to successfully compete with corn under marginal crop production conditions.
    Keywords: Stochastic budgeting, Monte Carlo simulation, bioenergy, cellulosic biomass, energy crops, investment analysis, risk., Production Economics, Risk and Uncertainty, Q42,
    Date: 2015
  32. By: Stranlund, John K.; Son, Insung
    Abstract: We investigate the optimal regulation of a pollutant given its interaction with another controlled pollutant under asymmetric information about firms’ abatement costs. The co-pollutant is regulated, but perhaps not efficiently. Our focus is on optimal instrument choice in this setting, and we derive rules for determining whether a pollutant should be regulated with an emissions tax, tradable permits, or a hybrid price and quantity policy, given the regulation of its co-pollutant. The policy choices depend on the relative slopes of the damage functions for both pollutants and the aggregate marginal abatement cost function, including whether the pollutants are complements or substitutes in abatement and whether the co-pollutant is controlled with a tax or tradable permits.
    Keywords: Emissions trading, emissions taxes, cap-and-trade, uncertainty, price controls, hybrid policies, prices vs. quantities, Environmental Economics and Policy, L51, Q58,
    Date: 2015
  33. By: Sara Moarif
    Abstract: Parties to the UN Framework Convention on Climate Change (UNFCCC) produced a negotiating text in February 2015, which forms the basis for negotiations toward a climate change agreement scheduled for adoption at the 21st Conference of the Parties in December 2015. This document aims to better understand proposals in the Geneva negotiating text related to the notion of strengthening nationally determined contributions (NDCs) over time, contained under the headings “strategic review of implementation”, “aggregate ambition assessment” and “enhanced ambition mechanism”. This paper focuses on how key elements of these proposals might apply to mitigation contributions or the mitigation component of NDCs: The document examines the main proposals in terms of their relevance, coherence, assumptions, scope, and feasibility, in the context of a cycle of mitigation contributions that seek to become more ambitious over time. It also explores whether the proposals are likely to be effective in achieving their foreseen outcomes, the majority of which involve changes to NDCs. In general, it finds that there is significant overlap between proposals for various “review” processes in different parts of the Geneva negotiating text, as well as overlap with monitoring, reporting and verification processes under the UNFCCC. The document also presents some broad messages on the subject of “strategic review” expressed during the CCXG Global Forum in March 2015. It is currently unclear what a review or assessment process would comprise, largely because it relates to an overarching process – a cycle of contributions – for which there is not yet an agreed vision or scope.<P>L'Examen Stratégique: conséquences des propositions sur les contributions d'atténuation<BR>Les Parties à la Convention-cadre des Nations Unies sur les changements climatiques (CCNUCC) ont produit en février 2015 un texte de négociation. Celui-ci constitue la base des négociations en vue d’un accord sur le changement climatique, dont l’adoption est prévue à l’occasion de la 21ème Conférence des Parties qui se réunira en décembre 2015. Ce document a pour objectif de permettre de mieux comprendre certaines propositions formulées dans le texte de négociation de Genève, relatif à la notion du renforcement progressif des contributions déterminées au niveau national, présentées sous les intitulés « examen stratégique de la mise en oeuvre », « évaluation de l’ambition globale » et « mécanisme pour l’amélioration de l’ambition ». Ce rapport épluche les principaux éléments de ces propositions et comment ils pourraient être appliqués aux contributions en matière d’atténuation (ou à la composante atténuation des contributions déterminées au niveau national). Il examine la pertinence, la cohérence, les hypothèses, la portée et la faisabilité des principales propositions, dans le contexte d’un cycle de contributions à l’atténuation qui se veut de plus en plus ambitieux au fil du temps. Il s’efforce également de déterminer si les propositions ont des chances d’être efficaces et atteindre les résultats qu’elles prévoient, qui impliquent pour la plupart des modifications des contributions déterminées au niveau national. D’une manière générale, ce document conclut qu’il existe des recoupements importants entre les propositions visant les divers processus d’« examen » décrits dans les différentes parties du texte de négociation de Genève, ainsi qu’un chevauchement avec les procédures de suivi, de communication des informations et de vérification relevant de la CCNUCC. Y sont présentés aussi quelques messages à caractère général sur la problématique de l’« examen stratégique », exprimés en mars 2015 au forum mondial du CCXG par des participants divers. Pour l’heure, il n’apparaît pas clairement de quoi le processus d’examen ou d’évaluation sera constitué, surtout parce qu’il dépend d’un processus prédominant – le cycle des contributions –pour lequel l’ambition ou la portée n’a pas encore été définie d’un commun accord.
    Keywords: climate change, mitigation, UNFCCC, 2015 agreement, greenhouse gas, gaz à effet de serre, atténuation, CCNUCC, accord de 2015, changement climatique
    JEL: F53 H87 Q54 Q56 Q58
    Date: 2015–05
  34. By: Okwelum, Edson
    Abstract: Measuring consumer response to gasoline price changes is a fundamental issue in the design and regulation of environmental externalities. In this paper, we document the importance of accounting for heterogeneity in consumer utilization of durable goods in explaining the apparent undervaluation of future fuel costs. We develop a Bayesian method within the context of heterogeneous discrete choice model paired with pricing equations derived from Bertrand competition to estimate heterogeneous demand elasticity for gasoline price changes, and use our results to conduct counterfactual analyses of alternative tax policies. We find that accounting for heterogeneity in utilization and other dimensions all but eliminates undervaluation of future operating costs. Results from our counterfactual analyses imply that gasoline taxes lead to welfare increases that are 20% higher than those obtained under a fuel economy regime.
    Keywords: Bayesian Econometrics, Heterogeneity, Gasoline Prices, Gasoline Policy, Simulation, Resource /Energy Economics and Policy,
    Date: 2015
  35. By: Stark, Camila; Khanna, Madhu; Bi, Xiang
    Abstract: One dominant argument against environmental regulations is that the regulations will increase costs to facilities, causing the facilities to lay-off their workers. However, there are several ways facilities can respond to regulatory and community pressures to increase environmental performance. The facility could reduce its emissions of toxic chemicals by preventing pollution at the beginning of the process, controlling pollution by recycling or treating chemicals, or controlling pollution using end of pipe techniques. Furthermore, these responses can affect employment in different ways, depending on whether abatement activities require more or less labor and their effect on the scale of output. The purpose of this study is to examine the impact of facilities’ voluntary reductions in toxic emissions on their level of employment by estimating the level pollution control and employment as a simultaneous decision made by facilities. We compare the different methods facilities use to reduce their emissions and how these methods affect facility-level employment. We apply a 3SLS model to panel data from the EPA’s Toxic Release Inventory and a unique facility-level dataset, which includes facility-level characteristic data on over 10,000 establishments across the United States over 15 years, from 1995 to 2011. Our results show that reductions in toxic releases had a statistically significant negative impact on employment. However, if the facility reduces emissions using prevent pollution methods through reducing emissions per unit of sales, then the facility will reduce less employment than if the facility reduced pollution using end of pipe pollution control methods. These effects are similar if the facility is reducing regulated emission as well as non-regulated emissions.
    Keywords: Environmental economics, Employment, Toxic Release Inventory, Environmental Economics and Policy, Q52, Q58,
    Date: 2015
  36. By: Howard, Peter H.; Sylvan, Derek
    Abstract: Cover page, abstract, Tables, and Appendix are included in addition to the 40 page length of the article.
    Keywords: Climate change, Survey, Social cost of carbon, Climate damages, Intergenerational discounting, International climate agreements, Environmental Economics and Policy, Resource /Energy Economics and Policy, Risk and Uncertainty,
    Date: 2015–05–27

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