nep-ene New Economics Papers
on Energy Economics
Issue of 2015‒08‒30
fifty-four papers chosen by
Roger Fouquet
London School of Economics

  1. Electricity Sector Demand for Natural Gas in the United States By Hartley, Peter R.; Medlock, Kenneth B., III; Rosthal, Jennifer
  2. Energy sector investment modeling under uncertainty for RA from the view of energy security By Ani Khalatyan
  3. Climate: the key objectives of the Paris 2015 Agreement By Michel Damian; Mehdi Abbas; Pierre Berthaud
  4. Energy Sector Innovation and Growth By Hartley, Peter; Medlock, Kenneth B., III; Temzelides, Ted; Zhang, Xinya
  5. Quality Uncertainty and the Market for Renewable Energy: Evidence from German Consumers By Rommel, Jens; Sagebiel, Julian; Müller, Jakob R.
  6. Mathematical formulation of REDEM algorithm for National soft landing CO2 trajectories under global carbon budgets By Emmanuel Prados; Patrick Criqui; Constantin Ilasca
  7. The Role of Heterogeneous Agents in Fuel Markets: Testing Tales of Speculators in Oil Markets By Andreas Fritz; Michael Stein; Christoph Weber
  8. Risk Spillovers across the Energy and Carbon Markets and Hedging Strategies for Carbon Risk By Mehmet Balcilar; Riza Demirer; Shawkat Hammoudeh; Duc Khuong Nguyen
  9. Explaining the Adoption of Diesel Fuel Passenger Cars in Europe By Linn, Joshua
  10. The Distributional Effects of U.S. Clean Energy Tax Credits By Severin Borenstein; Lucas W. Davis
  11. An econometric analysis of electricity demand response to price changes at the intra-day horizon: The case of manufacturing industry in West Denmark By Møller, Niels Framroze; Møller Andersen, Frits
  12. Relationship Between Oil Prices and Stock Prices of Major Oil Companies By Francis Declerck; Jean-Pierre Indjehagopian; Flavien Bellocq
  13. The Valley of Death for New Energy Technologies By Hartley, Peter R.; Medlock, Kenneth B., III
  14. HVDC Transmission and Solar Power in the US Southwest By Hartley, Peter; Medlock, Kenneth, III
  15. Selective reporting and the social cost of carbon By Tomas Havranek; Zuzana Irsova; Karel Janda; David Zilberman
  16. Greening Economy, Graying Society By Bretschger, Lucas
  17. Adapting cities to climate change: A systemic modelling approach By V. Masson; C. Marchadier; L. Adolphe; R. Aguejdad; P. Avner; M. Bonhomme; G. Bretagne; X. Briottet; B. Bueno; C. De Munck; O. Doukari; S. Hallegatte; J. Hidalgo; Thomas Houet; J. Le Bras; A. Lemonsu; N. Long; M.-P. Moine; T. Morel; L. Nolorgues; G. Pigeon; J.-L. Salagnac; V. Viguié; K. Zibouche
  18. Oil Price Forecasts for the Long-Term: Expert Outlooks, Models, or Both? By Jean-Thomas Bernard; Lynda Khalaf; Maral Kichian; Clement Yelou
  19. Mobility Choices and Climate Change: Assessing the Effects of Social Norms and Economic Incentives through Discrete Choice Experiments By Charles Raux; Amandine Chevalier; Emmanuel Bougna; Denis Hilton
  20. Forecasting the oil price using house prices Mechanism and the Business Cycle By Rainer Schulz; Martin Wersing; ;
  21. External Effects of Hydraulic Fracturing: Risks and Welfare Considerations for Water Supply in Germany By Loucao, Sebastian
  22. The Role of Nuclear Power in Enhancing Japan's Energy Security By Medlock, Kenneth B., III; Hartley, Peter
  23. Thematic report: Macroeconomic models including specifically social and environmental aspects By Kurt Kratena
  24. In brief... A Global Apollo Programme to tackle climate change By Richard Layard
  25. A poverty –adaptation –mitigation window within the Green Climate Fund By Sandrine Mathy
  26. The Housing Market Impacts of Shale Gas Development By Muehlenbachs, Lucia Anna; Spiller, Elisheba; Timmins, Christopher
  27. Renewable energy policy: the Italian experience By Teresa Romano
  28. Portfolio Management and Stochastic Optimization in Discrete Time: An Application to Intraday Electricity Trading and Water Values for Hydroassets By Simone Farinelli; Luisa Tibiletti
  29. Discrimination in Accessing Cleaner Cooking Fuels and Electricity in North India: The Role of Caste, Tribe, and Religion By Prabir C. Bhattacharya; Vibhor Saxena
  30. Policy mix and the impact on PV technologies and industry: The challenge - how to make policies quantifiable? By Breitschopf, Barbara
  31. Les régulations asymétriques dans les marchés énergétiques : efficacité, collusion et financement des coûts échoués By Cédric Clastres
  32. Pétrole une stabilité durable By Céline Antonin
  33. The Effects of Road Pricing on Driver Behavior and Air Pollution By Matthew Gibson; Maria Carnovale
  34. Employment Impacts of Upstream Oil and Gas Investment in the United States By Agerton, Mark; Hartley, Peter; Medlock, Kenneth B., III; Temzelidea, Ted
  35. Wealth Effects of Rare Earth Prices and China's Rare Earth Elements Policy By Maximilian Mueller; Denis Schweizer; Volker Seiler
  36. Can improved biomass cookstoves contribute to REDD+ in low-income countries ? evidence from a controlled cooking test trial with randomized behavioral treatments By Beyene,Abebe D.; Bluffstone,Randall; Dissanayake,Sahan; Gebreegziabher,Zenebe; Martinsson,Peter; Mekonnen,Alemu; Toman,Michael A.
  37. Analyzing interdependencies between policy mixes and technological innovation systems: the case of offshore wind in Germany By Kristin Reichardt; Karoline S. Rogge; Simona Negro; Marko Hekkert
  38. Innovation, Emissions Policy, and Competitive Advantage in the Diffusion of European Diesel Automobiles By Miravete, Eugenio J; Moral Rincón, Maria J; Thurk, Jeff
  39. Do Environmental Regulations Increase Bilateral Trade Flows? By Tsurumi, Tetsuya; Managi, Shunsuke; Hibiki, Akira
  40. The Causal Effect of Option Pay on Corporate Risk Management By Bakke, Tor-Erik; Mahmudi, Hamed; Fernando, Chitru S.; Salas, Jesus M.
  41. In brief... Oil: the impact on women's work By Stephan E. Maurer; Andrei V. Potlogea
  42. Pollution, décès prématuré et compensation By Grégory Ponthière
  43. A Latin lens on energy markets By Frank Wolak
  44. Real Estate Values, Air Pollution and Homeowner Perceptions: A Hedonic Study By Hartley, Peter
  45. Innovation in Local Public Services -the Solid Waste Sector from the perspective of Clean Development Mechanism landfill projects By Silvia Cruz; Faïz Gallouj; Sônia Paulino
  46. Assessing Options to Increase Climate Support By Jane Ellis; Sara Moarif; Yoko Nobuoka; Marte Pellegrino; Jennifer Helgeson
  47. Information and Price Dispersion: Theory and Evidence By Pennerstorfer, Dieter; Schmidt-Dengler, Philipp; Schutz, Nicolas; Weiss, Christoph; Yontcheva, Biliana
  48. Wind Power in the United States: Prospects and Consequences By Hartley, Peter R.
  49. Impacts of policies on market formation and competitiveness: The case of the PV industry in Germany By Breitschopf, Barbara
  50. Proposal for a poverty-adaptation-mitigation window within the Green Climate Fund By Sandrine Mathy; Odile Blanchard
  51. Wind Farm Portfolio Optimization under Network Capacity Constraints By Hélène Le Cadre; Anthony Papavasiliou; Yves Smeers
  52. Mean-risk hedging strategies in electricity markets with limited liquidity By Woll, Oliver
  53. Rural electrification and domestic violence in Sub-Saharan Africa By Sievert, Maximiliane
  54. The impacts of climate change according to the IPCC By Richard S. J. Tol

  1. By: Hartley, Peter R. (Rice University); Medlock, Kenneth B., III (Rice Univesrity); Rosthal, Jennifer (Rice University)
    Abstract: We examine determinants of the natural gas share in power generation for the NERC regions in the US. Our results indicate that plant and grid-level fuel-switching, technology in generation, installed capacity and weather all affect the natural gas share of energy input into power generation. Furthermore, we argue that fuel-switching is likely an important demand-side factor in establishing a long run relationship between the prices of petroleum products and natural gas. We estimate two specifications--a translog specification for expenditure share and a double logarithmic transformation of gas-fired capacity utilization--because our analysis calls into question the validity of the translog specification for analyzing fuel shares in the power generation sector.
    Date: 2014
  2. By: Ani Khalatyan
    Abstract: The Armenian economy has been growing strongly in recent years. The country has successfully implemented a comprehensive stabilisation and a structural reform program in energy sector. Although now Armenia almost completely depends on imported energy. The most domestically produced primary energy is electricity from hydroelectric plants and one nuclear power plant. However, there are serious challenges: a. Sufficient electricity service b. Energy safety c. Maintenance of electricity service availability for consumers at the same time providing the financial vitality of the sector.
    Date: 2014–11
  3. By: Michel Damian (équipe EDDEN - PACTE - Politiques publiques, ACtion politique, TErritoires - CNRS - Grenoble 2 UPMF - Université Pierre Mendès France - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - Grenoble 1 UJF - Université Joseph Fourier); Mehdi Abbas (équipe EDDEN - PACTE - Politiques publiques, ACtion politique, TErritoires - CNRS - Grenoble 2 UPMF - Université Pierre Mendès France - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - Grenoble 1 UJF - Université Joseph Fourier); Pierre Berthaud (CREG - Centre de recherche en économie de Grenoble - Grenoble 2 UPMF - Université Pierre Mendès France)
    Abstract: The present article focuses on the already discernable key objectives of the climate agreement due to be signed in December 2015 in Paris, coming into force in 2020. The agreement will be based exclusively on ‘national policies’, turning its back on the first climate policy enshrined in the Kyoto Protocol, synonymous with an outdated, top-down architecture and hopes of a binding international agreement. All states, including those, such as China, which the Kyoto Protocol placed in the list of developing countries, are expected to propose ‘intended nationally determined contributions’ to cutting greenhouse-gas emissions, which are heterogeneous, with only modest medium-term targets, and not legally binding. The Paris Agreement will represent a turning point, heralding a new climatic governance in the continuity of governance centring on states, but henceforth on a global scale. In other words the agreement will take into account the preferences of the 195 parties to the 1992 Framework Convention on Climate Change, in particular the most powerful among their number. We maintain that this agreement will change the course of climate change mitigation and adaptation for decades.
    Abstract: L’article est consacré aux grandes orientations, déjà repérables, de l’accord climatique qui sera signé à Paris en décembre 2015, pour devenir effectif à partir de 2020. L’Accord sera fondé sur les seules « politiques nationales » ; il tournera le dos à la première politique climatique, celle du Protocole de Kyoto, et donc à l’architecture ancienne « par le haut » et à l’ambition d’un accord international contraignant. Des « contributions nationalement déterminées » pour la réduction des émissions de gaz à effet de serre, de nature hétérogène et d’ambitions modestes à moyen terme – et non plus des engagements –, sont attendues de la part de tous les Etats, y compris ceux inclus par le Protocole de Kyoto, comme la Chine, dans la liste des pays en développement. L’Accord de Paris constituera un tournant. Il inaugurera une nouvelle gouvernance climatique, dans la continuité de la gouvernance centrée sur les Etats, mais cette fois à l’échelle globale, c’est-à-dire tenant compte des préférences des 195 Etats signataires de la Convention-cadre sur les changements climatiques de 1992, et en particulier des plus puissants d’entre eux. On soutient que cet accord marquera le paysage de la lutte contre le réchauffement et de l’adaptation à celui-ci pour des décennies.
    Date: 2015
  4. By: Hartley, Peter (Rice University and University of Western Australia); Medlock, Kenneth B., III (Rice University); Temzelides, Ted (Rice University); Zhang, Xinya (Rice University)
    Abstract: We study the optimal transition from fossil fuels to renewable energy in a neoclassical growth economy with endogenous technological progress in energy production from fossil fuels and renewable energy sources. Innovations keep fossil energy cost under control even as increased exploitation raises mining costs. Nevertheless, the economy eventually transitions to renewable energy. Learning-by-doing in renewable energy production implies that it is optimal to transition to renewable energy before the cost of fossil fuels reaches parity with renewable energy costs. Since energy costs escalate as the transition approaches, growth of consumption and output decline sharply around the transition. The energy shadow price remains more than double current values for over 75 years around the switch time, resulting in a continued drag on output and consumption growth. The model highlights the important role that energy can play in influencing economic growth.
    Date: 2014
  5. By: Rommel, Jens; Sagebiel, Julian; Müller, Jakob R.
    Abstract: Consumers can choose from a wide range of electricity supply contracts, including green power options. Electricity produced from renewable energy involves information asymmetries. With a sample of more than 2,000 German electricity consumers, we tested the proposition of a “lemon market” for renewable energy in a discrete choice experiment. Specifically, we found that, compared to investor-owned firms, additional willingness-to-pay (WTP) for renewable energy is approximately double when offered by cooperatives or municipally-owned electricity utilities. Consumers who are experienced with switching suppliers have an additional WTP of one Eurocent per kilowatt hour for cooperatives and two Eurocents for public enterprises. The results demonstrate that organizational transformation in dynamically-changing electricity markets is not only driven by political initiatives but also by consumers’ choices on the market. Public policy may reduce information asymmetries by promoting government labeling of green energy products.
    Keywords: Cooperatives; Discrete Choice Experiment; Germany
    JEL: D12 L33 L94
    Date: 2015
  6. By: Emmanuel Prados (INRIA Grenoble Rhône-Alpes / LJK Laboratoire Jean Kuntzmann - STEEP - CNRS - INRIA - LJK - Laboratoire Jean Kuntzmann - CNRS - Grenoble 1 UJF - Université Joseph Fourier - Grenoble 2 UPMF - Université Pierre Mendès France - Institut Polytechnique de Grenoble - Grenoble Institute of Technology - Grenoble 1 UJF - Université Joseph Fourier - Institut National Polytechnique de Grenoble (INPG)); Patrick Criqui (équipe EDDEN - PACTE - Politiques publiques, ACtion politique, TErritoires - CNRS - Grenoble 2 UPMF - Université Pierre Mendès France - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - Grenoble 1 UJF - Université Joseph Fourier); Constantin Ilasca (équipe EDDEN - PACTE - Politiques publiques, ACtion politique, TErritoires - CNRS - Grenoble 2 UPMF - Université Pierre Mendès France - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - Grenoble 1 UJF - Université Joseph Fourier)
    Abstract: Global warming may be one of the greatest threats facing the human civilization. It is now widely shared that it is necessary to reduce quickly and significantly the greenhouse gas emissions to avoid uncontrolled and irreversible evolutions of climate. It has now become urgent to develop a legal instrument addressing the post-2020 period and to achieve a successful outcome in the international climate negotiations. In this paper we propose a new computational tool which provides elements of benchmarking for the climate negotiations. The model and algorithm we propose is designed on rationale elaborated by energy and climate policy experts. We detail how to estimate the parameters of the model and how this benchmarking tool could be used.
    Abstract: Le changement climatique est probablement l'une des plus grandes menaces à laquelle la civilisation humaine doit faire face. Il est désormais largement partagé qu'il est nécessaire de réduire rapidement et de manière très importante les émissions de gaz à effet de serre afin d'éviter un emballement irréversible du système climatique. Il est aujourd'hui urgent de développer les instruments politiques et juridiques pour la période post-2020 et de faire aboutir les négociations internationales. Dans ce rapport, nous proposons un nouvel outil permettant de calculer des courbes de références des émissions nationales de gaz à effet de serre. L'algorithme et le modèle proposés se basent sur une logique développée par des économistes spécialistes de l'énergie et du changement climatique. Nous montrons comment les paramètres du modèles peuvent être estimés et comment ces outils peuvent être utilisés.
    Date: 2014–09–29
  7. By: Andreas Fritz; Michael Stein; Christoph Weber (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen)
    Abstract: This study investigates the role of heterogeneous agents in oil markets and tests tales of speculators in oil price formation. Results obtained from using a non-linear heterogeneous agent model suggest that oil market prices are driven by different groups of speculators, namely fundamentalists, chartists and the newly introduced contrarians. The latter enable us to disentangle stabilizing effects previously attributed solely to fundamentalists, and they are on average the most dominating group, whereas chartists exacerbate the huge price swings in 1990, 2008 and 2011. We also show how sensitive the model outcomes are to the specification of the fundamental value, what has strong economic implications.
    Keywords: Energy
    JEL: Q40
    Date: 2015–08
  8. By: Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Famagusta, Northern Cyprus); Riza Demirer (Department of Economics & Finance Southern Illinois University); Shawkat Hammoudeh (3200 Market Street Philadelphia, PA 19104 U.S.A Author-Email: -); Duc Khuong Nguyen (-)
    Abstract: This study examines the risk spillovers between energy futures prices and Europe-based carbon futures contracts. We use a Markov regime-switching dynamic correlation, generalized autoregressive conditional heteroscedasticity (MSDCC- GARCH) model in order to capture the time variations and structural breaks in the spillovers. We further evaluate the optimal weights, hedging effectiveness, and dynamic hedging strategies for the MS-DCC-GARCH model based on both the regime dependent and regime independent optimal hedge ratios. We finally complement our analysis by examining the in- and out-of sample hedging performances for alternative strategies. Our results mainly show significant volatility and time-varying risk transmission from energy markets to carbon market. We also find that spot and futures segments of the emission markets exhibit time-varying correlations and volatile hedging effectiveness. These results have important investment and policy implications
    Keywords: Multivariate regime-switching; time-varying correlations; hedging; CO2 allowance prices
    JEL: C32 G11 G19 Q47 Q54
    Date: 2014
  9. By: Linn, Joshua (Resources for the Future)
    Abstract: Compared with gasoline engines, diesel fuel engines significantly reduce fuel consumption and greenhouse gas emissions from passenger vehicles, but they emit more nitrogen oxides and other pollutants. Across countries, the market share of diesel fuel engines in passenger vehicles varies from close to zero to more than 80 percent. After specifying and estimating the parameters of a model of vehicle markets spanning seven European countries, I show that vehicle taxes and demand for fuel economy, rather than fuel prices or the set of vehicles in the market, explain adoption. The model is used to compare the environmental implications of fuel taxes and carbon dioxide emissions rate standards.
    Keywords: vehicle demand estimation, demand for fuel economy and performance, fuel taxes, vehicle taxes, carbon dioxide emissions ratesCreation-Date: 2015-08-17
    JEL: L62 Q4 Q5
  10. By: Severin Borenstein; Lucas W. Davis
    Abstract: Since 2006, U.S. households have received more than $18 billion in federal income tax credits for weatherizing their homes, installing solar panels, buying hybrid and electric vehicles, and other "clean energy" investments. We use tax return data to examine the socioeconomic characteristics of program recipients. We find that these tax expenditures have gone predominantly to higher-income Americans. The bottom three income quintiles have received about 10% of all credits, while the top quintile has received about 60%. The most extreme is the program aimed at electric vehicles, where we find that the top income quintile has received about 90% of all credits. By comparing to previous work on the distributional consequences of pricing greenhouse gas emissions, we conclude that tax credits are likely to be much less attractive on distributional grounds than market mechanisms to reduce GHGs.
    JEL: D30 H23 H24 H50 Q41 Q48
    Date: 2015–07
  11. By: Møller, Niels Framroze; Møller Andersen, Frits
    Abstract: The use of renewable energy implies a more variable supply of power. Market efficiency may improve if demand can absorb some of this variability by being more flexible, e.g. by responding quickly to changes in the market price of power. To learn about this, in particular, whether demand responds already within the same day, we suggest an econometric model for hourly consumption and price time series. This allows for multi-level seasonality and that information about day-ahead prices does not arrive every hour but every 24th hour (as a vector of 24 prices). We confront the model with data from the manufacturing industry of West Denmark (2007-2011). The results clearly suggest a lack of response. The policy implication is that relying exclusively on hourly price response by consumers for integrating volatile renewable electricity production is questionable. Either hourly price variation has to increase considerably or demand response technologies be installed.
    Keywords: Demand Response, Electricity Demand, Day-ahead prices, Econometrics, RegARIMA
    JEL: C22 Q0 Q4 Q41
    Date: 2015–08–18
  12. By: Francis Declerck (ESSEC Business School - Essec Business School); Jean-Pierre Indjehagopian (ESSEC Business School - Essec Business School); Flavien Bellocq (ESSEC Business School - Essec Business School)
    Abstract: The paper explains how stock price of oil companies depends on oil futures market price. The model is applied to major oil company stocks: Shell, Exxon Mobil, BP, Total and Chevron. The topic is original because it focuses on short‐ and long‐term relationships with vector error correction models (VECM) with changing regimes. To get structural model between stock price of oil companies and oil futures market price, investigation is oriented to cointegration link with autoregressive vector (VAR). Research is conducted in using monthly data from November 1989 to June 2011. The stationarity of times series is tested with Dickey‐Fuller unit root test, Philips‐Perron and KPSS. The approaches of Engle‐Granger and Johansen do not enable to find long‐term relationship over the overall period. However, cointegration with 5 changing regimes is found. The Bai and Perron approach enables to find 5 breakpoints. In order to identify cointegration relationships with changing regimes, the Gregory and Hansen method is used and results show cointegration with changing regimes. Vector error correction (VEC) models associated to cointegration with changing regimes are estimated. VEC looks at the dynamics on the short‐term.Then economic and financial analysis is done and choc analysis is implemented with impulse response function. Furthermore, ARCH‐LM test shows the existence of an ARCH vectorial model. The paper shows how recent cointegration techniques are useful in including endogenous structural breaks leading to changing regimes. Further investigations could be done to estimate whether one could be able to hedge commodity price fluctuations in using stocks whose markets are a lot more liquid. This modeling will be extended by short‐term construction of models incorporating changing regimes with Markovian approach MS‐VAR and MS‐VECM.
    Abstract: La recherche explique comment le cours des actions des compagnies pétrolières dépend du prix à terme du pétrole. La modélisation est appliquée aux principales compagnies pétrolières Shell: Exxon Mobil, BP, Total et Chevron. La recherche est originale car elle porte sur les relations à court et long terme à partir de modèles à correction d'erreur vectorielle (VECM) avec changements de régime. La modélisation structurelle, entre le cours des actions des compagnies pétrolières et le prix à terme du pétrole, est menée à partir de modèles de d’autorégression vectorielle (VAR) en lien avec la cointégration. La recherche est conduite en utilisant des données mensuelles de novembre 1989 à juin 2011. La stationnarité des séries temporelles est testée avec les tests de Dickey‐Fuller, Philips‐Perron et KPSS. Les approches d’Engle‐Granger et Johansen ne permettent pas de trouver une relation de long terme sur toute la période. Cependant, l’approche de Bai et Perron permet d’identifier 5 changements de régime et de modéliser des relations de cointégration différentes sur ces sous‐périodes. Afin d'identifier les relations de cointégration à changements de régime, la méthode Gregory et Hansen est utilisée et les résultats montrent une cointégration avec des changements de régime. Les VECM associés à la cointégration avec changements de régime sont estimés. Le VECM permet de comprendre la dynamique sur le court terme. Puis l'analyse économique et financière est faite. L’analyse de choc est mise en oeuvre avec la fonction de réponse impulsionnelle. De plus, le test ARCH‐LM montre l'existence d'un modèle ARCH vectoriel. La recherche indique comment les dernières techniques de cointégration sont utiles notamment en incluant des ruptures structurelles endogènes menant à des évolutions de régimes. D'autres recherches seront effectuées pour estimer si l'on peut couvrir les risques de fluctuations des prix des matières premières en utilisant les cours boursiers des entreprises cotées dans des marchés beaucoup plus liquides. Cette modélisation sera complétée par la construction de modèles de court terme incorporant des changements de régime avec l’approche markovienne MS‐VAR et MS‐VECM.
    Date: 2015–02
  13. By: Hartley, Peter R. (Rice University and University of Western Australia); Medlock, Kenneth B., III (Rice University)
    Abstract: It is often claimed that scarce financing prevents promising new energy technologies from attaining commercial viability. We examine this issue using a dynamic intertemporal model of the displacement of fossil fuel energy technologies by non-fossil alternatives. Our model highlights the fact that since capital used to produce energy services from fossil fuels is a sunk cost, it will continue to be used so long as the price of energy covers merely short-run operating costs. Until fossil fuels are abandoned, the price of energy is insufficient to cover even the operating costs of renewable energy production, let alone provide a competitive return on the capital employed. The full long-run costs of renewable energy production are not covered until some time after fossil fuels are abandoned.
    Date: 2014–08
  14. By: Hartley, Peter (Rice University); Medlock, Kenneth, III (Rice University)
    Abstract: In this paper, we examine the economic viability of two new energy technologies when implemented in the US Southwest. The first technology of interest is a long distance high voltage direct current (HVDC) transmission link between Texas and Southern California that is constructed using a so-called "nanowire" technology. The second technology is grid-connected photovoltaic solar power. We investigate the potential value of these technologies by examining how profitable they would likely have been if they had been available in 2003.
    Date: 2014
  15. By: Tomas Havranek; Zuzana Irsova; Karel Janda; David Zilberman
    Abstract: We examine potential selective reporting (publication bias) in the literature on the social cost of carbon (SCC) by conducting a meta-analysis of 809 estimates of the SCC reported in 101 studies. Our results indicate that estimates for which the 95% confidence interval includes zero are less likely to be reported than estimates excluding negative values of the SCC, which might create an upward bias in the literature. The evidence for selective reporting is stronger for studies published in peer-reviewed journals than for unpublished papers. We show that the findings are not driven by the asymmetry of the confidence intervals surrounding the SCC and are robust to controlling for various characteristics of study design and to alternative definitions of confidence intervals. Our estimates of the mean reported SCC corrected for the selective reporting bias range between USD 0 and 134 per ton of carbon at 2010 prices for emission year 2015.
    Keywords: Social cost of carbon, climate policy, integrated assessment models, meta-analysis, selective reporting, publication bias
    JEL: C83 Q54
    Date: 2015–08
  16. By: Bretschger, Lucas
    Abstract: The world economy is affecting ecosystems in a way that puts future living standards at risk. Important issues include global warming, fading resource stocks, scarce water supplies, and decreasing biodiversity. It is broadly ac-accepted that the future of our planet should be one of our major concerns. But when it comes to concrete policies, most clearly those related to climate change, grave difficulties arise. This may come as a surprise. In fact, it should not be surprising. Forward-looking and green policies have always proved to be demanding and controversial. At the global scale, national policy difficulties are only compounded. There is not sufficient consensus across the different countries. World society is not very dynamic in problem solving. Rather, it is graying and inertial, cultivating conservative views and institutions. Economic interests and political perceptions diverge widely across countries. While the potentials offered by green technologies are huge, institutions have not yet adapted to meet the challenges. The political debate lacks sufficient focus; it includes very diverse opinions and notions on admittedly complex issues. It is true that the most prominent sustainability policy, climate policy, combines the most difficult and complex conditions for policy making in a single subject. Correction of a big market failure, international consensus building, long-run planning, major uncertainties, huge equity concerns, and very heterogeneous country interests are ingredients that would bedevil any political decision. On the bright side, concepts such as “green economy” and “sustainable development” have prominently entered the political debate, documenting the rising number of bridges between economy and ecology. Re-source-efficient technologies are increasingly being developed and applied. Yet, while everyone would highly welcome political solutions to the climate problem, accepting their consequences is much less widely embraced. These include significant reductions in natural resource use, especially with fossil fuels. They also entail acknowledging responsibility for past emissions and obligations to other countries and future generations. Consistent sustainability policies require a framework and an institutional setting that has yet to be built and globally implemented. Such a framework would end-able policymakers exploiting the huge potentials for greening the economy. Many scientific and applied contributions on sustainability have al-ready been published. But the majority of the advocated policies have not been implemented; major problems such as global warming have not yet been properly addressed. It appears that sustainability policies are not attracting sufficient political support. By pointing to the profound problems inherent in policy making in this area, this book explains why this is the case. It also provides the elements needed to increase general understanding and to find political consensus. Compared to the much broader scientific contributions on sustainability, some authored by large numbers of international researchers in different disciplines, the present book takes a more modest approach. It draws on selected research results to explain the most important sustainability is-sues from the point of view of economics. The book points at central underlying problems and misperceptions with the aim of increasing ambitions and rationality in political decision making. It reflects the high complexity of reaching sustainable development, which will require the contribution of social sciences involving many different perspectives. The book uses neither formal models nor mathematical equations. These can be found in the underlying original academic works cited in the references. The approach follows that of the famous economist Alfred Mar-shall, who advised using formal analysis until the results were fully de-rived but then to “burn” the mathematics, translate the conclusions into normal language, and illustrate them by “examples that are important in real life.” In following this procedure, this book aims to make the economic approach to sustainability attractive for a broader audience and a useful input to policy making.
    Keywords: Sustainability, Development, Environmental Economics
    JEL: Q01 Q50
    Date: 2015–06
  17. By: V. Masson (CNRM-GAME - Groupe d'étude de l'atmosphère météorologique - CNRS - INSU - Météo France); C. Marchadier (CNRM-GAME - Groupe d'étude de l'atmosphère météorologique - CNRS - INSU - Météo France); L. Adolphe (LRA - Laboratoire de recherche en architecture - UTM - Université Toulouse 2 Le Mirail - ENSA Toulouse - École nationale supérieure d'architecture de Toulouse); R. Aguejdad (LETG - Costel - Littoral, Environnement, Télédétection, Géomatique - UN - Université de Nantes - Université de Caen Basse-Normandie - UBO - Université de Bretagne Occidentale - Université de Rennes II - Haute Bretagne - CNRS, CARE - Centre Armoricain de Recherche en Environnement - CNRS - Institut national de la recherche agronomique (INRA) - Ecole Nationale Supérieure Agronomique de Rennes - UR1 - Université de Rennes 1 - Université de Rennes II - Haute Bretagne); P. Avner (CIRED - Centre International de Recherche sur l'Environnement et le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - CIRAD - Centre de coopération internationale en recherche agronomique pour le développement - École des Ponts ParisTech (ENPC) - CNRS); M. Bonhomme (PIAF - Laboratoire de Physique et Physiologie Intégratives de l'Arbre Fruitier et Forestier - UBP - Université Blaise Pascal - Clermont-Ferrand 2 - Institut national de la recherche agronomique (INRA)); G. Bretagne (Urban Planning Agency, Toulouse, France); X. Briottet (Toulouse - Onera - The French Aerospace Lab - ONERA); B. Bueno (CNRM-GAME - Groupe d'étude de l'atmosphère météorologique - CNRS - INSU - Météo France); C. De Munck (CNRM-GAME - Groupe d'étude de l'atmosphère météorologique - CNRS - INSU - Météo France); O. Doukari (GEODE - Géographie de l'environnement - CNRS - UTM - Université Toulouse 2 Le Mirail); S. Hallegatte (World Bank - World Bank); J. Hidalgo (LISST - Laboratoire Interdisciplinaire Solidarités, Sociétés, Territoires - CNRS - EHESS - École des hautes études en sciences sociales - UTM - Université Toulouse 2 Le Mirail); Thomas Houet (GEODE - Géographie de l'environnement - CNRS - UTM - Université Toulouse 2 Le Mirail); J. Le Bras (CNRM-GAME - Groupe d'étude de l'atmosphère météorologique - CNRS - INSU - Météo France); A. Lemonsu (CNRM-GAME - Groupe d'étude de l'atmosphère météorologique - CNRS - INSU - Météo France); N. Long (LIENSs - LIttoral ENvironnement et Sociétés [La Rochelle] - Université de La Rochelle - CNRS); M.-P. Moine (CERFACS [Toulouse] - CNRS - INSU); T. Morel (CERFACS [Toulouse] - CNRS - INSU); L. Nolorgues (Urban Planning Agency of Île-de-France, Paris, France); G. Pigeon (CNRM-GAME - Groupe d'étude de l'atmosphère météorologique - CNRS - INSU - Météo France); J.-L. Salagnac (CSTB - Centre Scientifique et Technique du Bâtiment - CSTB - Centre Scientifique et Technique du Bâtiment); V. Viguié (CIRED - Centre International de Recherche sur l'Environnement et le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - CIRAD - Centre de coopération internationale en recherche agronomique pour le développement - École des Ponts ParisTech (ENPC) - CNRS); K. Zibouche (CSTB - Centre Scientifique et Technique du Bâtiment - CSTB - Centre Scientifique et Technique du Bâtiment)
    Abstract: Societies have to both reduce their greenhouse gas emissions and undertake adaptation measures to limit the negative impacts of global warming on the population, the economy and the environment. Examining how best to adapt cities is especially challenging as urban areas will evolve as the climate changes. Thus, examining adaptation strategies for cities requires a strong interdisciplinary approach involving urban planners, architects, meteorologists, building engineers, economists, and social scientists. Here we introduce a systemic modelling approach to the problem. Our four-step methodology consists of: first, defining interdisciplinary scenarios; second, simulating the long-term evolution of cities on the basis of socio-economic and land-use models; third, calculating impacts with physical models (such as TEB), and; finally, calculating the indicators that quantify the effect of different adaptation policies. In the examples presented here, urban planning strategies are shown to have unexpected influence on city expansion in the long term. Moreover, the Urban Heat Island should be taken into account in operational estimations of building energy demands. Citizens’ practices seem to be an efficient lever for reducing energy consumption in buildings. Interdisciplinary systemic modelling appears well suited to the evaluation of several adaptation strategies for a very broad range of topics.
    Date: 2014–12
  18. By: Jean-Thomas Bernard; Lynda Khalaf; Maral Kichian; Clement Yelou
    Abstract: Expert outlooks on the future path of oil prices are often relied on by industry participants and policymaking bodies for their forecasting needs. Yet little attention has been paid to the extent to which these area accurate. Using the regular publications by the Energy Information Administration (EIA), we examine the accuracy of annual recursive oil price forecasts generated by the National Energy Modeling System model of the Agency for forecast horizons of up to 15 years. Our results reveal that the EIA model is quite successful at beating the benchmark random walk model, but only at either end of the forecast horizons. We also show that, for the longer horizons, simple econometric forecasting models often produce similar if not better accuracy than the EIA model. Among these, time-varying specifications generally also exhibit stability in their forecast performance. Finally, while combining forecasts does not change the overall patterns, some additional accuracy gains are obtained at intermediate horizons, and in some cases forecast performance stability is also achieved.
    Keywords: Oil price, expert outlooks, long run forecasting, forecast combinations
    JEL: Q47 C20
    Date: 2015
  19. By: Charles Raux (LET - Laboratoire d'économie des transports - CNRS - UL2 - Université Lumière - Lyon 2 - École Nationale des Travaux Publics de l'État [ENTPE]); Amandine Chevalier (LET - Laboratoire d'économie des transports - CNRS - UL2 - Université Lumière - Lyon 2 - École Nationale des Travaux Publics de l'État [ENTPE]); Emmanuel Bougna (LET - Laboratoire d'économie des transports - CNRS - UL2 - Université Lumière - Lyon 2 - École Nationale des Travaux Publics de l'État [ENTPE]); Denis Hilton (Université de Toulouse - Université de Toulouse)
    Abstract: The potential of psychological and fiscal incentives in motivating environmentally responsible behavior in a context of long distance leisure travel is explored thanks to a series of controlled experiments on 900 participants. Framing effects like information on CO2 emissions, injunctive and descriptive norms, in combination with fiscal incentives such as a carbon tax, a bonus-malus or a carbon trading scheme are tested. Providing CO2 information on emissions is highly effective and the injunctive norm reinforces this effect in the case of air and train. A quota scheme reinforces the injunctive norm effect in the case of these two modes. More strikingly, the amount of the financial sanction or reward has no effect on the probability of using the various travel modes, unlike the presence of the fiscal framing itself. These results reinforce the case for using psychologically framing effects, in association or not with fiscal instruments, in promoting effective pro-environmental behavior in transport choices.
    Date: 2015–01–11
  20. By: Rainer Schulz; Martin Wersing; ;
    Abstract: We show that house prices from Aberdeen in the UK improve in- and out-of-sample oil price forecasts. The improvements are of a similar magnitude to those attained using macroeconomic indicators. We ex- plain these forecast improvements with the dominant role of the oil industry in Aberdeen. House prices aggregate the dispersed knowl- edge of the future oil price that exists in the city. We obtain similar empirical evidence for Houston, another city dominated by the oil in- dustry. Consistent with our explanation, we nd that house prices from economically more diversied areas in the UK and the US do not improve oil price forecasts.
    Keywords: oil price forecasting, house prices, knowledge spillover
    JEL: C53 E32 Q47 R31
    Date: 2015–08
  21. By: Loucao, Sebastian (RWTH Aachen University)
    Abstract: In this paper, we investigate the externalities related to hydraulic fracturing (‘hydrofracking’) in Germany, based on a detailed analysis of hydrofracking risks and potentials, and a stylized social welfare analysis related to adverse impacts of unconventional gas production on both surface and ground water resources and water supply. Natural gas is extracted by a profit-maximizing monopolist. Society faces several kinds of negative externalities, including additional water purification costs. The results of our sensitivity analysis show that the maximized welfare is in any case higher than the welfare resulting from the profit-maximizing quantities, as is predicted by our model. Also, the regulator always has to pay a subsidy in order to maximize welfare, which shows that the monopolist has an incentive to exercise his market power in order to keep the prices up for profit maximization. The monopolist’s profits are always non-negative, whereas the welfare-maximizing shale gas production generally reduces his profits. As profits do not drop below zero, however, there is no need to employ a second-best approach. We conclude that increasing costs and/or an increasing price sensitivity will lead to reduced profits and to reduced social welfare, while for an increasing choke price it is the other way around.
    Keywords: Natural gas; Fracking; Externalities; Water supply; Germany
    JEL: L71 Q31 Q34 Q42 Q53 Q58
    Date: 2014–04
  22. By: Medlock, Kenneth B., III (Rice University); Hartley, Peter (Rice University)
    Date: 2014
  23. By: Kurt Kratena
    Abstract: A significant reduction of the global environmental consequences of European consumption and production activities are the main objective of the policy simulations carried out in this paper. For this purpose three different modelling approaches have been chosen. Two macroeconomic models following the philosophy of consistent stock-flow accounting for the main institutional sectors (households, firms, banks, central bank and government) are used for quantifying the impact of several different policies. These policies comprise classical tax reforms (pricing of resources and emissions) as well as policies aiming at behavioural change in private and public consumption and at technological change (energy and resource efficiency and renewable sources). A Dynamic New Keynesian (DYNK) model is used for a comparison between classical green tax reform and taxing direct and indirect (footprint) energy and resource use of consumers. An important leading principle of the modelling work is the simultaneous treatment of economic (GDP, employment), social (income distribution, unemployment) and environmental issues. The paper shortly describes the different modelling approaches and highlights the most important features for the evaluation of the impacts of different policies. Then the different policy scenarios that are carried out with each model are described. The policy scenarios are not directly comparable between the different models, but show some similarities. The simulation results of the different policy scenarios are then analyzed and discussed. Two important conclusions can be drawn from the simulation results: (i) important trade-offs and synergies exist between the different economic, social and environmental goals (ii) simple policy scenarios mainly putting all the effort in one simple instrument (e.g. tax reform) are not likely to achieve an optimal result. A combination of instruments is most likely to achieve results satisfying the different economic, social and environmental goals.
    Keywords: Behavioural economics, Ecological innovation, Economic growth path, Innovation policy, New technologies
    JEL: C54 Q54 B52
    Date: 2015–07
  24. By: Richard Layard
    Abstract: Leading thinkers across the worlds of science, public service and academia have launched a new global programme to combat climate change. Richard Layard outlines their proposal for big public investment in research that will dramatically reduce the costs of clean energy.
    Keywords: climate change, clean energy, government policy, renewables, R&D
    Date: 2015–07
  25. By: Sandrine Mathy (équipe EDDEN - PACTE - Politiques publiques, ACtion politique, TErritoires - CNRS - Grenoble 2 UPMF - Université Pierre Mendès France - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - Grenoble 1 UJF - Université Joseph Fourier)
    Abstract: The stakes for poverty alleviation and the measures required to avoid unbridled climate change are inextricably linked: climate change will slow down and may even reverse trends in poverty reduction while trajectories consistent with a 2°C limitation of climate warming require that strategies for poverty alleviation integrate the constraint of low carbon development. Until now, existing climate funds have failed in targeting poverty alleviation as a high priority strategy for adaptation or as a component of low carbon development. The article proposes the creation of a financing window within the Green Climate Fund focusing on synergies between poverty alleviation, adaptation and mitigation. This financial mechanism is based on indicators of satisfaction of basic needs. It could offer an answer to developing countries that consider poverty alleviation as their first priority.
    Abstract: Les enjeux de réduction de la pauvreté sont liés de manière inextricable aux enjeux du changement climatique : celui-ci risque de ralentir, voire d'inverser, la courbe de réduction de la pauvreté, mais les trajectoires d'émissions compatibles avec une limitation à 2 °C du réchauffement sont telles que la sortie de la pauvreté devra se faire en intégrant la contrainte d'un développement bas carbone. Or, jusqu'à présent, les différents fonds climat existants ont échoué à proposer des réponses concrètes pour cibler la sortie de la pauvreté comme politique d'adaptation prioritaire ou selon des modalités contribuant à des trajectoires bas carbone. Pour répondre à ce manque, le Fonds Vert Climat pourrait créer une fenêtre de financement pauvreté-adaptation-atténuation dédiée à la mise en œuvre de synergies ciblant une amélioration de la satisfaction de besoins fondamentaux et intégrant les deux dimensions adaptation et atténuation. Ce mécanisme de soutien, basé sur des indicateurs de satisfaction de besoins fondamentaux, pourrait constituer un élément de réponse aux pays en développement qui font de l'élimination de la pauvreté leur priorité absolue.
    Date: 2015–06
  26. By: Muehlenbachs, Lucia Anna (Resources for the Future); Spiller, Elisheba; Timmins, Christopher
    Abstract: Using data from Pennsylvania and an array of empirical techniques to control for confounding factors, we recover hedonic estimates of property value impacts from nearby shale gas development that vary with water source, well productivity, and visibility. Results indicate large negative impacts on nearby groundwaterdependent homes, while piped-water-dependent homes exhibit smaller positive impacts, suggesting benefits from lease payments. Results have implications for the debate over regulation of shale gas development.
    Keywords: shale gas, groundwater, property values, hedonic models, nearest neighbor matching, differences-in-differences, triple differences
    JEL: Q32 Q33 Q50 Q53
    Date: 2013–12–09
  27. By: Teresa Romano
    Abstract: Since worldwide concerns about climate change were made official by the Kyoto Protocol at the end of 1997, renewable energy sources (RES) have been receiving increasingly more attention by policy makers. Teresa Romano investigates.
    Date: 2014–09–01
  28. By: Simone Farinelli; Luisa Tibiletti
    Abstract: Hydro storage system optimization is becoming one of the most challenging task in Energy Finance. Following the Blomvall and Lindberg (2002) interior point model, we set up a stochastic multiperiod optimization procedure by means of a "bushy" recombining tree that provides fast computational results. Inequality constraints are packed into the objective function by the logarithmic barrier approach and the utility function is approximated by its second order Taylor polynomial. The optimal solution for the original problem is obtained as a diagonal sequence where the first diagonal dimension is the parameter controlling the logarithmic penalty and the second is the parameter for the Newton step in the construction of the approximated solution. Optimimal intraday electricity trading and water values for hydroassets are computed. The algorithm is implemented in Mathematica.
    Date: 2015–08
  29. By: Prabir C. Bhattacharya; Vibhor Saxena
    Abstract: This paper studies the socio-economic determinants of access to cleaner cooking fuels and electricity by households in seven north Indian states in a multivariate framework. Together these states account for about 40 per cent of India’s population. We investigate, in particular, the role of any possible discrimination against the three major disadvantaged groups in the country – viz., the scheduled castes, scheduled tribes, and Muslims – in their accessing these goods. The results of our analysis suggest that discrimination against these groups, particularly against the Muslim households, does play an important role in their poorer access to both cleaner cooking fuels and electricity. The paper concludes with some policy suggestions.
    JEL: O13 Q40
    Date: 2015
  30. By: Breitschopf, Barbara
    Abstract: In the framework of the research project (Gretchen) financed by the German Federal Ministry of Education and Research, the impact of German policies on industry structure and technological change is investigated. As the quantitative impact analysis of German policies on technologies and structures is complex and requires a comprehensive approach, this paper focuses on a selected part of the analysis: It explores and discusses the possibilities of how to quantify and operationalize German policies addressing photovoltaic electricity generation. This is done for the case of PV. The impact analysis of the policies will be discussed in a separate paper.
    Date: 2015
  31. By: Cédric Clastres (équipe EDDEN - PACTE - Politiques publiques, ACtion politique, TErritoires - CNRS - Grenoble 2 UPMF - Université Pierre Mendès France - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - Grenoble 1 UJF - Université Joseph Fourier)
    Abstract: Les régulateurs ou autorités de concurrence peuvent adopter des régulations asymétriques pour favoriser le développement de la concurrence. Ces régulations obligent l'Opérateur Historique (OH) à rétrocéder une partie de ses approvisionnements à ses concurrents pour favoriser la concurrence sur le marché final. Les régulateurs se doivent de déterminer le montant de capacités rétrocédées ainsi que le prix de rétrocession. Ce faisant, ils peuvent effectivement permettre l'émergence d'une concurrence forcée, en facilitant l'accès pour les concurrents aux capacités de production. Cependant, considérant les investissements lourds en infrastructures, des stranded costs peuvent apparaître. Les régulateurs se doivent d'adapter leur politique de régulation afin de maximiser le welfare et de réduire les pertes engendrées. Le succès de cette politique dépend de l'efficacité de l'OH.
    Date: 2015–06
  32. By: Céline Antonin (OFCE - OFCE - Sciences Po)
    Abstract: Le deuxième semestre 2013 est marqué par la stabilité des prix autour de 110 dollars le baril de Brent. Ce maintien à des niveaux élevés s'explique par la faiblesse de l'offre par rapport à la demande, sous l'effet de ruptures d'approvisionnement (Libye, Nigéria) et d'un climat politique tendu au Proche-Orient, dans un marché surtout déterminé par les fondamentaux. Dans notre scénario central, nous faisons l'hypothèse d'une reprise progressive de la production en Libye dès 2014, de la levée des sanctions en Iran à partir de fin 2014/début 2015, et excluons une baisse de l'offre de la Russie malgré le bras de fer autour de l'Ukraine. Les prix du Brent baisseraient au cours de l'année 2014 avec la baisse des tensions sur l'offre pour atteindre 100 dollars en fin d'année. En 2015, les prix se maintiendraient autour de 100 dollars le baril, car le retour d'une croissance plus dynamique dans les pays développés devrait être compensé par une hausse de la production des pays non-membres de l'OPEP et par la présence de stocks abondants. La persistance de tensions politiques en Afrique et au Proche-Orient, la volonté de l'Arabie Saoudite de maintenir les cours entre 100 et 110 dollars, la demande toujours dynamique en provenance des pays non OCDE et le coût d'extraction des nouveaux gisements non conventionnels devraient néanmoins entraîner la résistance des cours en les maintenant au-dessus des 100 dollars.
    Date: 2014–04
  33. By: Matthew Gibson (Williams College); Maria Carnovale (Duke University)
    Abstract: Exploiting the natural experiment created by an unanticipated court injunction, we evaluate driver responses to road pricing. We find evidence of intertemporal substitution toward unpriced times and spatial substitution toward unpriced roads. The effect on traffic volume varies with public transit availability. Net of these responses, Milan's pricing policy reduces air pollution substantially, generating large welfare gains. In addition, we use long-run policy changes to estimate price elasticities.
    Keywords: road pricing, traffic policy, air pollution
    Date: 2015–05
  34. By: Agerton, Mark (James A Baker III Institute for Public Policy, Rice University); Hartley, Peter (James A Baker III Institute for Public Policy, Rice University); Medlock, Kenneth B., III (James A Baker III Institute for Public Policy, Rice University); Temzelidea, Ted (James A Baker III Institute for Public Policy, Rice University)
    Abstract: Technological progress in the exploration and production of oil and gas during the 2000s has led to a boom in upstream investment and has increased the domestic supply of fossil fuels. It is unknown, however, how many jobs this boom has created. We use time-series methods at the national level and dynamic panel methods at the state-level to understand how the increase in exploration and production activity has impacted employment. We find robust statistical support for the hypothesis that changes in drilling for oil and gas as captured by rig-counts do, in fact, have an economically meaningful and positive impact on employment. The strongest impact is contemporaneous, though months later in the year also experience statistically and economically meaningful growth. Once dynamic effects are accounted for, we estimate that an additional rig-count results in the creation of 37 jobs immediately and 224 jobs in the long run, though our robustness checks suggest that these multipliers could be bigger.
    Date: 2014–07
  35. By: Maximilian Mueller (WHUÐOtto Beisheim School of Management); Denis Schweizer (Concordia University); Volker Seiler (University of Paderborn)
    Abstract: Rare earth elements (REEs) have become increasingly important because of their relative scarcity and worldwide increasing demand, as well as China's quasi-monopoly of this market. REEs are virtually not substitutable, and they are essential for a variety of high-tech products and modern key technologies. This has raised serious concerns that China will misuse its dominant position to set export quotas in order to maximize its own profits at the expense of other rare earth user industries (wealth transfer motive). In fact, export restrictions on REEs were the catalyst for the U.S. to lodge a formal complaint against China in 2012 at the WTO. This paper analyzes possible wealth transfer effects by focusing on export quota announcements (so-called MOFCOM announcements) by China, and the share price reactions of Chinese REE suppliers, U.S. REE users, and the rest of the world REE refiners. Overall, we find limited support for the view of a wealth transfer in connection with MOFCOM announcements only when disentangling events prior to and post the initiation of the WTO trial, consistent with the trial triggering changes to ChinaÕs REE policy and recent announcement to abolish quotas. We do find, however, that extreme REE price movements have a first order effect on all companies in the REE industry consistent with recent market trends to enable hedging against REE price volatility.
    Keywords: Announcement Effects, Event Study, Rare Earths Elements, WTO
    JEL: F13 F52 G14 Q31 Q34 Q37 Q38
    Date: 2015–02
  36. By: Beyene,Abebe D.; Bluffstone,Randall; Dissanayake,Sahan; Gebreegziabher,Zenebe; Martinsson,Peter; Mekonnen,Alemu; Toman,Michael A.
    Abstract: This paper provides field experiment?based evidence on the potential additional forest carbon sequestration that cleaner and more fuel-efficient cookstoves might generate. The paper focuses on the Mirt (meaning ?best?) cookstove, which is used to bake injera, the staple food in Ethiopia. The analysis finds that the technology generates per-meal fuel savings of 22 to 31 percent compared with a traditional three-stone stove with little or no increase in cooking time. Because approximately 88 percent of harvests from Ethiopian forests are unsustainable, these findings suggest that the Mirt stove, and potentially improved cookstoves more generally, can contribute to reduced forest degradation. These savings may be creditable under the United Nations Collaborative Program on Reducing Emissions from Deforestation and Forest Degradation in Developing Countries. Because of the highly specific nature of the Mirt stove and the lack of refrigeration in rural Ethiopia, rebound effects are unlikely, but this analysis was unable completely to rule out such leakage. The conclusions are therefore indicative, pending evidence on the frequency of Mirt stove use in the field. The effects of six randomized behavioral treatments on fuelwood and cooking time outcomes were also evaluated, but limited effects were found.
    Keywords: Urban Environment,Energy Production and Transportation,Renewable Energy,Climate Change Mitigation and Green House Gases,Environmental Economics&Policies
    Date: 2015–08–17
  37. By: Kristin Reichardt; Karoline S. Rogge; Simona Negro; Marko Hekkert
    Abstract: One key approach for studying emerging technologies in the field of sustainability transitions is that of technological innovation systems (TIS). While most TIS studies aim at deriving policy recommendations – typically by identifying system barriers – the actual role of these proposed policies in the TIS is rarely looked at. In addition, often single policy instruments instead of more encompassing policy mixes are considered. We address these shortcomings by applying a more comprehensive policy mix concept within the TIS approach. In doing so we analyze interdependencies between the policy mix and the TIS by shedding light on the role of the policy mix for TIS functioning and performance as well as how TIS developments influence the evolution of the policy mix. We explore these interdependencies for the case of offshore wind in Germany, using data from event history analysis and expert interviews. We find highly dynamic interdependencies with reoccurring patterns of systemic problems and adjustments of the policy mix, which are fuelled by high policy mix credibility and supportive actors. Our study constitutes a first step incorporating the policy mix concept into the TIS approach, thereby enabling a better understanding of real dynamics occurring in TIS.
    Date: 2015–08
  38. By: Miravete, Eugenio J; Moral Rincón, Maria J; Thurk, Jeff
    Abstract: Spurred by Volkswagen's introduction of the TDI diesel engine in 1989, market penetration of diesel cars in Europe increased from 10% in 1990 to over 50% in 2000. Using Spanish automobile registration data, we estimate an equilibrium discrete choice, oligopoly model of horizontally differentiated products. We find that changing product characteristics and the increasing popularity of diesels leads to correlation between observed and unobserved (to the researcher) product characteristics, an aspect we allow for in the estimation. Despite widespread imitation by its rivals, Volkswagen was able to capture 32% of the potential innovation rents and diesels accounted for approximately 60% of the firm's profits. Moreover, diesels amounted to an important competitive advantage for European auto makers over foreign imports. We provide evidence that the greenhouse emissions policy enacted by European regulators, and not preferential fuel taxes, enabled the adoption of diesels. In so doing, this non-tariff policy was equivalent to a 20% import tariff; effectively cutting imports in half.
    Keywords: diesel cars; emission standards; import tariff equivalence; innovation rents
    JEL: F13 L62 O33
    Date: 2015–08
  39. By: Tsurumi, Tetsuya; Managi, Shunsuke; Hibiki, Akira
    Abstract: The argument that stringent environmental regulations are generally thought to harm export flows is crucial when determining policy recommendations related to environmental preservation and international competitiveness. By using bilateral trade data, we examine the relationships between trade flows and various environmental stringency indices. Previous studies have used energy intensity, abatement cost intensity, and survey indices for regulations as proxies for the strictness of environmental policy. However, they have overlooked the indirect effect of environmental regulations on trade flows. If the strong version of the Porter hypothesis is confirmed, we need to consider the effect of environmental regulation on GDP, because GDP induced by environmental regulation affects trade flows. The present study clarifies the effects of regulation on trade flows by distinguishing between the indirect and direct effects. Our results indicate an observed non-negligible indirect effect of regulation, implying that the overall effect of appropriate regulation benefits trade flows.
    Keywords: Environmental regulations, Porter hypothesis, Trade and environment, Gravity model
    JEL: F18 Q56 Q59
    Date: 2015–08–28
  40. By: Bakke, Tor-Erik (University of OK); Mahmudi, Hamed (University of OK); Fernando, Chitru S. (University of OK); Salas, Jesus M. (Lehigh University)
    Abstract: This study provides strong evidence of a causal effect of risk-taking incentives provided by option compensation on corporate risk management. We utilize the passage of FAS 123R, which required firms to expense options, to investigate how CEO option compensation affects the hedging behavior of oil and gas firms. Firms that did not expense options before FAS 123R significantly reduced option pay, which resulted in a large increase in their hedging intensity compared to firms that did not use options or expensed their options voluntarily prior to FAS 123R.
    JEL: G30 G32 G38 G39
    Date: 2015–06
  41. By: Stephan E. Maurer; Andrei V. Potlogea
    Abstract: Stephan Maurer and Andrei Potlogea explore whether oil-dominated economies are naturally biased against women's labour market participation.
    Keywords: Oil, structural transformation, female labor force, participation, gender pay gap
    JEL: R1 N5 O1 J1
    Date: 2015–07
  42. By: Grégory Ponthière (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12, PSE - Paris-Jourdan Sciences Economiques - CNRS - Institut national de la recherche agronomique (INRA) - EHESS - École des hautes études en sciences sociales - ENS Paris - École normale supérieure - Paris - École des Ponts ParisTech (ENPC), EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics)
    Abstract: Nous étudions la compensation des personnes décédées prématurément dans une économie où la production génère de la pollution, et où la pollution réduit, au-delà d’un certain seuil, les chances de survie. Pour ce faire, nous caractérisons l’optimum égalitarien ex post et nous le comparons à l’équilibre de laissez-faire et à l’optimum utilitariste. Lorsque le seuil de pollution au-dessus duquel une mortalité prématurée apparait est élevé, l’optimum égalitarien ex post requiert une pollution égale à ce seuil, et inférieure à celles prévalant au laissez-faire et à l’optimum utilitariste.Mais lorsque le seuil critique de pollution est faible, le niveau de pollution associé à l’optimum égalitarien ex post est égal à celui qui prévaut au laissez-faire, et supérieur à celui associé à l’optimum utilitariste.
    Date: 2014–12
  43. By: Frank Wolak
    Abstract: Stanford University’s Frank Wolak looks at the pros and cons of Latin-American-style cost-based dispatch and pricing on short-term energy and operating reserve markets.
    Date: 2013–11–01
  44. By: Hartley, Peter (Rice University)
    Date: 2014
  45. By: Silvia Cruz (State University of Campinas Campinas); Faïz Gallouj (CLERSE - CLERSE - Centre lillois d'études et de recherches sociologiques et économiques - CNRS - Université Lille 1 - Sciences et technologies); Sônia Paulino (University of Sao Paolo)
    Abstract: This paper is devoted to public services innovation in the municipal solid waste sector. It analyses the implementation of Clean Development Mechanism (CDM) projects in the Bandeirantes and São João landfills in the municipality of São Paulo, Brazil. The analysis is based on the concept of Public-Private Innovation Networks in services (ServPPINs). Using the ServPPIN concept it was possible to identify competence gaps affecting the stakeholders involved in these CDM projects. We focus in particular on those organisational and relational competence gaps that are likely to weaken innovation feasibility and reduce the quality of solid waste services supply. In fact, innovation is closely linked to the development of new competences among service providers and users. For the most part, these will arise out of changes in interactions between actors-given that the projects in question include the coordination of various actors (public, private, and citizen). Such innovations will also arise out of changes in the environmental aspect, since in addition to monitoring of the technical parameters required for the general operation of landfills which implement CDM projects, auditing is also carried out by the Designated Operational Entities (DOE), which are responsible for validation of these projects.
    Date: 2013–09–19
  46. By: Jane Ellis; Sara Moarif; Yoko Nobuoka; Marte Pellegrino; Jennifer Helgeson
    Abstract: Climate support will be an important element in reaching a post-2020 climate agreement at COP 21 in December 2015. To further increase and mobilise the levels of climate support post-2020, a number of proposals have been made in the negotiating text produced in the Geneva session of the Ad-hoc Working Group on the Durban Platform of the UN Framework Convention on Climate Change (UNFCCC) in February 2015. This paper explores the advantages and disadvantages of several of these proposals, focusing on those that are clear and specific. The paper assesses proposals on mobilising climate finance using the following criteria: (i) the level of financial flows that they could generate; (ii) how much of this could be mobilised in the UNFCCC context; (iii) the ease of implementation of the proposal; (iv) if and how such increased mobilisation could be monitored; and (v) whether the proposal would fill a specific gap in the context of climate support within the UNFCCC. The paper undertakes a similar assessment for proposals in the Geneva text on enhancing the level of technology development and transfer, as well as capacity building. It discusses whether the proposals could potentially increase technology development and transfer, capacity building and development, as well as whether they are likely to do so in practice, based on current experience and ease of implementation. The proposals vary significantly in the amount of climate support they could mobilise (or enhance, in the case of technology and capacity building), for a range of reasons. These include the particular wording of the proposals, their sensitivity to national implementation, uncertainty in measuring progress towards objectives, and in some cases the limited role the UNFCCC plays as an institution in a given area of climate support.<P>Évaluation des options envisageables pour accroître le soutien en faveur de l'action climatique<BR>Le soutien en faveur de l’action climatique sera un élément important pour parvenir à un accord sur le climat pour l’après-2020 lors de la Conférence des Parties (COP21) de décembre 2015. Afin de renforcer l’appui financier et de mobiliser le niveau de soutien nécessaire à l’action climatique pour l’après-2020, un certain nombre de propositions ont été formulées dans le texte de négociation établi lors de la session du Groupe de travail spécial sur la plate-forme de Durban de la Convention-cadre des Nations unies sur les changements climatiques (CCNUCC) tenue à Genève en février 2015. Ce rapport étudie les avantages et les inconvénients de plusieurs de ces propositions, en mettant l’accent sur celles qui sont précises et spécifiques. Les auteurs évaluent les propositions portant sur la mobilisation de financements climatiques au regard des critères suivants : (i) volume des ressources financières qu’elles pourraient permettre d’obtenir ; (ii) proportion de ces ressources pouvant être mobilisée dans le cadre de la CCNUCC ; (iii) facilité de mise en oeuvre de la proposition ; (iv) possibilité de suivi de cette mobilisation supplémentaire, et modalités de ce suivi ; et (v) capacité de la proposition à combler un manque spécifique dans le contexte du soutien climatique au titre de la CCNUCC. Le rapport livre une évaluation analogue des propositions contenues dans le texte de Genève portant sur la mise au point et le transfert de technologies, ainsi que sur le renforcement des capacités. Les auteurs examinent si les propositions formulées recèlent le potentiel d’intensifier la mise au point et le transfert de technologies, le développement et le renforcement des capacités, et sont susceptibles de le faire concrètement, en fondant leur analyse sur l’expérience actuelle et la facilité de mise en oeuvre de la proposition. L’ampleur du soutien que ces propositions pourraient mobiliser (ou accroître, en ce qui concerne la technologie et le renforcement des capacités) varie considérablement selon les propositions, et ce pour différentes raisons, notamment : la formulation particulière de la proposition ; sa sensibilité à une mise en oeuvre dans un contexte national ; le degré d’incertitude qu’elle présente s’agissant de la mesure les progrès accomplis au regard des objectifs ; et, dans certains cas, le rôle limité que joue la CCNUCC, en tant qu’institution, dans un domaine donné du soutien à l’action climatique.
    Keywords: climate change, technology transfer, UNFCCC, 2015 agreement, climate finance, capacity building, renforcement des capacités, accord de 2015, financement climatique, CCNUCC, changement climatique, transferts de technologie
    JEL: F53 O19 O30 O44 Q54 Q56 Q58
    Date: 2015–05
  47. By: Pennerstorfer, Dieter; Schmidt-Dengler, Philipp; Schutz, Nicolas; Weiss, Christoph; Yontcheva, Biliana
    Abstract: We examine the relationship between information and price dispersion in the retail gasoline market. We first show that the clearinghouse models in the spirit of Stahl (1989) generate an inverted-U relationship between information and price dispersion. We construct a new measure of information based on precise commuter data from Austria. Regular commuters can freely sample gasoline prices on their commuting route, providing us with spatial variation in the share of informed consumers. We use detailed information on gas station level prices to construct price dispersion measures. Our empirical estimates of the relationship are in line with the theoretical predictions.
    Keywords: commuter data; price dispersion; retail gasoline; search
    JEL: D43 D83 L13
    Date: 2015–08
  48. By: Hartley, Peter R. (Rice University)
    Date: 2014
  49. By: Breitschopf, Barbara
    Abstract: This paper analyzes the impact of German policies promoting PV on industry structures and technological changes in the PV sector. A quantitative analysis is conducted by applying a set of policy variables derived from demand-, supplierand R&D-focused policies. To depict the industry structure, the production volume in MW of German PV module and cell manufacturers offers a good basis to derive structural variables. Patent applications are used to illustrate technological changes and competitiveness. The approach includes a descriptive as well as a multivariate analysis relying on the operationalization of demand policies and a policy mix. The results underpin the significance of demand policies and a policy mix for market formation and knowledge generation. But they also indicate that policies enhancing PV demand induce growth in PV industries abroad as well, which in turn affects domestic industry structures.
    Date: 2015
  50. By: Sandrine Mathy (équipe EDDEN - PACTE - Politiques publiques, ACtion politique, TErritoires - CNRS - Grenoble 2 UPMF - Université Pierre Mendès France - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - Grenoble 1 UJF - Université Joseph Fourier); Odile Blanchard (équipe EDDEN - PACTE - Politiques publiques, ACtion politique, TErritoires - CNRS - Grenoble 2 UPMF - Université Pierre Mendès France - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - Grenoble 1 UJF - Université Joseph Fourier)
    Abstract: The stakes for alleviating poverty and avoiding unbridled climate change are inextricably linked. Climate change impacts will slow down and may even reverse trends in poverty reduction. The pathways consistent with global warming of no more than 2°C require strategies for poverty alleviation to make allowance for the constraint of low-carbon development. Existing climate funds have failed to target poverty alleviation as a high-priority strategy for adaptation or as a component of low-carbon development. This article proposes a funding window as part of the Green Climate Fund in order to foster synergies targeting greater satisfaction of basic needs, while making allowance for adaptation and mitigation. This financial mechanism is based on indicators of the satisfaction of basic needs and could respond to the claims of the developing countries which see alleviating poverty as the first priority in the climate negotiations. It defines a country continuum, given that there are poor people everywhere; all developing countries are therefore eligible with a mechanism of this sort.
    Date: 2015
  51. By: Hélène Le Cadre (CMA - Centre de Mathématiques Appliquées - MINES ParisTech - École nationale supérieure des mines de Paris); Anthony Papavasiliou (UCL - Université Catholique de Louvain); Yves Smeers (UCL - Université Catholique de Louvain)
    Abstract: In this article, we provide a new methodology for optimizing a portfolio of wind farms within a market environment, for two Market Designs (exogenous prices and endogenous prices). Our model is built on an agent based representation of suppliers and generators interacting in a certain number of geographic demand markets, organized as two tiered systems. Assuming rational expectation of the agents with respect to the outcome of the real-time market, suppliers take forward positions, which act as signals in the day-ahead market, to compensate for the uncertainty associated with supply and demand. Then, generators optimize their bilateral trades with the generators in the other markets. The Nash Equilibria resulting from this Signaling Game are characterized using Game Theory. The Markowitz Frontier, containing the set of efficient wind farm portfolios, is derived theoretically as a function of the number of wind farms and of their concentration. Finally, using a case study of France, Germany and Belgium, we simulate the Markowitz Frontier contour in the expected cost-risk plane.
    Date: 2015–06–06
  52. By: Woll, Oliver
    Abstract: This article investigates mean risk hedging with respect to limited liquidity and studies the impact of different risk measures on the hedging strategies. For motivation and application purposes hedging in electricity markets is chosen, because the relevant hedging markets are characterized by limited liquidity. We enhance the approach in Woll and Weber (2015) to a mean-risk optimization under limited liquidity, including the risk measures absolute and relative Value and Conditional Value at Risk (VaR and CVaR). It can be shown that for position independent measures (Variance, relative VaR, relative CVaR) liquidity has no influence on the minimum risk hedging strategies, whereas for position dependent measures (absolute VaR, absolute CVaR) liquidity has an impact on the minimum risk hedging strategies. The article gives the mathematical formulations of the problems and discusses the economic relevance of the different models. In addition, we apply the analyzed concepts to the German Electricity markets.
    Keywords: optimization,electricity,liquidity,electricity trading,mean-risk-model
    JEL: C61 G11 Q40
    Date: 2015
  53. By: Sievert, Maximiliane
    Abstract: One third of all women experience violence within their lifetime, most frequently perpetrated by their intimate partner (IPV). It impacts women's sexual, reproductive, and mental health, and increases the risk of chronic disease. Ways to reduce IPV are less obvious, though. Especially in rural areas, electrification is frequently said to foster women's development and contribute to a modernization of gender roles. Using Demographic and Health Survey (DHS) data from rural areas in 22 Sub-Saharan countries, the present paper analyses the effect of electrification on IPV by means of pseudo-panel and propensity score matching approaches. Women in households with electricity report significantly lower acceptance of IPV. It is especially access and higher exposure to information via TV sets that causes the difference in IPV acceptance. Accordingly, rural electrification might potentially play an important role in eliminating violence against women.
    Keywords: rural electrification,domestic violence,intimate partner violence,pseudopanel,propensity score matching
    JEL: J12 J16 O13 O18
    Date: 2015
  54. By: Richard S. J. Tol (Department of Economics, University of Sussex, UK; Institute for Environmental Studies, Vrije Universiteit, Amsterdam, The Netherlands; Department of Spatial Economics, Vrije Universiteit, Amsterdam, The Netherlands; Tinbergen Institute, Amsterdam, The Netherlands; CESifo, Munich, Germany)
    Abstract: I assessed five statements in the Summary for Policy Makers (SPM) of the Fifth Assessment Report (AR5) of Working Group II (WG2) of the Intergovernmental Panel on Climate Change (IPCC). The IPCC’s assessment of the impacts of climate change on agriculture all but ignores human agency and human ingenuity. The statement in the SPM on violent conflict is much stronger than in the chapter and indeed the literature. AR5 ignores the literature on the impacts of climate change on cold-related mortality and morbidity. On poverty traps, WG2 reaches a conclusion that is not supported by the cited papers. The total impacts of climate change were assessed in four subsequent IPCC report. Although there are no statistically significant differences between the assessment periods in the underlying literature, the subsequent SPMs reach very different conclusions. In sum, the IPCC has yet to reach the quality that one would expect from a gold standard.
    Keywords: Climate change; impacts; IPCC; agriculture; health; poverty; violent conflict; total economic impact
    JEL: Q54
    Date: 2015–08

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