nep-ene New Economics Papers
on Energy Economics
Issue of 2015‒10‒04
forty-five papers chosen by
Roger Fouquet
London School of Economics

  1. Effectiveness of Real Time Information Provision with Time of Use Pricing By Pon, Shirley
  2. On the relevance of differentiated car purchase taxes in light of the rebound effect By Bénédicte Meurisse
  3. The tragedy of energy efficiency. An interdisciplinary analysis of rebound effects By Grégoire Wallenborn
  4. Policy Effects on Total System Energy Efficiency: Comparisons of Advanced and Developing Economies in the EAS region By Venkatachalam ANBUMOZHI; Phoumin HAN
  5. Vehicle Fuel-Efficiency Choices, Emission Externalities, and Urban Sprawl By Kim, Jinwon
  6. Measuring Market Power and the Efficiency of Alberta’s Restructured Electricity Market: An Energy-Only Market Design By Brown, David P.; Olmstead, Derek
  7. L’efficience énergétique et les effets rebonds :déficiences théoriques et paradoxes pratiques By Grégoire Wallenborn
  8. Solar Power's Rise and Promise By Ernesto M. Pernia; Maria Janela M. Generoso
  9. Rough electricity: a new fractal multi-factor model of electricity spot prices By Mikkel Bennedsen
  10. Refinancing under yardstick regulation with investment cycles: The case of long-lived electricity network assets By Schober, Dominik; Weber, Christoph
  11. Network Centrality and Market Prices: An Empirical Note By Matthias Firgo; Dieter Pennerstorfer; Christoph R. Weiss
  12. Visual Mapping for the management of an innovation field: An application to Electric Vehicle Charging in Renault By Juan Vera; Camila Freitas Salgueiredo; Sophie Hooge; Milena Klasing Chen
  13. Short-term forecasting of electricity spot prices using model averaging (Krótkoterminowe prognozowanie spotowych cen energii elektrycznej z wykorzystaniem uśredniania modeli) By Jakub Nowotarski
  14. Kurak Donemlerde Elektrik Uretim Kaynaklari Arasindaki Ikame ve Bu Ikamenin Ithalat Uzerindeki Etkileri By Evrim Ýmer Ertunga; Ýbrahim Unalmis
  15. On the Uncertainty-Investment Relationship: An Overview with an Application to the Power Plant Investments in Turkish Electricity Sector By Erdal Yilmaz
  16. Time lags in the pass-through of crude-oil prices: Big data evidence from the German gasoline market By Frondel, Manuel; Vance, Colin; Kihm, Alex
  17. Sources of volatility during four oil price crashes By Baffes,John; Kshirsagar,Varun
  18. Regional Economic Impacts of the Shale Gas and Tight Oil Boom: A Synthetic Control Analysis By Abdul Munasib; Dan S. Rickman
  19. Enerji Fiyatlari ve Parite Degisimlerinin Ihracat ve Ithalat Fiyatlarindaki Degisime Katkisi By Okan Eren
  20. Petrol Fiyatlarinin Ihracat Uzerindeki Etkisi By Olcay Yucel Culha; Mustafa Utku Ozmen; Erdal Yilmaz
  21. Analyzing farmers' preferences for substrate supply contracts for sugar beets By Sauthoff, Saramena; Anastassiadis, Friederike; Mußhoff, Oliver
  22. Dieselization, CO2 emissions and fuel taxes in Europe By Jesús Rodríguez-López; Gustavo A. Marrero; Rosa Marina González-Marrero
  23. Taxing Fossil Fuels under Speculative Storage By Semih Tumen; Deren Unalmis; Ibrahim Unalmis; D. Filiz Unsal
  24. Environmental Tax Reform in a Federation with Rent-Induced Migration By Jean-Denis GARON; Charles SÉGUIN
  25. Tax and regulatory policies for European transport - getting there, but in the slow lane By DE BORGER, Bruno; PROOST, Stef
  26. “Evaluation of the Impact of Bus Rapid Transit on Air Pollution” By Germà Bel; Maximilian Holst
  27. Optimum Commodity Taxation with a Non-Renewable Resource By Julien DAUBANES; Pierre LASSERRE
  28. Target: Low-carbon Goods Transportation: A Growth-dynamics Perspective on Logistics and Goods Transportation until 2050 By Henrik Pålsson; Karl-Johan Lundquist; Lars-Olof Olander; Fredrik Eng Larsson; Lena Hiselius
  29. Statistical corruption in Beijing’s air quality data has likely ended in 2012 By Thomas Stoerk
  30. Anticipated International Environmental Agreements By Ömer T. AÇIKGÖZ; Hassan BENCHEKROUN
  31. Trade and Environment: Further Empirical Evidence from Heterogeneous Panels Using Aggregate Data By Thomas Jobert; Fatih Karanfil; Anna Tykhonenko
  32. Market based instruments to reduce air emissions from household heating appliances. Analysis of scrappage policy scenarios By Iñaki Arto; Kurt Kratena; Antonio F. Amores; Umed Temurshoev; Gerhard Streicher
  33. Environmental Policies, Innovation and Productivity in EU By Roberta De Santis; Cecilia Jona Lasinio
  34. Can growth be green? By Ian Gough
  35. Are corporate carbon management practices reducing corporate carbon emissions? By Baran Doda; Caterina Gennaioli; Andy Gouldson; David Grover; Rory Sullivan
  36. Productivity Effects of Eco-innovations Using Data on Eco-patents By Francesca Lotti; Giovanni Marin
  37. Can Thinking Green and Sustainability Be an Economic Opportunity for ASEAN? By Venkatachalam ANBUMOZHI; Ponciano S. INTAL, Jr.
  38. Environmental Regulation and Policy Design: The Impact of the Regulator?s Ecological Conscience on the Tax Setting Process By Jihad C. Elnaboulsi
  39. The nonparametric approach to evolutionary oligopoly By Moghadam, Hamed M.
  40. “Certificate Oversupply in the European Union Emission Trading System and its Impact on Technological Change” By Germà Bel; Stephan Joseph
  41. Climate emergencies do not justify engineering the climate By Sillmann, Jana; Lenton, Timothy M.; Levermann, Anders; Ott, Konrad; Hulme, Mike; Benduhn, Francois; Horton, Joshua
  42. Climate Tipping Points and Solar Geoengineering By Garth Heutel; Juan Moreno Cruz; Soheil Shayegh
  43. From Nash to Lindahl in Climate Change Policy By L.F.M. Groot; J. Swart
  44. Alternative Metrics for Comparing Domestic Climate Change Mitigation Efforts and the Emerging International Climate Policy Architecture By Pizer, William; Aldy, Joseph Edgar
  45. Modeling Uncertainty in Climate Change: A Multi-Model Comparison By Kenneth Gillingham; William D. Nordhaus; David Anthoff; Geoffrey Blanford; Valentina Bosetti; Peter Christensen; Haewan McJeon; John Reilly; Paul Sztorc

  1. By: Pon, Shirley (Department of Agricultural and Resource Economics - University of Maryland)
    Abstract: Real time information feedback combined with various pricing schemes has been found to reduce residential energy consumption more than information and pricing policies alone. I examine the effect of information provision with bi-monthly, monthly, and real time pricing with in-home displays with a time-of-use pricing scheme on consumption over each month of the Irish Consumer Behavior Trial. I find that time-of-use pricing with real time pricing information reduce electricity usage up to 8.7 percent during peak times at the start of the trial but the effect decays over the first three months and after three months the trial group is indistinguishable from the control group. I do not find statistically significant improvements in energy savings when comparing monthly and bi-monthly billing treatments. These findings suggest that increasing billing reports to the monthly level or a web application providing real time information may be more cost effective than providing in-home displays.
    Keywords: time-of-use pricing; information provision; feedback; energy efficiency behavior
    JEL: D04 D12 Q41 Q48 Q49
    Date: 2015–08
  2. By: Bénédicte Meurisse
    Abstract: The significant weight of CO2 emissions resulting from car use in the total of CO2 emissions is enough of a signal to set up policy tools aiming at reducing such emissions. This paper investigates the effects of setting a penalty on the purchase of high emitting cars (i.e. a Malus). With static comparative analyses of a basic model of consumer’s behaviour facing two alternatives: a clean and a dirty vehicles, we essentially find that a rebound effect does not necessarily accompany the reduction in the average fuel consumption per kilometre resulting from the implementation of a differentiated car purchase tax such as a Malus scheme. This is because the improvement of the fuel-efficiency is observed at the aggregate scale and not at the individual level. Thereby, it happens that we observe a rebound effect only under certain conditions pertaining to the characteristics of the vehicles that make up the fleet. We also show that, from the moment that a rebound effect occurs, the higher the amount of Malus, the higher the rebound effect. It implicitly means that because of the rebound effect, the higher the pricing scheme, the less efficient the purchase tax.
    Keywords: car purchase decision, car use, CO2 emissions, rebound effect, penalty on car purchase.
    JEL: D11 H31 Q58
    Date: 2015
  3. By: Grégoire Wallenborn
    Date: 2015
  4. By: Venkatachalam ANBUMOZHI (Economic Research Institute for ASEAN and East Asia (ERIA)); Phoumin HAN (Economic Research Institute for ASEAN and East Asia (ERIA))
    Abstract: The study attempts to assess the policy effects and investigate the patterns of Total System Energy Efficiency (TSEE) in the economies of some selected Association of Southeast Asian Nations (ASEAN) and East Asia countries. Using time series data for 1971– 2011, a dynamic lag model of TSEE was formulated. The study starts by constructing the variables of fuel input and fuel output based on engineering concepts. We expect that the TSEE in these economies is likely to be explained by both foreign direct investment (FDI) and domestic investment. And above all, the policy effect will be the prime investigation for all changes in TSEE. The study found that policy effects on TSEE are likely to have occurred in Japan, the People’s Republic of China (PRC), the Philippines, Thailand, and India. However, a closer look and examination of each country’s economy are needed to understand TSEE changes and fluctuations. Another key determinant of TSEE is inward FDI (FDI-inflow), as a result of which the PRC and India have shown positive impacts. Our findings led to the following key policy recommendations: (1) the PRC and India provided good examples of using FDI-inflows to impact TSEE. This implies that the transformation sector will need large investments and public financing will play crucial role in an improvement of the transformation sector; and (2) the developed economies of Japan, the Republic of Korea, and Australia provided mixed outcomes in terms of how the Cebu Declaration is likely to have had an effect. Japan showed some effect, but there was no effect on TSEE in South Korea and Australia. Thus, it is hard for the developed economies to jump further from the high base efficiency, unless there is a technological breakthrough of high efficiency like in Japan. Therefore, we will discuss technological transfer in the transformation sector such as high efficient power plants in the context of a public financing framework to ensure that such technologies could be deployed to the developing economies as well as globally.
    Keywords: Total System Energy Efficiency, Policy Effects/Impacts, and Energy Efficiency
    JEL: Q43 Q48 Q48
    Date: 2015–09
  5. By: Kim, Jinwon
    Abstract: This paper shows that a city where both a congestion externality and an externality from greenhouse gas emissions are corrected by efficient policies is more compact than the laissez-faire equilibrium city. Motivated by recent empirical studies showing a positive relationship between population density and vehicle fuel-efficiency, the consumer is assumed to choose vehicle fuel-efficiency jointly with housing consumption and residential location. By incorporating the consumer's vehicle choice into the urban spatial model, we can represent the total amount of vehicle emissions released by the city residents. We first establish the well-known result that the congestion externality as a source of market failure is associated with excessive urban sprawl. We then show that vehicle emissions are an additional source of market failure, which also leads to excessive urban sprawl. The source of excessive sprawl arising from the emission externality is the use of larger and less-fuel efficient vehicles in more sprawled cities, which is different from that of the congestion externality. We also analyze the effect of the Corporate Average Fuel Economy (CAFE) standards on urban spatial structure and its efficacy as a second-best tool for correcting the emission externality.
    Keywords: urban sprawl; vehicle fuel-efficiency; emission externality; congestion
    JEL: Q53 R14 R41
    Date: 2015–09–25
  6. By: Brown, David P. (University of Alberta, Department of Economics); Olmstead, Derek (Alberta Market Surveillance Administrator)
    Abstract: We measure the degree of market power execution and inefficiencies in Alberta’s restructured electricity market. Using hourly wholesale market data from 2008 to 2014, we find that firms exercise substantial market power in the highest demand hours with limited excess production capacity. The degree of market power execution in all other hours is low. Market inefficiencies are larger in the high demand hours and elevate production costs by 14% - 19% above the competitive benchmark. This reflects 2.35% of the average market price across all hours. A recent regulatory policy clarifies that certain types of unilateral market power execution is permitted in Alberta. We find evidence that suggests that strategic behavior changed after this announcement. Market power execution increased. We illustrate that the observed earnings are often sufficient to promote investment in natural gas based technologies. However, the rents from market power execution can exceed the estimated capacity costs for certain generation technologies. We demonstrate that the energy market profits in the presence of no market power execution are generally insufficient to promote investment in new generation capacity. This stresses the importance of considering both short-run and long-run performance measures.
    Keywords: Electricity Markets; Market Power; Regulatory Policy
    JEL: D44 L13 L50 L94 Q40
    Date: 2015–09–23
  7. By: Grégoire Wallenborn
    Abstract: Les mesures d’efficience énergétique sont généralement promues pour combattre le changement climatique, assurer la sécurité énergétique, augmenter la compétitivité et en raison de leur bon retour sur investissement. Toutefois, si l’efficience énergétique des différents secteurs de la société (industrie, bâtiments, transports, appareils, etc.) s’améliore, la consommation d’énergie ne cesse également d’augmenter. Ce constat contrariant peut être partiellement expliqué par ce qu’on appelle l’« effet rebond ». Cet effet est traditionnellement défini comme le changement de comportement d’un utilisateur suite à l’amélioration de l’efficience énergétique de telle sorte que sa consommation d’énergie est supérieure à ce qui est prévu par un modèle d’ingénieur. L’amplitude de cet effet, particulièrement au niveau macro-économique, est toutefois controversée. De même, il n’y a pas d’accord sur la classification des effets rebonds. Cette thèse part de l’hypothèse que les controverses sur les effets rebonds proviennent du fait qu’ils peuvent se produire à différentes échelles temporelles et spatiales, et que diverses disciplines capturent certains mécanismes car elles cadrent différemment leurs objets d’étude. Je montre que les mécanismes des effets rebonds peuvent être décrits comme la combinaison de deux efficiences. Premièrement, l’efficience énergétique mesure un rapport de production/consommation d’un individu (une machine ou un être vivant, par exemple). Deuxièmement, l’efficience temporelle mesure la vitesse à laquelle les activités de production/consommation sont menées (par une entité ou un ensemble d’entités). Lorsque les corps sont liés entre eux, notamment par des échanges de matière et d’énergie, une amélioration de l’efficience énergétique implique une augmentation de l’efficience temporelle. Cette augmentation n’est pas immédiate, mais elle est d’autant plus rapide que les corps ont à leur disposition des infrastructures qui permettent d’accéder à l’énergie. La combinaison des deux efficiences s’observe dans quatre cadres disciplinaires :écologie, technologie, économie néo-classique, sociologie des pratiques. En écologie, les deux efficiences procurent des avantages évolutifs, et sont appelés principes de la « production minimale d’entropie » et « puissance maximale ». Le développement technologique nous montre comment les deux efficiences se renforcent mutuellement via des réseaux de distribution et autres infrastructures. En économie néo-classique, l’efficience énergétique répond à la maximisation d’une fonction mal identifiée (profit ou utilité). En sociologie des pratiques, l’efficience temporelle joue un rôle majeur dans la multiplication des tâches déléguées à des machines — qui existent grâce à l’amélioration de leur efficience énergétique. En conclusion, ce n’est pas uniquement l’efficience énergétique qui est responsable des effets rebonds, mais sa combinaison avec l’efficience temporelle. Les effets rebonds dépendent de l’intensité des couplages colatéraux entre les machines et les corps. Habituellement ce couplage est estimé petit (il est totalement absent dans le cadre néo-classique). On peut pourtant contester cette hypothèse dans la mesure où ce couplage crée et multiplie les activités humaines. La part de la consommation exosomatique en comparaison à la consommation endosomatique montre l’ampleur de ce couplage. Pour limiter les effets rebonds, il convient de déconnecter les deux efficiences et les relations qui les renforcent.
    Keywords: infrastructure; social practice; technology; economics; ecology; Interdisciplinaire
    Date: 2015–09–02
  8. By: Ernesto M. Pernia (School of Economics, University of the Philippines Diliman); Maria Janela M. Generoso (School of Economics, University of the Philippines Diliman)
    Abstract: Time was when solar energy was facilely dismissed as impractical, inefficient, and pricey. In recent years, however, innovations in technology, regulation, and financing have resulted in remarkable efficiency improvements and price reductions, thereby reversing the skepticism about this renewable energy (RE) source. In this paper, we explore how this has happened, to what extent photovoltaic solar technology has been accepted around the world, and what might be its potential for inclusive green growth. We find that adoption of both on-grid and off-grid solar systems has been widespread and rapidly increasing. Particularly noteworthy is the utilization of small- scale individual or distributed off-grid solar home systems (SHS) in remote and underserved areas in the developing world, including East Africa and South Asia. It appears that the Philippines has been a relative latecomer. Data show that solar power's "installed" capacity remains a tiny fraction of all RE sources (that also include hydro, geothermal, wind, biomass, and ocean). Moreover, such capacity is for ongrid only; there seems none as yet installed for off-grid SHS. We conclude with the paper's main points and possible implications for policy and research.
    Keywords: Renewable energy, Inclusive green growth, Rural electrification, Economic development
    JEL: O10 O14 Q20 Q28
    Date: 2015–08
  9. By: Mikkel Bennedsen (Aarhus University and CREATES)
    Abstract: We introduce a new mathematical model of electricity spot prices which accounts for the most important stylized facts of these time series: seasonality, spikes, stochastic volatility and mean reversion. Empirical studies have found a possible fifth stylized fact, fractality, and our approach explicitly incorporates this into the model of the prices. Our setup generalizes the popular Ornstein Uhlenbeck-based multi-factor framework of Benth et al. (2007) and allows us to perform statistical tests to distinguish between an Ornstein Uhlenbeck-based model and a fractal model. Further, through the multi-factor approach we account for seasonality and spikes before estimating - and making inference on - the degree of fractality. This is novel in the literature and we present simulation evidence showing that these precautions are crucial to accurate estimation. Lastly, we estimate our model on recent data from six European energy exchanges and we find statistical evidence of fractality in five out of six markets. As an application of our model, we show how, in these five markets, a fractal component improves short term forecasting of the prices.
    Keywords: Energy markets, electricity prices, roughness, fractals, mean reversion, multi-factor modelling, forecasting.
    JEL: C22 C51 C52 C53 Q41
    Date: 2015–09–18
  10. By: Schober, Dominik; Weber, Christoph
    Abstract: In the context of yardstick regulation with long-lived assets, the influence of heterogeneous investment cycles on the ability to recover capital is found to be important. The application of efficient firm standards based on historic (straight-line) depreciation given heterogeneous investment and cost cycles will cause instantaneous yardstick levels below the long-run refinancing level. The efficient firm standard will prevent capital recovery in later periods. An illustrating example from electricity distribution illustrates the relevance of the problem. Finally, two alternatives, branch average cost yardstick determination and correction factors based on the share of capital under depreciation, are discussed.
    Keywords: yardstick regulation,infrastructure investment,capital-recovery,sustainable refinancing,electricity distribution
    JEL: L51 L52
    Date: 2015
  11. By: Matthias Firgo (Austrian Institute of Economic Research (WIFO)); Dieter Pennerstorfer (Department of Economics, Vienna University of Economics and Business; Austrian Institute of Economic Research (WIFO)); Christoph R. Weiss (Department of Economics, Vienna University of Economics and Business)
    Abstract: We empirically investigate the importance of centrality (holding a central position in a spatial network) for strategic interaction in pricing for the Austrian retail gasoline market. Results from spatial autoregressive models suggest that the gasoline station located most closely to the market center - defined as the 1-median location - exerts the strongest effect on pricing decisions of other stations. We conclude that centrality influences firms' pricing behavior and further find that the importance of centrality increases with market size.
    Keywords: Network Centrality, Spatial Competition, Retail Markets, Gasoline Prices
    JEL: C21 D43 L11 L81 R12
    Date: 2015–09
  12. By: Juan Vera (RENAULT); Camila Freitas Salgueiredo (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris, ISIR - Institut des Systèmes Intelligents et de Robotique - UPMC - Université Pierre et Marie Curie - Paris 6 - CNRS); Sophie Hooge (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris); Milena Klasing Chen (CGS - Centre de Gestion Scientifique - MINES ParisTech - École nationale supérieure des mines de Paris)
    Abstract: Radical innovation is becoming essential to insure firms stay competitive. Nevertheless, R&D departments struggle to achieve systematic innovation processes. The management of an innovation field requires adapted tools to the diversity, broadness and flexibility of the generation of innovative ideas. To face this challenge, we propose the use of a set of visual tools. These allow the abstraction of three fundamental innovation field dimensions: 1) the nonlinearity of the ideation process; 2) the degree of maturity of a technology and 3) the stakeholder diversity of an ecosystem. We propose an Innovation Map, a synthetic tool grouping several visual representations that allow describing these three dimensions of an innovation field. Having all aspects simultaneously described by a tool is enriching since it makes it possible for the visual representations to complement each other. This managerial tool was applied inside Renault, in the automobile sector, for the mapping of the electric vehicle charging, a strategic field in electric mobility. We tested the tool with several internal R&D stakeholders of the innovation field having different profiles and responsibilities. They perceived the Innovation Map as a useful tool to point out and share various strategic aspects of an innovation field, as well as establishing potential partnerships. This collaborative research is a first step towards the establishment of a visual language framework that managers can apply to communicate, organize and understand an innovation field.
    Keywords: innovation mapping, visual tools,Innovation field
    Date: 2015–06–23
  13. By: Jakub Nowotarski
    Abstract: The focus of this Master Thesis is on model (forecast) averaging as applied to electricity spot prices. In Chap. 2 we review the stylized facts of electricity spot prices. Then in Chap. 3 we discuss the time series models that are used in Chap. 4 as inputs to the forecast averaging schemes. Finally, in Chap. 5 we wrap up the results and conclude.
    Keywords: Electricity price forecasting; Forecast combination; ARX model; Day-ahead market;
    JEL: C22 C52 C53 Q47
    Date: 2013–12–31
  14. By: Evrim Ýmer Ertunga; Ýbrahim Unalmis
    Abstract: [TR] Yagis miktarinin az oldugu donemlerde hidroelektrik uretiminde dusus beklenir. Bu donemlerde elektrik talebinin karsilanmasi icin alternatif enerji kaynaklarina basvurulmasi gerekmektedir. Bu kaynaklarin bazilarinin ithal ediliyor olmasi ise kaynaklar arasi ikameyi, ikamenin buyuklugunu ve zamanlamasini iktisadi acidan daha onemli hale getirmektedir. Bu calismada kurak gecen donemlerde elektrik uretim kaynaklari arasindaki ikamenin yapisi analiz edilmekte ve bunun dis ticaret dengesi uzerindeki olasi sonuclari tartisilmaktadir. Sonuclar dusuk yagis miktarinin, beklendigi gibi, hidroelektrik uretiminde azalmaya yol actigini gostermektedir. Hidroelektrik uretimdeki bu azalma kýsa vadede dogal gaz tarafindan ikame edilse de orta vadede her iki kaynagi da komur ikame etmektedir. Dogal gazin tamamina yakini ithal edildiginden, calismanin sonuclari kurakligin Turkiye’nin dis ticareti uzerindeki enerji kaynakli olumsuz etkisinin buyuk olcude gecici olduguna isaret etmektedir. [EN] The periods with a low level of rainfall is expected to be associated with a decline in hydroelectricity production. In these periods, the electricity needs have to be met with alternative energy sources. If some of these energy sources are imported, the degree and the timing of the substitution between alternative sources become economically important parameters. This study analyses the substitution between alternative sources of electricity production in times of drought and discusses its possible effect on Turkey’s trade balance. Empirical findings show that, as expected, a significant decline in the level of rainfall leads to a reduction in hydroelectricity production. In the short run, the hydroelectricity production is substituted with the electricity production in natural gas power plants. However, coal substitutes both of these resources in the medium to long run. Since natural gas is imported from abroad, we argue that the effect of drought on Turkey’s trade balance due to energy imports would be temporary.
    Date: 2014
  15. By: Erdal Yilmaz
    Abstract: The effect of uncertainty on investment is widely considered to have a negative sign in the real option literature. Contrary to prediction of conventional real option theory, there are studies pioneered by Sarkar (2000) and Gryglewicz et al. (2008) with the argument that this negative relationship is not always correct. Such result is exceptional, since they show that uncertainty may accelerate irreversible investment without building on the convexity of the marginal product of capital in the real option framework. Major contribution of this paper, by applying the Gryglewicz et al. (2008) approach, is to show numerically that the uncertainty-investment relationship in Turkish electricity plant investment is non-monotonic and U-shaped. We also numerically compare those two studies and investigate whether certain conditions in Sarkar (2000) are associated with the parameter support by Gryglewicz et al. (2008) or not. Finally, we numerically demonstrate partial effect of the interest rate changes on optimal investment trigger based on Gryglewicz et al. (2008) framework.
    Keywords: Investment, Real Option, Uncertainty
    JEL: D92 E22 G31
    Date: 2014
  16. By: Frondel, Manuel; Vance, Colin; Kihm, Alex
    Abstract: This note investigates the pass-through of global Brent oil notations to fuel prices across the oligopoly of retail majors in Germany. We assemble a high-frequency panel data set that encompasses millions of price observations and allows us to distinguish effects by brand. Upon establishing a cointegrating relationship between fuel and crude-oil prices using daily data, we estimate an error-correction model (ECM) and find that (1) the pass-through of oil prices critically depends on the number of time lags included in the ECM, (2) strict adherence to classical information criteria for determining lag length yields extremely long pass-through durations, and (3) the estimated impulse response functions are virtually identical across brands, irrespective of the lag count, suggesting a high degree of competition among brands.
    Abstract: Dieser Artikel untersucht, wie sich die Brent-Öl-Preise auf die Kraftstoffpreise im deutschen Tankstellen-Oligopol übertragen. Auf Basis von Millionen von Panelpreisdaten und Schätzungen von Impulsantwortfunktionen, die angeben, wie sich einen Erhöhung des Rohölpreises um 1 Dollar in den Kraftstoffpreisen niederschlägt, finden wir praktisch keine Unterschiede zwischen den fünf großen Tankstellenmarken. Dies spricht für eine sehr hohes Maß an Wettbewerb im deutschen Tankstellenmarkt. Die Schätzung eines Fehler-Korrekturmodells zeigt außerdem, dass das Durchreichen der Brentpreise wesentlich von der Anzahl der Lags abhängt, die in das Modell eingebaut werden. Die Anwendung der klassischen Informationskriterien zur Modellwahl führt zu extrem langen, unplausiblen Durchreichedauern.
    Keywords: retail markets,competition,error-correction model
    JEL: D12 Q41
    Date: 2015
  17. By: Baffes,John; Kshirsagar,Varun
    Abstract: Previous sharp oil price declines have been accompanied by elevated ex post volatility. In contrast, volatility was much less elevated during the oil price crash in 2014/15. This paper provides evidence that oil prices declined in a relatively measured manner during 2014/15, with dispersion of price changes that was considerably smaller than comparable oil price declines. This finding is robust to nonparametric and GARCH measures of volatility. Further, the U.S. dollar appreciation exerted a strong influence on volatility during the recent crash; in contrast, the impact of shocks on equity markets was muted.
    Keywords: Debt Markets,Emerging Markets,Economic Conditions and Volatility,Markets and Market Access,Access to Markets
    Date: 2015–09–28
  18. By: Abdul Munasib (University of Georgia); Dan S. Rickman (Oklahoma State University)
    Abstract: The dramatic increase in oil and gas production from shale formations has led to intense interest in its impact on local area economies. Exploration, drilling and extraction are associated with direct increases in employment and income in the energy industry, but little is known about the impacts on other parts of local economies. Increased energy sector employment and income can have positive spillover effects through increased purchases of intermediate goods and induced local spending. Negative spillover effects can occur through rising local factor and goods prices and adverse effects on the local area quality of life. Therefore, this paper examines the net economic impacts of oil and gas production from shale formations for key shale oil and gas producing areas in Arkansas, North Dakota and Pennsylvania. The synthetic control method (Abadie and Gardeazabal 2003; Abadie et al., 2010) is used to establish a baseline projection for the local economies in the absence of increased energy development, allowing for estimation of the net regional economic effects of increased shale oil and gas production.
    Keywords: regional economic development, energy boom, regional science, economic geography
    JEL: Q32 R11
    Date: 2014–07
  19. By: Okan Eren
    Abstract: [TR] Bu calisma, Turkiye’nin altin haric ihracat ve ithalat birim deger endekslerinde 2003 Ocak - 2015 Ocak doneminde gerceklesen degisimlere, parite (dis ticarette kullanilan para birimlerinin ABD dolari cinsinden degeri) ve enerji fiyatlarindaki degisimin katkisini hesaplamaktadir. Adý gecen donemde altin haric ihracat (ithalat) fiyatlarindaki yillik degisimin ortalamasi yuzde 4,5 (5,0) civarinda gerceklesirken enerji fiyatlarinin ve paritenin ortalama katkisi sirasiyla 0,3 (2,1) ve 0,8 (0,6) puan olmustur. Son donemlerde ozellikle 2014 Agustos - 2015 Ocak doneminde gerek paritenin gerekse de enerji fiyatlarinin altin haric dis ticaret birim deger endekslerinde gozlenen degisimlerdeki payi onemli olcude yukselmistir. Soz konusu donemde ihracat (ithalat) fiyatlarindaki yillik degisimin ortalamasi yuzde -3,6 (-5,9) olurken, enerji fiyatlarinin katkisi -0,9 (-3,6) puan, paritenin katkisi -3,5 (-2,6) puan olarak hesaplanmistir. [EN] This study calculates the contribution of energy price and exchange rate parity (US dollar equivalent of currencies that are used in external trade) changes to the changes observed in Turkish export and import prices excluding gold between January 2003 and January 2015. In that period, the average annual change in export (import) prices is around 4.5 (5.0) percent, to which energy price and parity contribute 0.3 (2.1) and 0.8 (0.6) percentage points respectively. The individual shares of those two factors in both export and import price movements have been increasing considerably since August of 2014. Quantitatively speaking, export (import) price index on average experienced a -3.6 (-5.9) percent annual change while the energy prices and parity accounted for -0.9 (-3.6) and -3.5 (-2.6) percentage points, respectively.
    Date: 2015
  20. By: Olcay Yucel Culha; Mustafa Utku Ozmen; Erdal Yilmaz
    Abstract: [TR] Petrol fiyatlarinda 2014 yilinin ikinci yarisindan itibaren gozlenen ciddi dusus, petrol fiyatlarinin dis denge uzerindeki etkilerine iliskin tartismalari gundeme getirmistir. Soz konusu dusus petrol ihrac eden ulkelerden petrol ithal eden ulkelere reel gelirlerin kaymasina yol acmaktadir. Bu cercevede, bu calismada, ihracatin yaklasik ucte birinin petrol ihrac eden ulkelere, ucte ikisinin ise petrol ithal eden ulkelere yapildigi dikkate alinarak, petrol fiyatlarindaki degisimin Turkiye’nin ihracatini nasil etkileyecegi konusu ele alinmistir. Ilk asamada petrol fiyatlarinin, Turkiye’nin ihracat yaptigi petrol ihrac/ithal eden ulkelerin buyumelerine etkisi analiz edilmis, beklendigi gibi petrol fiyatlarindaki degisimin bu ulkelerin buyumesi uzerindeki etkisinin asimetrik oldugu bulunmustur. Ikinci asamada ise bu ulke gruplari icin buyumenin ihracati nasil etkiledigi ihracat talep fonksiyonu araciligiyla tahmin edildikten sonra, son asamada tahmin edilen petrol fiyati-buyume ve buyume-ihracat esneklikleri kullanilarak, petrol fiyatlarinin ihracat uzerine etkisi hesaplanmistir. Bulgular, mevcut ihracat paylari dikkate alindiginda petrol fiyatlarinin ihracat uzerindeki net etkisinin sinirli olduguna isaret etmektedir. [EN] Substantial decline in oil prices observed since the second half of 2014 has brought forward discussions on the impact of oil prices on the external balance. This decline is expected to shift real income from oil exporter countries to oil importer countries. In this context, in this study, the effect of change in oil prices on Turkey’s exports is discussed taking into account the fact that Turkey’s export to oil exporting countries has approximately one-third share in total exports, while export to oil importing countries has a share of two-thirds. At the first step, the effect of oil prices on economic growth of trade partners of Turkey is analyzed, where countries are grouped according to their net oil export position. As expected, it is found that the effect of oil prices on different country groups’ growth is asymmetric. In the second stage, for two groups of countries, growth-export elasticity through Turkey’s export demand function is estimated. Finally, effect of oil prices on exports is calculated considering different income effects caused by oil price change on each country groups. Results indicate that the net effect of oil prices on the exports is limited considering the current export shares.
    Date: 2015
  21. By: Sauthoff, Saramena; Anastassiadis, Friederike; Mußhoff, Oliver
    Abstract: Biogas production using biomass of agricultural origin plays a key role in Germany's energy transition process. Being the main substrate, maize has been increasingly criticized in recent years leading to a down-regulation of this crop for the use in biogas plants by an adjustment of the Renewable Energy Sources (RES) Act in 2012. Thus, it is necessary to widen the range of sustainable and suitable substrate alternatives. This study explores German farmers' willingness to grow sugar beets for biogas production based upon the analysis of a discrete choice experiment with 118 arable farmers conducted from November 2013 to February 2014. Models are estimated in willingness to pay space. Our results reveal that at least two-thirds of the participating farmers assess biogas production from sugar beets as an important and sustainable alternative to maize. However, with respect to their own farms, farmers prefer to maintain their status-quo instead of choosing a contract. Findings also indicate that risk-averse farmers are more likely to contract sugar beets as a biogas substrate than less risk-averse farmers resulting in a lower price demand. However risk-averse farmers prefer short contract periods and a small share of their arable land, otherwise they demand a markup. Regarding the expansion of renewable energies these findings are highly relevant for future political decisions that aim to enable a sustainable energy transition.
    Keywords: sugar beets,alternative biogas substrate,discrete choice experiment,supply contract design
    Date: 2015
  22. By: Jesús Rodríguez-López (U. Pablo de Olavide); Gustavo A. Marrero (U. La Laguna and CAERP); Rosa Marina González-Marrero (U. La Laguna and CAERP)
    Abstract: The stock of diesel motor cars has been growing during the last decades in Europe and nowadays accounts for nearly 40% of automobile fleet. Two issues helps explain this process. Firstly, fuel efficiency (liters/km) of diesel cars is about 20% higher than that of gasoline cars on average; secondly European governments have implemented tax policies lenient with diesel fuel, thus generating an extra stimulus to use diesel motor cars. We build on an dynamic general equilibrium model that makes distinction of diesel motor and gasoline motor vehicles, and calibrate it for main European countries. The model reproduces the vehicle fleet dieselization, the rebound effects in kilometers driven, the demand for fuel, and CO2 emissions dynamics. From a normative view, the model recommends a tax discrimination according to the carbon content of each fuel, and not according to the fuel efficiency of the engine. Given that such a content is 15% higher for diesel relative to gasoline, tax rates should reflect this point: 1.40 cents of Euro per liter of diesel, and 1.22 cents per liter of gasoline. This is equivalent to imposing a tax of 19 Euros per ton of carbon. Yet Pigouvian sale taxes on new cars are useless to internalize the costs of externalities. Both recommendations are radically different to the existing fuel tax design in most OECD countries, except in Australia, Switzerland, UK and the US.
    Keywords: Energy efficiency, Rebound effect, CO2 emissions, Pigouvian taxation.
    JEL: E13 H22 Q43 Q54 R40
    Date: 2015–09
  23. By: Semih Tumen; Deren Unalmis; Ibrahim Unalmis; D. Filiz Unsal
    Abstract: This paper investigates the mechanisms through which environmental taxes on fossil fuel usage can affect the main macroeconomic variables in the short-run. We concentrate on a particular mechanism : speculative storage. The existence of forward-looking speculators in the model improves the effectiveness of tax policies in reducing fossil fuel usage. Improved policy effectiveness, however, is costly : it drives inflation and interest rates up, while impeding output. Based on this tradeoff, we seek an answer to the question how monetary policy should interact with environmental tax policies in our DSGE model of fossil fuel storage.
    Keywords: Fossil fuel, Environmental taxes, Speculative storage, DSGE
    JEL: E31 E52 H23 O44
    Date: 2015
  24. By: Jean-Denis GARON; Charles SÉGUIN
    Abstract: We study the welfare effects of a revenue-neutral green tax reform in a federation. The reform consists of increasing a tax on a polluting input and reducing that on labor income. Households are fully mobile within the federation. Regions are unequally endowed with a nonrenewable natural resource. Resource rents are owned by regions and are redistributed to citizens on a residence basis, which generates a motive for inefficiently relocating to the resource-rich jurisdiction. Since the resource-poor region has a higher marginal product of labor than does the resource-rich region, the tax reform mitigates the scope of inefficient migration. This positive welfare effect may significantly reduce abatement costs of pollution and calls for higher environmental tax, as compared with a model where migration is assumed away.
    Keywords: federalism, environment, taxation, equalization, mobility, externalities
    JEL: D62 H21 H23 H77
    Date: 2015
  25. By: DE BORGER, Bruno; PROOST, Stef
    Abstract: This paper surveys tax and regulatory policies for road transport in the EU. According to the economic literature, policy reforms are needed that substitute current fuel and vehicle taxes by car and truck user taxes that depend on place and time of use. The survey analyzes how policies have developed over the last 20 years, what was their motivation and what were the main effects. Two ideas stand out. First, external cost concepts have been successfully introduced in policy thinking, but they have mainly lead to quantitative climate, energy and modal split objectives. Achieving these objectives has guided member states into costly policy reforms that have neglected other objectives, such as the efficient use of the current road infrastructure. Second, distance charging for trucks is a policy innovation that is spreading rapidly, but it risks to be mainly used for tax exporting rather than for better internalizing external costs.
    Keywords: Transport taxes, Fuel taxes, Road pricing, Distance charging, Transport policy in the EU, External costs
    JEL: R41 R48 Q58
    Date: 2015–05
  26. By: Germà Bel (Faculty of Economics, University of Barcelona); Maximilian Holst (Faculty of Economics, University of Barcelona)
    Abstract: Mexico City’s bus rapid transit (BRT) network, Metrobus, was introduced in an attempt to reduce congestion, increase city transport efficiency and cut air polluting emissions. In June 2005, the first BRT line in the metropolitan area began service. We use differences-in-differences and quantile regression techniques in undertaking the first quantitative policy impact assessment of the BRT system on air polluting emissions. The air pollutants considered are carbon monoxide (CO), nitrogen oxides (NOX), particulate matter of less than 2.5 µm (PM2.5), particulate matter of less than 10 µm (PM10), and sulfur dioxide (SO2). The ex-post analysis uses real field data from air quality monitoring stations for periods before and after BRT implementation. Results show that BRT constitutes an effective environmental policy, reducing emissions of CO, NOX, PM2.5 and PM10.
    Keywords: Bus Rapid Transit, Differences-in-Differences, Environmental Policy Evaluation, Public Transport, Urban Air Pollution JEL classification: Q51, Q58, R41, R48
    Date: 2015–09
  27. By: Julien DAUBANES; Pierre LASSERRE
    Abstract: Optimum commodity taxation theory asks how to raise a given amount of tax revenue while minimizing distortions. We reexamine Ramsey's inverse elasticity rule in presence of Hotelling-type non-renewable natural resources. Under standard assumptions borrowed from the non-renewable-resource-extraction and from the optimum-commodity-taxation literatures, a non-renewable resource should be taxed in priority whatever its demand elasticity and whatever the demand elasticity of regular commodities. It should also be taxed at a higher rate than other commodities having the same demand elasticity and, while the tax on regular commodities should be constant, the resource tax should vary over time. When the generation of reserves by exploration is determined by the net-of-tax rents derived during the extraction phase, reserves become a conventional form of capital and royalties tax its income; our results contradict Chamley's conclusion that capital should not be taxed at all in the very long run. In an autarkic economy, absent any subsidy to reserve discoveries, the optimal tax rate on extraction obeys an inverse elasticity rule almost identical to that of a commodity whose supply is perfectly elastic. As a matter of fact, there is a continuum of optimal combinations of reserve subsidies and extraction taxes, irrespective of whether taxes are applied on consumption or on production. When the government cannot commit, extraction rents are completely expropriated and subsidies are maximum. In general the optimum Ramsey tax not only causes a distortion of the extraction path, as happens when reserves are given, but also distorts the level of reserves developed for extraction. When that distortion is the sole effect of the tax, it is determined by a rule reminiscent of the inverse elasticity rule applying to elastically-supplied commodities. In an open economy, Ramsey taxes further acquire an optimum-tariff dimension, capturing foreign resource rents. For countries that import the resource, the result that domestic resource consumption is to be taxed at a higher rate than conventional commodities having the same demand elasticity emerges reinforced.
    Keywords: optimum commodity taxation, inverse elasticity rule, non-renewable resources, hotelling resource, supply elasticity, demand elasticity, capital income taxation
    JEL: Q31 Q38 H21
    Date: 2015
  28. By: Henrik Pålsson; Karl-Johan Lundquist; Lars-Olof Olander; Fredrik Eng Larsson; Lena Hiselius
    Abstract: The transportation sector is responsible for about 23% of all CO2 emissions globally and 30% in OECD countries with road being the dominating sector for transport emissions (ITF, 2010). National emissions data are rarely disaggregated by freight vs. passenger transport, but an estimate is that goods transportation accounts for 30-40% of the total road sector emissions in most countries (ITF, 2010). In addition, the trend for CO2 emissions from the transportation of goods is on the rise, while the increase in emissions from passenger transport has levelled off and emissions from other sectors have decreased. Internationally, based on traditional projections, transportation of goods is expected to continue increasing in step with the GDP, thus doubling by 2050. This trend contrasts sharply with the climate targets set by the EU, which require dramatic reductions in emissions; by 2050, the EU should cut its emissions to 80% below 1990 levels through domestic reductions alone (EU, 2011). The expected effects of on-going or planned measures will not be sufficient to achieve the EU target. On the contrary, CO2 levels are expected to increase. This is the problem that is the focus of the analysis and discussion in this paper.
    Date: 2014–07
  29. By: Thomas Stoerk
    Abstract: This research documents changes in likely misreporting in official air quality data from Beijing for the years 2008 to 2013. It is shown that, consistent with prior research, the official Chinese data report suspiciously few observations that exceed the politically important Blue Sky Day threshold and an excess of observations just below that threshold. Similar data, measured by the US Embassy in Beijing, do not show this irregularity. To document likely misreporting, this analysis compares the air quality measurements to Benford’s Law, a statistical regularity known to fit air pollution data. I find that the Chinese data fit Benford’s Law poorly until a change in air quality measurements at the end of 2012. From 2013 onwards, the Chinese data fit Benford’s Law closely. The US Embassy data, by contrast, exhibit no variation over time in the fit with Benford’s Law, implying that the underlying pollution processes remain unchanged. These findings suggest that misreporting of air quality data for Beijing has likely ended in 2012.
    Date: 2015–05
  30. By: Ömer T. AÇIKGÖZ; Hassan BENCHEKROUN
    Abstract: Consider a two-period transboundary stock pollution game in which countries anticipate an international environmental agreement (IEA) to be in effect in the future (i.e., in period 2). What will be the impact of the future IEA on current emissions (i.e., in period 1)? We show that the answer to this question is ambiguous. We examine a fi…rst type of IEA where countries anticipate that the level of emissions in period 2 will be set at an agreed upon target. Assuming that the countries can commit to this policy, we show that when this target is set close to the business-as-usual (BAU) level of emissions, the equilibrium level of emissions in period 1 falls below its BAU level. However, the emission level in period 1 is a decreasing function of the target that will prevail in period 2, hence, the impact of this policy on period 1 emissions may be ambiguous, and in general depend on the targeted emission level. We also examine other types of IEAs where countries cannot commit to an emission level but rather commit to an emission policy rule that depends on the level of pollution stock.
    Keywords: international environmental agreements, climate agreement, future agreements, transboundary pollution, dynamic games
    JEL: Q53 Q54 Q58 Q59
    Date: 2015
  31. By: Thomas Jobert (University of Nice Sophia Antipolis, France; GREDEG CNRS); Fatih Karanfil (University of Paris Ouest, France; EconomiX - CNRS); Anna Tykhonenko (University of Nice Sophia Antipolis, France; GREDEG CNRS)
    Abstract: Despite the growing body of work devoted to the impacts of development and international trade flows on the environment, the current state of empirical research is still controversial. In this line of analysis, the empirical studies using panel data face two simultaneous challenges. One is associated with the potential presence of unobserved cross-country heterogeneity in the panel, and the other with the use of aggregate data on international trade. In this paper, we apply both the dynamic fixed effects and empirical iterative Bayes estimators to a global panel of annual data on 55 countries spanning the period 1970-2013, to show that when country heterogeneity is accurately accounted for in the estimation, it is possible to obtain significant impacts of trade variables on the environment, even with aggregate data. Based on the estimation results and further information on the stringency of environmental regulations in both developed and developing countries involved in the analysis, we identify different country groups having similar features with respect to the trade-environment relationship. Future multilateral actions and agreements on climate change should account for differences in countries' trade structures and development levels that determine their capabilities to mitigate and adapt to climate change.
    Keywords: FDI; trade openness, CO2 emissions, regulatory stringency, Bayesian shrinkage estimator
    JEL: C33 F18 Q56
    Date: 2015–09
  32. By: Iñaki Arto (European Commission – JRC - IPTS); Kurt Kratena (WIFO); Antonio F. Amores (European Commission – JRC - IPTS); Umed Temurshoev (European Commission – JRC - IPTS); Gerhard Streicher (WIFO)
    Abstract: This document explores the potential for the use of a market-based instrument to contribute to reducing the emissions of particulate matter of less than 10 micrometres from household heating appliances in the framework of the review of the Thematic Strategy on Air Pollution. The study is focused on the assessment of the economic and environmental impacts of possible scrappage policies for promoting the accelerated replacement of existing heating appliances with cleaner ones. Under these policy programmes, households replacing an old appliance with a cleaner one would receive a subsidy from the government. This subsidy would compensate households for the residual value of the scrapped appliance and the opportunity costs of the early investment in a new one. Two different scenarios are analysed: The scrappage and replacement of all the different types of conventional appliances that do not incorporate any emission control technology ('non-controlled'), and the scrappage and replacement of only 'non-controlled' firewood- and hard-coal-fired manual single house boilers. It is assumed that the scrappage programme is in force between 2018 and 2020. For each scenario, the study focuses on the effects of different levels of replacement of the 'non-controlled' appliances and the size of subsidies relative to the investment costs.
    Keywords: Market-based Instruments, Emissions reduction, Particles Emissions, Scrappage, Economic Impact
    JEL: Q52 C54 D58 D62 H23 H41 I18 D1
    Date: 2015–09
  33. By: Roberta De Santis (ISTAT); Cecilia Jona Lasinio (ISTAT)
    Abstract: In a globalized framework, environmental regulations can have a decisive role in influencing countries’ comparative advantages. The conventional perception about environmental protection is that it imposes additional costs on firms, which may reduce their global competitiveness with negative effects on growth and employment. However, some economists, in particular Porter and Van der Linde (1995), argue that pollution is often associated with a waste of resources and that more stringent environmental policies can stimulate innovations that may over-compensate for the costs of complying with these policies. This is known as the Porter hypothesis and suggests the existence of a “double dividend”, for both economic and environmental aspects, related to environmental regulation. In this paper, we adopt a macroeconomic approach to investigate the impact of different environmental instruments on the economy as a whole. We investigate the environmental policy impacts on a sample of European economies in 1995-2008. Our findings suggest that the “narrow” Porter Hypothesis cannot be rejected and that the choice of the policy instruments is not neutral. In particular, market based environmental stringency measures look as the most effective to stimulate innovations and productivity.
    Keywords: environmental regulation, productivity, innovation, Porter hypothesis.
    JEL: D24 Q50 Q55 O47 O31
    Date: 2015
  34. By: Ian Gough
    Abstract: This short article, based on a presentation at the London School of Economics, criticizes the common opinion that “green growth” offers a relatively painless – some even say pain-free – transition path for capitalist economies. After a brief summary of the daunting arithmetic entailed in combining fast decarbonization with continuing growth, the article advances 3 propositions. First, market-based carbon mitigation programs, such as carbon trading, cannot be sufficient and must be coupled with other policy pillars that foster transformative investment and widespread regulation. Second, a political economy of climate policy needs to draw on the lessons of comparative social policy research, which emphasizes the role of international pressures, interests, institutions, and ideas. Taking these into account gives a more realistic perspective on climate policy making in today’s neoliberal world. Third, more radical policies on both consumption and production are called for, to ensure that carbon mitigation is not pursued at the expense of equity and social welfare. These include policies to restrain high-carbon luxury consumption and a transition toward shorter paid working time. The conclusion is that a realistic program of green growth will be immensely difficult and entail radical political change.
    Keywords: climate change; green growth; social policy; political economy
    JEL: N0
    Date: 2015–07
  35. By: Baran Doda; Caterina Gennaioli; Andy Gouldson; David Grover; Rory Sullivan
    Abstract: This paper is the first large scale, quantitative study of the impact of corporate carbon management practices on corporate greenhouse gas (GHG) emissions. Using data for 2009 and 2010 from the Carbon Disclosure Project survey, we find little compelling evidence that commonly adopted management practices are reducing emissions. This finding is unexpected and we propose three possible explanations for it. First, it may be because corporate carbon data and management practice information have not been reported in a standardized way. Second, there may be a delay between the application of corporate carbon management practices and their impact on emissions performance. Third, carbon management practices are not sufficiently impact-oriented, meaning there is no relationship to observe. Our findings are important for policymakers designing corporate GHG reporting standards, for the multiple stakeholders trying to understand the drivers of corporate carbon performance, and for the corporate managers responsible for measuring, reporting and mitigating emissions.
    Keywords: corporations; greenhouse emissions; carbon management
    JEL: J50
    Date: 2015
  36. By: Francesca Lotti (Bank of Italy (Italy)); Giovanni Marin (IRCrES-CNR, Milano (Italy); SEEDS, Ferrara, Italy)
    Abstract: We investigate the productivity effects of eco-innovations at the firm level using a modified version of the CDM model (Crepon et al., 1998). The peculiar nature of environmental innovations, especially as regards the need of government intervention to create market opportunities, is likely to affect the way they are pursued and their effect on productivity.
    Keywords: R&D, innovation, productivity, patents, eco-patents.
    JEL: L60 Q55
    Date: 2015–09
  37. By: Venkatachalam ANBUMOZHI (Economic Research Institute for ASEAN and East Asia (ERIA)); Ponciano S. INTAL, Jr. (Economic Research Institute for ASEAN and East Asia (ERIA))
    Abstract: ASEAN member states (AMS) are confronted by serious environmental problems that threaten to undermine future growth and regional stability. This paper considers four major environmental challenges that policymakers across ASEAN will need to address towards 2030: water management, deforestation and land degradation, air pollution, and climate change. We argue that these challenges, each unique in its own way, exhibit the characteristics of wicked problems. As developed in the planning literature, and now applied much more broadly, wicked problems are dynamic and complex, encompass many issues and stakeholders, and evade straightforward, lasting solutions. Detailed case studies are presented to illustrate the complexity and significance of these environmental challenges, as well as their nature as wicked problems. The most important implication of this finding is that there will be no easy or universal solutions to environmental problems across ASEAN, as Environmental Performance Indicators (EPI) illustrate. This is a caution against over-optimism for formulating sector-specific solutions. It is not, however, a counsel for despair. We suggest general principles which may be useful across the board to tackle the issues and accelerate green growth. These are: a focus on cobenefits; an emphasis on stakeholder participation; a commitment to scientific and technological research; an emphasis on long-term planning; pricing reform; tackling governance issues, in addition to generally bolstering institutional capacity with regard to environmental regulation; and a strengthening of regionally coordinated approaches and international support.
    Keywords: green growth, environmental performance indicators, regional cooperation, sustainability
    JEL: Q32 Q34 Q37
    Date: 2015–09
  38. By: Jihad C. Elnaboulsi (CRESE, Univ. Bourgogne Franche-Comté)
    Abstract: This paper presents an analysis of environmental policy in imperfectly competitive markets. We investigate how environmental taxes should be optimally levied in a precommitment policy game and their e¤ects on social welfare. The paper also examines the potential impacts of the regulator?s environmental conscience on policy setting. We start the analysis with a benchmark model where all players are environmentally dirty in the marketplace. We then extend the model to the case in which the market is composed of a mix of dirty and clean strategic players. We show that, in both cases, the regulator must necessarily trade o¤ between regulation of environmental quality and the industry production ine¢ ciency problems. Furthermore, the results show how higher levels of concern for environmental issues outweigh the under taxation problem that arises in order to avoid further reductions in welfare. Finally, we show that the existence of clean players produces positive social externalities. Under an ex ant environmental policy game, higher social welfare outcomes are possible.
    Keywords: Environmental Policy, Emissions Tax, Environmental Conscience, Social Welfare, Strategic Behavior, Oligopoly Competition.
    JEL: D60 D82 L13 Q28
    Date: 2015–09
  39. By: Moghadam, Hamed M.
    Abstract: A recent paper of Carvajal, Deb, Fenske, and Quah (Econometrica 2013) applies the revealed preference approach in the context of a quantity competition oligopoly game. This paper aims to present a different solution concept for an evolutionary model in the asymmetric oligopoly setup where firms have different cost functions to produce a homogenous good. Then, using the approach introduced by Carvajal et al. (2013), we derive the testable conditions of the evolutionary oligopoly model. Therefore, contrary to the typical empirical literature in IO, without making any parametric assumption regarding to the demand curve and the cost function, this nonparametric approach characterizes a set of conditions (restrictions) on observational dataset to be consistent with evolutionary oligopoly model. An empirical application to the oil market with OPEC producers and Non-OPEC producers is presented and we compare the rejection rates of both Cournot and evolutionary hypotheses.
    Abstract: In einem jüngst veröffentlichten Artikel wenden Carvajal, Deb, Fenske und Quah (Econometrica 2013) den Ansatz der offenbarten Präferenzen im Rahmen eines Cournot-Oligopols an. Dieser Aufsatz soll ein anderes Lösungskonzept für ein evolutionäres Modell eines asymmetrischen Oligopols präsentieren, wo Unternehmen über verschiedene Kostenfunktionen verfügen, um ein homogenes Gut zu produzieren. Mithilfe des Ansatzes von Carvajal et al. (2013) leiten wir anschließend die testbaren Bedingungen des evolutionären Oligopol-Modells ab. Entgegen der typischen empirischen Literatur in IO, das heißt ohne eine parametrische Annahme bezüglich der Nachfragekurve und der Kostenfunktion, charakterisiert dieser nichtparametrische Ansatz daher eine Reihe von Bedingungen (Einschränkungen) für beobachtete Datensätze, um sie mit einem evolutionären, oligopolistischen Modell in Einklang zu bringen. Eine empirische Anwendung auf den Ölmarkt mit OPEC-Produzenten und nicht-OPEC-Produzenten wird präsentiert und wir vergleichen die Hypothesen des Cournot-Modells und des evolutionären Modells hinsichtlich ihrer Ablehnungsraten.
    Keywords: evolutionary oligopoly,observable restrictions,non-parametric test,oil market
    JEL: C73 D22 D43
    Date: 2015
  40. By: Germà Bel (Faculty of Economics, University of Barcelona); Stephan Joseph (Faculty of Economics, University of Barcelona)
    Abstract: We examine the number of patent applications for climate change mitigation technologies (CCMT) filed at the European Patent Office and seek to relate it to the oversupply of emission allowances under the European Union Emission Trading System (EU ETS). We use a panel count data approach to show that firms covered by the policy take the oversupply into account when determining their level of innovative activity. We also indirectly demonstrate that the “weak” version of the Porter hypothesis holds for the EU ETS, given the sizable oversupply of allowances in the market. Our results suggest that in order to set the European economy firmly on the low-carbon technology pathway, and to ensure that the ambitious EU climate targets are met, serious policy changes must be undertaken.
    Keywords: Environmental Policy; Emission Trading System; Certificate Oversupply; Technological Change; Patent Count Data JEL classification: Q55; Q58; O33; O38
    Date: 2015–09
  41. By: Sillmann, Jana; Lenton, Timothy M.; Levermann, Anders; Ott, Konrad; Hulme, Mike; Benduhn, Francois; Horton, Joshua
    Abstract: Current climate engineering proposals do not come close to addressing the complex and contested nature of conceivable ‘climate emergencies’ resulting from unabated greenhouse gas emissions.
    Date: 2015
  42. By: Garth Heutel; Juan Moreno Cruz; Soheil Shayegh
    Abstract: We study optimal climate policy when climate tipping points and solar geoengineering are present. Solar geoengineering reduces temperatures without reducing greenhouse gas emissions. Climate tipping points are irreversible and uncertain events that cause large damages. We analyze three different rules related to the availability of solar geoengineering: a ban, using solar geoengineering as insurance against the risk of tipping points, or using solar geoengineering only as remediation in the aftermath of a tipping point. We model three distinct types of tipping points: two that alter the climate system and one that yields a direct economic cost. Using an analytic model, we find that an optimal policy, which minimizes expected losses from the tipping point, includes both emissions reductions and solar geoengineering from the onset. Using a numerical simulation model, we quantify optimal policy and various outcomes under the alternative scenarios. The presence of tipping points leads to more mitigation and more solar geoengineering use and lower temperatures.
    JEL: C61 H23 Q54 Q58
    Date: 2015–09
  43. By: L.F.M. Groot; J. Swart
    Abstract: To reach an international agreement on the cost of abatement of climate change, one needs to specify a fair burden sharing rule. This paper evaluates different burden sharing rules in terms of their redistributive impact and by the extent to which they realize the aim of optimal abatement. It is shown that for all regions and almost all countries, the Lindahl solution, where the burden sharing rule of carbon abatement is determined by each country’s willingness to pay, is to be preferred above the noncooperative Nash outcome. Poor countries and regions however would prefer the social planner outcome with a global permit market, because then the burden sharing rule is given a secondary role of income redistribution from rich to poor, on top of its primary role of assigning abatement burdens.
    Keywords: Nash, Lindahl, tradable permits, equity, efficiency, burden sharing rule
    Date: 2015
  44. By: Pizer, William; Aldy, Joseph Edgar
    Abstract: The availability of practical mechanisms for comparing domestic efforts aimed at mitigating global climate change are important for the stability, equity, and efficiency of international climate agreements. We examine a variety of metrics that could be used to compare countries’ climate change mitigation efforts and illustrate their potential application to large developed and developing countries. Because there is no single comprehensive, measurable metric that could be applied to all countries, we suggest using a set of indicators to characterize and compare mitigation effort, akin to using a set of economic statistics to indicate the health of the macroeconomy. Given the iterative pledge and review approach that is emerging in the current climate change negotiations, participation, commitment, and compliance could be enhanced if this set of indicators is able to show that all parties are doing their “fair share,†both prospectively and retrospectively. The latter, in particular, highlights the need for a well-functioning policy surveillance regime.
    Date: 2016
  45. By: Kenneth Gillingham (School of Forestry & Environmental Studies, Yale University); William D. Nordhaus (Cowles Foundation, Yale University); David Anthoff (University of California, Berkeley); Geoffrey Blanford (Electric Power Research Institute (EPRI)); Valentina Bosetti (Bocconi University); Peter Christensen (University of Illinois, Urbana-Champaign); Haewan McJeon (Joint Global Change Research Institute, University of Maryland); John Reilly (Sloan School, MIT); Paul Sztorc (Dept. of Economics, Yale University)
    Abstract: The economics of climate change involves a vast array of uncertainties, complicating both the analysis and development of climate policy. This study presents the results of the first comprehensive study of uncertainty in climate change using multiple integrated assessment models. The study looks at model and parametric uncertainties for population, total factor productivity, and climate sensitivity. It estimates the pdfs of key output variables, including CO2 concentrations, temperature, damages, and the social cost of carbon (SCC). One key finding is that parametric uncertainty is more important than uncertainty in model structure. Our resulting pdfs also provide insights on tail events.
    Keywords: Climate change, Modeling, Uncertainty, Statistics, Integrated assessment models
    JEL: Q4 Q5 C6 H4
    Date: 2015–09

This nep-ene issue is ©2015 by Roger Fouquet. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.