nep-ene New Economics Papers
on Energy Economics
Issue of 2015‒11‒01
thirty-six papers chosen by
Roger Fouquet
London School of Economics

  1. Economic Evaluation of Small-scale Renewable Electricity Generation Project with Community Participation by Regional I-O Analysis in which WTW is incorporated By Eiji Ohno; Ryuta Mori; Akira Matsumoto
  2. Tracing Brazilian states’ CO2 emissions in domestic and global trade By Denise Imori; Joaquim Jose Martins Guilhoto
  3. Tracing Brazilian regions? CO2 emissions in domestic and global trade By Denise Imori; Joaquim Guilhoto
  4. Toward a low carbon growth in Mexico : is a double dividend possible ? A dynamic general equilibrium assessment By Gissela Landa; Frédéric Reynès; Ivan Islas; François-Xavier Bellock; Fabio Grazi
  5. Forecasting Models of Energy Demand for Electricity Market: A Literature Review By Amel GRAA; Ismail ZIANE; Farid BENHAMIDA
  6. Energy Consumption, CO2 Emissions, and Economic Growth: A Moral Dilemma By Antonakakis, Nikolaos; Chatziantoniou, Ioannis; Filis, George
  7. Economic Impact of CO2 Emissions and Carbon Tax in Electric Vehicle Society in Toyohashi City in Japan By Yuzuru Miyata; Hiroyuki Shibusawa; Tomoaki Fujii
  8. Electric Appliance Ownership and Usage: Application of Conditional Demand Analysis to Japanese Household Data By Shigeru Matsumoto
  9. What if We Adopt a Resilience Thinking Approach in the Urban Governance for Emission Reduction? By Giulia Sonetti
  10. Is Shale Development Drilling Holes in the Human Capital Pipeline? By Dan S. Rickman; Hongbo Wang; John V. Winters
  12. Intermittent renewable generation and network congestion: an empirical analysis of Italian Power Market By Faddy Ardian; Silvia Concettini; Anna Creti
  13. Time Series Analysis of Persistence in Crude Oil Price Volatility across Bull and Bear Regimes By Luis A. Gil-Alana; Rangan Gupta; Olusanya E. Olubusoye; OlaOluwa S. Yaya
  14. Offset Credits in the EU ETS: A Quantile Estimation of Firm-Level Transaction Costs By Helene Naegele
  15. Environmental and Economic Impact of Carbon Credit in Makassar City in Indonesia By Yuzuru Miyata; Hiroyuki Shibusawa; Takahide Fukuda
  16. Essays on the electricity sector in developing countries By Daniel Camos-Daurella
  18. The impact of oil price shocks on the U.S. stock market: a note on the roles of U.S. and non-U.S. oil production By Kang, Wensheng; Ratti, Ronald A.; Vespignani, Joaquin L.
  19. Correcting agglomeration economies: How air pollution matters By Marion Drut; Aurélie Mahieu
  20. A New Carbon Tax in Portugal: A Missed Opportunity to Achieve the Triple Dividend? By Alfredo Marvão Pereira; Rui M. Pereira; Pedro G. Rodriguesa
  21. Left in the Dark? Oil and Rural Poverty By Brock Smith; Samuel Wills
  22. An empirical analysis of the relationships between crude oil, gold and stock markets By Semei Coronado; Rebeca Jim\'enez-Rodr\'iguez; Omar Rojas
  23. Resource Discovery and Conflict in Africa: What do the data show? By Rabah Arezki; Sambit Bhattacharyya; Nemera Mamo
  24. Mapping innovation in the global photovoltaic industry: a bibliometric approach to cluster identification and analysis By Marina Van Geenhuizen; Pieter Stek
  25. Oil Contracts, Progressive Taxation and Government Take in the Context of Uncertainty in Crude Oil Prices: The Case of Chad By Guy Dabi Gab-Leyba; Bertrand Laporte
  26. Electricity connections and firm performance in 183 countries By Geginat,Carolin; Ramalho,Rita
  27. Convergence in per capita Carbon Dioxide Emissions: a panel data approach By Guilherme de Oliveira; Giana de Vargas Moraes
  28. An evaluation of energy-environment-economic efficiency for EU, APEC and ASEAN countries By Soushi Suzuki; Peter Nijkamp
  29. Notes on the Underground: Monetary Policy in Resource-Rich Economies By Andrea Ferrero; Martin Seneca
  30. Green Shipping By Hella Engerer
  31. Macroeconomic Effects of Oil Price Fluctuations on Emerging and Developed Economies in a Model Incorporating Monetary Variables By Taghizadeh-Hesary, Farhad; Yoshino, Naoyuki
  32. Natural Resources and Economic Growth : A Meta-Analysis By Tomas Havranek; Roman Horvath; Ayaz Zeynalov
  33. Market Structure and Sustainable Use of Natural Resources By Yuri Yegorov
  34. A Stochastic Electricity Market Clearing Formulation with Consistent Pricing Properties By Victor M. Zavala; Kibaek Kim; Mihai Anitescu; John Birge
  35. Commodity Price Shcks, Growth and Structural Transformation in Low-Income Countries By Thomas McGregor
  36. Estimation of Social Costs of Highways in Japan By Fumitoshi Mizutani; Yusuke Suzuki; Shuji Uranishi

  1. By: Eiji Ohno; Ryuta Mori; Akira Matsumoto
    Abstract: Small-scale renewable electricity generation projects have the potential to address not just the need to reduce greenhouse gas emissions to combat climate change, but also to provide local, sustainable economic and community revitalization. JapanÂfs experience following the Great East Japan Earthquake has also demonstrated the potential fragility of too-heavy reliance on large-scale power plants. Small-scale projects, such as those using solar, wind, or hydroelectric resources, can thus also boost a regionÂfs energy self-sufficiency and ability to withstand natural disasters. In addition, small-scale operations mean that areas unsuitable to larger plants or installations can become productive - in the case of hydroelectric plants, as discussed in this paper, smaller streams can be tapped for power, with the additional benefit of not requiring costly dam construction. These benefits indicate the great potential for small-scale electricity generation projects, and this paper explores their economic feasibility in practice, using a hypothetical case study in a small regional Japanese city. The hypothetical plant is intended to provide both environmental and economic benefits to the local community, and the various trade-offs between levels of each are studied. We evaluate the project economically by using the regional I-O (input output) analysis in which the WTW (willingness to work) is incorporated. The WTW results for the project have been estimated by using the conjoint analysis as a function of its various attributes, namely revenue from the projectÂfs electricity sales, profits earned for the local community, and rewards given to contributors. The results show that if the reward for volunteer activity is set higher, the amount of volunteer labor is increased, and the operating surplus of the project is also increased. As a result, it is possible to reduce the subsidies of regional governments with respect to the project, and it is possible to devote that amount of budget to improvement of other administrative services. Subsequently, when this type of small hydroelectric generation project with citizen participation is introduced, household utility levels increase. Understanding the dynamism between these factors can allow regional governments to adapt the scheme to best fit the needs of individual regions. JEL classification: Q42, Q51, R13 Keywords: small-scale renewable electricity generation, community participation, community revitalization, regional input output analysis, willingness to work
    Keywords: small-scale renewable electricity generation; regional input output analysis
    JEL: Q42 Q51 R13
    Date: 2015–10
  2. By: Denise Imori; Joaquim Jose Martins Guilhoto
    Abstract: The current Brazilian position on climate change has been formalized with the law of National Climate Change Policy, which provides a legal framework for national actions aimed at mitigation and adaptation. Within PNMC, the country has defined its national voluntary reduction targets for greenhouse gases emissions, with reductions between 36.1% and 38.9% of projected emissions by 2020. The distribution of the corresponding mitigation efforts by regions is of great concern in a large country like Brazil. In fact, most of Brazilian states have established public policies on climate change. In this context, questions raised in the literature on global climate change, such as the environmental responsibility for emissions embodied in trade, also apply at the regional level, and perhaps even to a larger extent. In order to analyze at regional level the current relationship between Brazil’s CO2 emissions and domestic and global value chains, in this study we adopt a new framework that combines a world input-output table with an inter-regional input-output table. Also, a new database is compiled on Brazilian states’ energy use (by fuel) and related CO2 emissions at sectoral level, based on states’ official energy balances. We are able to evaluate the CO2 emissions in each of the 27 Brazilian states, considering their respective productive structure, energy use, as well as their trade with other states or foreign countries. We find that, in 2008, emissions from the production of inter-regionally traded goods and services corresponded to 36% of Brazilian CO2 emissions. There is great variation among states concerning their emissions intensities and carbon content of their trade relationships with their states and foreign countries.
    Keywords: CO2 emissions; input-output analysis; global value chains
    JEL: Q56 C67 R15
    Date: 2015–10–17
  3. By: Denise Imori; Joaquim Guilhoto
    Abstract: The current Brazilian position on climate change has been formalized with the law of National Climate Change Policy (PNMC, in Portuguese), established in December 2009, which provides a legal framework for national actions aimed at mitigation and adaptation. Within PNMC, the country has defined its national voluntary reduction targets for greenhouse gases emissions, with reductions between 36.1% and 38.9% of projected emissions by 2020. The distribution of the corresponding mitigation efforts by regions is of great concern in a large country like Brazil, with substantial regional variation in economic development, physical geography, production system, and energy consumption. In fact, most of Brazilian states have established public policies on climate change. Out of the 27 states, three have mandatory targets for reducing greenhouse gas emissions: São Paulo and Rio de Janeiro, in the most developed Southeast region; Mato Grosso do Sul, in the Central-West region; as well as Paraíba, in the Northeast region. In this context, questions raised in the literature on global climate change, such as the environmental responsibility for emissions embodied in trade, also apply at the regional level, and perhaps even to a larger extent. In order to analyze at regional level the current relationship between Brazil?s CO2 emissions and domestic and global value chains, in this study we adopt a new framework that combines a world input-output table (WIOT) with an inter-regional input-output table (IRIOT). In our approach, we have chosen not to take one of the datasets (say the WIOT) as a starting point and adapt the other dataset (i.e. the IRIOT) accordingly, instead we construct input coefficients for which both datasets are used. For the empirical application, we use the WIOT for 2008 that was constructed in the World Input-Output Database (WIOD) project. It is a full inter-country input-output table covering 40 countries and the rest of the world as a 41st country. Our IRIOT for 2008 covers the 27 Brazilian states. Both the WIOT and the IRIOT were aggregated to 28 compatible industries. Also, a new database is compiled on Brazilian states? energy use (by fuel) and related CO2 emissions at sectoral level, based on states? official energy balances and estimates of national greenhouses gases emissions for 2008 from Brazil?s Ministry of Science and Technology. We are able to evaluate the CO2 emissions in each of the 27 Brazilian states, considering their respective intra-regional productive structure, energy use, as well as their trade with other states or foreign countries. In this way, our results reveal how CO2 emissions are produced in Brazilian regions by means of domestic and global value chains.
    Keywords: CO2 emissions; input-output analysis; Brazil; global value chains
    JEL: Q56 C67 R15
    Date: 2015–10
  4. By: Gissela Landa (OFCE (OFCE)); Frédéric Reynès (Nederlandse Organisatie voor Toegepast Natuurwetenschappelijk Onderzoek); Ivan Islas (Instituto Nacional de Ecología y Cambio Climático (INEC)); François-Xavier Bellock (Agence Française de Féveloppement (AFD)); Fabio Grazi (Agence Française de Féveloppement (AFD))
    Abstract: This paper simulates the medium- and long-term impact of proposed and expected energy policy on the environment and on the Mexican economy. The analysis has been conducted with a Multi-sector Macroeconomic Model for the Evaluation of Environmental and Energy policy (Three-ME). This model is well suited for policy assessment purposes in the context of developing economies as it indicates the transitional effects of policy intervention. Three-ME estimates the carbon tax required to meet emissions reduction targets within the Mexican “Climate Change Law”, and assesses alternative policy scenarios, each reflecting a different strategy for the recycling of tax revenues. With no compensation, the taxation policy if successful will succeed in in reducing CO2 emissions by more than 75% by 2050 with respect to Business as Usual (BAU), but at high economic costs. Under full redistribution of carbon tax revenues, a double dividend arises and the policy is beneficial both in terms of GDP and CO2 emissions reduction.
    Keywords: Climate policy; Energy economy modelling; Energy system; Double dividend
    Date: 2015–10
  5. By: Amel GRAA (Djillali Liabes University); Ismail ZIANE (Djillali Liabes University); Farid BENHAMIDA (Djilali Liabes University)
    Abstract: Electricity demand forecasting has become a main field of research in electrical engineering. The effect of the unexpected economic fluctuations and high dependency of the power generation system on the energy resource, results in an electrical energy cost increase and demand fluctuation, so forecasting for electricity market is an predict system. The power industry requires forecasts not only from the production perspective but also from a financial viewpoint. This paper proposes a set of forecasting methods used for the electric energy demand. Similar day approach, trend method, econometric model, end-use approach are the most frequently used techniques for energy forecasting studies. Finally, authors discuss advantages and disadvantages of each method based on the theoretical background.
    Keywords: Forecasting approach, load demand, model section, electricity market, similar day method.
    JEL: C51
  6. By: Antonakakis, Nikolaos; Chatziantoniou, Ioannis; Filis, George
    Abstract: In this study we examine the dynamic interrelationship in the output-energy-environment nexus by applying panel vector autoregression (PVAR) and impulse response function analyses to data on energy consumption (and its subcomponents), carbon dioxide emissions and real GDP in 106 countries classified by different income groups over the period 1971-2011. Our results reveal that the effects of the various types of energy consumption on economic growth and emissions are heterogeneous on the various groups of countries. Moreover, causality between total economic growth and energy consumption is bidirectional, thus making a case for the feedback hypothesis. However, we cannot report any statistically significant evidence that renewable energy consumption, in particular, is conducive to economic growth, a fact that weakens the argument that renewable energy consumption is able to promote growth in a more efficient and environmentally sustainable way. Finally, in analysing the case for an inverted U-shaped EKC, we find that the continued process of growth aggravates the greenhouse gas emissions phenomenon. In this regard, we cannot provide any evidence that developed countries may actually grow-out of environmental pollution. In the light of these findings, the efficacy of recent government policies in various countries to promote renewable energy consumption as a means for sustainable growth is questioned. Put differently, there seems to be a moral dilemma, between high economic growth rates and unsustainable environment and low or zero economic growth and environmental sustainability.
    Keywords: Energy Consumption, Economic Growth, CO2 Emission, Panel Vector Auto Regression, Panel Impulse Response Function.
    JEL: C33 O13 O44 P28 P48 Q42 Q56
    Date: 2015–10–23
  7. By: Yuzuru Miyata; Hiroyuki Shibusawa; Tomoaki Fujii
    Abstract: In this paper, we explore the economic impact of promotion and realization of an electric vehicle society (EVS) in Toyohashi City in Japan. More concretely, this paper emphasizes a computable general equilibrium (CGE) modeling approach to evaluate the following issues: economic impacts of subsidies for promotion of an EVS, economic impacts of carbon tax for reducing CO2, industrial structure change towards an EVS, and modal shift occurring towards an EVS. Our simulation results demonstrate that after applying 5 ~ 25% up subsidies to five industries including electric vehicle (EV) manufacturing, EV transport, solar power, cogeneration and other transport, the total industrial output and city GDP increase. A large growth rate is found in industries where subsidies are introduced, but non-ferrous metal industry also grows without subsidies due a repercussion effect. Moreover, it is interesting that decreasing proportions are found in oil and coal product, mining, heat supply and gasoline vehicle (GV) transport industries. However the total CO2 emission in Toyohashi City is increased being interpreted as a rebound effect. All the commodity prices decrease since subsidies are given to some industries. Hence Toyohashi CityÂfs economy shows a direction where the demand for conventional vehicles and energy use are decreased, conversely, the demand for EVs and renewable energy are increased illustrating a different life style from the current one. Regarding CO2 emissions, we introduced a carbon tax of 1,000 yen/t-CO2 for industries except the five industries mentioned above. As a result the total CO2 emission is decreased and the equivalent variation shows a positive value as compared with the base case. Thus introducing 5 ~ 25% subsidies and the carbon tax can really represent a realistic alternative society to EVS in Toyohashi City.
    Keywords: CGE model; electric vehicle; carbon tax; solar power; Toyohashi City
    JEL: Q00 Q01 Q50 Q51 Q53 Q55
    Date: 2015–10
  8. By: Shigeru Matsumoto (Aoyama Gakuin University)
    Abstract: Although both appliance ownership and usage patterns determine residential electricity consumption, it is less known how households actually use their appliances. In this study, we conduct conditional demand analyses to break down total household electricity consumption into a set of demand functions for electricity usage, across 13 appliance categories. We then examine how the socioeconomic characteristics of the households explain their appliance usage. Analysis of micro-level data from the Nation Survey of Family and Expenditure in Japan reveals that the family and income structure of households affect appliance usage. Specifically, we find that the presence of teenagers increases both air conditioner and dishwasher use, labor income and nonlabor income affect microwave usage in different ways, air conditioner usage decreases as the wife’s income increases, and microwave usage decreases as the husband’s income increases. Furthermore, we find that households use more electricity with new personal computers than old ones; this implies that the replacement of old personal computers increases electricity consumption.
    Keywords: Appliance Usage; Conditional Demand Analysis; Micro-level Data
    JEL: Q41 J22 Q50
  9. By: Giulia Sonetti
    Abstract: In recent times, the contribution of technology and standard energy indicators in urban governance for a wiser use of energy resources has been called in debate, emphasising the potential role of traditional ecological knowledge, individual lifestyles, and in general a wider long-term thinking about the sustainability goal of policy makers. A resilience perspective may help in exploring the contribution of community resilience when dealing with human factors and energy consumptions trends. The paper analyses these relations by observing a special portion of city represented by university campuses. In particular, energy data from the Sustainability Office of the Hokkaido University, in Japan, coupled with surveys with campus users in the effort to reduce their energy consumption, are red under a resilience lens. Results showed that although collective responses did produce sparkling and virtuous outcomes, there were not enough to reach the targets fixed by the national government in terms of electric and thermal energy percentage reduction. Conclusions outline the possibility of systematic efforts to break through the current curricular paradigms in reducing public building energy consumption, using new ways to foster cultural identity protection and resilience thinking in urban governance action toward a low carbon society.
    Keywords: Sustainability Assessment; University Campus; Community Resilience
    Date: 2015–10
  10. By: Dan S. Rickman (Oklahoma State University); Hongbo Wang (Oklahoma State University); John V. Winters (Oklahoma State University)
    Abstract: Using the Synthetic Control Method (SCM) and a novel method for measuring changes in educational attainment we examine the link between educational attainment and shale oil and gas extraction for the states of Montana, North Dakota, and West Virginia. The three states examined are economically-small, relatively more rural, and have high levels of shale oil and gas reserves. They also are varied in that West Virginia is intensive in shale gas extraction, while the other two are intensive in shale oil extraction. We find significant reductions in high school and college attainment among all three states’ initial residents because of the shale booms.
    Keywords: shale development, energy boom, human capital, education; synthetic control method
    JEL: I2 Q4 R1
    Date: 2015–10
  11. By: A. Engin Özçelik (Selcuk University, Technology Faculty, Mechanical Engineering); Hasan Aydo (Selcuk University, Technology Faculty, Mechanical Engineering); Mustafa Acaro (Selcuk University, Technology Faculty, Mechanical Engineering)
    Abstract: In the present study, the effects of biodiesel obtained from safflower oil through transesterification and Eurodiesel blends on engine performance were examined in a four-stroke, common-rail fuel system, water-cooled, four-cylinder diesel engine.Biodiesel blends of 10% biodiesel-90% Eurodiesel (B10) and 20% biodiesel-80% Eurodiesel (B20) were prepared by using the fuels obtained. Afterwards, the diesel engine was operated using B10, B20, 100% biodiesel (B100) and 100% Eurodiesel (B0) fuels. The findings were comparatively presented. In the experiments, engine power values obtained with Eurodiesel fuel, biodiesel and its blends were observed to be close to one another at all engine speeds. It was observed that fuel consumption showed a certain amount of increase with the use of Biodiesel and its blends compared to Eurodiesel fuel.
    Keywords: Biodiesel, Eurodiesel, safflower oil, common-rail
  12. By: Faddy Ardian (Ecole Polytechnique); Silvia Concettini (Ecole Polytechnique); Anna Creti (UP9 - Université Paris 9, Dauphine - Université Paris IX - Paris Dauphine, Ecole Polytechnique)
    Abstract: The literature demonstrates the likely reduction of wholesale electricity prices due to a larger penetration of renewable energy sources (RES). When markets are organized as two or more inter-connected sub-markets within a larger power market the final impact of increasing RES production may be less straightforward given the presence of network constraints. We tests this phenomenon by analyzing the impact of RES production on the probability of congestion and on the size of congestion cost in Italy. Using a database with hourly observations for a five year period we estimate two econometric models on five zonal pairings: a multinomial logit model for the occurrence and direction of congestion and a three stage least square model for the size of congestion costs. The analysis suggests that the effect of a larger local wind and solar supply is to decrease the probability of suffering congestion in entry and to increase the probability of causing a congestion in exit compared to no congestion case. Increasing hydroelectric production has a similar effect. These results hold for both importing and exporting regions, but importing regions are less likely to cause congestion in exit, therefore the installation of new RES capacity in these zones may have a positive effects in terms of flow balance between regions. Concerning the cost level, a larger local RES supply seems to push the congestion cost towards negative values as it decreases the marginal cost for balancing the system. This is true for all zones in the case of explicit congestion cost, but it is only verified in importing regions in the case of implicit congestion cost. This result suggests that the increase of RES production should be promoted in importing zones, but the overall growth should be controlled in order to avoid congestion in the opposite direction.
    Keywords: Electricity markets,Congestion, Zonal prices, Renewable production
    Date: 2015–10–21
  13. By: Luis A. Gil-Alana (University of Navarra, Pamplona, Spain); Rangan Gupta (Department of Economics, University of Pretoria); Olusanya E. Olubusoye (Department of Statistics, University of Ibadan, Ibadan, Nigeria); OlaOluwa S. Yaya (Department of Statistics, University of Ibadan, Ibadan, Nigeria)
    Abstract: This paper deals with the analysis of crude oil prices in the context of fractional integration and using bull and bear phases over the monthly period of September, 1859 to July, 2015. We examine both the log prices series as well as volatility, approximated by means of the absolute and the squared returns. The results for the whole sample indicate that the log-prices are nonstationary, with an order of integration close to 1 or even higher than 1, while the squared and absolute returns show evidence of long memory behavior. Upon separating the sample according to bull and bear periods, we observe an increase in the order of integration in both the log-prices and the two measures of volatility. Our results have important policy implications.
    Keywords: Bull and bear regimes, Oil price, Persistence, Volatility, West Texas Intermediate market
    JEL: C22 Q41
    Date: 2015–10
  14. By: Helene Naegele
    Abstract: International offset certificates trade at lower prices than European Union Allowances (EUAs), although they are substitutes within the EU Emissions Trading System (EU ETS) for CO2. Firms therefore had a strong incentive to use the cheaper certificates. However, a considerable number of firms did not use their allowed offset quota and, by doing so, seemingly forwent profits. While most of the literature on emissions trading evaluates the efficiency of regulation in a frictionless world, in practice firms incur costs when complying with regulation. In order to assess the relevance of managerial and information-related transaction costs, this study examines the use of international offset credits in the EU ETS. It establishes a model of firm decision under fixed entry costs and estimates the size of transaction costs rationalizing firm behavior using semi-parametric binary quantile regressions. Comparing binary quantile results with probit estimates shows that high average transaction cost result from a strongly skewed underlying distribution. I find that for most firms the bulk of transaction costs stems from participation in the EU ETS in general, rather than additional participation in the offset trade.
    Keywords: Environmental policy, EU ETS, emissions trading, transaction costs, binary quantile estimation
    JEL: C25 D23 H23 Q58
    Date: 2015
  15. By: Yuzuru Miyata; Hiroyuki Shibusawa; Takahide Fukuda
    Abstract: Economic measures are advanced to environmental problems in EU nations. The economic approach imposes a constant economic load on activities negatively affecting the environment, and it is also a technique for giving a constant profit for activities conserving the environment. The whole society is expected to be environmental-friendly state by this incentive. Moreover, this method has the advantage for inventing new technologies and efficient production processes. The direct regulation is pointed out as an environmental conservation measure. However dependence on the regulatory control has the anxiety to decline the economic vitality of firms. Therefore, the economic approach that does not decrease inventiveness and the autonomy of each firm becomes important. Carbon credit can be taken as one of the economic measures for controlling global warming. The upper limits of CO2 emissions are assigned to each firm or country, and the carbon credit is defined as a credit of the volume of CO2 emissions generated by economic activities. The mechanism in which the total CO2 emission is controlled by buying and selling the carbon credit is called emission right trading. The present study focusses on the carbon credit. Although researches on environmental and economic impact by carbon credit at a country level have already been conducted, studies on such a topic in developing countries emitting large CO2 and/or a city level have hardly been found. Hence, the present study analyzes the environmental and economic impact of introduction of carbon credit in Makassar City, which is a main city in east Indonesia, by employing a computable general equilibrium (CGE) model. The reason selecting Indonesia as a study country is that CO2 emissions in Indonesia considering the swiddens and the peaty land are ranked at the third place in the world. The reason selecting Makassar City as a study region is that there is an enough forest in surroundings of Makassar City and a big amount of the CO2 forest absorption can be expected for issuing the carbon credit. Moreover, it is another reason that there is an input-output table in Makassar City, and data that is necessary to construct a computable general equilibrium model is available. In this paper, Makassar City is assumed to issue a carbon credit and sell it to other regions. Numerical simulations are implemented to analyze the environmental and economic impact of the carbon credit. The simulation results show a decrease in CO2 emissions and an increase in household utility in Makassar City by selling the carbon credit to other regions.
    Keywords: carbon credit; global warming; Makassar; Indonesia; CGE
    JEL: Q50 Q53 Q54 Q56 Q58
    Date: 2015–10
  16. By: Daniel Camos-Daurella
    Abstract: This thesis focuses on the electricity sector in developing economies. This is an important sector given the well-documented contribution of high quality electricity services to economic growth and social welfare. Yet, today, 1.2 billion people worldwide lack access to electricity - half of them in sub-Saharan Africa. The sector is characterized by the high cost of electricity investments combined with the tight fiscal constraints often faced by developing countries' governments. In this context, many electricity utilities around the world either do not perform satisfactorily or operate under severe financial stress. In order to improve the performance of the electricity sector, policy makers need to prioritize among competing objectives and identify the most relevant tools. The first chapter is called "Procuring the right supervisors for infrastructure investments in developing countries". It fits into the set of challenges regarding access that regulatory choices available to policy makers can address. This chapter focuses on a possible way to increase the efficiency of infrastructure investments financed by international financial institutions (IFI) in poor governance countries that has been under studied in the past: the role of supervision consultants, who typically supervise the performance of a contractor firm building the actual infrastructure on behalf of a principal such as the Ministry of Works. I argue that the incentive remuneration of supervisors - understood as a combination of a threat of non-payment and reputation to obtain future contracts - is exogenous to the quality of governance of the country of work. I then apply this exogeneity to the classical Laffont-Tirole (1991) three-tier principal-agent with supervisor setting. I find that the induced contractor's power of incentives of their seminal model change: if the supervisor's incentive remuneration is high enough, effort is optimal; if it decreases, then the effort is sub-optimal but capture is avoided; and if the remuneration decreases even further, then the supervisor is always captured. I then suggest that IFIs could enhance efficiency of infrastructure invesmtents by (i) linking the resources allocated to monitor projects with the corruptibility of the country, and (ii) adding the corruptibility of the country in which the supervisor has successfully conducted previous assignments as a selection criteria when procuring new supervisors. The second chapter is called "Does size matter for performance? Evidence from Brazilian electricity distribution utilities". It fits into the set of challenges regarding affordability that market structure choices available to policy makers can address. In this chapter, I study the relationship between the size and the evolution of total factor productivity in 33 Brazilian electricity distribution utilities (both public and private) representing 97% of the market. This is of particular interest at this point in time given that the renewal of many concessions of utilities is set to start in 2015. I use an input distance function in a stochastic frontier analysis framework with 2 outputs (number of connections and electricity sold) and 3 inputs (operational expenses, length of the network, and capacity of transformers). I apply this methodology to a database spanning from 2003 to 2012 and then decompose the productivity into various components, paying a particular attention to the effect of firm size on productivity. I find that while large utilities are at the minimum efficient scale, the others are slowly moving towards that point. In addition, I find that, when grouping utilities according to size categories, the scale component of technical change explains an important part of the TFP changes. Brazilian policy makers and the regulator would lose an opportunity if they did not consider these findings in the imminent renewal of concessions. The third and last chapter is called "When and how does rural electrification increase labor supply?" and is co-authored with Christian Lehmann. It fits into the set of challenges regarding access and growth that technology choices available to policy makers can address. This chapter is motivated by the expanding empirical literature studying the effects of rural electrification in developing countries that has emerged in the last few years. It focuses on the effect of rural electrification on the labor markets. While the literature tends to agree that labor supply increases with electrification, the underlying mechanisms through which this happens are not well documented: while some authors argue that it is the external market labor supply that goes up, others claim that it is the in-house labor supply of marketable goods that increases. We develop a household model that provides a theoretical framework to integrate the results of most existing empirical studies and explain the theoretical mechanisms behind them. Our model has three types of goods to which the household can allocate its labor: a subsistence good, an informal good, and a formal good. We find that, depending on a number of parameters, electrification increases labor supply either through more labor provided to the market or through more labor devoted to home production of tradable goods. This result is in line with previous empirical work. We also find that the effect of electrification is heterogeneous across households and deduce a number of predictions that, to the best of our knowledge, have not been tested by the empirical literature yet.
    Keywords: labor market; rural electrification; infrastructure; efficiency; utilities; electricity; procurement; consultants
    Date: 2015–07–16
  17. By: Balázs Sándor Gál (University of Miskolc)
    Abstract: If humanity wants to learn from theirearlier mistakes,required energy demand what need to the economy and living standards increase in, and technological obsolescence due to the loss of capacity should meet renewable sources, or replaced. It is particularly in those cases where the economic, technological or environmental conditions allow it. In several cases can encounter on the analysis of these developments in economic, environmental and social aspects. There several methods for the implementation of the measurements, but in most cases only one or two aspects examined. However, the enforcement of the principle of sustainability requires a complex comparison what we need to make any type of energy or energy-production methods in case of the most ideal ways of generating energy. Way for selecting adjusted to the economic, social and natural environment.
    Date: 2015–10–15
  18. By: Kang, Wensheng (Kent State University); Ratti, Ronald A. (University of Western Sydney); Vespignani, Joaquin L. (University of Tasmania)
    Abstract: Kilian and Park (IER 50 (2009), 1267–1287) find shocks to oil supply are relatively unimportant to understanding changes in U.S. stock returns. We examine the impact of both U.S. and non-U.S. oil supply shocks on stock returns in light of the unprecedented expansion in U.S. oil production since 2009. Our results underscore the importance of the disaggregation of world oil supply and of the recent extraordinary surge in the U.S. oil production for analysing impact on U.S. stock prices. We also show that stock returns respond very differently at the industrial level to non-U.S. and U.S. oil supply shocks.
    JEL: E44 G12 Q43
    Date: 2015–09–01
  19. By: Marion Drut; Aurélie Mahieu
    Abstract: This paper aims to correct standard measures of agglomeration economies to account for air pollution generated by commuting. This paper examines the impact of nitrogen oxide (NOX) ? a pollutant mainly released by transportation ? on worker productivity. On one side, literature on agglomeration economies highlights the positive role of employment density on productivity, without accounting for the environmental impact of a better accessibility. On the other side, several studies (Graham, 2007; Rice et al., 2006) show that new transportation infrastructures or policies have a positive effect on accessibility, thus enlarging the opportunities offered to workers and leading to increased labor productivity. However, additional commuting trips may be induced by enhanced accessibility, and generates higher levels of polluting emissions (Goodwin, 1999; Litman, 2011). Epidemiological studies show that atmospheric pollution has a negative and significant impact on human health (see e.g., Currie et al. (2009a, 2009b)), implying lower labor productivity (Lavy et al., 2012; Graff Zivin and Neidell, 2012). This article aims at correcting estimations of agglomeration economies by accounting for air pollution resulting from commuting. More specifically, we consider local air pollution as a determinant of labor productivity and integrate it in the theoretical framework estimating agglomeration economies in order to assess the extent to which pollution limits the full efficiency of production capacities. We use aggregate data for the year 2009 for the 304 French metropolitan employment areas. First, we estimate the effects on labor productivity per worker of employment density, controlling for standard variables. In line with the literature, the results show an increase in productivity of 0.03% for a 1% increase in employment density. Second, we include NOX emissions as a proxy for atmospheric pollution. In line with epidemiological studies, we find that air pollution negatively impacts labor productivity. A 1% increase in the level of NOX emissions leads to almost 0.1% decrease in productivity. Third, we compare the models with and without air pollution. When pollution is accounted for, the positive effect of employment density on productivity is reduced. Finally, we focus on an illustrative case to show the magnitude of the reduction of agglomeration economies when local air pollution is considered. When NOX emissions are included in the model, the productivity gains of agglomeration are reduced by more than 13%. We conclude that accounting for air pollution (NOX) in the econometric model of agglomeration economies allows ?correcting? the effect of density on productivity, confirming that pollution matters. Indeed, introducing new transportation infrastructures and policies improves the accessibility of an area, which enlarges the positive externalities (agglomeration economies) stemming from increased density, but which also generates additional pollution due to induced trips. Yet pollution limits the full efficiency of production capacities.
    Keywords: Agglomeration economies; accessibility; air pollution; transportation policies
    JEL: O18 R23
    Date: 2015–10
  20. By: Alfredo Marvão Pereira (Department of Economics, The College of William and Mary); Rui M. Pereira (Department of Economics, The College of William and Mary); Pedro G. Rodriguesa (Center for Administration and Public Policies, Universidade de Lisboa, Portugal)
    Abstract: In 2014, the Portuguese government appointed a Commission for Environmental Tax Reform that formulated a carbon-tax proposal designed to achieve three dividends: to help Portugal meet the European Union’s target for emissions reductions by 2030, to boost long-term employment and GDP above their pre-carbon tax levels, and to strengthen public finances by lowering public indebtedness. A key feature of this proposal was a judicious set of mixed strategies to recycle all carbon-tax revenues back into the economy. In this note, we show how the carbon tax that the Portuguese Parliament eventually approved deviated from such guidelines, and ultimately failed to achieve the triple dividend. We argue that authorities need to quickly amend the existing legislation to avoid this misguided attempt turning into a missed opportunity to improve environmental, macroeconomic, and fiscal outcomes.
    Keywords: Carbon Tax; Triple Dividend; Economic Growth; Fiscal Consolidation; Dynamic General Equilibrium; Portugal.
    JEL: D58 H63 O44
    Date: 2015–10–01
  21. By: Brock Smith; Samuel Wills
    Abstract: Oil booms do not benefit the rural poor. To show this we combine data on night-time lights and population at a very fine (1 km2) resolution to construct global measures of rural poverty from 2000-2013. We find that oil booms, due either to high prices or new discoveries, increase GDP per capita. However, the increase in output is limited to cities and towns, and does not benefit the rural poor. We also find that while urbanization is occurring throughout the developing world, it is not being hastened by oil wealth.
    Keywords: rural poverty, natural resources, structural transformation, oil booms
    JEL: F12 Q37
    Date: 2015
  22. By: Semei Coronado; Rebeca Jim\'enez-Rodr\'iguez; Omar Rojas
    Abstract: This paper analyzes the direction of the causality between crude oil, gold and stock markets for the largest economy in the world with respect to such markets, the US. To do so, we apply non-linear Granger causality tests. We find a nonlinear causal relationship among the three markets considered, with the causality going in all directions, when the full sample and different subsamples are considered. However, we find a unidirectional nonlinear causal relationship between the crude oil and gold market (with the causality only going from oil price changes to gold price changes) when the subsample runs from the first date of any year between the mid-1990s and 2001 to last available data (February 5, 2015). The latter result may explain the lack of consensus existing in the literature about the direction of the causal link between the crude oil and gold markets.
    Date: 2015–10
  23. By: Rabah Arezki; Sambit Bhattacharyya; Nemera Mamo
    Abstract: The empirical relationship between natural resources and conflict in Africa is not very well understood. Using a novel geocoded dataset on resource discovery and conflict we are able to construct a quasi-natural experiment to explore the causal effect of (giant and major) oil and mineral discoveries on conflict in Africa at the grid level corresponding to a spatial resolution of 0.5 x 0.5 degree covering the period 1946 to 2008. Contrary to conventional wisdom, we find no evidence of natural resources triggering conflict in Africa after controlling for grid-specific fixed factors and time varying common shocks. Resource discovery appears to have improved local income measured by nightlights which could be reducing the conflict likelihood. We observe little or no heterogeneity in the relationship across resource type, size of discovery, pre and post conclusion of the cold war, and institutional quality. The relationship remains unchanged at the regional and national levels.
    Keywords: Resource discovery; Conflict onset; Conflict incidence; Conflict intensity
    JEL: D72 O11
    Date: 2015
  24. By: Marina Van Geenhuizen; Pieter Stek
    Abstract: The photovoltaic industry acts as a key force in the transition toward a sustainable energy production model. Only a niche market a few years ago, photovoltaic panels and installations are now becoming a mainstream electricity provider. As a highly dynamic, multi-technology and globally distributed industry it is a challenge to identify and quantify its appearance in regional clusters. This challenge is even greater for its critically important innovation activities, including reaching higher efficiency of the cells, and increasing (other) functional and design qualities, like flexibility and color, as well as developing cheaper production methods. Yet because of the industry?s important role in securing a sustainable energy supply and in contributing to the regional economies in which it is established, a deeper understanding of the its global presence and activities is of significant scientific importance and policy relevance. This research follows the approach of 'paper trail' of the industry's innovation process as revealed in patents and scientific publications. By using these documents as sources from which to extract indicators for innovative activity, inputs, outputs and collaboration networks, a detailed picture of the photovoltaic industry innovation and its constituent regional clusters is constructed. This allows not only for the identification and analysis of major regional changes and global shifts of the industry and variation in cluster types, but also enables the estimation of models to identify at least some of the critical factors in photovoltaic clusters' innovation growth pattern, in so far as they can be revealed by bibliometric indicators. In order to select the relevant documents, we first determine which technologies are involved in the photovoltaic industry, like concerning the materials of the cells and shape of the panels, and derive this from expert opinion. We use the USPTO patent database and the Scopus database to retrieve relevant data published between 2005 and 2014. This data is used to carry out a multiple regression model estimation. Providing an understanding of the global location changes and growth and underlying factors in photovoltaic cluster's innovation development is new. The analysis exemplifies the currently increasing scientific attention to the role of cities and regions in transitions of socio-technical systems towards higher levels of sustainability, while referring to local seedbed conditions, including knowledge spillovers, and to networking power of technology actors like multinational companies and universities. The results offer insights to policy makers who aim to avoid barriers to innovation arising from global shifts.
    Keywords: photovoltaic industry; global shift; clusters; innovation; bibliometric approach
    JEL: F23 O14 O33 Q42
    Date: 2015–10
  25. By: Guy Dabi Gab-Leyba (CERDI - Centre d'études et de recherches sur le developpement international - CNRS - Université d'Auvergne - Clermont-Ferrand I); Bertrand Laporte (CERDI - Centre d'études et de recherches sur le developpement international - CNRS - Université d'Auvergne - Clermont-Ferrand I)
    Abstract: Concession Contracts (CC) and Production Sharing Contracts (PSC) have quite different implications for Government Take and the properties of the tax system, such as progressivity. In general, taxation via CC introduces significant distortions in activity, particularly due to the balance of royalties which tax production irrespective of the profitability of the project. So CC is normally regressive while PSC is normally progressive, because PSC taxation depends more directly on the profitability of the project. Chad has the distinction of having introduced PSC in the 2007 Chad oil code, while maintaining a royalty on production. Despite this feature, we show with a Cash Flow model and Monte Carlo simulations that the application of the 2007 oil code introduced more progressivity into taxation. This feature is particularly interesting in the current context of falling crude oil prices, because it maintains a favorable tax regime for exploration and exploitation by multinational oil companies. As a result, the Chad government should reactivate a counter-cyclical policy of oil revenue reserves when the crude oil price increases again.
    Keywords: cerdi
    Date: 2015–10–19
  26. By: Geginat,Carolin; Ramalho,Rita
    Abstract: This paper presents new data on electricity connections for businesses in 183 economies. The data cover information on procedures, time, and cost that a small or medium size business with a moderate electricity need has to invest to obtain a new electricity connection. The study finds significant variation in the time and cost to obtain such an electricity connection across countries. In low-income countries, for instance, it takes on average nearly twice as long as in high-income countries to connect a new customer to electricity, while the cost associated with a comparable connection is 70 times higher. The study finds that the poor performance of distribution utilities in low-income countries cannot only be explained by differences in income levels. The overall level of bureaucracy appears to be another important factor. The study also finds the data to be correlated with existing measures of the effectiveness of the electricity sector, suggesting that the hurdles related to obtaining an electricity connection mirror other problems in the sector, such as the quality of electricity supply and the incidence of bribe payments. Finally, the study finds that electricity connections affect firm performance. Simpler and less costly electricity connection processes are associated with better firm performance, in particular in industries with high electricity needs, such as manufacturing motor vehicles.
    Keywords: E-Business,Energy Production and Transportation,Public Sector Development,Environment and Energy Efficiency,Climate Change Mitigation and Green House Gases
    Date: 2015–10–26
  27. By: Guilherme de Oliveira; Giana de Vargas Moraes
    Abstract: The purpose of this paper is to estimate a dynamic panel data to test the convergence hypothesis in per capita CO2 emissions. The empirical approach uses random and fixed effects estimators to obtain the converge rate to 118 countries of the Extend Pen World Table, distributed in global and regional samples of countries. Our results show that the convergence rate increases when country-specific effects are considered in the model. In general, Asian and Latin American countries are converging faster to steady-state than the average of countries. The opposite was observed in Organization for Economic Cooperation and Development member countries. In addition, stable and strong convergence rates were found in global and regional large samples, a new result regarding previous literature.
    Keywords: Carbon dioxide emissions; conditional convergence; economic growth; environmental dynamics; panel data
    JEL: Q5 Q52 C33
    Date: 2015–10–22
  28. By: Soushi Suzuki; Peter Nijkamp
    Abstract: This paper aims to offer an advanced assessment methodology for sustainable national energy-environment-economic efficiency strategies, based on an extended Data Envelopment Analysis (DEA) in which distinct countries are regarded as Decision Making Units (DMUs). The aim is to show how much various countries can improve their combined efficiency profile. Standard DEA models use a uniform input reduction or a uniform output increase in their improvement projections. The development of novel efficiency-improvement solutions based on DEA has greatly progressed in recent years. A recent example is the Distance Friction Minimisation (DFM) method, which aims to generate an original contribution to efficiency-enhancement strategies by deploying a weighted projection function, while it may address both input reduction and output increase as a strategy of a DMU. To design a feasible improvement strategy for low-efficiency DMUs, we develop a Target-Oriented (TO) DFM model that allows for less ambitious reference points that remain below the efficiency frontier. The TO-DFM model calculates then a Target-Efficiency Score (TES) for inefficient DMUs. This model is able to compute an input reduction value and an output increase value in order to achieve this TES. However, in many real-world cases the input factor may not be immediately flexible or adjustable, due to indivisibility (or lumpiness) of the input factor. Usually, a DEA model does not include such a non-controllable or a fixed factor. In this study, we aim to integrate the TO-DFM model with a fixed factor (FF) model in order to cope with realistic circumstances in our search for an efficiency improvement projection in combined energy-environment-economic strategies of individual nations. The present paper aims to offer an original contribution to efficiency enhancement in national sustainability strategies by means of the above described DEA approach. After the description of the methodology, a complementary Super-efficiency (SE) approach to DEA is used in our comparative study on the efficiency assessment of energy-environment-economic targets for the EU, APEC and ASEAN (A&A) countries, using appropriate data sets ranging from the years 2003 to 2012. In the present study, we consider two inputs (primary energy consumption and population) and two outputs (CO2 and GDP), including a fixed input factor, namely the ?population? production factor that cannot be flexibly adjusted. On the basis of our DEA analysis results, it appears that EU countries exhibit generally a higher efficiency than A&A countries. In particular, it turns out that Cyprus, Luxembourg and Ireland may be seen as super-efficient countries in the EU, and Brunei as a high performance country in A&A. The above-mentioned TO-DFM-FF projection model is used to address realistic circumstances and requirements in an operational sustainability strategy for efficiency improvement in inefficient countries in the A&A region.
    Keywords: dea; fixed factor; energy-environment-economic efficiency; eu; apec; asean
    JEL: C00 Q48
    Date: 2015–10
  29. By: Andrea Ferrero; Martin Seneca
    Abstract: How should monetary policy respond to a commodity price shock in a resource-rich economy? As in the baseline New Keynesian model, the central bank of a small oil-exporting economy faces a tradeoff, between the stabilization of domestic infl ation and an appropriately defined output gap. But in our framework the output gap depends on oil technology, and the weight on output gap stabilization is increasing in the importance of the oil sector. Given substantial spillovers to the rest of the economy, optimal policy calls for a reduction of the interest rate following a drop in the oil price. In contrast, a central bank with a mandate to stabilize consumer price infl ation would raise interest rates to limit the infl ationary impact of an exchange rate depreciation.
    Keywords: small open economy, oil export, monetary policy
    JEL: E52 E58 J11
    Date: 2015
  30. By: Hella Engerer
    Abstract: Der Seeweg ist der für den internationalen Handel wichtigste Transportweg. Über 80 Prozent der Frachtmengen werden global per Schiff transportiert. Der Seeverkehr verursacht vielfältige Umweltbelastungen: Dazu gehört neben Havarien undLeckagen, der Einleitung von Abwässern und der Müllentsorgung vor allem auch die Emission von Luftschadstoffen. Die Verminderung dieser Umweltbelastungen und grundsätzlich die Verbesserung des Umweltschutzes in der Schifffahrt wird als „Green Shipping“ bezeichnet. In jüngerer Zeit steht dabei die Verminderung der Treibhausgasemissionen im Vordergrund. Weltweit sind etwa 2,5 Prozent der Treibhausgasemissionen auf den Seetransport zurückzuführen. Um die Emissionen zu senken, wurden unter anderem in bestimmten Seefahrtgebieten verschärfte Grenzwerte eingeführt. So ist seit Anfang 2015 für Fahrten in der Nord- und Ostsee sowie im Ärmelkanal der Schwefelgehalt im Kraftstoff auf 0,1 Prozent limitiert. Damit die Grenzwerte eingehalten werden, muss die bestehende Schiffsflotte umgerüstet werden. So kann ein Schiff mit Filteranlagen nachgerüstet oder mit einem schadstoffärmeren Kraftstoff als dem in der Seefahrt überwiegend verwendeten, stark schwefelhaltigen Schweröl betrieben werden. Für die Zukunft ist eine weitere Zunahme des Seetransports und der durch ihn verursachten Luftschadstoffe zu erwarten. Die bislang auf EU-Ebene sowie weltweitgetroffenen Übereinkünfte reichen indes nicht aus, um die durch die Schifffahrt verursachten Treibhausgasemissionen nachhaltig zu senken.
    Date: 2015
  31. By: Taghizadeh-Hesary, Farhad (Asian Development Bank Institute); Yoshino, Naoyuki (Asian Development Bank Institute)
    Abstract: The goal of this paper is to examine the impact of crude oil price movements on two macro variables, the gross domestic product (GDP) growth rate and the consumer price index (CPI) inflation rate, in three countries, the People’s Republic of China (an emerging economy), Japan, and the United States (developed economies), in a model incorporating monetary variables (money supply and exchange rate). The main objective of this research is to investigate whether these economies are still reactive to oil price movements and compare their reactions. Monetary variables are included in this survey because our earlier research showed that they have a significant role in oil price determination. To assess the relationship between crude oil prices and macro variables we adopt an N-variable structural vector autoregression (SVAR) model. The results suggest that the impact of oil price fluctuations on developed oil importers’ GDP growth is much milder than on the GDP growth of an emerging economy. On the other hand, however, the impact of oil price fluctuations on the People’s Republic of China’s inflation rate was found to be milder than in the two developed countries that were examined.
    Keywords: Oil; GDP growth rate; CPI inflation; developed economies; emerging economies
    JEL: E31 O57 Q43
    Date: 2015–10–27
  32. By: Tomas Havranek (Czech National Bank); Roman Horvath; Ayaz Zeynalov
    Abstract: An important question in development studies is how abundance of natural resources affects long-term economic growth. No consensus answer, however, has yet emerged, with approximately 40% of empirical papers finding a negative effect, 40% finding no effect, and 20% finding a positive effect. Does the literature taken together imply the existence of the so-called natural resource curse? In a quantitative survey of 402 estimates reported in 33 studies, we find that overall support for the resource course hypothesis is weak when potential publication bias and method heterogeneity are taken into account. Our results also suggest that three aspects of study design are especially effective in explaining the differences in results across studies: 1) including an interaction of natural resources with institutional quality, 2) controlling for the level of investment activity, and 3) distinguishing between different types of natural resources.
    Keywords: Natural resources, economic growth, institutions, publication selection bias, meta-analysis
    JEL: Q30 O13 C51
    Date: 2015–10
  33. By: Yuri Yegorov
    Abstract: Sustainable use of natural resources becomes an important issue today not only due to global warming and pollution issues but also because of critical pressure on the Earth?s regeneration possibility. We cannot use classical microeconomic approach here for two reasons: a) impossibility to create natural resources, both exhaustible and renewable, by simple use of labour and capital (like it is done on most of macroeconomic growth models); b) important role of spatial distribution and transport cost than leads to both overharvesting and under-harvesting in some regions. Due to these externalities market organization is extremely important for sustainability, and this question will be studied here in theoretical framework. The goal of this paper is to study the role of market structure for the sustainable harvesting of natural resources. This work is theoretical and uses explicit spatial structure as a component of production function. It continues other works of Yegorov (2005, 2007, 2009) where economic production function accounted explicitly for topological properties of geographical space. Contrary to the previous works, this uses also reproduction equation for renewable resources. The intensity of harvesting follows from market structure and is driven not only by population density but also by land ownership, land rent, transport cost and discount for future. The results show that overharvesting can originate in purely market laws because it does not account for an interaction between economy and nature. The models show that optimal harvesting of natural resources is highly sensitive to such economic parameters as the price of final good, energy price index, land rent and time discount. Land ownership by small farmers keeps the hope of more sustainable resource exploitation because they do not care about land rent and virtually have no time discount. However, they can also overexploit the resource if they have no idea about its dynamics under harvesting. Super-rational farmers who have such knowledge can choose lower land slots and exploit them moderately. However, they can loose competition to farmers who are rational only in economic sense and overexploit their land slots. References 1. Yegorov Y. (2005) Role of Density and Field in Spatial Economics? ? In: Yee Lawrence (Ed). Contemporary Issues in Urban and Regional Economics. Nova Science Publishers, 2005, N.Y., p.55-78. 2. Yegorov Y. (2007) Dynamics of Spatial Infrastructure with Application to Gas and Forest, 6th Conference on Applied Infrastructure Research (Infraday), TU Berlin, Germany, 5-6 October 2007. 3. Yegorov Y. (2009) Socio-economic influences of population density. Chinese Business Review, vol.8, No. 7, p.1-12.
    Keywords: land use; harvesting; sustainability; market; optimization
    JEL: R11 R12 R14 R40
    Date: 2015–10
  34. By: Victor M. Zavala; Kibaek Kim; Mihai Anitescu; John Birge
    Abstract: We argue that deterministic market clearing formulations introduce arbitrary distortions between day-ahead and expected real-time prices that bias economic incentives and block diversification. We extend and analyze the stochastic clearing formulation proposed by Pritchard et al. (2010) in which the social surplus function induces penalties between day-ahead and real-time quantities. We prove that the formulation yields price distortions that are bounded by the bid prices, and we show that adding a similar penalty term to transmission flows and phase angles ensures boundedness throughout the network. We prove that when the price distortions are zero, day-ahead quantities converge to the quantile of real-time counterparts. The undesired effects of price distortions suggest that stochastic settings provide significant benefits over deterministic ones that go beyond social surplus improvements. We propose additional metrics to evaluate these benefits.
    Date: 2015–10
  35. By: Thomas McGregor
    Abstract: This paper uses a panel-VAR approach to estimate both the dynamic and structural macroeconomic response of resource-rich, low-income countries to global commodity price shocks. I use a Block recursive ordering, as well as a simple Choleski decomposition, to identify structural commodity price shocks for a set of developing countries. The Block recursive identication strategy assumes only that global macroeconomic conditions do not respond to individual low-income country conditions contemporaneously. The results suggest that a one standard deviation increase in commodity prices (around 19% on average) raises per capita income levels, government spending and investment in developing countries by 0.03%-0.05%. Commodity price shocks also result in signicant transformation of these economies, with the share of value-added in manufacturing contracting by 0.25 percentage points; although within this, the share of value-added in agricultural manufactures, for example, expands by around 1.5 percentage points. Whilst these effects may appear small, they represent the effect of exogenous commodity price shocks that are not due to changes in aggregate demand or global nancial conditions. Taken together, these results present a more nuanced picture of the 'resource curse' in poor countries.Whilst per capital income levels are positively affected by resource booms, the potential for de-industrialisation, particularly in export oriented manufacturing sectors, does exist. The channel through which this link operates appears to be the real exchange rate, with resource booms leading to appreciation pressures. To illustrate these results, I simulate the impact of the recent oil price collapse on the Nigerian economy.
    Keywords: Dutch disease, natural resources, structural transformation, panel-VAR
    JEL: F12 Q37
    Date: 2015
  36. By: Fumitoshi Mizutani; Yusuke Suzuki; Shuji Uranishi
    Abstract: The main purpose of this paper is to estimate and evaluate the social costs of highways in Japan. In general, with more people concerned about protecting the environment at both local and global levels, dependence on vehicular transportation in cities has brought about problems. Too much dependence on autos causes air pollution, which has detrimental health effects. Furthermore, traffic congestion wastes time, money, and energy. The most concerning issue related to continuing dependence on car use is global warming. In order to implement transport policies conducive to creating a sustainable environment, it is necessary to measure correctly the social costs of vehicular transport such as traffic accidents, air pollution, noise, global warming, and traffic congestion. By using a data set from Japan, this paper aims to estimate the social costs of vehicular transport on highways and to evaluate how extensive these social costs are by comparing, for example, highway fares relative to GDP. Our study has several distinguishing characteristics. The most important point is that we estimate each individual highwayÂfs social costs by considering average speed at the peak period, total traffic volume, types of vehicular transport and so on. Second, this study distinguishes five kinds of social costs of vehicular transport for individual highways in Japan: 1) traffic accidents, 2) air pollution, 3) noise, 4) global warming, and 5) traffic congestion. Third, by using a data set of over 50 individual highways in Japan in 2005, we analyze the relationship between the social costs of vehicular transport and traffic volumes in general. Last, by comparing highway fares, the degree of GDP, the fuel tax level, and other factors, we assess the magnitude of social costs, for the purpose of creating prudent transport policy. In order to attain the objectives mentioned above, we organize our study as follows. First, we summarize previous studies, with special attention to the kinds of social costs used, the kinds of sub-items considered in estimating social costs, the aggregate level, the method of estimation, and the magnitude of the social costs of vehicular transport. Second, we explain our method for estimating social costs. In this section, we describe specific equations for the five main categories of highwaysÂf social costs. Third, based on these equations, by using a data set for highways in Japan, we estimate the social costs of vehicular transport on highways. Last, by comparing highway fares, and GDP and so on, we evaluate how extensive highwaysÂf social costs actually are. In this section, we also summarize our major findings.
    Keywords: Social Costs; Externalities; Highway; Transportation; Japan
    JEL: R41 Q51
    Date: 2015–10

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