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on Energy Economics |
| By: | Szulecki, Kacper; Ancygier, Andrzej; Neuhoff, Karsten |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esconf:125457&r=ene |
| By: | Adnane Kendel (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique); Nathalie Lazaric (GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | This article studies Business Models (BM) for Smart Meters (SM) and discusses related issues in the French institutional context. Because SM introduce deregulation on both the demand and supply sides, we argue that they represent an opportunity to 'unlock' the system by enabling feedback to consumers. We discuss the empirical findings from the TICELEC (Technologies de l'Information pour une Consommation Electrique responsable-Information Technology for Sustainable Electricity Consumption Behaviors) project which is an experimental initiative to measure potential energy savings through the implementation of SM, and to test behavioral change. We suggest that the opportunities provided by SM have to be compared with other kinds of intervention such as self-monitoring procedures. Our results show that any intervention is important for moderating the sole impact of SM. Our findings on the importance of changes to " energy habits " relate mainly to " curtailment " and " low efficiency " behaviors, which represent less costly changes. The lessons learned for BM developments linked to SM include incentive systems, smart tariffs, and technologies to increase potential behavior changes and energy savings in this field. Acknowledgements: |
| Keywords: | Business models,Feedback,behavior consumer,habits,residential consumption |
| Date: | 2015–08–22 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01246427&r=ene |
| By: | Fateh Belaid (Scientific and Technical Centre for Building, 84 avenue Jean Jaurès, 77447 Marne La Vallée, France); Thomas Garcia (Université de Lyon, F-69007, France; CNRS, GATE Lyon St Etienne, 93, Chemin des Mouilles, F-69130, Ecully, France; Université Lyon 2, Lyon, F-69007, France) |
| Abstract: | Analysing household energy-saving behaviours is crucial to improve energy consumption predictions and energy policy making. How should we quantitatively measure them ? What are their determinants ? This study explores the main factors influencing residential energy-saving behaviours based on a bottom-up multivariate statistical approach using data from the recent French PHEBUS survey. Firstly, we assess energy-saving behaviours on a one-dimension scale using IRT. Secondly, we use linear regression with an innovative variable selection method via adaptive lasso to tease out the effects of both macro and micro factors on the behavioural score. The results highlight the impact of five main attributes incentivizing energy-saving behaviours based on cross-variable analyses : energy price, household income, education level, age of head of household and dwelling energy performance. In addition, our results suggest that the analysis of the inverted U-shape impact of age enables the expansion of the energy consumption life cycle theory to energy-saving behaviours. |
| Keywords: | Energy-saving behaviours, Residential energy use, Econometric modelling, IRT, Lasso |
| JEL: | Q4 Q5 D19 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:gat:wpaper:1536&r=ene |
| By: | Arief Anshory Yusuf (Department of Economics, Padjadjaran University) |
| Abstract: | Climate change mitigation, through the means of energy efficiency improvement, requires all countries to play important roles. Developing countries are not the exception. However, in the context of developing countries, the benefit of energy efficiency improvement need to be measured against a broad range of development indicators. Using a general equlibrium model of the Indonesian economy, we simulate various different energy efficiency scenarios and compare its impact not only on the amount of emissions reduction, but also on other relevant development indicators such as employment creation, poverty incidence and income distribution. The result suggests that energy efficiency improvement which leave more resource available for output expansion is employment-generating, poverty-reducing and can have a favorable distributional implication. For Indonesia, improving fuel efficiency in public road transportation and improving energy efficiency of the energy-intensive manufacturing sector has come out as the key priority areas where energy efficiency strategy should focus on. |
| Keywords: | Energy efficiency, Computable General Equilibrium, Indonesia |
| JEL: | Q40 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:unp:wpaper:201506&r=ene |
| By: | G. Garau; G. Mandras |
| Abstract: | The International Energy Agency (IEA, 2009) suggests the importance of efficiency improvement to reduce energy use and, within the European Union, one of the targets for member states is to reduce energy consumption by 20% through increased energy efficiency (European Commission, 2009). Energy efficiency improvement has the unquestionable benefits to reduce the price of energy services. However, it is still under debate the extent to which, improvement in the productivity of energy, is effective in terms of reducing the consumption of energy and thus the associated negative externalities (e.g., carbon dioxide emissions, CO2). Thus, policy makers are particularly interested to determine the size of the energy rebound effect. In this paper, we attempt to quantify the magnitude of the general equilibrium rebound effects from an increase in energy efficiency in the industrial use of energy in Italy. To this end, we use a large-scale numerical dynamic general equilibrium model calibrated using the Italian Social Accounting Matrix for the year 2010. |
| Keywords: | rebound effect, energy efficiency, CGE model |
| JEL: | C68 D57 D58 Q43 Q48 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:cns:cnscwp:201520&r=ene |
| By: | Kniesner, Thomas J. (Claremont Graduate University); Rustamov, Galib (Claremont Graduate University) |
| Abstract: | Our research investigates the magnitude of the effect of residential energy efficiency audit programs on later household electricity consumption. These programs are designed to increase awareness of household energy consumption with personalized feedback that will eventually lead to behavioral changes. In this type of survey, there is only a one-time interaction between households, which participate voluntarily, and the surveyors. The objective of this study is to determine whether and to what extent such surveys lead to behavioral changes. We argue that the perceived complexity of the survey feedback will determine whether the subsequent behavior is sustainable. Then we analyze how persistent the intervention is over time and whether the effects decay or intensify. However, the main evaluation problem involving these surveys is self-selection bias. To correct for this bias, we propose two non-parametric estimators by using a kernel-based propensity score matching approach. In the first method, we use "difference-indifferences" (DID) estimations. The second estimator is quantile DID, which produces estimates on distributions. The comparison group consists of households who were not yet participating in the survey but participated later. The evidence suggest that the customers who participated in the survey reduced their electricity consumption by 6.7%, compared with customers who had not yet participated in the survey. In addition, as the quantiles of the distribution increase, the effect of the program decreases. |
| Keywords: | electricity consumption, information salience, selection bias, propensity-score matching, treatment effects, multiple treatments |
| JEL: | C31 D03 D12 L94 Q41 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9567&r=ene |
| By: | Venkatachalam ANBUMOZHI (Economic Research Institute for ASEAN and East Asia (ERIA)); HAN Phoumin (Economic Research Institute for ASEAN and East Asia (ERIA)) |
| Abstract: | The extreme prevalence of energy poverty in several Member States of Association of Southeast Asian Nations (ASEAN) calls for urgent action. This paper shows how clean energy development can be made inclusive by involving low-income households as producers, employees, and business owners. From this perspective, it also analyses how ASEAN economies are stepping up clean energy ambitions and the implementation deficits. One imperative is (i) clean energy with positive externalities that are not factored in either the production or purchasing decisions of consumers. (ii) If non-clean energy companies or products generate negative externalities but no tax or disincentive is levied, then governments may either tax these firms or give incentives to clean energy producers. It concludes that ASEAN Member States need to link the clean energy paradigm and inclusive development policies as part of the Environmental Fiscal Reform to strengthen the foundations for the ASEAN Socio-Cultural Community. |
| Keywords: | Rural development; employment creation; energy poverty; inclusive growth; ASEAN |
| JEL: | Q34 O13 O23 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:era:wpaper:dp-2015-87&r=ene |
| By: | Baulch, Bob; Do, Thuy Duong; Le, Thai-Ha |
| Abstract: | This study examines the constraints to the uptake of Solar Home Systems (SHS) in Ho Chi Minh City (HCMC), Vietnam. SHS are photovoltaic systems which generate electricity for residential properties. The limited numbers of SHS installed in HCMC are mostly on‐grid systems with backup batteries to supply electricity during evenings and/or power cuts. Semi‐structured interviews with SHS installers, manufacturers and users, plus government agencies and technical experts identify policy constraints and the cost of systems as major constraints. Cost‐benefit analysis is then used to estimate the payback period for three representative SHS. Raising residential electricity prices and introducing net metering or a feed‐in tariff could dramatically shorten the payback periods for SHS. In the next five years, these and other expected changes to the electricity market will make SHS more finally attractive than at present. SHS also have the potential to generate supplement electricity during peak times, thereby diversifying and greening the energy mix. SHS therefore represent a promising technology for HCMC in the future. |
| Keywords: | solar home systems; Vietnam; electricity; payback period. |
| JEL: | Q42 Q48 R48 |
| Date: | 2015–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68612&r=ene |
| By: | Katrin Rehdanz (Kiel Institute for the World Economy); Carsten Schroder (German Institute for Economic Research(DIW Berlin)/ SOEP); Daiju Narita (JICA Research Institute); Toshihiro Okubo (Faculty of Economics, Keio University) |
| Abstract: | Using representative household survey data from Japan after the Fukushima accident, we estimate peoples' willingness-to-pay (WTP) for renewable, nuclear, and fossil fuels in electricity generation. We rely on random parameter econometric techniques to capture various degrees of heterogeneity between the respondents, and use detailed regional information to assess how WTP varies with the distance to both the nearest nuclear power plant and to Fukushima. Compared to fossil fuels, we find a positive WTP for renewable and a negative WTP for nuclear fuels. These effects, in absolute terms, increase with the proximity to Fukushima. |
| Keywords: | electricity mix, willingness-to-pay, preference heterogeneity, renewables, spatial heterogeneity, Fukushima, nuclear power |
| JEL: | D12 Q40 Q42 |
| Date: | 2015–12–08 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2015-013&r=ene |
| By: | Frederick van der Ploeg |
| Abstract: | Unilateral second-best carbon taxes are analysed in a two-period, two-country model with international trade in final goods, oil and bonds. Acceleration of global warming resulting from a future carbon tax is large if the price elasticities of oil demand are large and that of oil supply is small. The fall in the world interest rate weakens this weak Green Paradox effect, especially if intertemporal substitution is weak. Still, green welfare rises if the fall in oil supply and cumulative emissions is strong enough. If the current carbon tax is too low, the second-best future carbon tax is set below the first best to mitigate adverse Green Paradox effects. Unilateral second-best optimal carbon taxes exceed the first-best taxes due to an import tariff component. The intertemporal terms of trade effects of the future carbon tax increase current and future tariffs and those of the current tax lower the current tariff. Finally, carbon leakage and globally altruistic and unilateral second-best optimal carbon taxes if non-Kyoto oil importers do not price carbon or price it too low are analysed in a three-country model of the global economy. |
| Keywords: | unilateral carbon taxes, intertemporal terms of trade, tax incidence, Green Paradox, asset tax, carbon leakage, second best, global altruism, unburnt fossil fuel |
| JEL: | D62 D90 H22 H23 Q31 Q38 Q54 |
| Date: | 2015–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:eus:ce3swp:0415&r=ene |
| By: | Armon Rezai; Frederick van der Ploeg |
| Abstract: | A new IAM is used to calculate the optimal tradeoff between, on the one hand, locking up fossil fuel and curbing global warming, and, on the other hand, sacrificing consumption now and in the near future. This IAM uses the Oxford carbon cycle, which differs from DICE, FUND and PAGE in that cumulative emissions are the key driving force of changes in temperature. We highlight how time impatience, intergenerational inequality aversion and expected trend growth affect the time paths of the optimal global carbon tax and the optimal amount of fossil fuel reserves to leave untapped. We also compare these with the adverse and deleterious global warming trajectories that occur if no policy actions are taken. |
| Keywords: | unburnable fossil fuel, cumulative emissions, optimal carbon tax, Oxford carbon cycle, trend growth, intergenerational inequality aversion, time impatience |
| JEL: | H21 Q51 Q54 |
| Date: | 2015–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:eus:ce3swp:0715&r=ene |
| By: | Dovern, Jonas; Harnisch, Sebastian; Klepper, Gernot; Platt, Ulrich; Oschlies, Andreas; Rickels, Wilfried |
| Abstract: | [Einleitung. Radiation Management als klimapolitische Option?] Naturwissenschaftliche Messungen bestätigen mittlerweile eindeutig eine weltweite Veränderung des Klimas, als dessen wesentliche Ursache die anthropogene Freisetzung von Kohlendioxid (CO2) gilt. Anstrengungen, diese CO2-Emissionen global zu kontrollieren, sind bislang gescheitert, und die auf zukünftigen Emissionspfaden basierenden Schätzungen lassen eine weitere deutliche Zunahme der globalen Temperatur und eine Veränderung des Klimas erwarten. Entsprechend beschränkt sich die klimapolitische Diskussion schon lange nicht mehr allein auf die Vermeidung bzw. Verringerung des Klimawandels (mitigation), sondern hat auch die Anpassung an den Klimawandel (adaptation) in den Blick genommen. Aufgrund der großen Unsicherheiten über die tatsächliche Temperaturreaktion und über nichtlineare Reaktionen innerhalb des komplexen Klimasystems wird seit ein paar Jahren aber auch über direkte technologische Eingriffe in das Klima diskutiert, die es teilweise erlauben, relativ schnell auf den Klimawandel zu reagieren. Grundsätzlich werden diese Technologien unter dem Sammelbegriff Climate Engineering (CE) zusammengefasst. Dabei soll der Teilbegriff Engineering aber nicht die ingenieurstechnische Kontrolle des Klimas suggerieren sondern verdeutlichen, dass diese Eingriffe gezielt vorgenommen werden, um das Klima zu beeinflussen bzw. den Klimawandel zu begrenzen. Dabei umfasst der Sammelbegriff Climate Engineering sowohl Technologien zur ursächlichen Rückführung des Strahlungsantriebs, welche die Konzentration des atmosphärischen CO2 (und ggf. anderer Treibhausgase) senken, als auch Technologien zur symptomatischen Kompensation des Strahlungsantriebs, welche die Strahlungsbilanz direkt beeinflussen. Erstere werden als Carbon Dioxide Removal (CDR) bezeichnet und die zweite Technologiegruppe als Radiation Management (RM). [...] |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwkdp:549-550&r=ene |
| By: | Agata Miazga; Dominik Owczarek |
| Abstract: | The aim of this paper is to present a statistical measure of energy poverty in Poland. This is the first research for Poland which is strictly based on the methodology applied in the United Kingdom - the only country with a statutory definition of energy poverty. We calculate three measures: absolute – 10% of income, modified absolute – 13% of income and relative - Low Income High Costs (LIHC). The results are compared with a subjective energy situation assessment made by households. Moreover, we answer the question to what extent energy poverty coincides with income poverty. After examining the different variants of the definition, we recommend using the relative LIHC definition in Poland. According to this measure, 17% of the Polish population (6.44 million people) are exposed to energy poverty, especially occupants of detached houses, inhabitants of rural areas, households living on non-earned sources, single parents and married couples with at least 2 children. |
| Keywords: | energy poverty, income poverty, energy expenditure |
| JEL: | I32 Q40 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ibt:wpaper:wp162015&r=ene |
| By: | Nam, Kee-Yung (Asian Development Bank); Cham, Maria Rowena (Asian Development Bank); Halili, Paulo Rodelio (Asian Development Bank) |
| Abstract: | While the economic literature has yet to establish whether greater electricity consumption leads to faster economic growth, or vice versa, it is widely accepted that the better provision of electricity can enable pro-poor growth. Because electricity consumption is expected to grow in emerging economies such as Myanmar, it is important that the government prioritize its stable, efficient, and affordable supply. This paper assesses Myanmar’s electricity sector and recommends several concrete policy options to enable government to address issues such as supply security, greater accessibility, and affordability, especially for the poor and disadvantaged. The paper also estimates infrastructure demand and the corresponding investment requirements to narrow the supply gap in the power sector. |
| Keywords: | electricity access; Myanmar; power investment gap; power sector development; supply security |
| JEL: | H54 L94 Q43 Q47 |
| Date: | 2015–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0460&r=ene |
| By: | Blázquez De Paz, Mario (Research Institute of Industrial Economics (IFN)) |
| Abstract: | Electricity markets are becoming more integrated around the world. However, the knowledge of the effects of different auction formats on suppliers’ strategies in the presence of transmission constraints and transmission costs is still very limited. In this paper, I analyze the performance of uniform and discriminatory price auctions in the presence of transmission constraints and transmission costs. When the transmission capacity is binding, the discriminatory price auction could outperform the uniform price auction, minimizing the equilibrium price and the transmission costs. Moreover, when the transmission capacity is binding, an increase in transmission costs could be pro-competitive when the auction is discriminatory, but not when the auction is uniform. |
| Keywords: | Electricity auctions; Transmission constraint; Transmission costs; Market design |
| JEL: | D43 D44 L13 L94 |
| Date: | 2015–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1098&r=ene |
| By: | Pär Holmberg and Frank Wolak |
| Abstract: | We analyse how the market design influences the bidding behaviour in multi-unit auctions, such as wholesale electricity markets. It is shown that competition improves for increased market transparency and we identify circumstances where the auctioneer prefers uniform to discriminatory pricing. We note that political risks could significantly worsen competition in hydro-dominated markets. It would be beneficial for such markets to have clearly defined contingency plans for extreme market situations. |
| Keywords: | cost uncertainty, asymmetric information, uniform-price auction, discriminatory pricing, Bertrand game, market transparency, wholesale electricity market, treasury auction, Bayesian Nash equilibria |
| JEL: | C72 D43 D44 L13 L94 |
| Date: | 2015–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1541&r=ene |
| By: | Nadine Schreiner |
| Abstract: | The term „fuel poverty“ describes to what extent increasing energy costs lead to a new kind of indebtness and poverty of low income households. Up to now there is no sufficient measuring method to identify fuel poverty households in Germany. The present paper reviews a British approach regarding its adaptability on German data. The aim is to examine the potential of the “Low-Income-High-Costs” indicator for German fuel poverty research. Data of the socio-economic panel, a wide-ranging representative longitudinal study of private households is used to answer this question. Although results show adaptability is given, the author is forced to use different kinds of variables according to energy costs as well as modelling the data. The findings shed light on the question on how many German households are affected by fuel poverty and provide contribution to the general problem of rudimentary data. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwsop:diw_sp811&r=ene |
| By: | Fleming, David; Komarek, Timothy; Partridge, Mark; Measham, Thomas |
| Abstract: | The U.S. shale boom has been joined by many other countries producing various unconventional fossil fuels (UFF) in the past decade. This new UFF industry differs from previous energy extraction by its rapid growth and sparse geographic nature, making the analysis of its socioeconomic consequences for extractive regions key for better regional planning and policy making. As such, the shale literature has boomed in recent years with numerous empirical studies evaluating and analysing different socioeconomic impacts from across the globe. This paper provides the first in-depth literature review of the growing body of empirical studies analysing the local impacts of shale (and other UFF) extraction, especially examining employment, income, population, housing, human and social capital effects and the co-existence of the industry with other productive activities. We find a quite surprising range of findings that in several occasions are contradictory, prompting more questions to many important issues. Given this broad range of results, we also focus on critical empirical considerations within this literature that are important to consider in future quantitative assessments of UFF impacts. Finally we provide some policy considerations and lines of future research. |
| Keywords: | shale, economics, fossil fuels, policy, regional planning, socioeconomic effects |
| JEL: | J0 J48 Q4 Q48 R11 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68487&r=ene |
| By: | Chi-Kong Chyong |
| Abstract: | Abstract Different hydrocarbon producer sales strategies have widely divergent implications for the value of Gazprom’s gas exports to Europe. In particular, hydrocarbon producers have commonly pursued two alternative sales strategies: (i) pure commodity production (border sales) and (ii) integrated supply, trading and marketing (ISTM). The impact of these two strategies on Gazprom’s export profits are examined under three sets of scenarios: (a) the possible entry of low-cost producers, (b) oil price dynamics and (c) the future of LTCs (pricing and volume structure). We also analysed how Statoil shifted its sales strategy in light of structural changes in European gas markets and conclude that the company began employing an ISTM strategy when the market in North-west Europe became liquid. Thus, when a market is mature, with an increasing number of buyers, the best sales strategy for a large hydrocarbon producer should be based on flexibility and increasing its use of market trading to maximise the value of its commodity. We conclude that an optimal export strategy for Gazprom should involve both a substantial and increasing portion of uncommitted volumes that can be traded in markets (gas hubs) and, if needed, some form of bilateral forward contract with a minimum take-or-pay level to secure infrastructure finance. |
| Keywords: | Long-term contracts, vertical integration, market trading, gas, Gazprom, Statoil, gas pricing, equilibrium energy modelling |
| JEL: | L14 L13 Q47 Q48 Q41 P28 O13 |
| Date: | 2015–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1542&r=ene |
| By: | Umed Temurshoev (European Commission – JRC - IPTS); Marian Mraz (European Commission – JRC - IPTS); Luis Delgado Sancho (European Commission – JRC - IPTS); Peter Eder (European Commission – JRC - IPTS) |
| Abstract: | The OURSE (Oil is Used in Refineries to Supply Energy) model is used to assess ex post the likely impact on the performance and international competitiveness of the EU refineries of the main EU legislation included in the EU Petroleum Refining Fitness Check (REFIT) study. Given the (dis)similar nature of the immediate (i.e. direct) impact mechanisms of the legislation acts on refining industry, the considered directives were grouped into the following three (broader) categories for modelling purposes: 1. Fuel quality specifications change due to the Fuels Quality Directive (FQD) and Marine Fuels Directive (MFD); 2. Demand levels and composition change due to the requirements of the Renewable Energy Directive (RED) and Energy Taxation Directive (ETD); and 3. Sulphur dioxide emissions limits change as implied by the requirements of the Large Combustion Plants Directive (LCPD), Integrated Pollution Prevention and Control Directive (IPPCD) and Air Quality Directive (AQD). |
| Keywords: | petroleum refining, modelling, OURSE, partial equilibrium model, optimization model, regulatory fitness check, EU legislation |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc96207&r=ene |
| By: | Jean-Francois Maystadt; Muhammad Kabir Salihu |
| Abstract: | Analysing the effect of opportunistic fiscal transfers on the electoral fortune of incumbent politicians can be very difficult due to problems of endogeneity. In this paper, we use oil windfalls as an exogenous variation in the political discretion an incumbent government can exert in rule-based transfers. Exploiting within-state variation between 2007 and 2015 in Nigeria, an increase in VAT transfers induced by higher oil windfalls is found to improve the electoral fortune of an incumbent government. Our results question the role of rule-based transfers as an efficient institutional arrangement in resource-abundant countries. |
| Keywords: | Intergovernmental transfers, ruled-based transfers, political manipulation, fiscal federalism, Nigeria |
| JEL: | H70 H77 P16 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:lan:wpaper:100756558&r=ene |
| By: | Rangan Gupta (Department of Economics, University of Pretoria); Mark E. Wohar (College of Business Administration, University of Nebraska at Omaha, USA, and School of Business and Economics, Loughborough University, UK.) |
| Abstract: | The extant literature suggests that oil price, stock price and economic activity are all endogenous and the linkages between these variables are nonlinear. Against this backdrop, the objective of this paper is to use a Qualitative Vector Autoregressive (Qual VAR) to forecast (West Texas Intermediate) oil and (S&P500) stock returns over a monthly period of 1884:09 to 2015:08, using an in-sample period of 1859:10-1884:08. Given that there is no data on economic activity at monthly frequency dating as far back as 1859:09, we measure the same using the NBER recession dummies, which in turn, can be easily accommodated in a Qual VAR as an endogenous variable. In addition, the Qual VAR is inherently a nonlinear model as it allows the oil and stock returns to behave as nonlinear functions of their own past values around business cycle turning points. Our results show that, for both oil and stock returns, the Qual VAR model outperforms the random walk model (in a statistically significant way) at all the forecasting horizons considered, i.e., one- to twelve-months-ahead. In addition, the Qual VAR model, also outperforms the AR and VAR models (in a statistically significant manner) at medium- to long-run horizons for oil returns, and short- to medium-run horizons for stock returns. |
| Keywords: | Vector Autoregressions, Business Cycle Turning Points, Forecasting, Oil and Stock Prices |
| JEL: | C32 C53 E32 G10 G17 Q41 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201589&r=ene |
| By: | Virginie Coudert; Valérie Mignon |
| Abstract: | This paper aims at reassessing the empirical relationship between the real price of oil and the U.S. dollar real effective exchange rate over the 1974-2015 period. We find that changes in both variables are now linked by a negative relationship, going from the dollar exchange rate to the real oil price. However, the same relationship is found positive when ending the sample in the mid-2000s, in line with the previous literature. To understand and investigate this evolution, we rely on a nonlinear, smooth transition regression model in which the oil price-dollar nexus depends on the dynamics followed by the U.S. currency. Our results show that the relationship is negative most of the times but turns positive when the dollar hits very high values, as in the early eighties. |
| Keywords: | Oil price;Dollar real effective exchange rate;Causality;Nonlinearity |
| JEL: | C22 F31 Q43 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2015-25&r=ene |
| By: | Ruslan Lukach (European Commission – JRC - IPTS); Robert Marschinski (European Commission – JRC - IPTS); Dilyara Bakhtieva (European Commission – JRC - IPTS); Marian Mraz (European Commission – JRC - IPTS); Umed Temurshoev (European Commission – JRC - IPTS); Peter Eder (European Commission – JRC - IPTS); Luis Delgado Sancho (European Commission – JRC - IPTS) |
| Abstract: | This report presents the results of the quantitative assessment of the impact on the petroleum refining sector of legislative measures, identified in the process of European Commission's analysis and stakeholder consultations as being of significant relevance for petroleum refineries, and as such included in the mandate of the fitness check. This quantitative assessment took into account the impact of the legislation on costs and revenues of the EU petroleum refining industry and therefore on its capacity to remain internationally competitive. This analysis, mostly of a quantitative nature, was accompanied where possible and relevant by a qualitative assessment in accordance with the Commission's general approach to fitness checks . In particular, the report analysed how coherently and consistently the EU legislation, identified as relevant for the sector, works together, whether it is effective and efficient, and whether it is associated with excessive regulatory burdens, overlaps, gaps, inconsistencies or obsolete measures. Since this fitness check addressed a specific industry sector rather than a policy area, it had a specific focus on the cumulative impact, effectiveness, efficiency and coherence of the measures with respect to the oil refining sector. The analysis in this report is retrospective and concentrated on the impact of the relevant legislation on the petroleum refining sector in the period between 2000 and 2012. |
| Keywords: | petroleum refining, competitiveness, regulatory fitness check, EU legislation |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc96206&r=ene |
| By: | Golombek, Rolf (Ragnar Frisch Centre for Economic Research.); Irarrazabal, Alfonso A. (BI Norwegian Business School); Ma, Lin (School of Economics and Business, Norwegian University of Life Sciences) |
| Abstract: | We estimate a dominant firm-competitive fringe model for the crude oil market using quarterly data on oil prices for the 1986-2009 period. All estimated structural parameters have the expected sign and are significant. We find that OPEC exercised market power during the sample period. Counterfactual experiments indicate that world GDP is the main driver of long-run oil prices, however, supply (depletion) factors have become more important in recent years. |
| Keywords: | Oil; dominant firm; market power; OPEC; Lerner index; oil demand elasticity; oil supply elasticity |
| JEL: | L13 L22 Q31 |
| Date: | 2015–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2015_021&r=ene |
| By: | Arora, Vipin |
| Abstract: | Have you paid cash to fill up your gas tank lately? Probably not—and I argue this is one reason why the U.S. economy appears to have become less sensitive to changes in the price of oil. When gas prices rise drivers have increasingly been able to borrow—and firms able to offer incentives—making immediate reductions in the purchases of groceries, electronics, cars, and other goods smaller than in the past. This alters the relationship between oil prices and U.S. economic activity, but does not eliminate it—the money must be paid back after all. |
| Keywords: | oil price, economic activity, credit, consumption |
| JEL: | C00 E20 E51 E60 Q43 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68563&r=ene |
| By: | Khan, Karim |
| Abstract: | The institutional perspective of cross-country differences in economic outcomes gives contrasting explanations on the persistence of extractive institutions in developing countries. Colonization, social fragmentation and the existence and use of natural resources are the most frequently discussed causes in the available literature. In this study, we analyze all the three explanations together by providing a case study of Nigeria. Nigeria is characterized by colonial legacy, social divide revealed by ethnicity and religion, and huge windfalls from oil. Based on our analysis, we argue that the lack and incoherence of formal institutional order is the main factor for Nigerian underdevelopment. Ethnic politics has shaped the formal institutional framework as a central stage for the disbursement of patronage and other types of the largesse. Colonial legacy has reinforced the effect of ethnicity by failing to provide a national ideology; and instead, providing a regional structure to rule. Similarly, the windfalls from oil have intensified the effect of ethnicity by invoking civil conflicts, arising mainly from the distribution of common pool. Thus, no single factor on its own can explain the persistence of extractive institutions; rather, it is the combination of exogenous and endogenous factors that collectively shape institutions. |
| Keywords: | Extractive Institutions, Economic Development, Colonization, Social Fragmentation, Natural resources, Nigeria |
| JEL: | E0 E01 O43 O55 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:68559&r=ene |
| By: | Rachaniotis, Nikolaos (Democritus University of Thrace, Department of Economics); Masvoula, Marisa (General Secretariat of Information Systems) |
| Abstract: | Fleets of fuel supply vessels are used to provide ships anchored in ports different oil products. Demand is satisfied based on a pull system, where oil shipments are triggered by orders placed by customers and delivered on a specific agreed day. The aim of this paper is to develop a time-effective Decision Support System (DSS) in order to aid the fleet schedulers to decide in a very short time (usually less than 10 minutes in the ships’ fuel supply business) if they will accept new orders, based on the fleet’s capacity and availability, and generate a feasible sub-optimal operation schedule. The DSS was tested in a small Hellenic oil company and the empirical evaluation is presented. |
| Keywords: | Decision support system; OR in maritime industry; transportation; scheduling; heuristics |
| JEL: | R40 |
| Date: | 2015–12–26 |
| URL: | http://d.repec.org/n?u=RePEc:ris:duthrp:2015_003&r=ene |
| By: | Huijie Yan (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université) |
| Abstract: | The goal of sustainable development is far from being achieved in China. In this context, this paper aims to provide an overview of China’s energy, environment and health policies over the past 30 years and discuss whether the previous policies have fully integrated the energy, environment and health issues in its sustainable development agenda. From the overview, we observe that the energy policies accelerating energy industrial upgrading, stimulating development of new energy sources, deregulating energy pricing mechanism, promoting energy saving and seizing the opportunity of green growth are conducive to an improvement of environmental conditions and public health in China. However, the environmental policies are not effectively implemented and subsequently they could not succeed in reducing environmental risks on public health and putting pressure on enterprises to efficiently use energy. The health policies have not taken real actions to focus with any specificity on energy-induced or pollution-induced health problems. |
| Keywords: | energy,environment,health,China |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01247183&r=ene |
| By: | Anastasios Xepapadeas; Athanasios Yannacopoulos |
| Abstract: | Variables describing the state of an environmental system such as resources (renewable or exhaustible), pollutants, greenhouse gases have a profound spatial dimension. This is because resources or pollutants are harvested, extracted, emitted, or abated in a specific location or locations, the impacts of environmental variables, whether beneficial or detrimental, have a strong spatial dimension, and there is transport of environmental state variables across geographical space due to natural processes. In this paper we study dynamic optimization for the joint management of resources and pollution when pollution affects resource growth and when spatial transport phenomena both for the resources and the pollution are present. We present approaches that deal with dynamic optimization in infinite dimensional spaces which can be used as tools in environmental and resource economic. We also present methods which can be used to study the emergence of spatial patterns in dynamic optimizations models. Our methods draw on the celebrated Turing diffusion induced instability but are different from Turing’s mechanism since they apply to forward-optimization models. We believe that this approach provides the tools to analyze a wide range of problems with explicit spatial structure which are very often encountered in environmental and resource economics. |
| Keywords: | spatial transport, renewable resource, pollution, optimization, in finite dimensional spaces, Turing instability, pattern formation, policy design |
| JEL: | C61 Q20 Q52 |
| Date: | 2015–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:eus:ce3swp:0515&r=ene |
| By: | Guilherme de Oliveira; Gilberto Tadeu Lima |
| Abstract: | This paper develops an environmental extension of a Lewis dual economy model, in which the interaction between environmental quality and economic growth, in one of its several dimensions, is explicitly modeled to explore long-run effects of a pollution abatement rule in developing economies. The government requires the Modern sector to dedicate a fraction of its output to pollution abatement, with such profitability-reducing fraction being endogenous to the level of environmental quality. Meanwhile, the level of environmental quality positively affects labor productivity, profits and, therefore, savings, which has a positive impact on capital accumulation. It is shown that this pollution abatement requirement, by affecting profitability in the Modern sector both negatively and positively, makes for the emergence of an ecological development trap from which a developing dual economy, if left to the free play of its structural forces, never escapes. Fortunately, however, this economy can be released from such a trap not only through a standard Big Push, in the spirit of Rosenstein-Rodan, but also by means of what we call an Environmental Big Push. |
| Keywords: | Ecological development trap; Environmental Big Push; Economic development; Environmental quality. |
| JEL: | O11 O44 Q50 |
| Date: | 2015–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2015wpecon49&r=ene |
| By: | Stefano Bosi; David Desmarchelier |
| Abstract: | Since Heal (1982), there is a theoretical consensus about the occurrence of limit cycles (through a Hopf bifurcation) under a positive effect of pollution on consumption demand (compensation effect) and about the impossibility under a negative effect (distaste effect). However, recent empirical evidence advocates for the relevance of distaste effects. Our paper challenges the conventional view on the theoretical ground and reconciles theory and evidence. The Environmental Kuznets Curve (pollution first increases in the capital level then decreases) plays the main role. Indeed, the standard case à la Heal (limit cycles only under a compensation effect) only works along the upward-sloping branch of the curve while the opposite (limit cycles only under a distaste effect) holds along the downward-sloping branch. Welfare effects of taxation also change according to the slope of the EKC. |
| JEL: | E32 O44 |
| Date: | 2015–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:eus:ce3swp:0315&r=ene |
| By: | Sergei Mihalischev; Yulia Raskina |
| Abstract: | This paper investigates the relationship between economic development and environmental pollution among Russian regions based on the concept of Environmental Kuznets Curve. It shows how income inequality, growth of GRP and structure of regional economy affect emissions of three pollutants: carbon monoxide, nitrogen dioxide and sulfur dioxide. We estimate a panel data model using the Russian Statistical Agency's data for Russian regions in the period 2000–2013. It is shown that the majority of regions in Russia have not reached a turning point when economic growth leads to decrease in pollution. Growth of the non-manufacturing sector of GRP has either no statistically significant effect on the change in emissions or its impact is ambiguous. The increase in the level of economic inequality in the region is characterized by the decrease in emissions. |
| Keywords: | Environmental Kuznets Curve, regional development, pollution, structural changes in the economy |
| JEL: | Q56 P28 C23 |
| Date: | 2015–11–28 |
| URL: | http://d.repec.org/n?u=RePEc:eus:wpaper:ec0315&r=ene |
| By: | Raitzer, David A. (Asian Development Bank); Samson, Jindra Nuella G. (Asian Development Bank); Nam, Kee-Yung (Asian Development Bank) |
| Abstract: | Myanmar’s long isolation from international markets and sources of finance historically limited development, and thus, the pressure on its environment. Many of its resources remain relatively intact, despite an absence of effective environmental regulations. Yet, as the country integrates into the global economy and its economic development accelerates, resource degradation is rising rapidly. Deforestation of closed forests in recent years has taken place at the fastest rate among major Southeast Asian countries, much of it driven by concessions for plantations and other large-scale projects. Marine capture fishing pressure has increased rapidly, and the sustainability of catches is largely unknown. Water and air pollution effluents and emissions are escalating. At the same time, policy responses to date, while emphasizing overall sustainability, need to be developed to address these issues. Environmental impact assessment procedures, environmental quality standards, emissions regulations, and penalties for environmental violations remain under development. Perverse incentives for resource destruction are still in place and efforts to create market incentives for sustainable practices are at an initial stage. To ensure long-run, sustainable economic development, Myanmar’s reforms need to address these issues more quickly and comprehensively. |
| Keywords: | deforestation; environmental protection and conservation; Myanmar; pollution management; vulnerability to climate change |
| JEL: | O13 O44 Q15 Q56 |
| Date: | 2015–12–14 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0467&r=ene |
| By: | Ferrarini , Benno (Asian Development Bank); de Vries , Gaaitzen J. (University of Groningen, the Netherlands) |
| Abstract: | Climate policy pledges and negotiations involve commitments about the reduction of emissions within national borders. However, the rise of global value chains has changed the nature of production and international trade, blurring the attribution of ultimate responsibility for emissions. This paper applies a novel method that examines the change in territorial emissions due to changes in energy intensity, supply chain participation, and domestic and foreign consumption. Our findings suggest that rising levels of domestic consumption are related to increased carbon dioxide emissions in both advanced and emerging economies. A substantial share of emissions growth in emerging economies is accounted for by higher participation in global production networks that serve expanding foreign consumption. However, even for economies that most rapidly integrated in global production networks, such as the People’s Republic of China, rising domestic consumption accounts for the bulk of territorial emissions. Improved energy efficiency partially stemmed the spike in emissions from higher consumer demand. |
| Keywords: | global multiregional input–output model; global value chains; structural decomposition analysis; World Input–Output Database |
| JEL: | D57 E01 F18 Q56 |
| Date: | 2015–10–14 |
| URL: | http://d.repec.org/n?u=RePEc:ris:adbewp:0458&r=ene |
| By: | Damien Sans (AMSE - Aix-Marseille School of Economics - EHESS - École des hautes études en sciences sociales - Centre national de la recherche scientifique (CNRS) - Ecole Centrale Marseille (ECM) - AMU - Aix-Marseille Université) |
| Abstract: | The literature on the micro-economics of the eco-industry often assumed interiority of pollutant net emissions. In a perfectly competitive final good market vertically integrated with an upstream monopoly supply this assumption implies that an optimal tax is always greater than its associated marginal social damage. In this short note we will relax this assumption and challenge that result. The market structure generates a unique threshold on the scale of the marginal social damage, whereby for any value above the threshold an optimal tax is strictly lower and net emissions are zero. |
| Keywords: | microeconomics,eco-industry,imperfect competition,optimal taxation |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:halshs-01247190&r=ene |
| By: | Asheim, Geir B. (Dept. of Economics, University of Oslo); Nesje, Frikk (Dept. of Economics, University of Oslo) |
| Abstract: | Are the probable future negative effects of climate change an argument for decreasing the discount rate to promote the interests of future generations? The analysis of the present paper suggests that such stronger intergenerational altruism might undermine future wellbeing if not complemented by collective climate action. In the standard one-sector model of economic growth normatively attractive outcomes will be implemented if each generation has sufficient altruism for its descendants. This conclusion is radically changed in a two-sector model where one form of capital is more productive than the other, but leads to negative atmospheric externalities. In fact, the model shows that, if each dynasty is trying to get ahead in a world threatened by climate change by increasing its intergenerational altruism, then long-term wellbeing will be seriously undermined. |
| Keywords: | Intergenerational altruism; climate change. |
| JEL: | D63 D64 D71 Q01 Q54 |
| Date: | 2015–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2015_022&r=ene |
| By: | Drupp, Moritz A. (Department of Economics, University of Kiel, Germany); Freeman, Mark C. (School of Business and Economics, Loughborough University, United Kingdom); Groom, Ben (Department of Geography and Environment, London School of Economics, United Kingdom); Nesje, Frikk (Dept. of Economics, University of Oslo) |
| Abstract: | As the most important driver of long-term project evaluation, from climate change policy to infrastructure investments, the social discount rate (SDR) has been subject to heated debate among economists. To uncover the extent and sources of disagreement, we report the results of a survey of over 200 experts that disentangles the long-term SDR into its component parts: the pure rate of time preference, the wealth effect, and the real risk-free interest rate. The mean recommended SDR is 2.27 percent, with a range from 0 to 10 percent. Despite disagreement on point values, more than three-quarters of experts are comfortable with the median SDR of 2 percent, and over 90 percent find an SDR in the range of 1 to 3 percent acceptable. Our disentangled data reveal that only a minority of responses are consistent with the Ramsey Rule, the theoretical framework dominating discounting policy. Instead, experts recommend that governmental discounting guidance should be updated to deal with uncertainty, relative prices, and alternative ethical approaches. |
| Keywords: | Social discount rate; project appraisal; expert opinions; disagreement. |
| JEL: | D61 H43 Q58 |
| Date: | 2015–11–30 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:osloec:2015_020&r=ene |
| By: | Francesco Lamperti; Mauro Napoletano; Andrea Roventini |
| Abstract: | The paper compares the effects of market-based and command-and-control climate policies on the direction of technical change and the prevention of environmental disasters. Drawing on the model proposed in Acemoglu et al. (2012, American Economic Review), we show that market-based policies (carbon taxes and subsidies towards clean sectors) exhibit bounded window of opportunities: delays in their implementation make them completely ineffective both in redirecting technical change and in avoiding environmental catastrophes. On the contrary, we find that command-and-control interventions guarantee policy effectiveness irrespectively on the timing of their introduction. As command-and-control policies are always able to direct technical change toward "green" technologies and to prevent climate disasters, they constitute a valuable alternative to market-based interventions. |
| Keywords: | Environmental Policy, Command and Control, Carbon Taxes, Disasters |
| Date: | 2015–12–28 |
| URL: | http://d.repec.org/n?u=RePEc:ssa:lemwps:2015/34&r=ene |
| By: | Maria Chistyakova; Philippe Mahenc |
| Abstract: | We examine how tax avoidance affects the optimal design of a linear tax on polluting emissions in a monopoly setting. The firm is owned by shareholder who differ in their cost of tax dodging. Following Buchanan (1969), the optimal tax should correct for two negative externalities due to pollution and the monopolist’s behavior. The analysis highlights two conflicting effects of tax avoidance on the environmental policy design: a free-riding effect and a tax base erosion effect. With heterogeneous tax avoidance, the regulator must also internalize the externality imposed by the free-riding of tax avoiders on the rest of the society. This free-riding makes the regulator either impotent or unfair, depending on the severity of the environmental damage and the firms’ efficiency. We also show that a two-part tax schedule can achieve the first-best outcome. |
| Keywords: | environmental taxation, monopoly, tax avoidance |
| JEL: | D43 D82 H23 L12 Q28 |
| Date: | 2015–11–19 |
| URL: | http://d.repec.org/n?u=RePEc:eus:ce3swp:0215&r=ene |
| By: | Effrosyni Diamantoudi (Department of Economics, Concordia University); Eftichios S. Sartzetakis (Department of Economics, University of Macedonia) |
| Abstract: | The present paper attempts to bridge the gap between the coop- erative and the non-cooperative approach employed to examine the size of stable coalitions, formed to address global environmental prob- lems. We do so by endowing countries with foresightedness, that is, by endogenizing the reaction of the coalition's members to a deviation by one member. We assume that when a country contemplates with- drawing or joining an agreement, it takes into account the reactions of other countries ignited by its own actions. We identify conditions under which there always exists a unique set of farsighted stable IEAs. The new farsighted IEAs can be much larger than those some of the previous models supported but are not always Pareto efficient. |
| Keywords: | International Environmental Agreements. |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:mcd:mcddps:2015_09&r=ene |
| By: | Rodrigo Harrison; Roger Lagunoff |
| Abstract: | This paper formulates a dynamic model of global carbon consumption in the absence of an effective international agreement. Each period, countries extract carbon from the global ecosystem. A country's output depends both on its carbon usage and on the ecosystem ("stored carbon"). The desired mix of extracted versus stored carbon by each country is determined by its stochastically evolving factor elasticities. We characterize Business-as-usual (BAU) equilibria as smooth, Markov Perfect equilibrium profiles of carbon usage across countries. A BAU equilibrium is shown to generate lower aggregate output and higher carbon use each period than the socially efficient path, although some countries might actually use less carbon under BAU. We characterize properties of tipping points, threshold levels of stored carbon stocks below which the global commons collapses, spiraling downward toward a steady state of marginal sustainability. We show that if the profile of carbon factor elasticities reaches a high enough threshold, a tipping point will be breached. Even in this case, there remains a time span (a "negotiation window") in which a collapse may be averted if the countries agree to implement the efficient profile of carbon usage. |
| JEL: | C73 D82 F53 Q54 Q58 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ioe:doctra:458&r=ene |