nep-ene New Economics Papers
on Energy Economics
Issue of 2016‒03‒06
forty-six papers chosen by
Roger Fouquet
London School of Economics

  1. Carbon emission and social capital in Sweden By Marbuah, George; Gren, Ing-Marie
  2. The 2015 Power Trading Agent Competition By Ketter, W.; Collins, J.; Reddy, P.; Weerdt, M.M.
  3. Custo econômico da energia em Minas Gerais: impacto das elevações de tarifas entre 2011 e 2015 By Kênia Barreiro de Souza; Edson Paulo Domingues; Aline Souza Magalhães; Terciane Sabadini Carvalho
  4. Global raw materials issues and their impact on polish economy By Katarzyna Idzkowska
  5. RECAP15-Policy Brief 2: Für einen wettbewerbsneutralen EU-Emissionshandel / EU Emissions Trading System without competitive disadvantages By Daniel Becker; Clemens Heuson; Wolfgang Peters; Ulrike Will
  6. Renewable Energy Support in Germany: Surcharge Development and the Impact of a Decentralized Capacity Mechanism By Thure Traber; Claudia Kemfert
  7. Rural electrification in India: Galilee Basin coal versus decentralised renewable energy micro grids By Molyneaux, Lynette; Wagner, Liam; Foster, John
  8. Economic incentives for carbon dioxide storage under uncertainty: A real options analysis By Narita, Daiju; Klepper, Gernot
  9. System Costs of Variable Renewable Energy in the European Union By Thibault Roy
  10. Urban energy consumption and CO2 emissions in Beijing: Current and Future By Hao Yu; Su-Yan Pan; Bao-Jun Tang; Zhi-Fu Mi; Yan Zhang; Yi-Ming Wei
  11. An economic analysis of transportation fuel policies in Brazil By Héctor M. Núñez; Hayri Onal
  13. Two Price Zones for the German Electricity Market: Market Implications and Distributional Effects By Jonas Egerer; Jens Weibezahn; Hauke Hermann
  14. Consommation d’énergie électrique et croissance économique au Togo By KPEMOUA, Palakiyem
  15. Forecasting oil price realized volatility: A new approach By Degiannakis, Stavros; Filis, George
  16. Something from Nothing: Estimating Consumption Rates Using Propensity Scores, with Application to Emissions Reduction Policies By Bardsley, Nicholas; Büchs, Milena; Schnepf, Sylke V.
  17. Climate policy modeling: An online SCI-E and SSCI based literature review By Yi-Ming Wei; Zhi-Fu Mi; Zhiming Huang
  18. Strategic capacity withholding through failures in the German-Austrian electricity market By Bergler, Julian; Heim, Sven; Hüschelrath, Kai
  19. China's regional energy and environmental efficiency: A Range-Adjusted Measure based analysis By Ke Wang; Bin Lu; Yi-Ming Wei
  20. Industrial energy and environment efficiency of Chinese cities: an analysis based on range-adjusted measure By Ke Wang; Xueying Yu
  21. Seven reasons to use carbon pricing in climate policy By Andrea Baranzini; Jeroen van den Bergh; Stefano Carattini; Richard Howarth; Emilio Padilla; Jordi Roca
  22. The INDC counter, aggregation of national contributrions and 2°C trajectories By Hélène Benveniste; Patrick Criqui; Olivier Boucher; Francois-Marie Breon; Celine Guivarch; Emmanuel Prados; Sandrine Mathy; Laetitia Chevallet; Laureline Coindoz; Hervé Le Treut
  23. Efficiency assessment of hydroelectric power plants in Canada: A multi criteria decision making approach By Bing Wang; Ioan Nistor; Tad Murty; Yi-Ming Wei
  24. Intra-Firm Diffusion of Green Energy Technologies and the Choice of Policy Instruments By Tobias Stucki; Martin Wörter
  25. Oil prices and the world business cycle: A causal investigation By Tapia, Jose
  26. Rate of return regulation and emission permits trading under uncertainty By Zhang,Fan; Huang,Tao
  27. Quantification of the Energy Efficiency Gap in the Swedish Residential Sector By Eoin Ó Broin; Érika Mata; Jonas Nässén; Filip Johnsson
  28. Permit Market Auctions with Allowance Reserves By Peyman Khezr; Ian A. MacKenzie
  29. Aceleración de la urbanización global y movilidad sostenible By Jorge Rafael Figueroa Elenes; Pablo Martín Urbano; Juan Ignacio Sánchez Gutiérrez
  30. Green accounting, institutional quality and investment decisions: Macroeconomic implications from an analysis of the oil and mining sector By Stöver, Jana
  31. Strategic trade in pollution permits By Alex Dickson; Ian A MacKenzie
  32. Do Environmental Messages Work on the Poor? Experimental Evidence from Brazilian Favelas By Chantal Toledo
  33. Analyse Risk-Return Paradox: Evidence from Electricity Sector of Pakistan By Naqi Shah, Sadia; Qayyum, Abdul
  34. A Conceptual Model of the Socioeconomic Impacts of Unconventional Fossil Fuel Extraction By Measham, Thomas; Fleming, David; Schandl, Heinz
  35. Optimal Control of an Energy Storage Facility Under a Changing Economic Environment and Partial Information By Anton A. Shardin; Michaela Sz\"olgyenyi
  36. Natural resource wealth and public social spending in the Middle East and North Africa By Cockx, Lara; Francken, Nathalie
  37. What drives long-term oil market volatility? Fundamentals versus Speculation By Yin, Libo; Zhou, Yimin
  38. Have Customers Benefited from Electricity Retail Competition? By Su, Xuejuan
  39. Who benefits from energy policy incentives? The case of Jatropha adoption by smallholders in Mexico By Iria Soto; Wouter Achten; Bart Muys; E Mathijs
  40. Electricity Use as an Indicator of U.S. Economic Activity By Arora, Vipin; Lieskovsky, Jozef
  41. Who will close the energy efficiency gap? A quantitative study of what characterizes ambitious housing firms in Sweden By Högberg, Lovisa
  42. Oil Prices, Inflation and U.S. Monetary Policy By Bullard, James B.
  43. Oil Prices and REER with Impact of Regime Dummies By Ahmed, Syed Shujaat; Nazir, Sidra
  44. On Start-up Costs of Thermal Power Plants in Markets with Increasing Shares of Fluctuating Renewables By Wolf-Peter Schill; Michael Pahle; Christian Gambardella
  45. NOx emissions and productive structure in Spain: an input-output perspective By Vicent Alcántara Escolano; Emilio Padilla; Matías Piaggio
  46. The economic effects of long-term climate change: evidence from the little ice age By Maria Waldinger

  1. By: Marbuah, George (Department of Economics, Swedish University of Agricultural Sciences); Gren, Ing-Marie (Department of Economics, Swedish University of Agricultural Sciences)
    Abstract: This paper addresses the issue of whether or not social capital explains per capita CO2 emissions dynamics in Swedish counties in an augmented environmental Kuznets curve framework. By accounting for issues of endogeneity in the presence of dynamic and spatial effects using geo-referenced emissions data, we show that per capita carbon emissions in a county matters for other counties and that net of economic, demographic and environmental factors, social capital has the potential to reduce carbon emissions in Sweden albeit less robustly. We test two different social capital constructs; trust in government and environmental engagement. Specifically, trust in the government inures to the reduction in CO2 emissions. Membership and engagement in environmental organisations reduces CO2 emissions only through its interaction with per capita income or trust. The implication of our estimates suggest that investment geared toward increasing the stock of social capital could inure to reductions in CO2 emissions in addition to climate policy instruments in Sweden
    Keywords: Social capital; environmental Kuznets curve; co2 emissions; spatial analyses; Sweden
    JEL: C23 Q53 Q56 Z13
    Date: 2015–04–30
  2. By: Ketter, W.; Collins, J.; Reddy, P.; Weerdt, M.M.
    Abstract: This is the specification for the Power Trading Agent Competition for 2015 (Power TAC 2015). Power TAC is a competitive simulation that models a “liberalized” retail electrical energy market, where competing business entities or “brokers” offer energy services to customers through tariff contracts, and must then serve those customers by trading in a wholesale market. Brokers are challenged to maximize their profits by buying and selling energy in the wholesale and retail markets, subject to fixed costs and constraints. Costs include fees for publication and withdrawal of tariffs, and distribution fees for transporting energy to their contracted customers. Costs are also incurred whenever there is an imbalance between a broker’s total contracted energy supply and demand within a given time slot. The simulation environment models a wholesale market, a regulated distribution utility, and a population of energy customers, situated in a real location on Earth during a specific period for which weather data is available. The wholesale market is a relatively simple call market, similar to many existing wholesale electric power markets, such as Nord Pool in Scandinavia or FERC markets in North America, but unlike the FERC markets we are modeling a single region, and therefore we model locational-marginal pricing through a simple manipulation of the wholesale supply curve. Customer models include households, electric vehicles, and a variety of commercial and industrial entities, many of which have production capacity such as solar panels or wind turbines. All have “real-time” metering to support allocation of their hourly supply and demand to their subscribed brokers, and all are approximate utility maximizers with respect to tariff selection, although the factors making up their utility functions may include aversion to change and complexity that can retard uptake of marginally better tariff offers. The distribution utility models the regulated natural monopoly that owns the regional distribution network, and is responsible for maintenance of its infrastructure. Real-time balancing of supply and demand is managed by a market-based mechanism that uses economic incentives to encourage brokers to achieve balance within their portfolios of tariff subscribers and wholesale market positions, in the face of stochastic customer behaviors and weather-dependent renewable energy sources. The broker with the highest bank balance at the end of the simulation wins.
    Keywords: autonomous agents, electric commerce, energy, preferences, portfolio management, power, policy guidance, sustainability, trading agent competition
    Date: 2015–02–03
  3. By: Kênia Barreiro de Souza (Cedeplar-UFMG); Edson Paulo Domingues (Cedeplar-UFMG); Aline Souza Magalhães (Cedeplar-UFMG); Terciane Sabadini Carvalho (PPGDE/UFPR)
    Abstract: The first half of 2015 was marked by significant increases in electricity prices as a result of problems of hydro generation and the consequent use of thermal generation in energy supply. In this context, this paper aims to study the economic impacts of changes in the electricity prices in Minas Gerais, identifying the role of price changes by category of consumption. To do this, we have used a computable general equilibrium model, specially tailored for this analysis. When analyzing the sectoral impact of energy prices, the results allow us to identify elements that can subsidize energy pricing policies in Minas Gerais. The results indicate that indirect effects of energy prices on the economy can be more harmful than the effects of the price increase on residential energy consumption. Thus, price adjustments toward the final consumption tend to be less negative than the energy price increases on productive sectors, especially in industry.
    Keywords: Energy, Minas Gerais, Prices, Computable General Equilibrium Model
    JEL: Q40 C68 R13
    Date: 2015–12
  4. By: Katarzyna Idzkowska (Warsaw University of Life Sciences, Poland)
    Abstract: This research concentrate on an irregular distribution of energy resources in the world and also on the problem of scarcity of non-renewable raw materials, such as petroleum, natural gas, charcoal. The main purpose of the article is to describe a topical fossil fuels market’s situation and to present prognosis about the future of natural resources’ extraction. The consequences of limited energy resources using in Poland is also an important issue. The author carried out an analysis of a secondary data that is published in annual British Petroleum reports: “Energy Outlook 2035: February 2015” and “BP Statistical Review of World Energy”, that are about energy production, consumption and trade. Along with the limited resources increase, the price increase as well. By the end of 2013 year, a petroleum’s barely cost 110 USD, whereas 10 years ago the cost was 30 USD. Even though the recent world’s energy demand has decreased, within next 50-60 years petroleum and gas loads may exhaust, being an effect of an intensive extraction. A difficult situation on an fossil fuels market also has its effects on polish economy. Due to a high dependency on an abroad load supply (especially of natural gas – 70% and oil – 99%) and a constantly growth of the prices, energy safety in Poland is seriously endangered.
    Keywords: fossil resources, non-renewable raw materials, resource scarcity
    JEL: L71 O13 Q32
    Date: 2015–06
  5. By: Daniel Becker (Faculty of Business Administration and Economics, European University Viadrina, Frankfurt (Oder)); Clemens Heuson; Wolfgang Peters (Faculty of Business Administration and Economics, European University Viadrina, Frankfurt (Oder)); Ulrike Will (Faculty of Business Administration and Economics, European University Viadrina, Frankfurt (Oder))
    Abstract: Handlungsempfehlungen (deutsch): 1. Die volle Wirksamkeit des Emissionshandels (ETS) wird dann gewährleistet, wenn pauschale Ausnahmetatbestände unterbleiben. Insbesondere die Carbon-Leakage-Liste sollte durch einen vollständigen Grenzausgleich ersetzt werden. 2. Grenzausgleichsinstrumente helfen bei der Vermeidung des Carbon Leakage und stellen zudem die Wettbewerbsneutralität europäischer Unternehmen wieder her. 3. Die Belastung durch den Grenzausgleich muss sich eng an der tatsächlichen Belastung durch das ETS orientieren. 4. Eine produkt- bzw. sektorenbezogene Grenzausgleichssteuer ist gut mit dem WTO-Recht vereinbar, dabei wettbewerbsneutral, klimapolitisch wirksam und unbürokratischer als andere Formen des Grenzausgleichs. 5. Die neuen Exportfreistellungen sind nur auf die tatsächlich exportierten Produkte zu beschränken. Die Exportbefreiungen mindern die Effektivität des Emissionshandels dann nicht, wenn sie vom Cap abgezogen werden. 6. Das Ausland sollte zwischen Grenzausgleich und der Einbindung in das ETS wählen können. 7. Die Investition der Einnahmen aus der Importbesteuerung bzw. aus dem integrierten Zertifikatehandel in geeignete Klimafonds ermöglicht eine doppelte klimapolitische Dividende. Policy recommendations (english): 1. The Emission Trading System (ETS) will be fully effective if its discretionary exemptions are omitted. The carbon-leakage list in particular should be replaced with a full border adjustment (BA). 2. The BA helps to prevent carbon leakage and restores competitive neutrality to EU enterprises. 3. The burden of the BA must be closely linked to the actual burden of the ETS. 4. A product- or sector-based BA is likely to be compatible with WTO rules, correspond to the principle of competitive neutrality, have a positive effect on climate protection, and be less bureaucratic than other forms of BA. 5. The new export rebates must be limited to products that are actually exported. Export rebates do not limit the effectiveness of the ETS if they are accounted for when fixing the cap. 6. Foreign countries should have the choice between two options: the BA and integration into the ETS. 7. If the revenue of the import BA respective of the integrated ETS is used for climate funding, a double dividend for climate protection can be facilitated.
    Date: 2015–02
  6. By: Thure Traber; Claudia Kemfert
    Abstract: The German support for renewable energies in the electricity sector is based on the feed-in tariff for investors that grants guaranteed revenues for their renewable energy supply. Corresponding to differences of granted tariffs and respective market values, a surcharge on consumption covers differential costs. While granted tariffs are bound to fall with advances in renewable energy technologies, the market design and the flexibility of the system influence the expected market values of renewables and the necessary surcharge. We apply the European electricity market equilibrium model EMELIE-ESY to investigate this relationship. We find a crucial dependence of market values of renewables on a high system flexibility and the current so-called energy-only market design. Under these conditions, the market values of renewables sequentially recover with increasing market prices by 2024 and 2034. This allows to limit the increase of the core surcharge to below a quarter of its 2013 value by 2024 despite a doubling of renewables, and to introduce substantial surcharge reductions through 2034. However, the introduction of a capacity market would erode market values of renewable energies and induce a pronounced growth of the core surcharge. Under inflexible supply structures and a capacity market, we find an increase of the core surcharge of more than 50 percent by 2024, a respective loss of the market value of wind power of the same magnitude, and an increase of the generation induced part of the consumer prices of more than a quarter.
    Keywords: electricity market; renewable energy support; capacity mechanism
    JEL: C63 D61
    Date: 2015
  7. By: Molyneaux, Lynette; Wagner, Liam; Foster, John
    Abstract: The state of Bihar in India has approximately 75 million people with no access to electricity. The government of India has pursued a policy of rural electrification through the provision of centralised coal-fired power which has been unable to resolve the low levels of electrification. Coal supply woes in India have led Indian companies to pursue new coal mines in Australia’s Galilee Basin. The costs of these mining ventures will be high due to the mining infrastructure required and long transport distances to rural India. A high level analysis of mining, transport and power station investment to meet rural demand in Bihar shows that the absolute investment requirement using coal, especially coal sourced from Australia, as an expensive option. Pursuing electrification through village level, renewable energy micro-systems requires lower financing and provides more flexibility. Pollution costs associated with coal-fired generation, employment benefits associated with many village implementations and a rural load unsupported by industry load, show the benefit associated with decentralised, renewable energy electrification.
    Keywords: Rural electrification Renewable energy Distributed energy
    JEL: Q42 Q53 R51
    Date: 2015–06–25
  8. By: Narita, Daiju; Klepper, Gernot
    Abstract: Carbon dioxide capture and storage (CCS) is considered to be an important option for reducing carbon dioxide (CO2) emissions. However, there are still concerns about its economic viability, especially if the risk of leakage in the storage site is taken into account. We use a real options approach for assessing the impact of uncertainty on the timing and the profitability of CO2 storage projects. We model an investment decision for a storage site under uncertainty about CO2 leaking from the storage site, about the development of carbon prices, and about the cost of investment. The numerical model results show that investment under these uncertainties requires a much larger price for carbon credits for storage than an investment plan ignoring uncertainty would suggest. We also show under reasonable parameter assumptions that the risk for investing in CO2 storage is dominated by the uncertain development of carbon prices, whereas the risk of carbon leakage has little influence on the investment decision.
    Keywords: carbon dioxide capture and storage (CCS),real options analysis,climate policy
    JEL: D81 Q49 Q54
    Date: 2015
  9. By: Thibault Roy (European Commission)
    Abstract: To shift to a low-carbon economy, the EU has been encouraging the deployment of variable renewable energy sources (VRE). However, VRE lack of competitiveness and their technical specificities have substantially raised the cost of the transition. Economic evaluations show that VRE life-cycle costs of electricity generation are still today higher than those of conventional thermal power plants. Member States have consequently adopted dedicated policies to support them. In addition, Ueckerdt et al. (2013) show that when integrated to the power system, VRE induce supplementary not-accounted-for costs. This paper first exposes the rationale of EU renewables goals, the EU targets and current deployment. It then explains why the LCOE metric is not appropriate to compute VRE costs by describing integration costs, their magnitude and their implications. Finally, it analyses the consequences for the power system and policy options. The paper shows that the EU has greatly underestimated VRE direct and indirect costs and that policymakers have failed to take into account the burden caused by renewable energy and the return of State support policies. Indeed, induced market distortions have been shattering the whole power system and have undermined competition in the Internal Energy Market. EU policymakers can nonetheless take full account of this negative trend and reverse it by relying on competition rules, setting-up a framework to collect robust EU-wide data, redesigning the architecture of the electricity system and relying on EU regulators.
    Keywords: Variable renewable energy, Integration costs, Distortion costs, EU electricity system, System costs
    JEL: L51 L94 O52 Q20 Q42
    Date: 2015–12
  10. By: Hao Yu; Su-Yan Pan; Bao-Jun Tang; Zhi-Fu Mi; Yan Zhang; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology)
    Abstract: This paper calculates the energy consumption and CO2 emissions of Beijing over 2005-2011 in light of the Beijing's energy balance table and the carbon emission coefficients of IPCC. Furthermore, based on a series of energy conservation planning program issued in Beijing, the LEAP-BJ model is developed to study the energy consumption and CO2 emissions of Beijing's six end-use sectors and the energy conversion sector over 2012-2030 under the BAU scenario and POL scenario. Some results are found in this research: (1) during 2005-2011, the energy consumption kept increasing, while the total CO2 emissions fluctuated obviously in 2008 and 2011. The energy structure and the industrial structure have been optimized to a certain extent. (2) If the policies are completely implemented, the POL scenario is projected to save 21.36% and 35.37% of the total energy consumption and CO2 emissions than the BAU scenario during 2012 and 2030. (3) The POL scenario presents a more optimized energy structure compared with the BAU scenario, with the decrease of coal consumption and the increase of natural gas consumption. (4) The commerce and service sector and the energy conversion sector will become the largest contributor to energy consumption and CO2 emissions, respectively. The transport sector and the industrial sector are the two most potential sectors in energy savings and carbon reduction. In terms of sub-scenarios, the TEC is the most effective one. (5) The macro parameters, such as the GDP growth rate and the industrial structure have great influence on the urban energy consumption and carbon emissions.
    Keywords: Urban, Energy consumption, CO2 emissions, Scenario analysis, LEAP model
    JEL: Q47 Q54
    Date: 2014–08–30
  11. By: Héctor M. Núñez (Division of Economics, CIDE); Hayri Onal
    Abstract: Brazil uses taxes, subsidies, and blending mandates as policy instruments to manage its transportation fuel markets. Despite all the market stabilization efforts, the fuels sector has been very dynamic in recent years. In response to ethanol supply fluctuations, the ethanol blending rate is adjusted at times and complemented with fuel tax rates changes. In this paper, we analyze the impacts of such policy adjustments and market disturbances in the world ethanol and sugar markets on Brazilian producers’ supply responses, consumers’ driving demand and fuel choice, ethanol trade with the rest of the world, greenhouse gas (GHG) emissions, and social welfare. As the analytical tool, we use a large-scale spatially explicit price endogenous mathematical programming model which simulates the resource utilization in agriculture and finds the simultaneous equilibrium in food and fuel markets. The model results show that reducing the ethanol blending rate would reduce the driving demand by conventional vehicles while lowering the tax rate on gasoline would encourage flex fuel vehicle users to switch from pure ethanol to gasohol resulting in larger GHG emissions due to the consumption of a more carbon intensive fuel blend.
    Keywords: Brazil fuel policy, mathematical programming, land use, greenhouse gas emissions
    JEL: Q42 Q55
    Date: 2014–03
  12. By: Mehmet Balcilar (Department of Economics, Eastern Mediterranean University); Rangan Gupta (Department of Economics, University of Pretoria); STELIOS BEKIROS (European University Institute (EUI))
    Abstract: We emphasize the role of news-based economic policy and equity market uncertainty indices as robust drivers of oil price fluctuations. In that, we utilize a new hybrid nonparametric quantile causality methodology in order to investigate whether EPU and EMU uncertainty measures incorporate critical predictability for oil market returns and volatility. Based on an updated daily database spanning January 1986 to December 2014, we find that both measures present strong predictability over the entire distribution of oil around the median, yet more importantly for volatility forecastability covers the entire distribution except minor divergences in the tails. Therefore, an inherent heterogeneity is observed and an asymmetric pattern over the distribution of oil returns and its volatility exists with respect to uncertainty predictability.
    Keywords: Uncertainty; Oil markets; Volatility; Quantile causality
    JEL: C32 C53 Q41
    Date: 2015
  13. By: Jonas Egerer; Jens Weibezahn; Hauke Hermann
    Abstract: We discuss the implications of two price zones, i.e. one northern and southern bidding area, on the German electricity market. In the northern zone, continuous capacity additions with low variable costs cause large regional supply surpluses in the market dispatch while conventional capacity decreases in the southern zone. As the spatial imbalance of supply and load is increasing, the current single bidding area results more often in technically infeasible market results requiring curative congestion management. Additional bidding zones would enable better market integration of scarce transmission capacities in a system exposed to structural regional imbalances. Using a line sharp electricity sector model, this paper analyzes the system implications and the distributional effects of two bidding zones in the German electricity system in 2012 and 2015, respectively. Results show a decrease in cross-zonal re-dispatch levels, in particular in 2015. However, overall network congestion and re-dispatch levels increase in 2015 and also remain high for both bidding zones. Results are very sensitive to additional line investments illustrating the challenge to define stable price zones in a dynamic setting. With two bidding areas, prices in the model results increase in the southern zone and decrease in the northern zone. The average price deviation grows from 0.4 EUR/MWh in 2012 to 1.7 EUR/MWh in 2015 with absolute values being significantly higher in hours with price differences. Stakeholders within zones are exposed to the price deviations to a different extent. Distributional effects are surprisingly small compared to the wholesale price or different network charges.
    Keywords: German electricity market, congestion management, bidding zone configuration, distributional effects.
    JEL: L94 Q41 Q48 L51
    Date: 2015
  14. By: KPEMOUA, Palakiyem
    Abstract: The general purpose of this study is to analyze the effect of the consumption of electric energy on Togo’s economic growth and check the direction of the causality between this consumption and economic growth. From a simple methodological approach, the study uses cointegration and causality techniques to meet its objectives and tests the research hypothesis that consumption of electric energy causes, as Granger puts, the economic growth. The results show that there is a positive correlation between economic growth, capital stock and consumption of electric energy with a negative effect energy crisis in 1983. These results also show that there is no causality between economic growth and consumption of electric energy, in other words, the consumption of electric energy dwells a small component of economic growth.
    Keywords: Electric energy consumption, economic growth, Granger causality
    JEL: E21
    Date: 2016–01–30
  15. By: Degiannakis, Stavros; Filis, George
    Abstract: This paper adds to the extremely limited strand of the literature focusing on the oil price realized volatility forecasting. More specifically, we evaluate the information content of four different asset classes’ volatilities when forecasting the oil price realized volatility for 1-day until 66-day ahead. To do so, we concentrate on the Brent crude oil and fourteen other assets, which are grouped into four different asset classes, based on Heterogeneous AutoRegressive (HAR) framework. Our out-of-sample forecasting results can be summarised as follows. (i) The use of exogenous volatilities statistically significant improves the forecasting accuracy at all forecasting horizons. (ii) The HAR model that combines volatilities from multiple asset classes is the best performing model. (iii) The Direction of Change suggests that all HAR models are highly accurate in predicting future movements of oil price volatility. (iv) The forecasting accuracy of the models is better gauged using the Median Absolute Error and the Median Squared Error. (v) The findings are robust even during turbulent economic periods. Hence, different asset classes’ volatilities contain important information which can be used to improve the forecasting accuracy of oil price volatility.
    Keywords: Volatility forecasting, realized volatility, crude oil futures, Brent crude oil, HAR, MCS.
    JEL: C22 C53 G13 Q02 Q47
    Date: 2016–01–29
  16. By: Bardsley, Nicholas (University of Reading); Büchs, Milena (University of Southampton); Schnepf, Sylke V. (European Commission)
    Abstract: Consumption surveys often record zero purchases of a good because of a short observation window. Only mean consumption rates can then be inferred. We show that propensity scores can be used to estimate each unit's consumption rate, revealing the distribution. We demonstrate the method using the UK National Travel Survey, in which c.40% of motorist households purchase no fuel. Estimated consumption rates are plausible judging by households' annual mileages, and highly skewed. We apply the same approach to estimate CO2 emissions and direct outcomes of a carbon cap or tax. Analysis of such policies based solely on means appears to have a negative bias, because of skewness of the underlying distributions. The regressiveness of a simple tax or cap is overstated, and redistributive features of a revenue-neutral policy are understated.
    Keywords: emissions reduction, fuel consumption, infrequent purchase, propensity score matching, surveys
    JEL: C13 D04 D12 H23
    Date: 2016–02
  17. By: Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology); Zhi-Fu Mi; Zhiming Huang
    Abstract: This study utilizes the bibliometric method on climate policy modeling based on the online version of SCI-E from 1981 to 2013 and SSCI from 2002 to 2013, and summarizes several important research topics and methodologies in the field. Publications referring to climate policy modeling are assessed with respect to quantities, disciplines, most productive authors and institutes, and citations. Synthetic analysis of keyword frequency reveals six important research topics in climate policy modeling which are summarized and analyzed. The six topics include integrated assessment of climate policies, uncertainty in climate change, equity across time and space, endogeneity of technological change, greenhouse gases abatement mechanism, and enterprise risk in climate policy models. Additionally, twelve types of models employed in climate policy modeling are discussed. The most widely utilized climate policy models are optimization models, computable general equilibrium (CGE) models, and simulation models.
    Keywords: Climate policy, Integrated assessment, Enterprise risk, Bibliometric, Word frequency analysis
    JEL: Q40 Q54 Q58
    Date: 2014–06
  18. By: Bergler, Julian; Heim, Sven; Hüschelrath, Kai
    Abstract: In electricity day-ahead markets organized as uniform price auction, a small reduction in supply in times of high demand can cause substantial increases in price. We use a unique data set of failures of generation capacity in the German-Austrian electricity market to investigate the relationship between electricity spot prices and generation failures. Differentiating between strategic and non-strategic failures, we find a positive impact of prices on non-usable marginal generation capacity for strategic failures only. Our empirical analysis therefore provides evidence for the existence of strategic capacity withholding through failures suggesting further monitoring efforts by public authorities to effectively reduce the likelihood of such abuses of a dominant position.
    Keywords: Antitrust Policy,Market Power,Auctions,Electricity,Withholding
    JEL: L94 L12 L41 K21
    Date: 2016
  19. By: Ke Wang; Bin Lu; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology)
    Abstract: Energy and environmental efficiency evaluation has recently attracted increasing interest in China. In this study, we utilize the Range-Adjusted Measure (RAM) based nonparametric approach to evaluate the regional energy and environmental efficiency of China over the period of 2006-2010. The desirable/good and undesirable/bad outputs, as well as the energy and non-energy inputs are considered in the efficiency evaluation so as to characterize the energy consumption, economic production, and CO2 emission process of different China's regions. In addition, the economic concepts of natural disposability and managerial disposability are incorporated in the evaluation instead of the strong and weak disposability in conventional environmental efficiency evaluation. Therefore, the types of returns to scale and damages to scale of different China's regions are measured and correspondingly the strategy and policy implications are proposed for guiding the future improvement of regional energy and environmental efficiency. This study finds that: i) Beijing, Shanghai, and Guangdong had the highest integrated energy and environmental efficiency during the study period, which could be seen as the benchmarks of inefficient China's regions. ii) On average, east China had the highest integrated efficiency under natural disposability, and west China had the highest integrated efficiency under managerial disposability. iii) During 2006-2010, the average production efficiency of China slightly decreased and the average emission efficiency of China slightly increased. v) Among China's 30 regions, 19 regions exhibited decreasing returns to scale, 4 regions shown increasing returns to scale, and 7 regions have mixed returns to scale types under natural disposability in our study period. In addition, under managerial disposability, there are 18, 3 and 9 regions respectively exhibited increasing, decreasing and mixed damages to scale types over time. v) For most Chinese regions, it is not recommended to simply increase or maintain their current scales of production, but alternatively, they should pay more attentions on technology innovation of energy utilization efficiency improvement, since up to 2010, China still had large energy conservation and emission reduction potentials.
    Keywords: Energy and environmental efficiency, Range-Adjusted Measure (RAM), Returns to scale, Damages to scale
    JEL: Q40 Q58
    Date: 2014–07–05
  20. By: Ke Wang; Xueying Yu
    Abstract: Industrial energy and environment efficiency evaluation is essential in guiding national and environmental policy making, since the industrial sector is the largest energy consumer and major pollutants producer in China. This study utilizes the Range-Adjusted Measure (RAM) based models to evaluate the energy and environment efficiency of industrial sectors in 31 Chinese major cities. The empirical results show that eastern Chinese cities outperform their western counterparts in terms of industrial energy efficiency, and central Chinese cities outperform their eastern counterparts in terms of industrial environment efficiency. Under natural disposability, 23 cities exhibit decreasing returns to scale, and under managerial disposability, 18 cities exhibit increasing damages to scale.
    Keywords: Chinese city, energy and environment efficiency, industrial sector, Range-Adjusted Measure (RAM)
    JEL: Q40 Q58
    Date: 2014–08–07
  21. By: Andrea Baranzini; Jeroen van den Bergh; Stefano Carattini; Richard Howarth; Emilio Padilla; Jordi Roca
    Abstract: The idea of a global carbon price has been a recurrent theme in debates on international climate policy. Discarded at the Conference of Parties (COP) of Copenhagen in 2009, it remained part of deliberations for a climate agreement in subsequent years. Unfortunately, there is still much misunderstanding about the reasons for implementing a global carbon price. As a result, ideological and political resistance against it prospers. Here we present the main arguments in favor of a carbon price to stimulate a fair and well-informed discussion about climate policy instruments. This includes arguments that have received surprisingly little attention so far. It is stressed that a main reason to use carbon pricing is environmental effectiveness, so not only economic efficiency (including the special case of cost-effectiveness). In addition, we provide ideas on how to implement a uniform global carbon price, whether using a carbon tax or emissions trading.
    Date: 2016–02
  22. By: Hélène Benveniste (Institut Pierre-Simon Laplace (IPSL) - CNRS - Centre National de la Recherche Scientifique); Patrick Criqui (équipe EDDEN - PACTE - Politiques publiques, ACtion politique, TErritoires - Grenoble 2 UPMF - Université Pierre Mendès France - UJF - Université Joseph Fourier - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - CNRS - Centre National de la Recherche Scientifique); Olivier Boucher (LMD - Laboratoire de Météorologie Dynamique - ENS Paris - École normale supérieure - Paris - UPMC - Université Pierre et Marie Curie - Paris 6 - INSU - Polytechnique - X - CNRS - Centre National de la Recherche Scientifique); Francois-Marie Breon (Laboratoire des sciences du Climat de l'Environnement (UMR 8212) - Commissariat à l'Energie Atomique et aux Energies Alternatives); Celine Guivarch (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CNRS - Centre National de la Recherche Scientifique - CIRAD - Centre de coopération internationale en recherche agronomique pour le développement - EHESS - École des hautes études en sciences sociales - École des Ponts ParisTech (ENPC) - AgroParisTech - AgroParisTech); Emmanuel Prados (STEEP - Sustainability transition, environment, economy and local policy - Inria Grenoble - Rhône-Alpes - INRIA - Institut National Polytechnique de Grenoble (INPG) - LJK - Laboratoire Jean Kuntzmann - Grenoble 2 UPMF - Université Pierre Mendès France - UJF - Université Joseph Fourier - Institut Polytechnique de Grenoble - Grenoble Institute of Technology - CNRS - Centre National de la Recherche Scientifique); Sandrine Mathy (équipe EDDEN - PACTE - Politiques publiques, ACtion politique, TErritoires - Grenoble 2 UPMF - Université Pierre Mendès France - UJF - Université Joseph Fourier - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - CNRS - Centre National de la Recherche Scientifique); Laetitia Chevallet (équipe EDDEN - PACTE - Politiques publiques, ACtion politique, TErritoires - Grenoble 2 UPMF - Université Pierre Mendès France - UJF - Université Joseph Fourier - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - CNRS - Centre National de la Recherche Scientifique); Laureline Coindoz (équipe EDDEN - PACTE - Politiques publiques, ACtion politique, TErritoires - Grenoble 2 UPMF - Université Pierre Mendès France - UJF - Université Joseph Fourier - IEPG - Sciences Po Grenoble - Institut d'études politiques de Grenoble - CNRS - Centre National de la Recherche Scientifique); Hervé Le Treut (UPMC - Université Pierre et Marie Curie - Paris 6)
    Abstract: Considering that limiting global warming to below 2°C implies a CO2 budget not to be exceeded and near-zero emissions by 21OO (IPCC), we can assess global 2030 greenhouse gas emissions implied by INDCs in comparison to long-term trajectories. Ahead of the COP21, we estimate that submitted INDCs would bring global greenhouse gas emissions in the range of 55 to 64 GtC02eq in 2030. Under this assumption,global emissions in 2030 are thus higher than the level of 51GtC0 2eq for the year 2012. However, this is not in contradiction with a peaking of global emissions that can only be expected after 2020, given in particular the projected dynamics of emissions in China and other developing countries. The published INDCs represent a significant step towards trajectories compatible with the 2°C goal,but remain insufficient to join trajectories presenting a reasonable probability of success. ln order to increase the chance of meeting the 2°C objective, the ambition of the short-term contributions needs to be strengthened in future negotiations. ln order to sustain a high pace in emissions reductions after 2030,structural measures are also needed, which, in order to have a rapi impact, should be prepared as early as possible. Continued efforts are needed to accelerate the development of low carbon solutions on the one hand,and demonstrate the feasibility of negative emissions on the other hand.
    Date: 2015–11
  23. By: Bing Wang; Ioan Nistor; Tad Murty; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology)
    Abstract: Hydropower plays a major role in the Canadian electricity generation industry. Few attempts have been made, however, to assess the efficiency of hydropower generation in Canada. This paper analyzes the overall efficiency of hydropower generation in Canada from comprehensive viewpoints of electricity generating capability, its profitability, as well as environmental benefits and social responsibility using the TOPSIS (the Technique for Order Preference by Similarity to Ideal Solution) method. The factors that influence the efficiency of the hydropower generation are also presented to help to the sustainable hydropower production in Canada. The most important results of this study concern (1) the pivotal roles of energy saving and of the social responsibility in the overall efficiency of hydropower corporates and (2) the lower hydropower generation efficiency of some of the most important economic regions in Canada. Other results reveal that the overall efficiency of hydropower generation in Canada experienced an improvement in 2012 following a downtrend from 2005 to 2011. Amidst these influencing factors, energy saving and social responsibility are key factors in the overall efficiency scores while management (defined herein by the number of employees and hydropower stations of a corporation) has only a slightly negative impact on the overall efficiency score.
    Keywords: Hydropower efficiency, TOPSIS, Social responsibility, Energy saving, Benchmarking management
    JEL: Q40 Q58
    Date: 2014–08–21
  24. By: Tobias Stucki (KOF Swiss Economic Institute, ETH Zurich, Switzerland); Martin Wörter (KOF Swiss Economic Institute, ETH Zurich, Switzerland)
    Abstract: Environmental benefits only unfold if green (environmentally friendly) technologies are widely diffused and intensively deployed within a firm. We investigate how different types of policies - directly and in combination - affect the number of different green energy technologies adopted by a single firm (intra-firm diffusion). Using data from a dedicated survey on the diffusion of green energy technologies of 1200 Swiss firms and applying well-identified econometric models, we found that energy taxes are a very effective policy instrument for the intra-firm diffusion of green energy technologies. Even more important, however, are non-political measures that show the largest effect among all tested instruments. Additional analyses show that (a) time-consistency in policy making is more important for energy tax regimes than for regulations and (b) no evidence for complementarities between the policy types could be identified.
    Keywords: Technology Adoption, Innovation, Policies, Intra-firm diffusion, Survey data
    JEL: O31
    Date: 2016–01
  25. By: Tapia, Jose
    Abstract: Oil shocks have been often considered as exogenous factors responsible of economic downturns. In this paper the hypothesized exogeneity of oil prices is investigated by using running cross-correlations, distributed lag-regressions, Granger causality tests and VAR models applied to annual data 1960-2014 of oil prices and global economic activity—as measured by world GDP. Strong evidence is found that (a) the relation between oil prices and the global economy has significantly changed since the 1960s to the present, and (b) oil prices are endogenously influenced by the level of activity in the global economy. Evidence of a negative effect of oil prices on the global economy is weak for the whole sample and null for recent decades. These findings are consistent with former results using the Kilian index, which is shown to be a leading indicator of activity in the world economy. As such it is significantly correlated with other indicators of the global business cycle, such as the rate of growth of world output and the annual growth of CO2 global emissions.
    Keywords: oil price; global economy; business cycle
    JEL: E32 F00 F2
    Date: 2016–01–19
  26. By: Zhang,Fan; Huang,Tao
    Abstract: This paper analyzes the dynamic effects of rate-of-return regulation on firms? emissions compliance behavior when the price of emissions permits is uncertain. The paper shows that uncertainty regarding the price of permits would motivate a regulated firm to adopt a more self-sufficient strategy and would reduce the cost-effectiveness of emission allowance trading. When allowance transactions are treated as capital investments, uncertainty could reverse the classic Averch-Johnson effect, so that a regulated firm would purchase fewer permits in the ex ante period than its unregulated counterpart. These results are driven by the asymmetric impact of a price change on the expected marginal value of allowances under rate-of-return regulation. A wider variation in the permit price and a decline in the regulated rate of return would amplify the asymmetry. These results have implications for the efficiency of the proposed global carbon trading system.
    Keywords: Energy Production and Transportation,Debt Markets,Climate Change Mitigation and Green House Gases,Markets and Market Access,Climate Change Economics
    Date: 2015–06–26
  27. By: Eoin Ó Broin (CIRED - Centre International de Recherche sur l'Environnement et le Développement - EHESS - École des hautes études en sciences sociales - CIRAD - Centre de coopération internationale en recherche agronomique pour le développement - Ecole Nationale du Génie Rural des Eaux et Forêts - École des Ponts ParisTech (ENPC) - CNRS - Centre National de la Recherche Scientifique, Chalmers University of Technology [Gothenburg]); Érika Mata (Chalmers University of Technology [Gothenburg]); Jonas Nässén (Chalmers University of Technology [Gothenburg]); Filip Johnsson (Chalmers University of Technology [Gothenburg])
    Abstract: We present a method for quantifying the energy efficiency gap ex-ante. To do this we define the energy efficiency gap as being the difference between the ex-ante market and techno-economic energy savings potentials. The estimation of market potential is based on top-down (econometric) modelling of energy demand using data from the period 1970–2005. The techno-economic estimates are made using a bottom-up building stock model (ECCABS), to assess the effects and cost-efficiency of various energy efficiency measures. Common to these two modelling approaches are two scenarios of energy prices, which differ only with respect to the carbon tax component. We implement the method for the case of useful energy demand for space and water heating in the Swedish residential sector up to 2030. In comparison to the level of energy use in 2005 (74 TWh), the top-down model predicts for 2030 reductions in demand for the two price scenarios of 17 TWh and 21 TWh, respectively. The bottom-up model predicts corresponding reductions in demand of 25 TWh and 31 TWh, respectively. Thus, there is an energy efficiency gap between the two models of at least 8 TWh in 2030. An implicit discount rate of 10% would render the results from the bottom-up modelling identical to those from the top-down modelling. However the presence of the energy efficiency gap indicates that there is a need for enhanced policies in order to make future reductions in energy demand reach the levels predicted by the bottom-up modelling.
    Keywords: Residential,Top-down,Heating,Ex-ante,Energy efficiency gap,Bottom-up
    Date: 2015–10–26
  28. By: Peyman Khezr (School of Economics, The University of Queensland); Ian A. MacKenzie (School of Economics, The University of Queensland)
    Abstract: This article investigates pollution permit auctions that incorporate allowance reserves. In these auctions the sale of a fixed quantity of permits is supplemented by an additional permit reserve. This reserve automatically releases permits if a sufficiently high price is triggered. The main justifications for implementing an allowance reserve are to reduce price volatility as well as assisting in cost containment. We show—paradoxically—that incorporating an allowance reserve into a permit auction can decrease firms’ payoffs, increase the clearing price, and increase the associated costs of compliance. This has direct policy implications for all major cap-and-trade markets, including the US Regional Greenhouse Gas Initiative.
    Keywords: permit auction, allowance reserve
    JEL: D44 Q52
    Date: 2016–01–14
  29. By: Jorge Rafael Figueroa Elenes (Universidad Autónoma de Sinaloa); Pablo Martín Urbano (Universidad Autónoma de Madrid); Juan Ignacio Sánchez Gutiérrez (Universidad Autónoma de Madrid)
    Abstract: Acceleration of the processes of global urbanization, especially in developing countries, produces a multitude of impacts, most of them as a result of transport. Responses to an always unsatisfied demand for urban mobility cities have gone through various stages, evolving from the increase in the supply of human and material resources to attempts to manage the demand. The largest offer of transport meant to multiply endowment of infrastructures, to facilitate the mobility of the particular vehicle, but it failed because, among other effects of congestion, pollution and accidents. The further strengthening of public transport services found its limits in the conception of the urban system and transport planned for the particular vehicle. In addition to fulfill those needs meeting the challenges of decarburization of the cities, which means to address the problems of global warming transforming urban displacement in sustainable mobility. An appropriate solution to the problems of urban transport through profound transformations of existing transport systems, involving the same conception of cities and their functions, individual and social relations, as well as improving the alternatives to private vehicles and the use of fossil energy. The article reviews the importance of urban transport in the global sustainability and the problems posed by the processes of urbanization worldwide to achieve it, outlining some guidelines for sustainable mobility
    Keywords: Urbanization, Agglomeration, Cities, Transport, Sustainable Mobility.
    JEL: R11 R12 R14 R40 R41 R42
    Date: 2015–09–01
  30. By: Stöver, Jana
    Abstract: This paper investigates the effect of institutional quality on sustainable development.Institutional quality is assumed to determine the (perceived) risk in the face of which oil and mining firms determine their level of investment in physical and natural capital. Since these two types of capital are used jointly in the industry's production process, the firms face a dual investment decision, whereby they have to decide on the investment into both types of capital simultaneously. It is shown that this production structure implies that better institutional quality can increase as well as decrease the speed of resource extraction. However, due to the structure of national accounting data, this fact has so far not been adequately accounted for in preceding studies. By integrating the dual investment model into the green accounting approach it is then shown that the form of capital aggregation in national accounting can lead to an underestimation of the effect of institutional quality on sustainable development and potentially on economic growth. The results imply that it could be useful to investigate the macroeconomic effects of institutional quality on the oil and mining sector separately from those on the rest of the economy.
    Keywords: exhaustible resource extraction,institutions,ownership risk,resource curse,adjusted net saving / genuine saving,green accounting,sustainable development
    JEL: Q32 Q56 Q01
    Date: 2016
  31. By: Alex Dickson (Department of Economics, University of Strathclyde); Ian A MacKenzie (School of Economics, University of Queensland)
    Abstract: Markets for pollution have become a popular regulatory instrument. Yet these markets are often highly concentrated, which may lead to strategic behavior by all participants. In this article we investigate the implications of strategic trade in pollution permits. The permit market is developed as a strategic market game, where all firms are allowed to behave strategically and their roles as buyers or sellers of permits are determined endogenously with price-mediated trade. In a second stage, firms transact on a product market and we allow for a variety of market structures. Our framework establishes the endogenous determination of equilibrium price, market structure, and levels of exchange in the permit market.
    Keywords: Pollution market, Market power, Strategic market game.
    JEL: C72 D43 D51 L13 Q53
    Date: 2016–01
  32. By: Chantal Toledo
    Abstract: Using a randomized experiment conducted in 17 favelas (shantytowns) in Rio de Janeiro, Brazil, this paper investigates the interplay between three levels of monetary incentives and an environmental persuasion communication on the take-up of an energy-efficient lightbulb (a light-emitting diode or, LED).
    Keywords: Energy efficient technologies, Favelas, Non Monetary incentives
    JEL: F Z
    Date: 2016–03–01
  33. By: Naqi Shah, Sadia; Qayyum, Abdul
    Abstract: This study analyse risk return relationship of the electricity companies of Pakistan by using the log return series of these electricity companies. Financial time series data have the property of autoregressive heteroscedasticity so move towards the GARCH family test. As the study want to analyse the risk return relationship so, GARCH-M Model of Engel et al (1987) is used, who empirically found relationship between risk and return. Results show that risk return in case of Pakistan electricity companies is not a specific relation (negative or positive) rather they show paradox of risk return.
    Keywords: GARCH test, Risk return relation, Paradox, GARCH-M, Pakistan
    JEL: C58 G1 G12
    Date: 2016–01
  34. By: Measham, Thomas; Fleming, David; Schandl, Heinz
    Abstract: As global energy demand increases, the rapid expansion of the unconventional fossil fuel sector has triggered an urgent need for social, economic and policy research to understand and predict how this sector affects host communities and how governance systems can respond to changes presented by this sector. In response to this need, this paper addresses three linked objectives. The first is to review the literature on regional impacts of energy extraction, presented in the form of a framework of hierarchical effects. The second is to consider how these are playing out differently in the context of conventional compared with unconventional fossil fuels. The third is to draw attention to the institutional avenues for addressing these impacts, including an overview of the lessons from existing research on the human and policy dimensions associated with conventional energy industries. In particular, we consider the importance of multi-stakeholder dialogue, which plays an important role in how regions respond to the challenges brought about through extractive industries. Overall, we demonstrate that experiences from conventional energy development provide a useful starting point for navigating the human and policy dimensions of unconventional energy for host communities and discuss how these experiences differ when unconventional energy seeks to co-exist with other land uses such as agriculture. The paper draws attention to the dispersed nature of impacts (positive and negative) and how this may shape winners and losers from unconventional energy development, particularly in regions with pre-existing land uses such as agriculture.
    Keywords: unconventional energy, shale, community impacts, dialogue, governance
    JEL: Q4 Q42 R1 R11
    Date: 2015–06–01
  35. By: Anton A. Shardin; Michaela Sz\"olgyenyi
    Abstract: In this paper we consider an energy storage optimization problem in finite time in a model with partial information that allows for a changing economic environment. The state process consists of the storage level controlled by the storage manager and the energy price process, which is a diffusion process the drift of which is assumed to be unobservable. We apply filtering theory to find an alternative state process which is adapted to our observation filtration. For this alternative state process we derive the associated Hamilton-Jacobi-Bellman equation and solve the optimization problem numerically. This results in a candidate for the optimal policy for which it is a-priori not clear whether the controlled state process exists. Hence, we prove an existence and uniqueness result for a class of time-inhomogeneous stochastic differential equations with discontinuous drift and singular diffusion coefficient. Finally, we apply our result to prove admissibility of the candidate optimal control.
    Date: 2016–02
  36. By: Cockx, Lara; Francken, Nathalie
    Abstract: This paper investigates the discrepancy between the vast natural resource wealth and the relatively low spending on human development in the Middle East and North Africa (MENA) region. Our results show a robust, significant inverse relationship between natural resource dependence and public health spending, and natural resource dependence and public education spending over time. The effects remain significant after controlling for income, aid, the age structure of the population, and the quality of institutions. Moreover, we find a particularly strong resource curse effect of oil on social spending. Despite the mounting burden on MENA‘s economic development models due to significant population growth and the pressing need for diversification, countries have been unable or unwilling to convert natural resource wealth into increased social spending. Governments should be strongly encouraged to manage their natural wealth in an accountable and equitable manner that follows international best practice. Correct taxation of natural resource, and especially, oil wealth should provide the governments with adequate budgets to fund a desirable level of public health provision. Finally, the equity of distribution of education spending could be improved.
    Keywords: public social spending; Middle East; North Africa
    Date: 2015–03
  37. By: Yin, Libo; Zhou, Yimin
    Abstract: This paper explores the role of speculation and economy fundamentals in the oil market using a two-component GARCH-MIDAS model. Particularly, the authors highlight the different role played by changing oil shocks on short-term and long-term components in terms of oil market volatility. The results show that the global demand shock is the only one factor found to be positive and significantly increasing long- or short-term oil volatility in the full sample. This is consistent with a classic host advocating that global demand dominates the oil market. However, impacts of other oil shocks are significantly weakened and even reversed since the year of 2004. In particular, the speculative demand shock plays a role in stabilizing long-term oil volatility during the post-2004 period. The results also suggest the existence of asymmetric impacts on the short-term oil volatility, particularly for shocks from oil supply, oil specific and oil speculative demand.
    Keywords: oil shocks,economy fundamentals,speculation,long/short-term oil volatility,GARCH-MIDAS model
    JEL: Q43
    Date: 2016
  38. By: Su, Xuejuan (University of Alberta, Department of Economics)
    Abstract: Compared to traditional cost-of-service (COS) regulation, electricity retail competition may lead to lower costs but higher markups. Thus, the net effect on electricity retail prices is ambiguous. This paper uses a difference-in-difference approach to estimate the impact. The results suggest that in restructured states, only residental customers have benefited from significantly lower prices but not commercial or industrial customers. Furthermore, this benefit is transitory and disappears in the long run. Overall, retail compettion does not seem to deliver lower electricity prices to retail customers across the board or over time.
    Keywords: electricity; restructuring; retail competition; difference-in-difference
    JEL: D42 D43 K23 L52 Q48
    Date: 2012–10–01
  39. By: Iria Soto; Wouter Achten; Bart Muys; E Mathijs
    Date: 2015
  40. By: Arora, Vipin; Lieskovsky, Jozef
    Abstract: We argue for the resurrection of an old idea: electricity use as an indicator of U.S. economic activity. Our analysis relies on associations–the 40-year correlation between growth rates in real GDP and electricity use can be as high as 89% –and intuition. Electricity use and economic conditions should move together. The vast majority of goods and services are still produced using electricity; services may require less electricity, but they still require some. Electricity use also has other strengths –it is broad-based and the data are available weekly, possibly hourly by 2015.
    Keywords: electricity,economic indicator,business cycles
    JEL: E32 E37 Q43
  41. By: Högberg, Lovisa (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: This paper reports the results from a study that attempts to identify factors that characterize housing firms with particularly ambitious approaches to energy efficiency in connection to renovation. The aim of the study was to identify factors that correlate with ambitious firms and the market they operate in. The study builds on previous results that identified four ideal types among Swedish housing firms, ranging from not ambitious to very ambitious with regards to energy efficiency. Based on the ideal types, this paper uses three levels of ambition and focuses on the more ambitious levels to see if there are factors that co-vary with an ambitious approach. Six hypotheses were formulated; ambitious firms were believed to be municipal, to be operating in markets with high and/or volatile energy prices, to be operating in strong markets, to have building portfolios in need of renovation, to be large and to have an expert employee who champions energy efficiency issues. Using web survey results from housing firms, an ordered probit model was used to test if level of ambition as the independent variable and a number of firm and market specific factors as dependent variables The results indicate support for some of the hypotheses; the probability of being ambitious increases if firms are municipally owned, have a building portfolio in need of renovation and have an employee who champions the energy efficiency issues. There were no indications that high/volatile energy prices, strong markets or firm size influence the probability of being more ambitious.
    Keywords: energy efficiciency; housing; sustainable renovation; incentives; drivers
    JEL: H23 Q55 Q58
    Date: 2015–01–26
  42. By: Bullard, James B. (Federal Reserve Bank of St. Louis)
    Abstract: January 14, 2016. Presentation. "Oil Prices, Inflation and U.S. Monetary Policy." 2016 Regional Economic Briefing and Breakfast, Economic Club of Memphis, Memphis, Tenn.
    Date: 2016–01–14
  43. By: Ahmed, Syed Shujaat; Nazir, Sidra
    Abstract: This study is basically explores the long run relationship between REER, IRD and Oil Prices, with the use of dummies and interaction terms for exchange rate regimes in Pakistan. By using Hatemi – J residual based cointegration test. Test has modified by including level shift, level shift with trend and regime shift. The data span is from the period of 1982m01-2014m03 in case of Pakistan. Also negative relationship between IRD and REER is due to indirect relationship between inflation and nominal interest rate that leads to fall in exchange rate. Long run relationship has concluded from cointegration test between variables.
    Keywords: Hatemi-J residual based cointegration, Cointegration test, Level Shift, Regime Shift and Interaction terms
    JEL: C22 F31
    Date: 2016–01
  44. By: Wolf-Peter Schill; Michael Pahle; Christian Gambardella
    Abstract: The emerging literature on power markets with high shares of fluctuating renewables suggests that more frequent start-up procedures of thermal power plants may become an increasing concern, both for costs and possibly also for market design. Based on official scenario assumptions, we investigate how start-ups and related costs develop in Germany, where the share of fluctuating renewables quadruples between 2010 and 2030. We find that the overall number of start-ups decreases by a third, while related costs increase by half. The relative share of start-up costs in overall variable costs of thermal plants grows only slightly and remains below 1%. Several overlapping effects drive these results. The expansion of fluctuating renewables alone would strongly increase start-up costs. In contrast, increased flexibility of biomass power plants, additional power storage and larger block sizes have opposite effects. While the relevance of start-up costs grows only moderately under baseline assumptions, it may increase further under alternative developments of system flexibility. Future power market design reforms should thus aim to ensure proper remuneration of quasi-fixed start-up costs. Our findings are also relevant for many other countries with thermal power systems that plan to undergo comparable transitions toward fluctuating renewables.
    Keywords: Power sector modeling, start-up costs, unit commitment, renewables
    JEL: Q41 Q47
    Date: 2016
  45. By: Vicent Alcántara Escolano (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Emilio Padilla (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Matías Piaggio (Universidad de la República, Uruguay)
    Abstract: We analyse the NOX gas emissions of different productive sectors in Spain. Using input–output analysis, we study all sectors as subsystems of the economy and classify them according to the explanatory factors of their total (direct and indirect) emissions. This classification provides guidance on the type of policies that should be developed in the different sectors with the aim of mitigating NOX emissions. Some sectors that seem less important when looking at their direct emissions turn out to be highly relevant in terms of their total emissions. The results indicate that demand policies can be effective in these sectors, especially in construction, but also in some service sectors that do not appear to be important polluters at first sight. These policies can complement technical improvements and best practice measures applied to directly polluting sectors.
    Keywords: input-output analysis, Nox emissions, subsystems
    Date: 2016–01
  46. By: Maria Waldinger
    Abstract: Recent studies have consistently found important economic effects of year-to-year weather fluctuations. This paper studies the economic effects of long-term and gradual climate change, over a period of 250 years, when people have time to adapt. In particular, I study the effects of the Little Ice Age, a historical episode of long-term climate change. Results show significant negative economic effects of long-term climate change. Cities with good access to trade were substantially less affected. Results from yearly historical wheat prices and yield ratios show that temperature change impacted economic growth through its effect on agricultural productivity. Further evidence shows a lack of adaptation. I show evidence of the relevance of these results to the context of contemporary developing countries and recommend ways in which these findings may improve Integrated Assessment Models.
    Date: 2015–10

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