nep-ene New Economics Papers
on Energy Economics
Issue of 2016‒03‒29
39 papers chosen by
Roger Fouquet
London School of Economics

  1. Global Energy Demand in a Warming Climate By De Cian, Enrica; Wing, Ian Sue
  2. Two historical changes in the narrative of energy forecasts By Minh Ha-Duong; Franck Nadaud; Martin Jegard
  3. Analysing the potential economic value of energy storage By Lisa Flatley; Monica Giulietti; Luigi Grossi; Elisa Trujillo-Baute; Michael Waterson
  4. A Game Theoretic Approach for EV Recharge Pricing Under Competition: Analysis and Simulation By Isabel Amigo; Maurice Gagnaire
  5. Cross-Border Effects of Capacity Mechanisms: Do Uncoordinated Market Design Changes Contradict the Goals of the European Market Integration? By Roland Meyer; Olga Gore
  6. The economic impact of electricity losses By Maria Teresa Costa-Campi; Daniel Daví-Arderius; Elisa Trujillo-Baute
  7. Appliance Ownership and Aspirations among Electric Grid and Home Solar Households in Rural Kenya By Kenneth Lee; Edward Miguel; Catherine Wolfram
  8. Regulation of non-marketed outputs and substitutable inputs By Bertsch, Joachim; Hagspiel, Simeon
  9. Neighborhood Effects in Wind Farm Performance: An Econometric Approach By Matthias Ritter; Simone Pieralli; HMartin Odening;
  10. Technology Development in South Africa: The Case of Wind and Solar PV. By Lucy Baker
  11. Path creation through branching and transfer of complementary resources: the role of established industries for new renewable energy technologies By Jens Hanson; Markus Steen; Tyson Weaver; Håkon E. Normann; Gard H. Hansen
  12. Innovation in Green Energy Technologies and the Economic Performance of Firms By Kruse, Juergen
  13. Sharing R&D Investments in Breakthrough Technologies to Control Climate Change By Rubio, Santiago J.
  14. Including System Integration of Variable Renewable Energies in a Constant Elasticity of Substitution Framework: the Case of the WITCH Model By Samuel Carrara; Giacomo Marangoni
  15. Which electricity market design to encourage the development of demand response? By Vincent Rious; Yannick Perez; Fabien Roques
  16. On the Quality and Impact of Residential Energy Performance Certificates By Hårsman, Björn; Daghbashyan, Zara; Chaudhary, Parth
  17. Exploring the Potential for Energy Efficiency in Turkey By Simone Tagliapietra
  18. Assessing Market Structures in Resource Markets - An Empirical Analysis of the Market for Metallurgical Coal Using Various Equilibrium Models By Lorenczik, Stefan; Panke, Timo
  19. Innovation in Clean Coal Technologies: Empirical Evidence from Firm-Level Patent Data By Kruse, Jürgen; Wetzel, Heike
  20. Guerre des prix ou instrumentalisation de l'incertitude sur les prix : quelle stratégie pour un fournisseur dominant sur le marché gazier européen ? By Sadek Boussena; Catherine Locatelli
  21. The Law of one Price in Global Natural Gas Markets - A Threshold Cointegration Analysis By Nick, Sebastian; Tischler, Benjamin
  22. Fear of Fracking: The Impact of the Shale Gas Exploration on House Prices in Britain By Steve Gibbons; Stephan Heblich; Esther Lho; Christopher Timmins
  23. The Impacts of Oil Price Shocks on Stock Market Volatility: Evidence from the G7 Countries By Andrea Bastianin; Francesca Conti; Matteo Manera
  24. How is Volatility in Commodity Markets Linked to Oil Price Shocks? By Maryam Ahmadi; Niaz Bashiri Behmiri; Matteo Manera
  25. Impact of Oil Price and Its Volatility on CPI of Pakistan: Bivariate EGARCH Model By Naurin, Abida; Qayyum, Abdul
  26. Long Run Dynamic Volatilities between OPEC and non-OPEC Crude Oil Prices By Ghassan, Hassan B.; Alhajhoj, Hassan R.
  27. Carbon Storage and Bioenergy: Using Forests for Climate Mitigation By Alice Favero; Robert Mendelsohn; Brent Sohngen
  28. Sacrificing Cereals for Crude: Has oil discovery slowed agriculture growth in Ghana? By Ackah, Ishmael
  29. Real Time Monitoring of Carbon Monoxide Using Value-at-Risk Measure and Control Charting By Bersimis, Sotirios; Degiannakis, Stavros; Georgakellos, Dimitrios
  30. Particulate matter and labor supply: evidence from Peru By Fernando M. Aragon; Juan Jose Miranda; Paulina Oliva
  31. The Social Value of Job Loss and Its Effect on the Costs of U.S. Environmental Regulations By Timothy J. Bartik
  32. Finding the Right Yardstick: Regulation under Heterogeneous Environments By Endre Björndal; Mette Bjoerndal; Astrid Cullmann; Maria Nieswand
  33. Estimation of climate change damage functions for 140 regions in the GTAP9 database By Roberto Roson; Martina Sartori
  34. Sources of carbon productivity change: A decomposition and disaggregation analysis based on global Luenberger productivity indicator and endogenous directional distance function By Ke Wang; Yujiao Xian; Yi-Ming Wei; Zhimin Huang
  35. Spatial Heat Transport, Polar Amplification and Climate Change Policy By W. Brock; A. Xepapadeas
  36. Environmental Kuznets curve hypothesis and the role of globalization in selected African countries By Muhammad, Shahbaz; Adebola Solarin, Solarin; Ozturk, Ilhan
  37. Time substitution for environmental performance: The case of Sweden manufacturing By Bostian, Moriah; Färe, Rolf; Grosskopf, Shawna; Lundgren, Tommy; Weber, William L.
  38. Vertical fiscal externalities and the environment By Christoph Böhringer; Nicholas Rivers; Hidemichi Yonezawa
  39. Lessons Learned from Three Decades of Experience with Cap-and-Trade By Richard Schmalensee; Robert N. Stavins

  1. By: De Cian, Enrica; Wing, Ian Sue
    Abstract: This paper combines an econometric analysis of the response of energy demand to temperature and humidity exposure with future scenarios of climate change and socioeconomic development to characterize climate impacts on energy demand at different spatial scales. Globally, future climate change is expected to have a moderate impact on energy demand, in the order of 6-11%, depending on the degree of warming, because of compensating effects across regions, fuels, and sectors. Climate-induced changes in energy demand are disproportionally larger in tropical regions. South America, Asia, and Africa, increase energy demand across all sectors and climate scenarios, while Europe, North America and Oceania exhibit mixed responses, but with consistent reductions in the residential sector. Even so, only Europe and Oceania in the moderate warming scenario experience aggregate reductions in energy use, as commercial electricity use increases significantly. We find that climate change has a regressive impact on energy demand, with the incidence of increased energy demand overwhelmingly falling on low- and middle-income countries, raising the question whether climate change could exacerbate energy poverty.
    Keywords: Panel Data, Climate Change, Adaptation, Energy, Resource /Energy Economics and Policy, N5, O13, Q1, Q54,
    Date: 2016–03–01
  2. By: Minh Ha-Duong (CIRED - Centre International de Recherche sur l'Environnement et le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - AgroParisTech - CIRAD - Centre de coopération internationale en recherche agronomique pour le développement - École des Ponts ParisTech (ENPC) - CNRS - Centre National de la Recherche Scientifique, CleanED - Clean Energy and Sustainable Development Lab - USTH - Université des Sciences et des Technologies de Hanoi); Franck Nadaud (CIRED - Centre International de Recherche sur l'Environnement et le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - AgroParisTech - CIRAD - Centre de coopération internationale en recherche agronomique pour le développement - École des Ponts ParisTech (ENPC) - CNRS - Centre National de la Recherche Scientifique); Martin Jegard (CIRED - Centre International de Recherche sur l'Environnement et le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - AgroParisTech - CIRAD - Centre de coopération internationale en recherche agronomique pour le développement - École des Ponts ParisTech (ENPC) - CNRS - Centre National de la Recherche Scientifique)
    Abstract: A collection of 417 energy scenarios was assembled and harmonized to compare what they said about nuclear, fossil and renewable energy thirty years from their publication. Based on data analysis, we divide the recent history of the energy forecasting in three periods. The first is defined by a decline in nuclear optimism, approximately until 1990. The second by a stability of forecasts, approximately until 2005. The third by a rise in the forecasted share of renewable energy sources. We also find that forecasts tend to cohere, that is they have a low dispersion within periods compared to the change across periods.
    Keywords: energy,scenario,periodization
    Date: 2016–02–17
  3. By: Lisa Flatley (University of Warwick); Monica Giulietti (Loughborough University); Luigi Grossi (University of Verona); Elisa Trujillo-Baute (University of Warwick and Chair of Energy Sustainability, Barcelona Institute of Economics); Michael Waterson (University of Warwick)
    Abstract: This paper examines the likely market for electrical energy storage from a market viewpoint, taking market prices as given and determining the extent to which a strategy of arbitrage across the day, buying at the lowest price times at night and selling at the highest times during the early evening, generates profits in the British context. The paper sets out the potential problems as the market moves to absorb increasing amounts of wind, then characterises the nature of prices, which reveals the importance of a strategy in which power is absorbed into store for a relatively few hours of the day and discharged over a relatively few hours. The paper models the ongoing costs of operation and compares them with revenues, but does not consider construction costs. It argues that additional incentives may need to be put into place in order to render storage over relatively longer periods more attractive.
    Keywords: Energy storage, arbitrage, electricity markets, market clearing
    JEL: L94 L98 H54 D24 Q41 Q47
    Date: 2016
  4. By: Isabel Amigo (Département Informatique et Réseaux (Institut Mines-Télécom-Télécom Paristech)); Maurice Gagnaire (Institut Mines-Télécom-Télécom Paristech)
    Abstract: Electric Vehicles (EV) are a key element of future smart cities, providing a clean transportation technology and potential benefits for the grid. Nevertheless, limited vehicle autonomy and lack of charging stations are preventing EVs to be broadly accepted. To address this challenge, French GreenFeed project is working to develop an interoperable and universal architecture to allow EV recharge across multiple cities and countries. In this work, we consider such architecture and focus on price setting by its main actors. We show how a Stackelberg game models the market, and we study the outcomes when users choose a recharge station according to objective and subjective parameters. Simulation shows the different actors' revenues, and the social and user welfare for different scenarios. I. INTRODUCTION Electric Vehicles (EV) and Hybrid Electric Vehicles are expected to dominate the automobile industry in the near future [12]. They present the great advantage of being environmentally friendly, dramatically reducing greenhouse gases emissions with respect to fossil-fuel vehicles [8], while almost eliminating noise pollution. Moreover, EVs are nowadays part of a whole evolutionary energy context. Energy transition is taking place in several countries in order to introduce distributed and renewable energy resources into the grid. Electricity market is also changing into a deregulated market, where time-variant tariffs are introduced, making demand side management solutions possible. In this context, EVs become also attractive because of the ancillary services they can offer to the grid. They can provide flexibility, by the possibility to shift the battery recharge. They can also provide the grid with the energy stored in their batteries through Vehicle to Grid (V2G) technologies, when energy production is lower than demand, and can store energy when supply exceeds demand. In spite of the aforementioned advantages, EVs are facing some barriers to their large adoption, such as the so-called range anxiety. This term refers to the fear that the vehicle will not have enough range to reach the destination. With state-of-the-art batteries, vehicle's autonomy is on the average 50 km and it can reach up to 160 km with large batteries [10]. However, these figures may dramatically vary according to driving manner and particular circumstances (e.g. temperature, weight, etc.). In this context, it is of paramount importance to have ubiquitous, easy and fast means to get the recharge service and to pay for it, regardless the EV model, without problems of interoperability or users' contract. In this sense, industry and research institutions, and standardisation bodies are carrying out efforts to develop electromobility and charging solutions, such as GreenFeed [3], green eMotion [2], standard ISO 15118 [5], the French initiative for EV roaming Gireve [1], or the platform Hubject [4]. Ongoing French project GreenFeed, aims to develop interoperable recharge solutions to foster EVs penetration. The project has defined an architecture, following the standard ISO 15118, that has the following main actors: EV Users (EVU), e-Mobility Provider (EMO), Charging Point Operator (CPO) and e-Mobility Operator Clearing House (EMOCH), as shown in Fig. 1a. Such architecture structures a supply chain market for EV recharge. This work is part of the outcome of GreenFeed project, and focuses on the problem of setting EV recharge price at the different levels of the supply chain-one of the questions raised by the project. We assume variable recharge costs faced by the mobility providers (EMOs), but a fixed recharge price paid by the final client (EVU). Fixed prices are attractive from the point of view of the EVU, who is then shielded from electricity price volatility. We model the situation as a Stackelberg game, where CPOs play first, setting a price to be paid by the EMO, and where the EMO follows, setting a price for the recharge, which is paid by the final client. In addition, we take into account clients decision about where to get their EV recharged, considering subjective and objective parameters about the CPOs. Our results show interesting insights which could help CPOs and EMOs to set prices, and regulators to evaluate the market structure induced by GreenFeed's architecture. Simulation allow us to show in several scenarios the existence of a Nash equilibrium. The reminder of this paper is organised as follows. Section II reviews related work. In Section III we introduce the GreenFeed architecture, formally explain the market structure and the problem under study. We then formalise the problem as a Stackelberg
    Date: 2015–12–05
  5. By: Roland Meyer; Olga Gore
    Abstract: This paper analyses cross-border effects of a strategic reserve (SR) and reliability options (ROs) based on a two-country simulation model. Using a game-theoretic approach, the countries' policy options for capacity remuneration mechanisms (CRMs) are analysed with respect to welfare and distribution effects. An SR tends to narrow down the market, while ROs intensify price competition. However, cross-border effects are most likely negative for consumers and producers in total in the case of a unilateral implementation of a CRM, and market design changes should be coordinated. All results are strongly driven by possible changes in competition and market power. In practice, the market design decision should also consider possible regulatory failures that might lead to further market distortions. The risk of market design flaws seems larger for full capacity markets such as ROs than for an SR, which requires only minor adjustments to the market design.
    Keywords: market design, generation adequacy, capacity mechanisms, internal European market
    JEL: L11 L52 L94
    Date: 2014–06
  6. By: Maria Teresa Costa-Campi (University of Barcelona and Chair of Energy Sustainability, Barcelona Institute of Economics); Daniel Daví-Arderius (University of Barcelona and Chair of Energy Sustainability); Elisa Trujillo-Baute (University of Warwick and Chair of Energy Sustainability, Barcelona Institute of Economics)
    Abstract: Although electricity losses constitute an important, but inevitable, amount of wasted resources (and a share that has to be funded), they remain one of the lesser known parts of an electricity system, and this despite the fact that the decisions of generators, transmission and distribution system operators and consumers all impact on them. In this paper we analyse the effects of such losses from two perspectives: from that of consumption or outflows and from that of generation or inflows. Given that end-user consumption varies across the day, consumption has direct implications for electricity losses. Indeed, demand-side management policies seek to encourage consumers to use less energy during peak hours and to reduce network congestion. At the same time, from the perspective of generation, the recent growth in distributed generation has modified the traditional, unidirectional, downward flows in electricity systems. This affects losses as energy is produced in the lower voltage network, which is closer to points of consumption. In this paper we evaluate the impact of consumption patterns and different generation technologies on energy losses. To do so, we draw on data from a real electricity system with a high level of renewable penetration, namely, that of Spain between 2011 and 2013. To the best of our knowledge, this is the first paper to analyse the real impact of consumption and the effect of each generation technology on energy losses, offering an opportunity to evaluate the potential benefits of demand-side management policies and distributed generation. Based on our results, we make a number of regulatory recommendations aimed at exploiting to the full these potential benefits. Our results should serve as a baseline for countries that are in the early stages of implementing these policies.
    Keywords: Regulation, networks, energy losses, distributed generation
    JEL: L51 L94
    Date: 2016
  7. By: Kenneth Lee; Edward Miguel; Catherine Wolfram
    Abstract: In Sub-Saharan Africa, there are active debates about whether increases in energy access should be driven by investments in electric grid infrastructure or small-scale “home solar” systems (e.g., solar lanterns and solar home systems). We summarize the results of a household electrical appliance survey and describe how households in rural Kenya differ in terms of appliance ownership and aspirations. Our data suggest that home solar is not a substitute for grid power. Furthermore, the environmental advantages of home solar are likely to be relatively small in countries like Kenya, where grid power is primarily derived from non-fossil fuel sources
    JEL: O18 Q42
    Date: 2016–01
  8. By: Bertsch, Joachim (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Hagspiel, Simeon (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))
    Abstract: We study the regulation of a monopolistic firm that provides a non-marketed output based on multiple substitutable inputs. The regulator is able to observe the effectiveness of the provision, but faces information asymmetries with respect to the efficiency of the firm’s activities. Motivated by the example of electricity transmission services, we consider a setting where one input (grid expansion) and the output (uninterrupted electricity transmission) are observable, while another input(sophisticated grid operation) and related costs are not. Multi-dimensional information asymmetries are introduced by discrete distributions for the functional form of the marginal rate of substitution between the inputs as well as for the input costs. For this novel setting, we investigate the theoretically optimal Bayesian regulation mechanism. We find that the first best solution cannot be obtained in case of shadow costs of public funding. The second best solution implies separation of the most efficient type with first best input levels, and upwards distorted (potentially bunched)observable input levels for all other types. Moreover, we compare these results to a simpler on-Bayesian approach and hence, bridge the gap between the academic discussion and regulatory practice. We provide evidence that under certain conditions, a single contract on-Bayesian regulation can indeed get close to the second best of the Bayesian menu of contracts regulation.
    Keywords: regulation; asymmetric information; mechanism design; non-marketed goods; substitutable inputs; electricity transmission;
    JEL: D42 D82 L51
    Date: 2015–12–16
  9. By: Matthias Ritter; Simone Pieralli; HMartin Odening;
    Abstract: The optimization of turbine density in wind farms entails a trade-off between the usage of scarce, expensive land and power losses through turbine wake effects. A quantification and prediction of the wake effect, however, is challenging because of the complex aerodynamic nature of the interdependencies of turbines. In this paper, we propose a parsimonious data driven econometric wake model that can be used to predict production losses of existing and potential wind parks. Motivated by simple engineering wake models, the predicting variables are wind speed, turbine alignment angle, and distance. By utilizing data from two wind parks in Germany, a significantly better prediction of wake effect losses is attained compared to the standard Jensen model. A scenario analysis reveals that a distance between turbines can be reduced up to three times the rotor size without entailing substantial production losses. In contrast, a suboptimal configuration of turbines with respect to the main wind direction can result in production losses that are five times higher.
    Keywords: Wind energy; wake modeling; wind farm designmultiplesystem approach, dual-self model, drift–diffusion model, response times
    JEL: Q42 Q47
    Date: 2016–03
  10. By: Lucy Baker (Science Policy Research Unit, University of Sussex.)
    Abstract: This paper examines the political economy of technology development in the context of South Africa’s emerging utility-scale, privately generated renewable energy sector. Focussing on the wind and solar PV industries, the paper explores how international dynamics in manufacturing, investment and trade that involve increasingly global industries, are interacting with territorial factors embedded within South Africa’s unique economic, social and political context. While South Africa’s renewable energy industry has been celebrated internationally, there are tensions between commercial priorities, and requirements for economic development including local content. The paper merges perspectives from global production networks and the literature on technological innovation in low and middle income countries in order to analyse the potential for the development of innovative capabilities in South Africa’s renewable energy sector. The paper provides rich empirical content including challenges to the definition and implementation of local content requirements, as well as the involvement of key national and international actors.
    Keywords: Innovation, local content, renewable energy technologies, global production networks, South Africa
    Date: 2016–05
  11. By: Jens Hanson (TIK Centre, University of Oslo); Markus Steen (Norwegian University of Science and Technology, Trondheim and SINTEF Technology & Society, Trondheim); Tyson Weaver (Norwegian University of Science and Technology, Trondheim); Håkon E. Normann (TIK Centre, University of Oslo); Gard H. Hansen (Norwegian University of Science and Technology, Trondheim)
    Abstract: Building industrial capacity for new renewable energy technologies (RETs) is a central challenge in transitioning to a low-carbon economy. This article analyses how resources from established industries can contribute to new industrial path creation for RETs, by processes of path branching. We develop a theoretical framework that explores pressures and drivers of path branching and how complementary resources are mobilized from established to emerging paths. The framework is confronted with two cases in Norway that illustrate how old and new industrial paths are interlinked: (1) the energy intensive process industry and solar photovoltaics and (2) oil & gas and offshore wind power. We find that multiple resources are transferred, including knowledge, infrastructures and financial and human capital. We further suggest that processes of resource transfer are driven by the simultaneous presence of selection pressures and branching opportunities. Our findings have implications for policy making as well as theorizing sustainability transitions with regards to how established industries can provide key foundations for and inputs to emergence of new ones.
    Date: 2016–03
  12. By: Kruse, Juergen (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))
    Abstract: In this article, I empirically analyze and compare the impact of innovation in green and non-green energy technologies on the economic performance of firms. My analysis is conducted on a panel of 8,619 patenting firms including 968 green energy patenters from 22 European countries over the period 2003 to 2010. I measure economic firm performance in terms of productivity and use a panel data model based on an extended Cobb-Douglas production function. My results show that green energy innovation has a statistically significant negative impact on economic firm performance. In contrast, non-green energy innovation is shown to have a statistically significant positive impact on economic firm performance. These findings suggest that private economic returns in terms of productivity are lower for green energy than for non-green energy innovation.
    Keywords: green energy technologies; innovation; performance; patents; technological change
    JEL: C33 L25 O31 Q40 Q55
    Date: 2016–02–24
  13. By: Rubio, Santiago J.
    Abstract: This paper examines international cooperation on technological development as an alternative to international cooperation on GHG emission reductions. In order to analyze the scope of cooperation, a three-stage technology agreement formation game is solved. First, countries decide whether or not to sign up to the agreement. Then, in the second stage, the signatories (playing together) and the non-signatories (playing individually) select their investment in R&D. In this stage, it is assumed that the signatories not only coordinate their levels of R&D investment but also pool their R&D efforts to fully internalize the spillovers of their investment in innovation. Finally, in the third stage, each country decides non-cooperatively upon its level of energy production. Emissions depend on the decisions made regarding investment and production. If a country decides to develop a breakthrough technology in the second stage, its emissions will be zero in the third stage. For linear environmental damages and quadratic investment costs, the grand coalition is stable if marginal damages are large enough to justify the development of a breakthrough technology that eliminates emissions completely, and if technology spillovers are not very important.
    Keywords: International Environmental Agreements, R&D Investment, Technology Spillovers, Breakthrough Technologies, Environmental Economics and Policy, D74, F53, H41, Q54, Q55,
    Date: 2016–02–29
  14. By: Samuel Carrara (Fondazione Eni Enrico Mattei (FEEM) and Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC)); Giacomo Marangoni (Fondazione Eni Enrico Mattei (FEEM), Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC) and Politecnico di Milano)
    Abstract: The penetration of Variable Renewable Energies (VREs) in the electricity mix poses serious challenges in terms of management of the electrical grids, as the associated variability and non-dispatchability are in contrast with the requirement that the load be instantaneously equalized by the generation. One of the goals of Integrated Assessment Models (IAMs) is to simulate the evolution of electricity demand and generation mix over time, therefore a proper modeling of VRE system integration is crucial. In this paper we discuss how different modeling mechanisms can profoundly impact the evolution of the electricity mix, and specifically renewable penetration. In particular, we focus on the effects of introducing a set of explicit system integration constraints in a model, WITCH, characterized by a Constant Elasticity of Substitution (CES) framework.
    Keywords: Variable Renewable Energies, System Integration, Electrical Grid, Constant Elasticity of Substitution, Integrated Assessment Models
    JEL: Q4 Q41 Q42
    Date: 2015–10
  15. By: Vincent Rious (E3S - Supélec Sciences des Systèmes [Gif-sur-Yvette] - SUPELEC); Yannick Perez (LGI - Laboratoire Génie Industriel - EA 2606 - CentraleSupélec, RITM - Réseaux Innovation Territoires et Mondialisation - UP11 - Université Paris-Sud - Paris 11); Fabien Roques (LESIA - Laboratoire d'études spatiales et d'instrumentation en astrophysique - UPMC - Université Pierre et Marie Curie - Paris 6 - UP7 - Université Paris Diderot - Paris 7 - Observatoire de Paris - INSU - CNRS - Centre National de la Recherche Scientifique)
    Abstract: Demand response is a cornerstone problem in electricity markets under climate change constraints. Most liberalized electricity markets have a poor track record at encouraging the deployment of smart meters and the development of demand response. In Europe, different models are considered for demand response, from a development under a regulated regime to a development under competitive perspectives. In this paper focusing on demand response and smart metering for mid-­‐size and small consumers, we investigate which types of market signals should be sent to demand managers to see demand response emerge as a competitive activity. Using data from the French power system over nine years , we compare the possible market design options which would enable the development of demand response. Our simulations demonstrate that under the current market rules demand response is not a profitable activity in the French electricity industry. Introducing a capacity market could bring additional revenues to demand response providers and improve incentives to put in place demand response programs in a market environment.
    Keywords: Market Design,Demand Response,Capacity Market
    Date: 2015
  16. By: Hårsman, Björn (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Daghbashyan, Zara (CESIS - Centre of Excellence for Science and Innovation Studies, Royal Institute of Technology); Chaudhary, Parth (Department of Energy Science and Engineering, Indian Institute of Technology, Mumbai, India)
    Abstract: This paper addresses quality and impact issues concerning Energy Performance Certificates (EPC) by means of a dataset based upon the Swedish EPCs for single-family houses. Assuming that the quality of the certificates plays an important role for their impact, we examine to what extent various characteristics of the firms and experts issuing the certificates are influencing their assessments of energy consumption and energy conservation. Exploiting the information on biased assessments, we also investigate the relationship between the transaction price of a house and its EPC label. Doing so, we distinguish the attributes that can be observed by visiting the house and those that a buyer only can inform herself about through the EPC. Applying regression analyses we find that firm and expert characteristics matter quite a lot implying that the EPC-quality could be improved considerably by increasing the inter-rater reliability. The results also show that the price impact of the energy label is related to information that the buyers can obtain by visiting the house rather than to information uniquely provided by the EPCs. Hence, the EPCs per se are unlikely to stimulate energy conservation through the price mechanism.
    Keywords: Residential energy performance certificates; assessments of energy consumption and conservation; inter-rater reliability; capitalization of energy efficiency; hedonic regression
    JEL: D12 Q41 R31
    Date: 2016–03–10
  17. By: Simone Tagliapietra (Fondazione Eni Enrico Mattei)
    Abstract: Energy efficiency is one of the key crossroads between energy, climate and economic issues. In fact, it represents one of the most cost effective ways to enhance security of energy supply, to reduce emissions of greenhouse gases and to enhance economic competitiveness at one fell swoop. This paper explores the potential for energy efficiency gains in Turkey, a country characterized by a strong growth in energy demand and by a strong need of better security of supply, emissions reduction and economic competitiveness.
    Keywords: Energy Efficiency, Turkey, Sustainability
    JEL: Q41 Q43 Q48
    Date: 2016–02
  18. By: Lorenczik, Stefan (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Panke, Timo (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))
    Abstract: The prevalent market structures found in many resource markets consist of high concentration on the supply side and low demand elasticity. Market results are therefore frequently assumed to be an outcome of strategic interaction between producers. Common models to investigate the market outcomes and underlying market structures are games representing competitive markets, strategic Cournot competition and Stackelberg structures that take into account a dominant player acting first followed by one or more players. We add to the literature by expanding the application of mathematical models and applying an Equilibrium Problem with Equilibrium Constraints (EPEC), which is used to model multi-leader-follower games, to a spatial market. Using our model, we inves- tigate the prevalent market setting in the international market for metallurgical coal between 2008 and 2010, whose market characteristics provide arguments for a wide variety of market structures. Using different statistical measures and comparing with actual market outcomes, we find that two previously neglected settings perform best: First, a setting in which the four largest metallurgical coal exporting firms compete against each other as Stackelberg leaders, while the remainders act as Cournot followers. Second, a setting with BHPB acting as sole Stackelberg leader.
    Keywords: Applied industrial organisation; Stackelberg games (MPEC); multi-leader-follower; games (EPEC); Cournot oligopolies (MCP); resource markets;
    JEL: C61 D43 L71 Q31
    Date: 2015–05–15
  19. By: Kruse, Jürgen (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Wetzel, Heike (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))
    Abstract: This article empirically analyzes supply-side and demand-side factors expected to affect innovation in clean coal technologies. Patent data from 93 national and international patent o ces is used to construct new firm-level panel data on 3,648 clean coal innovators over the time period 1978 to 2009. The results indicate that on the supply-side a firm's history in clean coal patenting and overall propensity to patent positively a↵ects clean coal innovation. On the demand-side we find strong evidence that environmental regulation of emissions, that is CO2, NOx and SO2, induces innovation in both e ciency improving combustion and after pollution control technologies.
    Keywords: clean coal technologies; innovation; patents; technological change
    JEL: C33 O31 Q40 Q55
    Date: 2016–02–01
  20. By: Sadek Boussena (UGA - Université Grenoble Alpes); Catherine Locatelli (GAEL - Laboratoire d'Economie Appliquée de Grenoble - UGA - Université Grenoble Alpes - CNRS - Centre National de la Recherche Scientifique - Institut national de la recherche agronomique (INRA) - Grenoble INP - Institut Polytechnique de Grenoble)
    Abstract: L’objectif de cet article est donc de tenter d’apprécier quelle stratégie pourrait être mise en place par un fournisseur (ou un groupe de gros fournisseurs) dominant de l’UE durant la phase de transition dans laquelle se trouve le marché gazier européen, afin de conserver (augmenter ?) ses parts de marché et maximiser ses revenus. Il s’agit d’explorer les possibilités d’actions stratégiques sur le long terme autres que celles consistant à défendre les volumes au travers d’une guerre des prix. En particulier, on tentera de définir si la société gazière russe, Gazprom, acteur important du marché gazier de l'UE serait en mesure de mettre en œuvre une stratégie visant instrumentaliser l'incertitude sur les prix à l'image de celle menée par l'Arabie saoudite sur le marché pétrolier international
    Keywords: marché international du gaz , Union européenne , Gazprom
    Date: 2016–03
  21. By: Nick, Sebastian (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Tischler, Benjamin (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI))
    Abstract: The US and UK markets for natural gas are connected by arbitrage activity in the form of shifting trade volumes of liquefied natural gas (LNG). We empirically investigate the degree of integration between the US and the UK gas markets by using a threshold cointegration approach that is in accordance with the law of one price and explicitly accounts for transaction costs. Our empirical results reveal a high degree of market integration for the period 2000-2008. Although US and UK gas prices seemed to have decoupled between 2009 and 2012, we still find a certain degree of integration pointing towards significant regional price arbitrage. However, high threshold estimates in the latter period indicate impediments to arbitrage that are by far surpassing the LNG transport costs difference between the US and UK gas market.
    Keywords: natural gas market; liquified natural gas; law of one price; arbitrage; nonlinear models; threshold error correction;
    JEL: C51 G14 Q40 Q41
    Date: 2014–11–14
  22. By: Steve Gibbons; Stephan Heblich; Esther Lho; Christopher Timmins
    Abstract: Shale gas has grown to become a major new source of energy in countries around the globe. While its importance for energy supply is well recognized, there has also been public concern over potential risks – such as damage to buildings and contamination of water supplies – caused by geological disturbance from the hydraulic fracturing (‘fracking’) extraction process. Although commercial development has not yet taken place in the UK, licenses for drilling were issued in 2008 implying potential future development. This paper examines whether public fears about the geological impacts of fracking are evident in changes in house prices in areas that have been licensed for shale gas exploration. Our estimates suggest differentiated effects. Licensing did not affect house prices but areas where shale gas development was mentioned in the license application experienced an average house price decrease between 1 and 1.5 percent for the period 2008-2014. This was a response to geological events related to fracking. Specifically, two very minor earthquakes caused by the process in 2011 were strong drivers of this price drop. We find a 2.7-4.1 percent house price decrease in the area where the earthquakes occurred. Robustness checks confirm our findings.
    Keywords: Shale gas, Fracturing, Property valuation, Housing prices, Consumer expectation, hedonic price, United Kingdom.
    Date: 2016–03–03
  23. By: Andrea Bastianin (University of Milan and Fondazione Eni Enrico Mattei); Francesca Conti (Fondazione Eni Enrico Mattei); Matteo Manera (University of Milan-Bicocca and Fondazione Eni Enrico Mattei)
    Abstract: We study the effects of crude oil price shocks on the stock market volatility of the G7 economies. We rely on a structural VAR model to identify the causes underlying the oil price shocks and gauge the differential impact that oil supply and oil demand innovations have on financial volatility. We show that stock market volatility does not respond to oil supply shocks. On the contrary, demand shocks impact significantly on the variability of the G7 stock markets.
    Keywords: Volatility, Oil Price Shocks, Oil Price, Stock Prices, Structural VAR
    JEL: C32 C58 E44 Q41 Q43
    Date: 2015–10
  24. By: Maryam Ahmadi (Lombardi Advanced School of Economic Research (LASER) and University of Milan); Niaz Bashiri Behmiri (Fondazione Eni Enrico Mattei (FEEM)); Matteo Manera (University of Milan-Bicocca and FEEM)
    Abstract: This study investigates the effects of oil price shocks on volatility of selected agricultural and metal commodities. To achieve this goal, we decompose an oil price shock to its underlying components, including macroeconomics and oil specific shocks. The applied methodology is the structural vector autoregressive (SVAR) model and the time span is from April 1983 to December 2013. The investigation is divided into two subsamples, before and after 2006 for agricultures taking into account the 2006-2008 food crisis, and before and after 2008 for metals considering the recent global financial crisis. The validity of time divisions is confirmed by historical decomposition accomplishment. We find that, based on impulse response functions, the response of volatility of each commodity to an oil price shock differs significantly depending on the underlying cause of the shock for the both pre and post-crisis periods. moreover, according to variance decomposition the explanatory power of oil shocks becomes stronger after the crisis. The different responses of commodities are described in detail by investigating market characteristics in each period.
    Keywords: Metals, Commodities, Volatility, Oil Price
    JEL: Q02 Q14 Q41 C22
    Date: 2015–10
  25. By: Naurin, Abida; Qayyum, Abdul
    Abstract: Oil is becoming as an important determinant which affects the macroeconomic activities in unusual patterns among various parts of the world particularly since the first oil crisis in 1973. Also Petroleum products are recognized to be the essential source of energy and power throughout the world and gaining massive importance as a tool for survival and security of developed nations. The research study targets to explore the impact of oil price and its volatility on CPI in case of Pakistan from the period 1980:M1 to 2014:M12. In this study we used the financial time series econometrics techniques; first applied the Box-Cox transformation on the data which suggested log transformation is required for all series. As data used will be monthly, Beaulieu and Miron (1992) seasonal unit root test is used to test stationarity of the data. All variables hold unit root at zero frequency and become stationary at first difference. Further to confirm if co-integration relationship exists between the variables we have estimated Engle and Granger (1987) two-step method. And finally Bivariate EGARCH model is applied to scrutinize the impact of oil price volatility on CPI. This model is estimated by using Maximum Likelihood Method proposed by Bollerslev and Wooldridge (1992). The results of Bivariate EGARCH model concluded that positive relationship between oil prices and CPI. We have also found the asymmetric impact of news on the change in consumer price index. In case of Pakistan, it is positive and significant statistically; which suggests that positive news tends to intensify the CPI volatility more than the negative news.
    Keywords: Oil prices, Volatility of oil prices, CPI, Monthly Unit Root, Co-integration, EGARCH, Pakistan.
    JEL: C5 C58 G1
    Date: 2016–02
  26. By: Ghassan, Hassan B.; Alhajhoj, Hassan R.
    Abstract: Understanding the long-run dynamics of OPEC and non-OPEC crude oil prices is important in an era of increased financialization of petroleum markets. Utilizing an ECM within a threshold cointegration and CGARCH errors framework, we provide evidence on the cointegrating relationship and estimate how and to what extent the respective prices adjust to eliminate disequilibrium. Our findings suggest that the adjustment process of OPEC prices to the positive discrepancies is slow which implies that OPEC producers do not prefer moderate oil prices; however, the reverse holds for non-OPEC producers. These results reflect distinct competitive behaviors between OPEC and non-OPEC producers.
    Keywords: Dynamic volatility, Threshold cointegration, Component GARCH, OPEC, Oil prices.
    JEL: C5 E39 F53
    Date: 2015–06–03
  27. By: Alice Favero (Sohngen); Robert Mendelsohn (Yale University); Brent Sohngen (Ohio State University)
    Abstract: The carbon mitigation literature has separately considered using forests to store carbon and as a source of bioenergy. In this paper, we look at both options to reach a 2°C mitigation target. This paper combines the global forest model, GTM, with the IAM WITCH model to study the optimal use of forestland to reach an aggressive global mitigation target. The analysis confirms that using both options is preferable to using either one alone. At first, while carbon prices are low, forest carbon storage dominates. However, when carbon prices pass $235/tCO2, wood bioenergy with CCS becomes increasingly important as a mechanism to remove CO2 from the atmosphere. The use of both mechanisms increases global forestland at the expense of marginal cropland. While the storage program dominates, natural forestland expands. But when the wood bioenergy program starts, natural forestland shrinks as more forests become managed for higher yields.
    Keywords: Climate Change, Woody Biomass, Carbon Sequestration, BECCS, Forestry, Carbon Mitigation, Integrated Assessment Model
    JEL: Q23 Q42 Q54
    Date: 2016–01
  28. By: Ackah, Ishmael
    Abstract: This study applies the quadratic hill climbing model, stepwise regression, and a dynamic generalized method of moments to investigate the relationship between oil rents and agriculture growth in Ghana. Agriculture, once considered the backbone of Ghana’s economy recorded a reduction of its contribution to GDP from 45% in 1992 to 22% in 2013 and a growth rate of 0.04 in 2015. The results from all models confirm an inverse relationship between oil rents and agriculture output. Further, availability of agriculture land is a major driver of agriculture output. Since oil resources are exhaustible and oil revenues are volatile, the study recommends a sustainable investment plan that emphasis on diversification, private investment in the agriculture value chain, and productive land use, and encourages higher percentage of revenues into agriculture.
    Keywords: Oil revenues, Agriculture, Ghana, Oil Production
    JEL: Q1 Q10 Q4 Q43 Q48 Q5
    Date: 2016–03–10
  29. By: Bersimis, Sotirios; Degiannakis, Stavros; Georgakellos, Dimitrios
    Abstract: One of the most important environmental health issues is air pollution, causing the deterioration of the population’s quality of life, principally in cities where the urbanization level seems limitless. Among ambient pollutants, carbon monoxide (CO) is well known for its biological toxicity. Many studies report associations between exposure to CO and excess mortality. In this context, the present work provides an advanced modelling scheme for real time monitoring of pollution data and especially of carbon monoxide pollution in city level. The real time monitoring is based on an appropriately adjusted multivariate time series model that is used in finance and gives accurate one-step-ahead forecasts. On the output of the time series, we apply an empirical monitoring scheme that is used for the early detection of abnormal increases of CO levels. The proposed methodology is applied in the city of Athens and as the analysis revealed has a valuable performance.
    Keywords: Air Quality Surveillance, Atmospheric Pollution, Autoregressive Conditional Heteroskedasticity modelling, Control Charts, Diag-aVECH, Multivariate Statistical Process Monitoring, Multivariate Time Series, Value-at-Risk.
    JEL: C10 C32 C4 C40 C51 C53
    Date: 2015–01–01
  30. By: Fernando M. Aragon (Simon Fraser University); Juan Jose Miranda (The World Bank); Paulina Oliva (University of California, Santa Barbara)
    Abstract: This paper examines the effect of air pollution on labor supply using the case of Lima, Peru. We focus on fine particulate matter (PM2.5), an important air pollutant, and show that moderate levels of pollution reduce hours worked for working adults. The effect is concentrated among households with susceptible dependents, i.e., small children and elderly adults. This indicates that caregiving is likely a mechanism linking air pollution to labor supply. We find no evidence of intra-household attenuation behavior. For instance, there is no re-allocation of labor across household members, and earnings decrease. Finally, we show evidence of non-linearities in the dose response function: at higher concentrations, households without susceptible dependents also start experiencing negative effects.
    Keywords: pollution, labor supply, cost of pollution
    JEL: Q52 Q53
    Date: 2016–02
  31. By: Timothy J. Bartik (W.E. Upjohn Institute for Employment Research)
    Keywords: benefit-cost analysis, worker displacement, environmental regulation, social cost of labor
    JEL: D61 Q52 J68
  32. By: Endre Björndal; Mette Bjoerndal; Astrid Cullmann; Maria Nieswand
    Abstract: Revenue cap regulation is often combined with systematic benchmarking to reveal the managerial inefficiencies when regulating natural monopolies. One example is the European energy sector, where benchmarking methods are based on actual cost data, which are influenced by managerial inefficiency as well as operational heterogeneity. This paper demonstrates how a conditional nonparametric method, which allows the comparison of firms operating under heterogeneous technologies, can be used to estimate managerial inefficiency. A dataset of 123 distribution firms in Norway is used to show aggregate and firm-specific effects of conditioning. By comparing the unconditional model to our proposed conditional model and the model presently used by the Norwegian regulator, we see that the use of conditional benchmarking methods in revenue cap regulation may effectively distinguish between managerial inefficiency and operational heterogeneity. This distinction leads first to a decrease in aggregate efficient costs and second to a reallocation effect that affects the relative profitability of firms and relative customer prices, thus providing a fairer basis for setting revenue caps.
    Keywords: Data Envelopment Analysis, Yardstick Regulation, Electricity Distribution
    JEL: L94 C44 L51
    Date: 2016
  33. By: Roberto Roson (Department of Economics, University Of Venice Cà Foscari); Martina Sartori (Department of Economics, University Of Trento)
    Abstract: Climate change damage (or, more correctly, impact) functions relate variations in temperature (or other climate variables) to economic impacts in various dimensions, and are at the basis of quantitative modeling exercises for the assessment of climate change policies. This document provides a summary of results from a series of meta-analyses aimed at estimating parameters for six specific damage functions, referring to: sea level rise, agricultural productivity, heat effects on labor productivity, human health, tourism flows and households' energy demand. All parameters of the damage functions are estimated for each of the 140 countries and regions in the GTAP9 dataset. To illustrate the salient characteristics of our estimates, we approximate the change in real GDP for the different effects, in all regions, corresponding to an increase in average temperature of +3°C. After considering the overall impact, we highlight which factor is the most significant one in each country, and we elaborate on the distributional consequences of climate change.
    Keywords: Climate change, integrated assessment, computable general equilibrium, damage function, climate impacts
    JEL: C68 C82 D58 Q51 Q54
    Date: 2016
  34. By: Ke Wang; Yujiao Xian; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology); Zhimin Huang
    Abstract: The measurement of carbon productivity makes the effort of global climate change mitigation accountable and helps to formulate policies and prioritize actions for economic growth, energy conservation, and carbon emissions control. Previous studies arbitrarily predetermined the directions of directional distance function in calculating the carbon productivity indicator, and the traditional carbon productivity indicator itself is not capable of identifying the contribution of different energy driven carbon emissions in carbon productivity change. Through utilizing an endogenous directional distance function selecting approach and a global productivity index, this paper proposes a global Luenberger carbon productivity indicator for computing carbon productivity change. This carbon productivity indicator can be further decomposed into three components that respectively identify the best practice gap change, pure efficiency change, and scale efficiency change. Moreover, the carbon productivity indicator is shown as a combination of individual carbon emissions productivity indicators that account for the contribution of different fossil fuel driven carbon emissions (i.e. coal driven CO2, oil driven CO2, and natural gas driven CO2) toward the carbon productivity change. Our carbon productivity indicator is employed to measure and decompose the carbon productivity changes of 37 major carbon emitting countries and regions over 1995¨C2009. The main findings include: (i) Endogenous directions identifying the largest improvement potentials are noticeably different from exogenous directions in estimating the inefficiencies of undesirable outputs. (ii) Carbon productivity indicator calculated with the consideration of emission structure provides a more significant estimation on productivity change. (iii) The aggregated carbon productivity and the specific energy driven carbon productivities significantly improve over our study period which are primarily attributed to technical progress. (iv) Empirical results imply that policies focused on researching and developing energy utilization and carbon control technologies might not be enough; it is also essential to encourage technical efficiency catching-up and economic scale management.
    Keywords: Data envelopment analysis (DEA); Energy driven carbon emissions; Efficiency change; Best practice gap change
    JEL: Q54 Q40
    Date: 2016–03–05
  35. By: W. Brock (Economics Department, University of Wisconsin and University of Missouri); A. Xepapadeas (Athens University of Economics and Business)
    Abstract: This paper is, to our knowledge, the first paper in climate economics to consider the combination of spatial heat transport and polar amplification. We simplified the problem by stratifying the Earth into latitude belts and assuming, as in North et al. (1981), that the two hemispheres were symmetric. Our results suggest that it is possible to build climate economic models that include the very real climatic phenomena of heat transport and polar amplification and still maintain analytical tractability. We derive optimal fossil fuel paths under heat transport with and without polar amplification. We show that the optimal tax function depends not only on the distribution of welfare weights but also on the distribution of population across latitudes, the distribution of marginal damages across latitudes and cross latitude in- teractions of marginal damages, and climate dynamics. We also determine optimal taxes per unit of emission and show that, in contrast to the standard results suggesting spatially uniform emission taxes, poorer latitudes should be taxed less per unit emissions than richer latitudes.
    Keywords: Climate Change, Heat Transport, Polar Amplification, Welfare Maximization, Fossil Fuels, Optimal Taxation
    JEL: Q54 Q58 C61
    Date: 2016–01
  36. By: Muhammad, Shahbaz; Adebola Solarin, Solarin; Ozturk, Ilhan
    Abstract: The present study incorporates globalization and energy intensity into the CO2 emissions function and investigates the presence of Environmental Kuznets Curve (EKC) in 19 African countries for the time period of 1971-2012. We have applied the ARDL bounds testing approach to cointegration to examine the long run relationship in the variables. Our results confirmed the presence of cointegration between the series in Africa, Algeria, Angola, Cameroon, Congo Republic, Ghana, Kenya, Libya, Morocco, Nigeria, South Africa, Sudan, Tanzania, Togo, Tunisia, Zambia and Zimbabwe. The results indicated the positive effect of energy intensity on CO2 emissions in Africa, Algeria, Angola, Cameroon, Congo Republic, Ghana, Kenya, Libya, Morocco, Nigeria, South Africa, Sudan, Togo, and Tunisia while energy intensity declines CO2 emissions in the case of Zambia and Zimbabwe. Globalization decreases CO2 emissions in Africa, Angola, Cameroon, Congo Republic, Egypt, Kenya, Libya, Tunisia and Zambia but increases CO2 emissions in Ghana, Morocco, South Africa, Sudan and Tanzania. The EKC exists in Africa, Algeria, Cameroon, Congo Republic, Morocco, Tunisia and Zambia but U-shaped relationship is found between economic growth and CO2 emissions in Sudan and Tanzania.
    Keywords: EKC, Energy, Globalization, Africa
    JEL: Q4
    Date: 2016–03–01
  37. By: Bostian, Moriah (Department of Economics, Lewis & Clark College); Färe, Rolf (Department of Economics, Oregon State University); Grosskopf, Shawna (CERE and Department of Economics, Oregon State University); Lundgren, Tommy (CERE); Weber, William L. (Department of Economics and Finance, Southeast Missouri State University)
    Abstract: We apply recent advances in time substitution modeling to examine the environmental performance of firms in Sweden’s pulp and paper industry for the years 2002 - 2008. Our data allow us to estimate the optimal reallocation of environmental investments, expenditures and energy use to simultaneously maximize production output and minimize emissions reductions in the years immediately before and after the implementation of the European Union Emissions Trading Scheme. We find some evidence of overall productivity decline when considering both emissions and output objectives, due primarily to technological decline, and that cumulative dynamic inefficiency outweighs static inefficiency. A comparison of optimal investment time paths to observed investment levels indicates that firms could have improved their performance by reallocating environmental investments to early periods and production-oriented investment to later periods.
    Keywords: Time Substitution; Dynamic Efficiency; Environmental Performance; Environmental Investment; DEA
    JEL: D22 D24 M14 Q40 Q41
    Date: 2016–02–22
  38. By: Christoph Böhringer (University of Oldenburg); Nicholas Rivers (University of Ottawa); Hidemichi Yonezawa (ETH Zurich, Switzerland)
    Abstract: We show that imposition of a state-level environmental tax in a federation crowds out pre-existing federal taxes. We explain how this vertical fiscal externality can lead unilateral state-level environmental policy to generate a welfare gain in the implementing state, at the expense of other states, even absent any environmental benefits. Using a computable general equilibrium model of the Canadian federation, we show that vertical fiscal externalities can be the major determinant of the welfare change following environmental policy implementation by a state government. Our numerical simulations indicate that - as a consequence of vertical fiscal externalities - state governments can reduce greenhouse gas emissions by over 20 percent without any net cost to themselves.
    Keywords: fiscal externality, climate policy, federalism, computable general equilibrium
    JEL: C68 H77 Q54
    Date: 2016–03
  39. By: Richard Schmalensee (Massachusetts Institute of Technology); Robert N. Stavins (, Harvard Kennedy School, Resources for the Future and National Bureau of Economic Research)
    Abstract: This essay provides an overview of the major emissions trading programs of the past thirty years on which significant documentation exists, and draws a number of important lessons for future applications of this environmental policy instrument. References to a larger number of other emissions trading programs that have been implemented or proposed are included.
    Keywords: Market-based instruments, Cap-and-trade, Leaded Gasoline Phasedown, Clean Air Act Amendments of 1990, Sulfur Dioxide, Acid Rain, Carbon Dioxide, Global Climate Change, European Union Emissions Trading System
    JEL: Q54 Q58 Q40 Q48
    Date: 2015–10

This nep-ene issue is ©2016 by Roger Fouquet. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.