nep-ene New Economics Papers
on Energy Economics
Issue of 2016‒04‒23
25 papers chosen by
Roger Fouquet
London School of Economics

  1. Has the Restructuring of EU Electricity Markets Reduced Industrial Electricity Prices? By Hyland, Marie
  2. Environmental Policy Design, Innovation And Efficiency Gains In Electricity Generation By Nick Johnstone; Shunsuke Managi; Miguel Cárdenas Rodríguez; Ivan Haščič; Hidemichi Fujii; Martin Souchier
  3. Electricity Pricing for North Vietnam By Nguyen Van Song; Nguyen Van Hanh
  4. Price-Based Unit Commitment Electricity Storage Arbitrage with Piecewise Linear Price-Effects By Tom Brijs; Frederik Geth; Sauleh Siddiqui; Benjamin F. Hobbs; Ronnie Belmans
  5. Wind Electricity Subsidies = Windfall Gains for Land Owners? Evidence from Feed-In Tariff in Germany By Peter Haan; Martin Simmler
  6. Integration of Energy Storage and Distributed Generation (DG) in Distribution Systems: Economic Analysis and Development Perspective By Mohajeryami, Saeed; Jennings, Ronald; Alkhbbaz, Ghadeer
  7. Storage as a flexibility option in power systems with high shares of variable renewable energy sources: a POLES-based analysis By Jacques Després; Silvana Mima; Alban Kitous; Patrick Criqui; Nouredine Hadjsaid; Isabelle Noirot
  8. Secondary Power Resources of the Fuel and Energy Complex in Ukraine By F.P. Shkrabets; V.V. Berdnyk
  9. Using Feedback as a Tool for Household Energy Conservation: An Experimental Approach By Kannika Thampanishvong
  10. Energy Price Transmission and Retail Milk Prices By Li, Xun; Lopez, Rigoberto A.
  11. Structural decompositions of energy consumption, energy intensity, emissions and emission intensity - A sectoral perspective: empirical evidence from WIOD over 1995 to 2009 By Zhong, Sheng
  12. Filipino 2040 Environmental Resources, Shocks, and National Well-Being By J. Roumasset; M. Ravago; K. Jandoc; C. Arellano
  13. A New Approach to Modelling Natural Gas Markets By Mel Devine; Steven A Gabriel; Moryadee, Seksun
  14. Resource Discovery and the Politics of Fiscal Decentralization By Sambit Bhattacharyya; Louis Conradie; Rabah Arezki
  15. Impacts of Oil Shocks on Exchange Rates and Macroeconomic Variables: A multi-country analysis By IWAISAKO Tokuo; NAKATA Hayato
  16. Imperfect Cartelization in OPEC By Okullo, Samuel; Reynes, F.
  17. Macroeconomic and Financial Effects of Oil Price Shocks: Evidence for the Euro Area By Claudio Morana
  18. Biofuel Production in Vietnam: Cost-Effectiveness, Energy and GHG Balances By Loan T. Le
  19. Considering the effect of biomass energy consumption on economic growth:fresh evidence from BRICS region By Shahbaz, Muhammad; Ahmed, Khalid; Rasool, Ghulam; Kumar, Mantu
  20. Corporate Governance and Global Supply Chains: How Self -regulation Replaces the Lack of Regulatory Initiatives or Do Regulatory Initiatives Add Value to Corporate Governance By Boeva, Bistra
  21. Switching Economics for Physics and the Carbon Price Inflation: Problems in Integrated Assessment Models and their Implications By Sgouris Sgouridis; Abdulla Kaya; Denes Csala
  22. Policy Conflicts and the Performance of Emissions Trading Markets: An Adaptive Agent-based Analysis By Bing Zhang; Yongliang Zhang
  23. Higher Price, Lower Costs? Minimum Prices in the EU Emissions Trading Scheme By Jan Abrell; Sebastian Rausch; Hidemichi Yonezawa
  24. A Wavelet Analysis of the Environmental Kuznets Curve in France By MUTASCU Mihai; PEREAU Jean-Christophe; URSU Eugen
  25. Economic growth and environmental pollution in Iran: evidence from manufacturing and services sectors By Mohamad Taghvaee, Vahid; Parsa, Hojat

  1. By: Hyland, Marie
    Date: 2016–01
  2. By: Nick Johnstone; Shunsuke Managi; Miguel Cárdenas Rodríguez; Ivan Haščič; Hidemichi Fujii; Martin Souchier
    Abstract: This paper explores the relationship between environmental regulation, innovation, and competitiveness, drawing upon a unique dataset on environmental regulations directed at combustion plants, a global dataset of power plants, and a global dataset of ‘environmental’ patents. The analysis is conducted in two stages. First, a nonparametric frontier analysis is implemented to estimate efficiency scores, including a measure of technological innovation based on patent stocks. Second, econometric methods are applied to analyse the role of policy stringency and policy design on efficiency. Our estimation sample covers thermal power plant sectors in 20 countries from 1990 to 2009. The results show that the stringency of environmental regulations is a significant determinant of productive efficiency with respect to pollutant emissions as well as fuel use. However, these effects turn negative once the level of stringency leaps over a certain threshold. In addition, the paper concludes that the positive effect of regulatory stringency can be diminished by a negative effect of regulatory differentiation with measures which are differentiated across plant size and age having negative consequences, and these effects are increasing over time. This finding is important given the prevalence of size- and vintage-differentiated policies in many countries. Finally, it is found that integrated approaches to environmental innovation are more likely to bring about efficiency improvements than end-of-pipe technologies. Cet article étudie les relations entre réglementation environnementale, innovation et efficacité, en s’appuyant sur un ensemble de données mondiales sur les inventions « environnementales » brevetées et sur les centrales électriques, ainsi que sur un jeu unique de données sur la réglementation environnementale applicable aux installations de combustion. Cette étude comporte deux étapes. Dans un premier temps, des scores d’efficience sont estimés à l’aide d’une analyse non-paramétrique de la frontière efficiente de production, en utilisant notamment des indicateurs d’innovation comme les stocks de brevets. Ensuite, l’impact des politiques environnementales sur ces scores d’efficience est analysé économétriquement. Notre analyse couvre le secteur des centrales thermiques dans 20 pays entre 1990 et 2009. Les résultats montrent que des politiques environnementales contraignantes ont un effet positif sur l’efficacité de la production tant concernant l’émission de polluants que la consommation de carburant. Néanmoins, cet effet devient négatif lorsque la contrainte réglementaire dépasse un certain seuil. Par ailleurs, l’effet positif d’une réglementation contraignante peut être atténué lorsque celle-ci est différentiée en fonction de l’âge ou de la taille de la centrale. Les conséquences négatives d’une telle différentiation se font alors souvent sentir à long terme. Compte tenu de la prédominance d’une telle approche dans de nombreux pays, ce constat invite à une refonte des politiques environnementales en matière de limitation des émissions polluantes. Enfin, il est également constaté que des innovations environnementales intégrées (modifiant l’ensemble de la chaine de production) ont un impact plus important sur l’efficacité de la production que les innovations de fin de processus.
    Keywords: policy design, regulatory differentiation, productive efficiency, environmental innovation, directional distance function, fonction de distance directionnelle, innovation environnementale, élaboration des politiques, efficience productive, différentiation de la réglementation
    JEL: O33 Q48 Q55
    Date: 2016–04–14
  3. By: Nguyen Van Song (Economics and Rural Development Faculty, Hanoi Agricultural University); Nguyen Van Hanh (Economics and Rural Development Faculty, Hanoi Agricultural University)
    Abstract: The rapid economic growth in Vietnam has resulted in an increasing demand for electricity. This in turn translates to a higher rate of coal resource extraction and consequent rise in pollution of water and land resources.This study estimated the environmental costs associated with the electricity demand requirements of the coal electricity sector, as a component of the long-run marginal opportunity cost (LR-MOC) of electricity production. The LR-MOC has three components: Marginal Production Cost or direct cost (MPC), Marginal User Cost (MUC) and the Marginal Environmental Cost (MEC). The MEC is divided further into two components: Marginal Environmental Cost of coal mining (MEC1) and Marginal Environmental Cost of coal burning (MEC2). The MEC1 consists of on-site environmental cost and off-site environmental cost while the MEC2 is made up of control cost and off-site environmental cost. The total production cost per tonne of clean coal was 241,050 VND in 1998 and was estimated to be 343,679.70 VND in 2010. The marginal environmental cost of coal mining (MEC1) is 19,029.4 VND/per tonne in 2010 or 5.5% of production cost. Of the MEC1, on-site and off-site cost is about 3.6% and 1.93% of production cost, respectively.The LR-MOC of coal electricity is 771.9 VND/per kWh at transmission and 975.5 VND/per kWh at distribution. The MEC (MEC1 + MEC2) accounts for 16.6% at transmission and 13.9% at distribution level. In comparison to the current tariff, the cost of the total electricity in 2010 is 1.75 times higher. The most suitable technological options for pollution control in coal-fired thermal power plants are precipitators for Group A and bag filters and limestone injection for Group B2. The least abatement and damage cost is associated with environmental technology alternative 2 (ETA2) valued at 1,862 billion VND. Given the worsening environmental problems in Halong Bay, which is a coal mining area, and the overall deteriorating environmental situation due to coal-fired power plants in Vietnam, the current subsidy of 25-30% to production cost and electricity tariff should gradually be removed. In fact, the environmental cost should be included in electricity and coal prices.
    Keywords: Hydropower, Vietnam
    Date: 2016–03
  4. By: Tom Brijs; Frederik Geth; Sauleh Siddiqui; Benjamin F. Hobbs; Ronnie Belmans
    Abstract: Electricity storage plants can be used for many applications, with one of the most studied applications being arbitrage in the day-ahead market. Although the arbitrage value is related to the presence of price spreads, it also depends on the effect of (dis)charge actions on prices, as arbitrage generally reduces price spreads by increasing off-peak prices when charging and decreasing peak prices when discharging. As such, there are two important assumptions in price-based unit commitment arbitrage models: first, whether the storage operator is assumed to have perfect knowledge of future prices, and second, whether they recognize that their (dis)charge actions may affect those prices, i.e., the price-taking or price- making assumption. This article proposes a comprehensive formulation of the arbitrage problem including detailed operating constraints, and focuses on relaxing the price-taking assumption by considering real-world price-effect data, published in the form of hourly piecewise linear relationships between quantity and price based on submitted bids, which are referred to as “market resilience functions". These can be used to (1) evaluate the price-taking and price-making assumptions based on simplified price-effects, and to (2) provide an upper limit to the arbitrage value under the assumption that prices and price-effects are known at the decision stage. In addition, a stepwise approximation to the piece- wise linear functions is developed to reduce computation time, i.e., from mixed-integer nonconvex quadratic programming to mixed-integer linear programming, while providing lower- and upper bound approximations to the arbitrage value. The developed models are applied to the Belgian day-ahead market for 2014, and show that the price-effect has a strong impact on the operation and arbitrage value of large-scale storage.
    Keywords: electricity storage, arbitrage, day-ahead market, price-effect, piecewise linear market resilience functions, price-based unit commitment
    JEL: C61 D4 L94 Q41
    Date: 2016
  5. By: Peter Haan; Martin Simmler
    Abstract: In 2013, around 121 billion US-Dollar were spend worldwide to promote the investment into renewable energy sources. The most prominent support scheme employed is a feed-in tariff, which guarantees a fixed price for electricity produced by renewable energies sources, usually for around 15 years after the installation of the plant. We study the incidence of wind turbine subsidies, due to a feed-in tariff in Germany, into land prices to shed light on who benefits from the subsidies. In order to identify the incidence share we exploit quasi-experimental variation in wind strength across 270 non-urban counties combined with an institutional reform and use an Instrumental Variable estimator based on administrative transactionprices. We find that between 15 and 20% of expected wind turbine profits are capitalized into land prices. Using the estimated incidence share of 15%, we find that wind turbine subsidies account for roughly 4% of overall agricultural income of land owners in 2007.
    Keywords: Incidence, subsidy, renewable energy, wind turbines, land prices
    JEL: H22 H23 H25 Q28 Q42
    Date: 2016
  6. By: Mohajeryami, Saeed; Jennings, Ronald; Alkhbbaz, Ghadeer
    Abstract: This paper sheds light on distributed generation (DG) and energy storage and their impacts on electricity distribution networks. The purpose is to consider the various technologies of DG and energy storage and their financial and dynamic influence on the distribution network performance. In this paper, some different business cases in the U.S. related to energy storage and DG are investigated. One of these cases is related to Hawaiian Electric CO. One of the goals of Hawaiian Electric Co. for 2030 is to provide at least 65 percent of its electricity from renewable resources and working on providing sufficient energy storage. The company is considering energy storage project proposals on Oahu in order to provide their services by 2017. The paper will provide a look inside the company and how they are managing their existing projects and their future plans.
    Keywords: Distributed Generation (DG); energy storage system; economic analysis
    JEL: Z00
    Date: 2015–05–01
  7. By: Jacques Després (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, LITEN - Laboratoire d'Innovation pour les Technologies des Energies Nouvelles et les nanomatériaux - Université Grenoble Alpes - Grenoble 2 - CEA - DEN/DM2S/SEMT - CEA, G2ELab - Laboratoire de Génie Electrique de Grenoble - UJF - Université Joseph Fourier - Institut Polytechnique de Grenoble - Grenoble Institute of Technology - CNRS - Centre National de la Recherche Scientifique); Silvana Mima (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); Alban Kitous (European Commission (JRC-IPTS)); Patrick Criqui (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); Nouredine Hadjsaid (G2ELab - Laboratoire de Génie Electrique de Grenoble - UJF - Université Joseph Fourier - Institut Polytechnique de Grenoble - Grenoble Institute of Technology - CNRS - Centre National de la Recherche Scientifique); Isabelle Noirot (CEA/LITEN/DTNM/LT - CEA - DEN/DM2S/SEMT - CEA)
    Abstract: In this paper we demonstrate the role of electricity storage for the integration of high shares of Variable Renewable Energy Sources (VRES 3) in the long-term evolution of the power system. For this a new electricity module is developed in POLES (Prospective Outlook on Long-term Energy Systems). It now takes into account the impacts of VRES on the European power system. The power system operation relies on EUCAD (European Unit Commitment And Dispatch), which includes daily storage and other inter-temporal constraints. The innovative aspect of our work is the direct coupling between POLES and EUCAD, thus combining a long-term simulation horizon and a short-term approach for the power system operation. The storage technologies represented are pumped-hydro storage, lithium-ion batteries, adiabatic Compressed Air Energy Storage (a-CAES) and electric vehicles (charging optimisation and vehicle-to-grid). Demand response and European grid interconnections are also represented, in order to include to some extent these flexibility options. 2 Disclaimer: The views expressed are purely those of the writer and may not in any circumstances be regarded as stating an official position of the European Commission. 3 Abbreviations: a-CAES: adiabatic Compressed Air Energy Storage CCS: Carbon Capture and Storage
    Keywords: Electricity storage,Long-term modelling,Power system dispatch,Variable renewable energy sources,Flexibility
    Date: 2016
  8. By: F.P. Shkrabets (National Mining University); V.V. Berdnyk (National Mining University)
    Abstract: This article describes the types of secondary energy resources that occur during or as a result of mining or of technological processes at metallurgical, coke and chemical enterprises. The research of opportunities to use them directly at industrial enterprises, in case when an energy resource or the energy generated "is not a commodity" was carried out. To generate electricity from secondary sources, the use of diesel power plants and gas–turbine facilities was offered. The values of investments in the construction of thermal power plants (TPP) based on different types of secondary energy resources were calculated. Tentative capacities of power plants, which utilize the energy of secondary sources were also computed. The figures used for assessing the release and use of secondary energy resources were given. The necessity of using secondary sources of energy to reduce harmful effects on the environment was emphasized. Introduction. World coal production totals 2.025 billion tons per year (4033 mines). This results in nearly 6 bln tons of solid, liquid and gaseous waste being formed, which is about 3 tons per 1 ton of coal (including dump waste product of 2.5 tons). In underground coal mining, specific output of the rock hoisted onto the surface of the mine constitutes about 0.3 tons per 1 ton of coal. Actually combustible mass in the coal industry is only 20% of the rock mass. As follows, in order to preserve fossil fuel resources the number of which is steadily decreasing in the world and the use of which produces more harmful effect on the environment, one should try to use all their potential. The use of waste, or so–called secondary energy resources (SER), formed during the coal mining, will reduce the harmful effects on the environment and increase the energy potential of Ukraine. Research objective. Unprofitability of mines associated with the high cost of coal production, large overheads and a complex environmental situation in these regions are considered to be main problems of coal mining enterprises in Ukraine.
    Keywords: secondary sources of energy,coal mines,heat electropower stations,diesel power plants,coal methane,power generation
    Date: 2016–03
  9. By: Kannika Thampanishvong (Thailand Development Research Institute)
    Keywords: Household Energy Conservation,Experimental Approach, Thailand
    Date: 2016–03
  10. By: Li, Xun (University of Connecticut); Lopez, Rigoberto A.
    Abstract: This paper estimates the pass-through between diesel fuel and retail milk prices at the product brand level, based on a random coefficient logit demand model along with a market channel marginal cost function in order to estimate energy price pass-through rates to the consumer. It takes into account the partial and net impact of energy prices through the multi-market effects on other inputs. It also exploits a natural experiment of energy hyperinflation and the great recession in 2008. Empirical results show that energy prices (e.g., diesel price) significantly impact the retail prices of milk products and are, therefore, an important determinant of food price inflation. Pass-through rates are estimated to be in the range from 0.15 to approximately 0.50 before March 2008 and from 0.09 to 0.19 after March 2009, with an average of 0.26. This indicates that a $1.00 per gallon increase in diesel prices would on average result in a 26¢ per gallon increase in the retail price of milk.
    Keywords: food, milk, energy, pricing, pass-through
    Date: 2015–07
  11. By: Zhong, Sheng (UNU-MERIT)
    Abstract: Using more than 68 million data points from the newly introduced World Input-Output Database (WIOD) over 1995 to 2009, this study investigates the historical dynamics of energy consumption, aggregate energy intensity, total emissions and total emission intensity at sectoral level by decomposing their relative changes in the input-output framework into five influencing factors: intensity effect, inter-industry structural effect, trade effect in intermediate inputs, structural change effect in final demand and total final demand effect. It identifies crucial empirical patterns that support UNIDO’s ISID initiative: increases in energy consumption and total emissions at sectoral level driven by economic growth can be partially or even largely offset by the efficiency technology related intensity effect and the intensity effect within sectors contributes the most to reductions in aggregate energy intensity and total emission intensity.
    Keywords: Structural decomposition, input-output model, energy, emissions, sustainable development
    JEL: C67 O13 R15
    Date: 2016–03–29
  12. By: J. Roumasset (University of Hawaii; Energy Policy and Development Program); M. Ravago (University of the Philippines; Energy Policy and Development Program); K. Jandoc (University of Hawaii; Energy Policy and Development Program); C. Arellano (University of the Philippines; World Bank, Philippines)
    Abstract: The contribution of the environmental-resource sector to national well-being is the sum of natural resource depletion and environmental degradation. Inasmuch as existing resource stocks are below efficient levels, better enforcement of existing laws as well as policies that incentivize sustainable use are needed. Similarly, progressive royalty assessment of mineral resources can incentivize exploration without transferring the bulk of resource rents to private interests. In the case of pollution, the key is to face firms with the full costs of their production, e.g. through emission taxes and/or cap and trade systems. Calculating total depletion and degradation (TDD) will facilitate the calculation of green national income (GNI), a more inclusive metric of national well-being. In the same way, simultaneous optimization of disaster management policies in the face of climate change can facilitate a further improvement in national well-being, this time measured as comprehensive national income (CNI).
    Keywords: Well-being, risk, natural disaster, scenario-building, Philippines
    JEL: N55 Q01 Q54 Q56 Q58
    Date: 2016–04
  13. By: Mel Devine; Steven A Gabriel; Moryadee, Seksun
    Date: 2015–12
  14. By: Sambit Bhattacharyya; Louis Conradie; Rabah Arezki
    Abstract: If the central government is a revenue maximizing Leviathan then resource discovery and democratization should have a discernible impact on the degree of fiscal decentralization. We systematically explore this effect by exploiting exogenous variation in giant oil and mineral discoveries and permanent democratization. Using a global dataset of 77 countries over the period 1970 to 2012 we find that resource discovery has very little effect on revenue decentralization but induces expenditure centralization. Oil discovery appears to be the main driver of centralization and not minerals. Resource discovery leads to centralization in locations which have not experienced permanent democratization. Tax and intergovernmental transfers respond most to resource discovery shocks and democratization whereas own source revenue, property tax, educational expenditure, and health expenditure do not seem to be affected. Higher resource rent leads to more centralization and the effect is moderated by democratization.
    Keywords: Resource discovery; Resource rent; Democratization; Fiscal decentralization
    JEL: H41 H70 O11
    Date: 2016
  15. By: IWAISAKO Tokuo; NAKATA Hayato
    Abstract: This paper provides a quantitative assessment of the relative importance of exogenous shocks related to oil price determination on countries' exchange rates and outputs within the same framework of the structural vector autoregression (VAR) model. Because we are interested in the effect of oil price changes on energy exporters and importers, we chose Australia, Canada, Japan, Norway, and the United Kingdom as the sample countries. We assume four structural shocks: (i) oil supply shocks, (ii) global demand shocks, (iii) oil price fluctuations unrelated to supply and demand, and (iv) pure exchange rate fluctuations unrelated to other structural shocks. Differing responses to structural shocks explain the correlation structure of these currencies, while pure exchange rate shocks are the main sources of exchange rate volatilities. We also examine the roles of structural shocks in explaining macro variables, taking Australia and Japan as examples. We find evidence that global demand shocks and nonfundamental oil price fluctuations have a strong impact on gross domestic product (GDP) and export growth for both countries, while pure exchange rate shocks are relatively unimportant in explaining Japan's macroeconomic variables.
    Date: 2016–03
  16. By: Okullo, Samuel (Tilburg University, Center For Economic Research); Reynes, F.
    Abstract: A model of global oil production is applied to study cartelization by OPEC countries. Writing out the shadow price on quota allocations so as to draw correspondence to coefficients of cooperation (Cyert et al. 1973), we examine the incentives that different OPEC members to collude. We find that heterogeneity in OPEC and the supplies of the non-OPEC fringe create strong incentives against OPEC cooperation. OPEC’s optimal supply strategy although observed to be substantially more restrictive than that of a Cournot-Nash oligopoly, is found to still be more accommodative than that of a perfect cartel. The strategy involves allocating larger than proportionate quotas to smaller and relatively costlier producers as if to bribe their participation in the cartel. This is contrary to predictions of the standard cartel model that such producers should be allocated relatively more stringent quotas. Furthermore, we find that cartel collusion is likely to be sustained for elastic than inelastic demand. Since global oil demand is well known to be inelastic, this observation provides another structural explanation for why OPEC behavior is inconsistent with that of a perfect cartel. Our study points to multiple headwinds that limit OPECs ability to raise long-run global oil prices.
    Keywords: imperfect cartels; oil; OPEC; Nash bargaining; cullusion strategies
    JEL: C61 C7 L13 L22 L71 Q31
    Date: 2016
  17. By: Claudio Morana (Department of Economics, Management and Statistics, University of Milano-Bicocca, Italy; Collegio Carlo Alberto, Italy; The Rimini Centre for Economic Analysis, Italy)
    Abstract: The paper asses the macroeconomic and financial effects of oil prices shocks in the euro area since its creation in 1999, with a special focus on the recent slump. The analysis is carried out episode by episode, within a time-varying parameter framework, consistent with the view that "not all the oil price shocks are alike", yet without imposing any a priori identification assumption. We find evidence of recessionary effects triggered not only by oil price hikes, but also by oil price slumps in some cases, likewise for the most recent episode, which is also rising deflation risk and financial distress. In addition through uncertainty effects, the current slump might then be depressing aggregate demand by increasing the real interest rate, as ECB monetary policy is already conducted at the zero lower bound. The increase in real money balances following the slump points to the accommodation of the shock by the ECB, concurrent with the implementation of the Quantitative Easing policy (QE). Yet, in so far as QE failed to generate inflationary expectations within the current and expected environment of soft oil prices, the case for a more expansionary use of fiscal policy than in the past would become compelling, in order to counteract the deflationary and recessionary threats to the euro area.
    Date: 2016–02
  18. By: Loan T. Le (Faculty of Economics, Nong Lam University)
    Keywords: Biofuel, cost effectiveness
    Date: 2016–03
  19. By: Shahbaz, Muhammad; Ahmed, Khalid; Rasool, Ghulam; Kumar, Mantu
    Abstract: This paper investigates the relationship between biomass energy consumption and economic growth by incorporating capital and trade openness in production function for the case of BRICS countries. In doing so, unit root and cointegration tests have been used in order to examine unit root properties and long run relationship between the series for the period of 1991Q1-2015Q4. The results confirm the presence of long-run equilibrium relationship between the variables. Moreover, biomass energy consumption stimulates economic growth. Capital increments economic growth and trade openness spurs economic growth. The feedback effect exists between biomass energy consumption and economic growth. Trade openness Granger causes economic growth, capital and biomass energy consumption. The policy to adopt biomass as the primary source of renewable energy helps BRICS countries to achieve sustainable development goal in both short-run and long-run. However, the key innovative point of this study is to establish the sign for Granger causality test.
    Keywords: Biomass energy, Growth, Capital, Trade
    JEL: C0
    Date: 2016–03–12
  20. By: Boeva, Bistra
    Abstract: This paper poses some questions related to the current state of international business and the way it is governed by big multinationals. The author aims to examine critically how corporate boards of listed companies design and monitor the policy of their companies towards their suppliers - Global Supply Chains. Environmental and social issues in the buyer-supplier relations are on the agenda of policy makers at both national and international levels. Global business players devise initiatives to fight child abuse, pollution, improper usage of natural resource. Academia examines the above issues through the prism of macroand microeconomic studies, social and environmental research. This paper aims to analyze the role of good corporate governance in coping with bad working conditions in factories in developing economies and related environmental problems. The focus is on the compliance with one of the six corporate governance principles: recognizing the rights of stakeholders. Traditional research methods are employed to meet the objective of the study: literature survey and case studies.
    Keywords: corporate governance, stakeholders, global supply chains, corporate social responsibility, boards, nonfinancial information
    JEL: F23 G3
    Date: 2015
  21. By: Sgouris Sgouridis; Abdulla Kaya; Denes Csala
    Abstract: Integrated Assessment Models (IAMs) are mainstay tools for assessing the long-term interactions between climate and the economy and for deriving optimal policy responses in the form of carbon prices. IAMs have been criticized for controversial discount rate assumptions, arbitrary climate damage functions, and the inadequate handling of potentially catastrophic climate outcomes. We review these external shortcomings for prominent IAMs before turning our focus on an internal modeling fallacy: the widespread misapplication of the Constant Elasticity of Substitution (CES) function for the technology transitions modeled by IAMs. Applying CES, an economic modeling approach, on technical factor inputs over long periods where an entire factor (the greenhouse gas emitting fossil fuel inputs) must be substituted creates artifacts that fail to match the S-curve patterns observed historically. A policy critical result, the monotonically increasing cost of carbon, a universal feature of IAMs, is called into question by showing that it is unrealistic as it is an artifact of the modeling approach and not representative of the technical substitutability potential nor of the expected cost of the technologies. We demonstrate this first through a simple but representative example of CES application on the energy system and with a sectoral discussion of the actual fossil substitution costs. We propose a methodological modification using dynamically varying elasticity of substitution as a plausible alternative to model the energy transition in line with the historical observations and technical realities within the existing modeling systems. Nevertheless, a fundamentally different approach based on physical energy principles would be more appropriate.
    Date: 2016–03
  22. By: Bing Zhang (Department of Environmental Planning and Management, School of Environment, Nanjing University); Yongliang Zhang
    Keywords: Emissions,Agent-based Analysis,Trading Markets
    Date: 2016–03
  23. By: Jan Abrell (ETH Zürich, Switzerland); Sebastian Rausch (ETH Zurich, Switzerland); Hidemichi Yonezawa (ETH Zurich, Switzerland)
    Abstract: This paper examines the efficiency and distributional impacts of introducing a price floor in an emissions trading system (ETS) when environmental regulation is partitioned. We theoretically characterize the conditions under which a price floor enhances welfare. Using a multi-country multi-sector numerical general equilibrium model of the European carbon market, we find that moderate minimum price levels in the EU ETS can reduce the costs of EU climate policy by up to thirty percent and yield outcomes close to uniform carbon pricing. Moreover, most of the EU Member States would gain. Our results are robust with respect to parametric uncertainty in production and consumption technologies.
    Keywords: Emissions Trading, Price Floors, EU ETS, Partitioned Environmental Regulation, General Equilibrium
    JEL: H23 Q52 Q58 C68
    Date: 2016–04
  24. By: MUTASCU Mihai; PEREAU Jean-Christophe; URSU Eugen
    Abstract: The paper explores the causality between carbon emission and economic growth in the case of France, for the period 1983Q2-2015Q2, by following a wavelet approach. The study offers detailed information of this nexus, for different frequencies and sub-periods of time, revealing the lead-lag nexus between variables under cyclical and anti-cyclical shocks. \r\nDifferent environmental-growth hypotheses are found in the case of France, for a given period of investigation, which varie from sub-periods to sub-periods, from short to medium and long terms, under particular national and international economic contexts.
    Keywords: Carbon emissions, Growth, Effects, Wavelet analysis
    JEL: C1 O1 Q5
    Date: 2016
  25. By: Mohamad Taghvaee, Vahid; Parsa, Hojat
    Abstract: This article aims to answer the question of whether the manufacturing (and mining) and services sectors in Iran should be reconstructed or grown as before, in order to improve the environmental quality. The global warming, if not global burning, is a dire warning about environmental pollution dangers to everyone, living on the Earth. In this field, Iran is a good candidate due to its significantly high share of CO2 emissions in proportion to the low share of economic growth in the world which can be remedied by economic growth, based on Environmental Kuznets Hypothesis (EKH). We employ the Auto-Regressive Distributed Model (ARDL) to examine the long run equilibrium relationship between CO2 emission and economic growth. The results show that, regarding EKC, the nexus of CO2 emissions and economic growth in either sector is in a sharply ascending phase. It implies that if manufacturing (and mining) and services sectors inflate, the quality of environment will decline owing to the intensive and pollutant energy-using structures. Thus, rather than growing, they should be reconstructed by importing cleaner and more efficient technologies and developing internal inventions.
    Keywords: Environment. Manufacturing. Services.
    JEL: Q5
    Date: 2015

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