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on Energy Economics |
| By: | Richard G. Newell; Yifei Qian; Daniel Raimi |
| Abstract: | This paper assesses trends in the global energy sector through 2040 by harmonizing multiple projections issued by private, government, and inter-governmental organizations based on methods from “Global Energy Outlooks Comparison: Methods and Challenges” (Newell and Qian 2015). These projections agree that global energy consumption growth in the coming 25 years is likely to be substantial, with the global demand center shifting from Europe and North America to Asia, led by China and India. Most projections show energy demand growing as much or more in absolute terms to 2040 than previous multi-decade periods, although the rate of growth will be slower in percentage terms. Total consumption of fossil fuels grows under most projections, with natural gas gaining market share relative to coal and oil. The North American unconventional gas surge has expanded to tight oil more rapidly than anticipated, with implications for global oil markets that are still unfolding. Renewable electricity sources are also set to expand rapidly, while the prospects for nuclear power are more regionally varied. Global carbon dioxide emissions continue to rise under most projections and, unless additional climate policies are adopted, are more consistent with an expected rise in average global temperature of close to 3°C or more, than international goals of 2°C or less. |
| JEL: | Q41 Q42 Q43 Q47 Q48 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22075&r=ene |
| By: | Chris Hope (Cambridge Judge Business School, University of Cambridge); Jimena Alvarez (Cambridge Judge Business School, University of Cambridge); Paul Gilding (Cambridge Institute for Sustainability Leadership, University of Cambridge) |
| Abstract: | Fossil fuel companies sell the products that cause the vast majority of anthropogenic climate change. These companies don't pay for the economic damage these products cause to society. The IMF calculated that in 2011 this implicit subsidy amounted to about $800 billion globally. This implicit subsidy represents a risk to individual companies because as society seeks to reduce or recover the economic costs fossil fuels create, company profits could be lost and assets stranded by the resulting shift to low carbon energy. As a result attempts are being made to identify companies most at risk. However, no company-level model exists to compare present-day implicit subsidies and therefore risk level. Here we calculate these subsidies, by company, for the years 2008 to 2012. For all companies the implicit subsidy exceeded their post-tax profit (averaged over five years). For all pure coal companies, the implicit subsidy exceeded total revenues. There is substantial variation between companies within the same fuel type. We anticipate that these results will be a useful starting point for investors seeking to manage their exposure to climate change risk, and for policy makers interested in fossil fuel companies' net contribution to society. |
| Keywords: | fossil fuel, climate change, carbon tax |
| Date: | 2015–07 |
| URL: | http://d.repec.org/n?u=RePEc:jbs:wpaper:201502&r=ene |
| By: | Kannika Thampanishvong (Thailand Development Research Institute) |
| Keywords: | Information, household, electricity consumption, Thailand |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:eep:pbrief:pb20160428&r=ene |
| By: | Edouard Civel; Jérémy Elbeze |
| Abstract: | A strong cut in heat consumption can be realized by the thermal renovation of buildings: this article gives an assessment of energy savings achievable in the French residential stock and their associated investment costs. A bottom-up approach, using a dataset on material and labor costs for renovations and a thermal model (including a representation of the “rebound effect”) is applied to a description of existing dwellings in France. Renovation investment costs increase with the efficiency target of the housing stock: two inflection points are identified, for 40% and 60% reduction targets. If the first inflection is driven by a quantity effect, the second one is pushed by a price effect. Specificities of the thermal renovation market imply a lock-in risk: at the micro-scale, the discount rate could induce households to realize low ambition renovations, whereas at the macro-scale, having successive short-term objectives triggers important over-costs, above 15% of the optimized investment costs. We suggest that policy-makers take the risk of low ambition renovations into account, as it may nip the potential of energy savings in the bud. Relevant policies would set today the long-term efficiency target and earmark public incentives, like tax credits or interest-free loans, to ambitious renovations. |
| Keywords: | Energy efficiency, Renovation, Residential sector, Public policy. |
| JEL: | Q47 Q48 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:cec:wpaper:1603&r=ene |
| By: | Carsten Helm (University of Oldenburg, Department of Economics); Mathias Mier (University of Oldenburg, Department of Economics) |
| Abstract: | When the supply of intermittent renewable energies like wind and solar is high, the electricity price is low. Conversely, prices are high when their supply is low. This reduces the profit potential in renewable energies and, therefore, incentives to invest in renewable capacities. Nevertheless, we show that perfect competition and dynamic pricing lead to efficient choices of renewable and fossil capacities, provided that external costs of fossils are internalized by an appropriate tax. We also investigate some properties of electricity markets with intermittent renewables and examine the market diffusion of renewables as their capacity costs fall. We show that the intermittency of renewables causes an S-shaped diffusion pattern, implying that a rapid build-up of capacities is followed by a stage of substantially slower development. While this pattern is well known from the innovation literature, the mechanism is new. Moreover, the S-shaped pattern is followed by another acceleration phase towards the end of the diffusion process. We also find that technology improvements such as better storage capabilities have substantial effects not only on the speed of market penetration, but also on its pattern. Finally, fluctuations of energy prices rise with the share of renewables. If regulators respond with a price cap, this leads to a faster market diffusion of renewables. |
| Keywords: | renewable energies, peak-load pricing, intermittent energy sources, technology diffusion, price caps, energy transition |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:old:dpaper:389&r=ene |
| By: | Ghaith, Ahmad; Epplin, Francis; Frazier, R. Scott |
| Abstract: | Oklahoma households serviced by investor owned electric utilities that have smart meters may select to be charged based on either a traditional meter rate schedule, a smart meter schedule, or they may install a household grid-tied wind turbine or solar panel system and be subject to a different rate schedule. The objective of the research is to determine the annual cost of electricity for a case study household for six alternative situations: grid purchased with traditional meter rates, grid with smart meter rates, and four household Renewable Distributed Generation (RDG) systems tied to the grid with unique rates under consideration for implementation. Twenty years of hourly information regarding wind and solar quantity were obtained from the Oklahoma Mesonet weather system. Hourly use data for a representative household were obtained from the Department of Energy. These data, the Oklahoma Corporation Commission rate schedules, and purchase prices and power output response functions, for each of the four household systems were used to address the objective. The annual cost of electricity for the modeled household is estimated to be $710 for the smart meter system and $812 for the traditional meter system. The estimated annual cost of $2,343 for the least costly household grid tied production system, a 4 kW solar system, is 3.3 times greater than the annual cost of purchasing from the grid via a smart meter system. If external consequences of electricity generation and distribution are ignored, given current and proposed rate structures and prices, household generation systems are not economically competitive in the region. |
| Keywords: | cost, grid-tied, renewable distributed generation, solar energy, solar panel, wind energy, wind turbine, Resource /Energy Economics and Policy, Q28, Q42, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea16:229820&r=ene |
| By: | Oskar Lecuyer (OCCR,University of Bern); Philippe Quirion (CNRS, CIRED) |
| Abstract: | We study the interactions between a CO2 emissions trading system (ETS) and renewable energy subsidies under uncertainty over electricity demand and energy costs. We first provide evidence that uncertainty has generated over-allocation (defined as an emissions cap above business-as-usual emissions) during at least part of the history of most ETSs in the world. We then develop an analytical model and a numerical model applied to the European Union electricity market in which renewable energy subsidies are justified only by CO2 abatement. We show that in this context, when uncertainty is small, renewable energy subsidies are not justified, but when it is big enough, these subsidies increase expected welfare because they provide CO2 abatement even in the case of over-allocation. The source of uncertainty is important when comparing the various types of renewable energy subsidies. Under uncertainty over electricity demand, renewable energy costs or gas prices, a feed-in tariff brings higher expected welfare than a feed-in premium because it provides a higher subsidy when it is actually needed i.e. when the electricity price is low. Under uncertainty over coal prices, the opposite result holds true. These results shed new light on the ongoing switch from feed-in tariffs to feed-in premiums in Europe. |
| Keywords: | Willingness to pay, Social capital, Environmental protection, Ordered logistic regression, Sweden |
| JEL: | Q28 Q48 Q58 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2016.14&r=ene |
| By: | Crampes, Claude; Moreaux, Michel |
| Date: | 2015–01 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:28916&r=ene |
| By: | Crampes, Claude; Moreaux, Michel |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:30415&r=ene |
| By: | Nguyen Van Song (Vietnam National University of Agriculture); Nguyen Van Hanh (Vietnam National University of Agriculture) |
| Abstract: | 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. |
| Keywords: | Electricity Pricing, Vietnam |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:eep:report:rr2016058&r=ene |
| By: | Gautam, Tej; Paudel, Krishna |
| Abstract: | This paper examines the demand for natural gas and electricity in residential, commercial and industrial sectors of the Northeastern United States comprising seven states using annual state-level panel data over the period between 1997and 2011. It applies panel unit root and cointegration tests and then estimates the parameters using four alternative estimators: dynamic fixed effect (DFE), mean group (MG), pooled mean group (PMG) and Common correlated effect mean group (CCEMG). PMG showed better performance compared to estimators obtained from other three models. The panel unit root and cointegration tests show that the series are I (1) and variables are cointegrated. The estimated results show that long-run price elasticity for natural gas in residential, commercial and industrial sectors are -0.05, -0.96 and -0.20; and for electricity they are -0.11, 0.10 and -2.07 respectively. The corresponding long-run income elasticities are 3.05, 0.86, & 0.07 for natural gas and 0.93, 0.53 and 0.18 for electricity, respectively. The cooling degree days (CDD) and heating degree days (HDD) have positive effects on demand for electricity and natural gas in all but not for electricity in industrial sector. |
| Keywords: | Electricity, Natural gas, Residential, Commercial, Industrial, PMG, Panel data, cointegration., Consumer/Household Economics, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, Q41, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea16:230114&r=ene |
| By: | Gabriel Gomes |
| Abstract: | This paper investigates to which extent dollar real exchange rate fluctuations explain the unexpected divergent movement between the real exchange rate of oil exporting countries and the price of oil in certain periods. Estimating a panel cointegrating model for 11 OPEC and 5 major oil exporting countries over the 1980-2014 period, we find evidence to support they have oil currencies in the long term. In fact, a 10% increase in the price of oil leads to a 2.1% appreciation of their real exchange rate. To analyse how swings on the dollar exchange rate affect the co-movement between the two variables in the short run, we rely on a non-linear approach and estimate a panel smooth transition regression model. Results show that, in the short term, oil currencies move in concert with the price of oil only if the dollar appreciation is lower than 2.6%. After the dollar appreciates beyond this threshold, the real exchange rate of oil exporting economies is rather negatively affected by the price of oil. |
| Keywords: | Oil Price;Oil Currencies;Non-linearities |
| JEL: | C33 F31 Q43 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:cii:cepidt:2016-11&r=ene |
| By: | Chunhua Wang (School of International Trade and Economics, University of International Business and Economics) |
| Keywords: | Energy Consumption,Carbon Emissions, China |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:eep:report:rr20160338&r=ene |
| By: | Tilak, Doshi; Fred, Joutz; Lakuma, Corti Paul; Lwanga, Musa; Baltasar, Manzano |
| Abstract: | Recent natural resource discoveries in East Africa provide an enormous opportunity for development. We focus on oil discoveries in Uganda and their expected impact on government revenues. We analyze alternative spending policies of natural resource revenues using a calibrated dynamic, stochastic, general equilibrium model (DSGE). We use detailed publicly-available information on the upstream oil sector and the fiscal regime to derive realistic cost and government revenue profiles across a range of oil price scenarios. This enables us to project annual production, fixed and variable costs, and government revenues for given global oil price paths. We compare the potential effects of income transfers versus public investment spending, as well as front-loaded versus gradual public investment policies. We also assess the impacts of alternative assumptions on the efficiency of public investment due to constraints on absorptive capacity. In terms of economic welfare, income transfers dominate public investments (whether gradual or front-loaded) given the typically low discount factors for households in low-income developing countries. Similarly, front-loaded investment policies dominate gradual investment policies given the low discount factors. However, our simulations show that as individuals care more about the future (i.e. have a lower discount rate), the welfare order of policies change, as the productivity effect of public investment produces a higher increase in consumption and welfare even though this increase is lagged in time. |
| Keywords: | Environmental Economics and Policy, Farm Management, Land Economics/Use, Research and Development/Tech Change/Emerging Technologies, |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:ags:eprcrs:234556&r=ene |
| By: | Jha, Girish; Kumar, Rajeev; Singh, Alka; Pal, Suresh |
| Abstract: | The expenses on energy based inputs have registered a phenomenal increase since the 1990s in Indian agriculture. The use of energy intensive inputs is higher on marginal farms than on large farms. In view of increasing share of energy costs, this paper examined the transmission mechanism of increase in energy prices in agricultural commodity markets in India using monthly wholesale price indices during April 1994 to March 2014. In order to assess the effect of deregulation of some petroleum products since April 2002, study period was divided into two sub-periods (April 1994 to March 2004 and April 2004 to March 2014), besides analyzing for full period. The co-integration analysis indicated evidence of parallel movement between prices of energy and all selected agricultural commodities after deregulation, which means higher transmission between crude oil and these commodity prices. |
| Keywords: | Agricultural commodity prices, Cost of cultivation, Crude oil prices, India, Multivariate co-integration, Agribusiness, Agricultural Finance, O13, Q11, |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iaae15:211805&r=ene |
| By: | Shahbaz, Muhammad; Chaudhary, A. R.; Ozturk, Ilhan |
| Abstract: | This paper reinvestigates the relationship between urbanization and energy consumption in case of Pakistan for the period of 1972Q1-2011Q4 by employing the STIRPAT (Stochastic Impact by Regression on Population, Affluence and Technology) model. We have employed the ARDL bounds testing approach to cointegration in the presence of structural breaks stemming in the series to count for these missing elements in other studies. Finally, the VECM Granger causality approach has been applied to examine the causal relationship between the variables. Our results show that urbanization adds in energy consumption. Affluence (economic growth) increases energy demand. Technology has positive impact on energy consumption. An increase in transportation is positively linked with energy consumption. The causality analysis indicates the unidirectional causality running from urbanization to energy consumption. |
| Keywords: | Urbanization, Energy Demand, STIRPAT, Pakistan |
| JEL: | E00 |
| Date: | 2016–03–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70313&r=ene |
| By: | Santos, João; Domingos, Tiago; Sousa, Tânia; St. Aubyn, Miguel |
| Abstract: | Neoclassical models disregard the role of energy in production, equating a factor's output elasticity with its cost share, but failing to explain growth without a residual term. In contrast, ecological economics acknowledges energy's importance in production, regardless of its cost share. The aggregate production function (APF) concept, central to neoclassical theory, is also disputed. We apply cointegration analysis to test for APFs between output, capital, and labor. We investigate the inclusion of energy inputs, measuring energy's capacity to generate productive work (useful exergy). Plausible APFs must verify cointegration and Granger-causality between output and inputs; and non-negative output elasticities. This method recognizes cases where: a) plausible APFs don't exist; b) energy impacts growth directly; c) energy impacts growth indirectly, through other inputs. We apply the method to Portugal (1960-2009), considering standard and quality-corrected capital and labor measures. Plausible APFs are rarely obtained for capital-labor models. When they are, the residual growth component is large, and output elasticities disagree with historical cost shares. However, the residual is virtually eliminated for capital-labor-energy models with two cointegration relationships: a) a capital-labor APF, with output elasticities matching historical cost shares; b) a function estimating capital from useful exergy. These models reconcile energy's significance in production with cost-share neoclassical assumptions. |
| Keywords: | Cointegration; Aggregate production function; Cost shares; Solow residual; Useful exergy |
| JEL: | C01 E13 O47 Q43 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70850&r=ene |
| By: | Antoine D'Autume (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Katheline Schubert (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics); Cees Withagen (Department of Economics - VU University Amsterdam) |
| Abstract: | International di¤erences in fuel taxation are huge, and may be justi…ed by different local negative externalities that taxes must correct, as well as by di¤erent preferences for public spending. In this context, should a worldwide uniform carbon tax be added to these local taxes to correct the global warming externality? We address this question in a second best framework à la Ramsey, where public goods have to be …nanced through distortionary taxation and the cost of public funds has to be weighted against the utility of public goods. We show that when lump-sum transfers between countries are allowed for, the second best tax on the polluting good may be decomposed into three parts: one, country-speci…c, dealing with the local negative externality, a second one, country-speci…c, dealing with the cost of levying public funds, and a third one, global, dealing with the global externality and which can be interpreted as the carbon price. Our main contribution is to show that the uniformity of the carbon price should still hold in this second best framework. Nevertheless, if lump-sum transfers between governments are impossible to implement, international di¤erentiation of the carbon price is the only way to take care of equity concerns. keywords: carbon price, second best, Pigovian taxation |
| Keywords: | carbon price, second best, Pigovian taxation |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:cesptp:halshs-01300261&r=ene |
| By: | Abidi, Hella; Marner, Torsten; Schwarz, Dominic |
| Abstract: | In order to provide a sustainable handling of increasing freight traffic, there is a need for the minimization of the central problems of air and noise pollution and especially the emissions of greenhouse gases like carbon dioxide. This is especially true for the wholesale sector since it is one of the most important and transport intensive branches. Therefore, in science and politics, a significant future role of electric mobility in logistics is discussed. Funded by the State of North Rhine-Westphalia and the European Regional Development Fund (ERDF) the project partners FOM University of Applied Sciences, University of Duisburg-Essen (UDE), and the enterprises Handelshof, Noweda and Zentek investigate the operational change areas by using electric vehicles in their common project ERoute. In the field of wholesale business this research contribution examines the strengths, weaknesses, opportunities and threats of implementing electric vehicles. The contribution uses the results of test drives and interviews that have been conducted within the project E-Route. Furthermore, the contribution shows an exemplary economic comparison between the purchase costs and the operating costs of an electric truck and a comparable conventional diesel truck. The value of this paper is to provide guidance for further research and to give information for companies who are interested in gaining information concerning the chances and risks of implementing e-vehicles to their existing transport fleet. |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fomild:45&r=ene |
| By: | Alberto Bagnai (Department of Economics, Gabriele d'Annunzio University); Christian Alexander Mongeau Ospina (Italian Association for the Study of Economic Asymmetries) |
| Abstract: | Building on the well-established “rockets and feathers” literature, and on the recently developed nonlinear autoregressive distributed lag (NARDL) modelling, we investigate the asymmetries in gasoline pricing on a comprehensive sample of monthly data from twelve Eurozone countries running from 1994:1 to 2014:12. The empirical results feature two robust patterns. Firstly, while the effects of exchange rate variations display a positive asymmetry (i.e., devaluations have a greater impact with respect to revaluations), crude price variations induce negative asymmetry (i.e., reductions in the price of crude oil have a greater impact than price rises). Secondly, the positive asymmetry to exchange rate changes is much stronger in core Eurozone countries. The negative asymmetry with respect to crude oil prices confirms the results of recent empirical research and theoretical models. |
| Keywords: | asymmetric cointegration, asymmetric price adjustment, pass-through, gasoline price, European gasoline market, signaling. |
| JEL: | C22 D43 D82 E31 L71 Q41 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:ais:wpaper:1602&r=ene |
| By: | Viccaro, Mauro; Rocchi, Benedetto; Cozzi, Mario; Severino, Marino |
| Abstract: | The aim of this work was to assess the socioeconomic impact derived from the oil royalty allocation on regional development, using a multi-sector model based on a Social Accounting Matrix (SAM), appropriately implemented for Basilicata region (Italy), the typical case of a region lagging behind in a developed economy. Our focus was on how political decisions have influenced the economic development of the region and how a different set of choices can be more effective in transforming public receipts into long-term benefits. Results clearly show that in the past the allocation of oil royalties to the regional government (as a whole €990 million) generated a much lower impact than expected, in terms of economic growth and employment. Given the structure of the regional economy, much of the impact of investments and running expenses financed by royalties has maybe been lost outside the regional boundaries. A greater effect on income and employment will not be possible unless resources are re-directed towards greater competitiveness of the regional economic system. Better balancing the use of royalties between social expenditure and production investments would probably be the first step towards a strategy of sustainable development of the regional economy. |
| Keywords: | social accounting matrix, multi-sector models, natural resource curse, regional development, oil allocation, Agricultural and Food Policy, E16 – Q01 – Q35 – R15 – R58, |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aiea15:207861&r=ene |
| By: | Arfaoui, Mongi; Ben Rejeb, Aymen |
| Abstract: | This paper takes a global perspective in examining relationships among oil, gold, US dollar and stock prices, using simultaneous equations system to identify direct and indirect linkages for the period spanning from January 1995 to October 2015. Results show significant interactions between the all parties. Indeed, we found negative relation between oil and stock prices but oil price is significantly and positively affected by stock markets, gold and USD. Oil price is also affected by oil future prices and by Chinese oil gross imports. Gold price is concerned by changes in oil, USD and stock market prices but slightly depend on US oil imports and corporate default premium. The US dollar is negatively affected by stock market and significantly by oil and gold prices and also by US consumer price index. Indirect effects always exist which confirm the presence of global interdependencies and involve the financialization process of commodity markets. |
| Keywords: | Oil price; gold price; trade weighted exchange rate; stock market; simultaneous equations |
| JEL: | F3 G15 Q02 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70452&r=ene |
| By: | Thiago Trafane Oliveira Santos |
| Abstract: | Currently in the oil market, the main question is: how should oil prices behave in order to ensure the rebalancing of the market? To answer this question, this paper presents an alternative pricing model to the Hotelling model. In this alternative model, the non-OPEC companies produce as much oil as possible, there are speculators and the market equilibrium is only assessed in the long-term, so that the relationship between the prices of different maturities is more flexible than suggested by the Hotelling model, with the alternative model providing justifications for the general shape of the futures price curve. This alternative model was then integrated with the global oversupply simulation model developed here and the long-term price it generated, allowing the estimation of current prices. The results indicate that (1) the current global oversupply should be reversed only from 2017 and (2) WTI price should begin to show a recovery trend, converging to US$65 in 2020 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:bcb:wpaper:429&r=ene |
| By: | Izatov, Asset |
| Abstract: | In this study we employ an empirical analysis to observe the impact of changes in inflation rate, real exchange rate instability and oil price fluctuations on the level of real economic activity of Russia. Vector Autoregressive Model (VAR) was represented and estimated along with Vector Error Correction Model (VECM). There was revealed the existence of long-run cointegration between the economic activity, the real effective exchange rate and oil prices over the 01/1995-03/2015 period. In addition, the effect of these factors on the economic output is positive. However, the cointegration with the inflation was not present in the long-run over the sample period. While, in the short-run only real effective exchange rate had an effect on the economy of Russia. The important feature of this research is that there was revealed an automatic adjustment mechanism in the model, which helps the economy of Russia to reach its equilibrium after the shock. The paper insists on implementation of the relevant reforms to the fiscal policy to diversify and strengthen the economy. |
| Keywords: | macroeconomics empirical oil exchange inflation economy Russia monetary fiscal policy |
| JEL: | B22 C01 F62 |
| Date: | 2015–11–25 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70735&r=ene |
| By: | Zapata, Samuel D.; Ribera, Luis A.; Palma, Marco |
| Abstract: | The optimal allocation of resources and efforts is needed to fulfill the latest Renewable Fuel Standard mandate. In order to warranty the success of the nascent cellulose-based biofuel industry, it is crucial to better understand the effects that production parameters have on the economic feasibility of a biofuel enterprise. The main goal of this study is to estimate the impact that the different feedstock production and biofuel conversion parameters have on the probability of economic success. To this aim, an original stochastic financial model is developed to analyze and identify the most economically relevant components of the biofuel production path. Estimation of the model was carried out using Monte Carlo simulation techniques along with parametric maximum likelihood estimation procedures. Results indicate that operational efficiency strategies should concentrate on improving feedstock yields and extending the feedstock growing season. |
| Keywords: | Binary response model, Energy cane, Marginal effects, Monte Carlo simulation, Net present value, Agribusiness, Agricultural Finance, Crop Production/Industries, Production Economics, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, Q16, C15, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea16:229804&r=ene |
| By: | Asian Development Bank (ADB); Asian Development Bank (ADB) (East Asia Department, ADB); Asian Development Bank (ADB) (East Asia Department, ADB); Asian Development Bank (ADB) |
| Abstract: | Achieving deep decarbonization of the heavily coal-based energy system of the People’s Republic of China (PRC) while maintaining gross domestic product growth at an acceptable rate requires additional efforts beyond the strengthening of energy efficiency and the further introduction of renewable energy. Carbon capture and storage (CCS) is an essential low-carbon option for the PRC. It is currently the only near-commercial system of technologies that offers medium-to long-term opportunities to make very deep cuts in carbon dioxide emissions from industrial processes and power plants based on coal (and other fossil fuels), while enabling the continued utilization of coal in a low-carbon way for such major applications. Drawing on relevant technical assistance from the Asian Development Bank (ADB), consultants’ reports, and the work of ADB staff, this report assesses the potential, the barriers, and the challenges in developing CCS in the PRC and recommends necessary policy actions during the 13th Five-Year Plan and the medium term to facilitate CCS demonstration and deployment. |
| Keywords: | co2, co2 emissions, carbon dioxide emissions, ghg, energy efficiency, prc emissions, ccs, fossil fuels, energy security, renewable energy, coal, power generation, low carbon technologies, climate change, low-carbon economy, carbon capture |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:rpt157521-2&r=ene |
| By: | Mao Xianqiang (Beijing Normal University); Guo Xiurui (Beijing Normal University) |
| Keywords: | Air Quality,Coal,Natural Gas,Policy |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:eep:report:rr2016062&r=ene |
| By: | Karen Clay; Joshua Lewis; Edson Severnini |
| Abstract: | Pollution is a common byproduct of economic activity. Although policymakers should account for both the benefits and the negative externalities of polluting activities, it is difficult to identify those who are harmed and those who benefit from them. To overcome this challenge, our paper uses a novel dataset on the mid-20th century expansion of the U.S. power grid to study the costs and the benefits of coal-fired electricity generation. The empirical analysis exploits the timing of coal-fired power plant openings and annual variation in plant-level coal consumption from 1938 to 1962, when emissions were virtually unregulated. Pollution from the burning of coal for electricity generation is shown to have quantitatively important and nonlinear effects on county-level infant mortality rates. By 1962, it was responsible for 3,500 infant deaths per year, over one death per thousand live births. These effects are even larger at lower levels of coal consumption. We also find evidence of clear tradeoffs associated with coal-fired electricity generation. For counties with low access to electricity in the baseline, increases in local power plant coal consumption reduced infant mortality and increased housing values and rental prices. For counties with near universal access to electricity in the baseline, increases in coal consumption by power plants led to higher infant mortality rates, and lower housing values and rental prices. These results highlight the importance of considering both the costs and benefits of polluting activities, and suggest that demand for policy intervention may emerge only when the negative externalities are significantly larger than the perceived benefits. |
| JEL: | I18 N22 Q52 Q53 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22155&r=ene |
| By: | Catherine Leining (Motu Economic and Public Policy Research); Suzi Kerr (Motu Economic and Public Policy Research) |
| Abstract: | The New Zealand Emissions Trading Scheme (NZ ETS) is the New Zealand government’s cornerstone policy instrument for meeting New Zealand’s climate change responsibilities. The New Zealand system was designed based on strong linkages to international carbon markets. Understanding how these have affected the New Zealand market is critical both for policymakers in New Zealand and designers of international emissions trading schemes who are considering linkages. We adapt Pizer and Yates' 2013 model of a linked tradable permit systems to conditions in the NZ ETS. We compare the model with price and surrender data and find that the international linkage works as expected. When New Zealand is a buyer of units and linking is certain, NZU prices are roughly equal to the Kyoto unit price. When the New Zealand government announces that New Zealand will de-link – no longer allowing any international units – prices diverge and New Zealand participants meet almost all current obligations with Kyoto units, saving their NZUs for the delinked future. |
| Keywords: | New Zealand Emissions Trading Scheme (NZ ETS), Emissions trading, linked tradable permit market, Kyoto units, Certified Emission Reductions (CERs), Emission Reduction Units (ERUs), greenhouse gas, carbon markets. |
| JEL: | Q54 Q58 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:16_06&r=ene |
| By: | Jing Cao (Harvard China Project, Harvard University Center for the Environment and School of Economics and Management Tsinghua University, Beijing) |
| Abstract: | This study investigates the potential impact of two environmental tax regimes on the movement of rural people to China's cities. The study models the impact of a fuel tax and an output tax on the country's economy to get a full picture of how they would affect people's livelihoods and welfare, and how this would, in turn, affect rural-urban migration. The study sheds light on the implications of future environmental taxes and how they would affect urbanization and "rural-urban" migration in China. The study finds that both proposed taxes would discourage the flow of migrants from China's countryside to its cities. This would therefore exacerbate the current distortions in the country's labour market, where there is a surplus of rural labour. A comparison of the impact of the two taxes shows the fuel tax to be more efficient in terms of reducing pollution emissions and their associated environmental and health impacts. It also produces less distortion in the rural-urban migration process than the output tax. The study therefore recommends that this would be the preferable policy. |
| Keywords: | environmental taxation, rural-urban, China |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:eep:pbrief:pb2016044&r=ene |
| By: | Kaivanto, Kim; Zhang, Peng |
| Abstract: | Air transport Greenhouse Gas (GHG) emissions estimates differ greatly, depending on the calculation method employed. Among the IPCC, ICAO, DEFRA, and BrighterPlanet calculation methods, the largest estimate may be up to 4.5 times larger than the smallest. Such heterogeneity -- and ambiguity over the true estimate -- confuses the consumer, undermining the credibility of emissions estimates in general. Consequently, GHG emissions estimates do not currently appear on the front page of flight search-engine results. Even where there are differences between alternative flights' emissions, this information is unavailable to consumers at the point of choice. When external considerations rule out alternative travel-modes, the relative ranking of flight options' GHG emissions is sufficient to inform consumers' decision making. Whereas widespread agreement on a gold standard remains elusive, the present study shows that the principal GHG emissions calculation methods produce consistent rankings within specific route-structure classes. Hence, for many consumers, the question of which calculation method to employ is largely irrelevant. But unless GHG emissions information is displayed at the point of decision, it cannot enter into consumers' decision making. A credible and ambiguity-free alternative would thus be to display GHG ranking information on the front page of flight search-engine results. |
| Keywords: | greenhouse gas emissions; carbon footprint computation; scheduled passenger air transport; informed choice; decision making; behavior; policy |
| JEL: | D03 D62 K3 Q54 |
| Date: | 2016–04–22 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:70923&r=ene |
| By: | Massimo Anna Alberini (University of Maryland,USA); Markus Bareit (ETH Zurich, Switzerland) |
| Abstract: | In Switzerland, the annual circulation taxes on road vehicles are set by and paid to the cantons (not to the federal government). We exploit the 26 different circulation tax rules and their variation over time, which we interpret as a natural experiment, to see if linking them to a vehicle’s CO2 emissions rate has helped shift new car sales towards cleaner, lower-emitting vehicles. We find that even when the penalty associated with a highly polluting vehicle is high, the effect is relatively small. For example, in canton Zurich, imposing a 50% “malus” on the annual registration fee for cars that emit 200 or more grams of CO2 per kilometer reduces the average CO2 emissions rate from new cars by only 0.46 gram per kilometer, bringing it to 158.11 grams per kilometer in 2011. A similar effect would be attained with a modest increase in fuel taxes. |
| Keywords: | vehicle demand estimation; fuel economy; fuel taxes; vehicle taxes; carbon dioxide emissions rates. |
| JEL: | L62 Q4 Q5 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:16-245&r=ene |
| By: | Halicioglu, Ferda; Ketenci, Natalya |
| Abstract: | This research presents first empirical time series evidence of the impact of international trade on environmental quality in the case of transition countries. The linkages between international trade and environmental quality are well established both theoretically and empirically in the literature. However, the empirical evidence relating to transition countries is non-existent as far as this study is concerned. Thus, our research aims at filling this gap. To this extent, fifteen transition countries are selected in order to test the impact of international trade on environmental quality. An econometric model between carbon emissions, energy use, income and trade openness is formed. The econometric model was estimated via ARDL approach to cointegration and GMM procedures. The econometric results from both econometric techniques support the existence of the EKC hypothesis only in three transition countries: Estonia, Turkmenistan and Uzbekistan. As for the impact of trade on environmental quality, the econometric results from both techniques vary in different transition countries. To this extent, the displacement hypothesis is validated in the case of Armenia, Estonia, Latvia, Kyrgyzstan, and Russia. The paper also discusses policy implications of the empirical results as well as offering policy recommendations. |
| Keywords: | International trade, Environmental quality, Cointegration, Transition countries |
| JEL: | C22 F1 F18 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71097&r=ene |
| By: | Chunhua Wang (School of International Trade and Economics, University of International Business and Economics) |
| Keywords: | Impact, Carbon Emissions, China |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:eep:pbrief:pb20160436&r=ene |
| By: | Fried, Stephie; Novan, Kevin; Peterman, William B. |
| Abstract: | This paper examines the non-environmental welfare effects of introducing a revenue- neutral carbon tax policy. Using a life cycle model, we find that the welfare effects of the policy differ substantially for agents who are alive when the policy is enacted compared to those who are born into the new steady state with the carbon tax in place. Consistent with previous studies, we demonstrate that, for those born in the new steady state, the welfare costs are always lower when the carbon tax revenue is used to reduce an existing distortionary tax as opposed to being returned in the form of lump-sum payments. In contrast, during the transition, we find that rebating the revenue with a lump sum transfer is less costly than using the revenue to reduce the distortionary labor tax. Additionally, we find that the tax policy is substantially more regressive over the transition than in the steady state, regardless of what is done with the revenue. Overall, our results demonstrate that estimates of the non-environmental welfare costs of carbon tax policies that are based solely on the long-run, steady state outcomes may ultimately paint too rosy of a picture. Thus, when designing climate policies, policymakers must pay careful attention to not only the long-run outcomes, but also the transitional welfare costs and regressivity of the policy. |
| Keywords: | Carbon taxation ; overlapping generations |
| JEL: | E62 H21 H23 |
| Date: | 2016–04–20 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedgfe:2016-38&r=ene |
| By: | Martin L. Weitzman |
| Abstract: | It is difficult to resolve the global warming free-rider externality problem by negotiating many different quantity targets. By contrast, negotiating a single internationally-binding minimum carbon price (the proceeds from which are domestically retained) counters self-interest by incentivizing countries to internalize the externality. In this contribution I attempt to sketch out, mostly with verbal arguments, the sense in which each country's extra cost from a higher emissions price is counter-balanced by that country's extra benefit from inducing all other countries to simultaneously lower their emissions in response to the higher price. Some implications are discussed. While the paper could be centered on a more formal model, here the tone of the discussion resembles more that of an exploratory think piece directed to policymakers and the general public. |
| JEL: | F51 H41 Q54 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22197&r=ene |