nep-ene New Economics Papers
on Energy Economics
Issue of 2016‒05‒21
forty-nine papers chosen by
Roger Fouquet
London School of Economics

  1. Post-EPIRA Impacts of Electric Power Industry Competition Policies By Navarro, Adoracion M.; Detros, Keith C.; dela Cruz, Kirsten J.
  2. Public Acceptability of Climate Change Mitigation Policies: A Discrete Choice Experiment By Milan Ščasný; Iva Zvěřinová; Mikolaj Czajkowski; Eva Kyselá; Katarzyna Zagórska
  3. Towards a low carbon Europe: the role of technological change and environmental policies in European manufacturing sectors By Marianna Gilli
  4. Revisiting the relationships between non-renewable energy consumption, CO2 emissions and economic growth in Iran By Nasre Esfahani, Mohammad; Rasoulinezhad, Ehsan
  5. Fair Access to Energy Resources, Market Transfers and Climate Change in the WTO By Daniel Rais
  6. Environmental Protection for Sale: Strategic Green Industrial Policy and Climate Finance By Carolyn Fischer
  7. Optimal Policy Identification: Insights from the German Electricity Market. By Johannes Herrmann; Ivan Savin
  8. Climate and finance systemic risks, more than an analogy? The climate fragility hypothesis By Michel Aglietta; Etienne Espagne
  9. Environmental Protection for Sale: Strategic Green Industrial Policy and Climate Finance By Fischer, Carolyn
  10. Carbon Emissions and Economic Growth: Production-based versus Consumption-based Evidence on Decoupling By Goher-Ur-Rehman Mir; Servaas Storm
  11. Fossil Fuel Subsidies in Indonesia: Trends, Impacts, and Reforms By Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB); Asian Development Bank (ADB)
  12. Advances and Slowdowns in Carbon Capture and Storage Technology Development By Aurora D’Aprile
  13. Renewable Energy and WTO Law: More Policy Space or Enhanced Disciplines? By Daniel Rais
  14. Asymmetric volatility in European day-ahead power markets: A comparative microeconomic analysis By Erdogdu, Erkan
  15. The Effects of Allowance Price on Energy Demand under a Personal Carbon Trading Scheme By Jin Fan; Jun Li; Yanrui Wu; Shanyong Wang; Dingtao Zhao
  16. Determinants of Energy Consumption in Canada: A Long-Run Perspective By Ehsan Latif
  17. Credit and Oil Consumption By Arora, Vipin
  18. Bayesian Learning and Regulatory Deterrence: Evidence from Oil and Gas Production By Peter Maniloff
  19. Negotiating an Energy Deal under TTIP: Drivers and Impediments to U.S. Shale Exports to Europe By Daniel Rais
  20. Options for Increasing Federal Income From Crude Oil and Natural Gas on Federal Lands By Congressional Budget Office
  21. On the Comparative Advantage of US Manufacturing: Evidence from the Shale Gas Revolution By Rabah Arezki; Thiemo Fetzer
  22. Changes in Energy Output in a Regional Economy: A Structural Decomposition Analysis By Llop Llop, Maria
  23. Ownership Rights versus Access Rights Allocation to Critical Resources: An Empirical Study of the Economic Impact of Changes in Oil Governance By Mohammad Kemal
  24. Price Relationships in Vegetable Oil and Energy Markets By Rini Yayuk Priyati; Rod Tyers
  25. Designing Policies to Make Cars Greener: A Review of the Literature By Soren T. Anderson; James M. Sallee
  26. Assessing the EU ETS with an Integrated Model By Pablo Pintos; Pedro Linares
  27. Extending the EU Commission’s Proposal for a Reform of the EU Emissions Trading System By Stefan P. Schleicher; Angela Köppl; Alexander Zeitlberger
  28. Structural shocks and dinamic elasticities in a long memory model of the US gasoline retail market By Lovcha, Yuliya; Pérez Laborda, Àlex
  29. Quantifying Impacts of Consumption Based Charge for Carbon Intensive Materials on Products By Stefan Pauliuk; Karsten Neuhoff; Anne Owen; Richard Wood
  30. Power It Up; Strengthening the Electricity Sector to Improve Efficiency and Support Economic Activity By Gabriel Di Bella; Francesco Grigoli
  31. Using a Free Permit Rule to Forecast the Marginal Abatement Cost of Proposed Climate Policy By Kyle C. Meng
  32. Particulate matter and labor supply : the role of caregiving and non-linearities By Aragon,Fernando M.; Miranda Montero,Juan Jose; Oliva,Paulina
  33. Federal Support for the Development, Production, and Use of Fuels and Energy Technologies By Congressional Budget Office
  34. Tipping Points and Loss Aversion in International Environmental Agreements By Doruk Iris; Alessandro Tavoni
  35. The impact of pollution abatement investments on production technology: new insights from frontier analysis By Huiban, J.P.; Mastromarco, C.; Musolesi, A.; Simioni, M.
  36. Macroeconomic and Financial Effects of Oil Price Shocks: Evidence for the Euro Area By Claudio Morana
  37. Mitigating Environmental and Public-Safety Risks of United States Crude-by-Rail Transport By Olufolajimi Oke; Daniel Huppmann; Max Marshall; Ricky Poulton; Sauleh Siddiqui
  38. Shared Value Potential of Transporting Cargo via Hyperloop By Werner, Max; Eißing, Klaus; Langton, Sebastian
  39. Energy Intensity and Convergence in Swedish Industry: A Combined Econometric and Decomposition Analysis By Karimu, Amin; Brännlund, Runar; Lundgren, Tommy; Söderholm, Patrik
  40. Tiered Gasoline Pricing: A Personal Carbon Trading Perspective By Yao Li; Jin Fan; Dingtao Zhao; Yanrui Wu; Jun Li
  41. The sheer scale of China’s urban renewal and CO2 emissions: Multiple structural breaks, long-run relationship and short-run dynamics By Ahmed, Khalid
  42. Structural Breaks in Renewable Energy in South Africa: A Bai & Perron Test Approach By Jaco Pieter Weideman and Roula Inglesi-Lotz
  43. The Influence of Oil and Gas on Local Sales and Use Tax Receipts: Evidence from Oklahoma Panel Data By Johnston, Dylan; Whitacre, Brian
  44. Social and economic impact analysis of Vadinar refinery of Essar oil: The Case of a mega refinery By Sumana Chaudhuri; Shovan Ray
  45. How to Best Phase Out Non-optimal Subsidies: The Case of Indonesia's Fuel Subsidy By Rimawan Pradiptyo; Gumilang Aryo Sahadewo
  46. Pollution Permit Sharing Games By Sang-Chul Suh; Yuntong Wang
  47. Foreign and Domestic Ownership in Western Australia’s Gas Market By Gabrielle McGrath; Kelly Neill
  48. Collective Action in an Asymmetric World By Cuicui Chen; Richard J. Zeckhauser
  49. Energy Prices, Pass-Through, and Incidence in U.S. Manufacturing By Sharat Ganapati; Joseph S. Shapiro; Reed Walker

  1. By: Navarro, Adoracion M.; Detros, Keith C.; dela Cruz, Kirsten J.
    Abstract: This study evaluates the achievement of the desired outcomes of the competition policies contained in the Electric Power Industry Restructuring Act of 2001 (EPIRA). It traces the evolution of the electric power industry before EPIRA and post-EPIRA. It looks at impacts on the consumers in terms of price affordability and supply reliability, and impact on production efficiency in terms of system loss reduction. In pre-EPIRA, electricity price in the Philippines was already high relative to other countries. Trends show that, in real terms, there was a price uptrend during the transition (2001-2005) toward the start of competition in the generation sector. There was a slight downtrend in the real price of electricity after the introduction of spot electricity trading, but the price of electricity remains high and it has not declined to pre-EPIRA levels. There is a danger that the findings on price trends could provide ammunition to those advocating the repeal of the EPIRA and renationalization of the industry. It must be emphasized, however, that the country has a long history of private sector-led electric power industry. Moreover, the nationalization years were marked by inefficiencies and fiscal problems that were not borne by electricity consumers alone but by the whole country. Thus, calls to repeal EPIRA are ill-advised. What needs to be done is to find ways of improving its implementation. The electricity spot market has to be governed by an independent market operator, regulatory capacity has to be strengthened, and the energy department needs to beef up its planning function.
    Keywords: Philippines, competition, EPIRA, electric power industry, restructuring, electricity price
    Date: 2016
  2. By: Milan Ščasný (Charles University in Prague, Environment Center); Iva Zvěřinová (Charles University in Prague, Environment Center); Mikolaj Czajkowski (Faculty of Economic Sciences, University of Warsaw); Eva Kyselá (Charles University in Prague, Environment Center); Katarzyna Zagórska (Faculty of Economic Sciences, University of Warsaw)
    Abstract: Our study examines public acceptability of the EU’s future mitigation targets. Using the discrete choice experiment, we elicit the preferences of about 4,098 respondents from the Czech Republic, Poland, and the United Kingdom for the GHG emission reduction policies that differ in four attributes: emission reduction target, burden sharing across the EU Member States, the distribution of costs within each country, and cost. The three specific reduction targets we analysed correspond to the EU 2050 Roadmap and deep decarbonisation policy (80% target), the climate-energy 2014 targets (40% target), and the status quo policy (20% target); each will result in a specific emission trajectory by 2050. Our results reveal stark differences between the three countries. Czechs would be on average willing to pay around EUR 13 per household and year for the 40% GHG emission reductions by 2030 or EUR 17 for 80% reduction target by 2050, and the citizens of the UK are willing to pay about EUR 40. Conversely, the mean willingness to pay of the Polish household for adopting more stringent targets is not statistically different from zero. The willingness to pay for adopting 40% and 80% targets are not statistically different in any of the examined countries. However, we found that the preferences in all three countries are highly heterogeneous. In addition, we provide an insight into the preferred characteristics of the future GHG emission reduction policies.
    Keywords: discrete choice experiments; climate change mitigation policy; consumer preferences; burden sharing; cost distribution; GHG emission targets
    JEL: Q48 Q51 Q54 Q58
    Date: 2016
  3. By: Marianna Gilli (Department of Economics and Management, University of Ferrara, Italy.)
    Abstract: This paper aims to shed light on the role of environmental policies, technological change and their interaction, on CO2 emissions in Europe. Building on the literature, which studies the relationship between environmental performances and technological change, as well as the literature related to the effects of environmental policy, two hypothesis are framed: the first one is that both environmental policy and technological change have a negative effect on CO2 emissions level. The second one is that technological change and environmental policy are complementary determinants of a reduced CO2 level. Both a fixed effects model and IV model are applied. Results offer support to these hypothesis and highlight sectorial differences in policy and technology effects toward lower emissions levels.
    Keywords: technological change, environmental policy, pollution emissions
    JEL: L60 O33 Q53
    Date: 2016–04
  4. By: Nasre Esfahani, Mohammad; Rasoulinezhad, Ehsan
    Abstract: Exploring the short-run and long-run relationships between consumption of various sources of non-renewable energy, economic growth and carbon dioxide(CO2) emissions would be considered as a golden key to provide rational energy policies of Iran in the post sanctions era. The aim of this paper is to find these mentioned relationships by using the Johanesen cointegration approach, the VECM Granger causality test, Generalized impulse responses functions and variance decomposition in Iran for the period 1966-2013. The findings support evidence for the existence of long-run linkage between non-renewable energy consumption, economic growth and CO2 emissions. The short-run relationship examination proves the causality running from non-renewable energy consumption to economic growth in Iran. The variance decomposition highlights that economic growth changes are explained more by gas consumption than by consumption of other non-renewable energy resources. Furthermore the contribution to CO2 emissions is mainly from oil consumption. The study recommends some new policy insights for Iran in order to reach a higher economic growth by non-renewable energy resources, while lower carbon dioxide emissions.
    Keywords: Economic growth; CO2 emissions; Energy consumption; Iran.
    JEL: Q30 Q43
    Date: 2016–03
  5. By: Daniel Rais
    Abstract: This paper addresses the issues of dual pricing and export restrictions in the energy sector, stressing the comparability of their economic and climate change impacts. It assesses whether WTO disciplines relevant and applicable to such practices are well-equipped to ensure fair access to energy resources. It finds that relevant GATT disciplines are overall deficient in the case of dual pricing and export taxes, while the landscape of WTO-plus obligations generally consisting of a network of narrowly tailored commitments. It discusses possible avenues to address such practices under the ASCM to the extent that they distort domestic energy prices and subsidize consumption of cheap fossil fuels
    Date: 2015–04–01
  6. By: Carolyn Fischer (Resources for the Future, Gothenburg University, FEEM, and CESifo Research Network)
    Abstract: Industrial policy has long been criticized as subject to protectionist interests; accordingly, subsidies to domestic producers face disciplines under World Trade Organization agreements, without exceptions for environmental purposes. Now green industrial policy is gaining popularity as governments search for low-carbon solutions that also provide jobs at home. The strategic trade literature has largely ignored the issue of market failures related to green goods. I consider the market for a new environmental good (like low-carbon technology) whose downstream consumption provides external benefits (like reduced emissions). Governments may have some preference for supporting domestic production, such as by interest-group lobbying, introducing a political distortion in their objective function. I examine the national incentives and global rationales for offering production (upstream) and deployment (downstream) subsidies in producer countries, allowing that some of the downstream market may lie in nonregulating third-party countries. Restraints on upstream subsidies erode global welfare when environmental externalities are large enough relative to political distortions. Climate finance is an effective alternative if political distortions are large and governments do not undervalue carbon costs. Numerical simulations of the case of renewable energy indicate that a modest social cost of carbon can imply benefits from allowing upstream subsidies.
    Keywords: Green Industrial Policy, Emissions Leakage, Externalities, International Trade, Renewable Energy, Subsidies
    JEL: F13 F18 H21 Q5
    Date: 2016–04
  7. By: Johannes Herrmann; Ivan Savin
    Abstract: The diffusion of renewable electricity generating technologies is widely considered as crucial for establishing a sustainable energy system in the future. However, the required transition is unlikely to be achieved by market forces alone. For this reason, many countries implement various policy instruments to support this pro- cess, also by re-distributing related costs among all electricity consumers. This paper presents a novel history-friendly agent-based study aiming to explore the efficiency of different mixes of policy instruments by means of a Differential Evolution algorithm. Special emphasis of the model is devoted to the possibility of small scale renewable electricity generation, but also to the storage of this electricity using small scale facilities being actively developed over the last decade. Both combined pose an important instrument for electricity consumers to achieve partial or full autarky from the electricity grid, particularly after accounting for decreasing costs and increasing efficiency of both due to continuous innovation. Among other things, we find that the historical policy mix of Germany introduced too strong and inflexible demand-side instruments (like feed-in tariff ) too early, thereby creating strong path-dependency for future policy makers and reducing their ability to react to technological but also economic shocks without further increases of the budget.
    Keywords: differential evolution; electricity storage; energy grid; feed-in tariff; renewable energy.
    JEL: C63 Q41 Q42 Q48
    Date: 2016
  8. By: Michel Aglietta; Etienne Espagne
    Abstract: In this paper, we develop the notion of climate systemic risk. Climate change is usually considered as a negative externality, against which society can insure itself through a carbon tax or an emission trading market. But except under the unrealistic efficient market hypothesis, there is little chance that such a simple approach to climate policy succeeds in mitigating climate damages. Financial and climate fragility reinforce each other. We argue that in concrete economies, a collective insurance approach to climate change has to target the financial sector, as well as its articulation with monetary policy. As in the financial world, climate change thus constitutes a systemic risk against which specific ex ante and ex post monetary policies and financial regulations should be deployed. The Paris Agreement of COP21 ignores the policy consequences of such an approach to the climate threat, but the exegesis of the text still offers some indispensable pillars to promote a new financial order mitigating climate systemic risk.
    Keywords: Systemic Risk;Climate Fragilit;Monetary Policy;Macroprudential Policy;COP21
    JEL: Q51 Q54 Q58 E42 E44
    Date: 2016–04
  9. By: Fischer, Carolyn
    Abstract: Industrial policy has long been criticized as subject to protectionist interests; accordingly, subsidies to domestic producers face disciplines under World Trade Organization agreements, without exceptions for environmental purposes. Now green industrial policy is gaining popularity as governments search for low-carbon solutions that also provide jobs at home. The strategic trade literature has largely ignored the issue of market failures related to green goods. I consider the market for a new environmental good (like low-carbon technology) whose downstream consumption provides external benefits (like reduced emissions). Governments may have some preference for supporting domestic production, such as by interest-group lobbying, introducing a political distortion in their objective function. I examine the national incentives and global rationales for offering production (upstream) and deployment (downstream) subsidies in producer countries, allowing that some of the downstream market may lie in nonregulating third-party countries. Restraints on upstream subsidies erode global welfare when environmental externalities are large enough relative to political distortions. Climate finance is an effective alternative if political distortions are large and governments do not undervalue carbon costs. Numerical simulations of the case of renewable energy indicate that a modest social cost of carbon can imply benefits from allowing upstream subsidies.
    Keywords: Green Industrial Policy, Emissions Leakage, Externalities, International Trade, Renewable Energy, Subsidies, Environmental Economics and Policy, F13, F18, H21, Q5,
    Date: 2016–04–30
  10. By: Goher-Ur-Rehman Mir (Ecofys Consulting, Kanaalweg 15G, 3526 KL Utrecht, The Netherlands); Servaas Storm (Delft University of Technology, The Netherlands)
    Abstract: We assess the Carbon-Kuznets-Curve hypothesis using internationally consistent and comparable production-based versus consumption-based CO2 emissions data for 40 countries (and 35 industries) during 1995-2007 from the World Input Output Database (WIOD). The estimates for per capita CO2 emissions are truly comprehensive as these include all carbon emissions embodied in international trade and global commodity chains. Even if we find evidence suggesting a decoupling of production-based CO2 emissions and growth, consumption based CO2 emissions are monotonically increasing with per capita GDP. We draw out the implications of these findings for climate policy and binding emission reduction obligations.
    Keywords: Carbon Kuznets Curve; Climate change; Economic growth; Production-based CO2 emissions, Consumption-based CO2 emissions; Decoupling.
    JEL: F64 Q54 Q55 Q56
  11. By: Asian Development Bank (ADB); Asian Development Bank (ADB) (Economic Research and Regional Cooperation Department, ADB); Asian Development Bank (ADB) (Economic Research and Regional Cooperation Department, ADB); Asian Development Bank (ADB)
    Abstract: Subsidized energy is provided to all Indonesian citizens as a public service obligation. This study measures the size of fossil fuel subsidies such as underpricing of petroleum products and electricity, tax exemptions, and subsidized credit; examines the potential economic, energy, and environmental impacts of reducing them; and discusses options for social safety nets to mitigate the impacts of the reforms. It shows that the short-term adverse impacts of subsidy reform turn positive in the long term as households and industry respond to changing market realities by adjusting energy demand, supply, and production capacity. Policy options for sustainable energy use are provided to aid policymakers in their current subsidy reform process.
    Keywords: indonesia, fossil fuel, energy, fossil fuel subsidies, greenhouse gas emissions, energy use, economic impacts, social programs, developing asia
    Date: 2015–10
  12. By: Aurora D’Aprile (Fondazione Eni Enrico Mattei (FEEM) and Centro Euro-Mediterraneo sui Cambiamenti Climatici (CMCC))
    Abstract: With the long term goal of holding the increase in the global average temperature to well below 2°C and "to pursue efforts to limit the temperature increase to 1.5°C", the Paris Agreement puts renewed attention on the portfolio of technologies needed to achieve consistent emission reductions and reach "a balance between anthropogenic emissions by sources and removals by sinks” in the second half of this century. Carbon capture and storage (CCS) technology, after having been hailed as a promising mitigation option around a decade ago, is undergoing a gruelling path to stay on top of the expectations. The opportunities and constraints in deploying large-scale carbon capture and storage systems are of the utmost actuality, as the technology promises to get rid of up to 90% of the most common greenhouse gases produced in industrial and energy plants before they reach the atmosphere (or even to achieve “negative” emissions, if combined with biomass). Despite potential benefits, CCS development and deployment proceeded at a far slower rate than what was expected and are struggling to emerge as a sound low-carbon choice for governments and investors. Based on recent existing literature, this reflection explores the main progress and deadlocks in CCS’s difficult path.
    Keywords: Climate Change, Carbon Sequestration, CCS, Carbon Mitigation, Low-carbon Technology
    JEL: Q42 Q55 Q58
    Date: 2016–04
  13. By: Daniel Rais
    Abstract: The shift to renewable energy is of key importance to decarbonisation of economies and to achieving effective results addressing global warming and rapid climate change. Enhanced recourse in the production of electricity – the main driver and engine of modern life – to solar, wind and tidal energy, complementing hydropower, is essential if informally defined goals to keep the increase of average global temperatures below 2 degrees Celsius in this century are to be realised.
    Date: 2014–11–07
  14. By: Erdogdu, Erkan
    Abstract: This paper uses high frequency spot price data from fourteen wholesale electricity markets in Europe to analyze asymmetric volatility in European day-ahead power markets with Exponential GARCH (E-GARCH) and TARCH models. Our data set ranges from 1992 to 2015 and consists of approximately 926 thousand observations. As such, this paper constitutes the most extensive and comprehensive work conducted so far on European power markets, to the best of our knowledge. Unlike most of the literature that treats price as a continuous variable and attempts to model its trajectory, this paper adopts a unique approach and regards each hour in a day a separate market. The results show, in post-2008 period, the most expensive electricity is consumed in Turkey, Ireland and UK while the cheapest power is in Russia, Nordic countries and Czech Republic. Russia, Poland and Czech Republic have the least volatile markets while France, Ireland and Portugal have the most volatile ones. Volatility has decreased in many European countries in post-2008 period. Besides, we find magnitude effect is usually larger than the leverage effect, meaning that the absolute value of price change is relatively more important than the sign of the change (whether it is an increase or a decrease) to explain volatility in European day-ahead power markets. Moreover, the results imply there isn’t a uniform inverse leverage effect in electricity prices; that is, price increases are more destabilizing in some European markets (e.g. Poland, Slovenia, Ireland, Netherlands) than comparable price decreases but vice versa also holds true in some other countries (e.g. Portugal and France). Leverage (or inverse leverage) effect in post-2008 period is relatively stronger in Portugal, France and Ireland; but its impact is quite limited in Turkey and Germany. Furthermore, although the impact of seasonality on prices is obvious, a specific pattern cannot be identified. Finally, large changes in the volatility will affect future volatilities for a relatively longer period of time in Nordic countries, Ireland and the UK while changes in current volatility will have less effect on future volatilities in Czech Republic, Russia and Turkey.
    Keywords: asymmetric volatility; price modeling; European power markets; E-GARCH, TARCH
    JEL: D44 D47 L94 Q41
    Date: 2015–08–06
  15. By: Jin Fan (School of Management, University of Science and Technology of China); Jun Li (School of Management, University of Science and Technology of China); Yanrui Wu (Business School, University of Western Australia); Shanyong Wang (School of Management, University of Science and Technology of China); Dingtao Zhao (School of Management, University of Science and Technology of China)
    Abstract: Personal carbon trading (PCT) is a downstream cap-and-trade scheme which could be used to reduce carbon emissions from the household sector. To explore the effectiveness of this scheme, it is necessary to investigate how consumers respond to allowance price change.. In this paper, a general utility optimization (GUO) model and a constant elasticity of substitution (CES) utility function are proposed to examine the price, substitution and income effects of carbon allowance price changes. It is shown that higher income consumers are more sensitive to the allowance price changes than lower income consumers. Moreover, the short-run adjustment in consumers’ consumption of electricity in response to a change in allowance price would be lower than the long-run value. According to the sensitivity analysis, downward (upward) adjustments in the elasticity of substitution result in a positive (negative) effect on price effect. The findings in this study are used to draw policy implications. Suggestions for future research are also provided.
    Date: 2016
  16. By: Ehsan Latif (Thompson Rivers University)
    Abstract: Using Canadian panel data, this study examined the impact of per capita real GDP and energy price on aggregate energy consumption in Canada. In the estimation process, this study utilized panel cointegration including panel unit root tests, panel cointegration test, fully modified ordinary least square model and dynamic ordinary least square model. To take into account of the possible cross- sectional dependence among the variables, this study used cross-sectionally augmented IPS test, Westerlund cointegration test, common correlated effects mean group estimator and common correlated effects augmented mean group estimators. The results of this study suggest that there exists long run relationship among per capita energy consumption, per capita real GDP, and energy price. The long run estimations show that per capita real GDP has a significant positive impact while energy price has a significant negative effect on per capita energy consumption.
    Keywords: Energy Consumption; Panel Data; Canada
    JEL: Q41 C23 Q48
  17. By: Arora, Vipin
    Abstract: Credit greases the wheels of oil consumption—it is prevalent in purchases of cars, trucks, and even the construction of factories. But the traditional view is that it affects oil consumption only through economic activity and the price of oil. I argue that credit is important in its own right. To make my case, I first show that an association between credit and oil consumption growth exists across countries and time. I then give a nod to the traditional view, and conclude by showing that changes in credit alter oil consumption—even after accounting for economic activity and oil prices.
    Keywords: credit; oil consumption; economic activity; VAR
    JEL: E51 F39 Q47
    Date: 2016–02–14
  18. By: Peter Maniloff (Division of Economics and Business, Colorado School of Mines)
    Abstract: This paper proposes a Bayesian learning model of regulatory enforcement. Firms exert compliance effort based on their belief about a regulator's effort level. Firms use regulatory actions to learn about the regulator and update their own compliance efforts accordingly. This theoretical model suggests that deterrence will be most effective when regulators have discretion or when firms are inexperienced. Econometric analysis of inspections of Pennsylvania oil and gas wells supports these hypothesis. This work provides a causal mechanism for the commonly observed phenomenon of general deterrence in which regulatory actions towards one firm lead other fims to increase their own compliance.
    Keywords: enforcement, deterrence, reputation oil and gas, hydraulic fracturing
    JEL: D22 K32 L51 L71 Q58
    Date: 2016–04
  19. By: Daniel Rais
    Abstract: Denver Journal of International Law and Policy 43 (4) 2015, pp. 357-378: The problem of global security of energy supply is growing in importance. TTIP negotiations represent an opportunity to improve energy security in Europe and negotiate a legal framework for bilateral trade in energy, which could serve as a model for future negotiations at a multilateral level. This paper explores some of the thorniest legal, geopolitical, and economic issues that need to be taken up by TTIP negotiators for the promotion of a secure and sustainable trade in energy between the United States and European Union. It gives an account of the most recent developments in the TTIP negotiations on energy and examines the link between a possible legal framework for energy trade under TTIP and other energy-related regional and international fora. The paper critically assesses the negotiating positions of the European Union and the United States in light of their reciprocal energy profiles and needs. It offers an overview of the critical items most likely to be on top of the TTIP agenda on energy based on a comparative analysis of energy provisions in E.U. and U.S. legislation and in light of the both parties’ interests. Finally, it discusses the main driving forces and inhibiting factors capable of facilitating or rather impeding a successful conclusion of an energy trade deal between the United States and the European Union.
    Date: 2016–03–29
  20. By: Congressional Budget Office
    Abstract: From 2005 to 2014, private firms paid $11 billion per year, on average, to the federal government for the right to produce oil and gas on federal lands. CBO analyzes eight options for changing the leasing system for oil and gas development on federal lands in order to increase federal income modestly without significantly reducing production.
    JEL: D44 H82 L71 Q38 Q48
    Date: 2016–04–19
  21. By: Rabah Arezki; Thiemo Fetzer
    Abstract: This paper provides the first empirical evidence of the newly found comparative advantage of the United States manufacturing sector following the so-called shale gas revolution. The revolution has led to (very) large and persistent differences in the price of natural gas between the United States and the rest of the world owing to the physics of natural gas. Results show that U.S. manufacturing exports have grown by about 6 percent on account of their energy intensity since the onset of the shale revolution. We also document that the U.S. shale revolution is operating both at the intensive and extensive margins.
    Keywords: manufacturing, exports, energy prices, shale gas
    JEL: Q33 O13 N52 R11 L71
    Date: 2016
  22. By: Llop Llop, Maria
    Abstract: In the input-output literature, structural decomposition analysis (SDA) has largely been used to disentangle changes in key variables over time. This paper uses the demand-driven input-output model and proposes a simple method to decompose the changes in energy gross output into different determinants. Specifically, the total changes in energy output are divided into two elements: technological changes, showing the effects of changing the technological coefficients of the input-output model, and structural changes, showing the effects of changing the final demand components. The empirical application, which is for the Catalan economy, uses two input-output tables that cover an entire decade (2001 and 2011). The results show a positive contribution of technology to increasing energy output, while the contribution of the final demand for energy is negative. In addition, the various energy activities exert a different repercussion on energy gross output changes. This highlights the importance of using detailed methods in the study of energy issues. Keywords: Energy Output, Input-Output Analysis, Structural Decomposition Analysis, Technological Coefficients, Final Demand.
    Keywords: Anàlisi d'entrada/sortida, Energia -- Producció, 332 - Economia regional i territorial. Economia del sòl i de la vivenda,
    Date: 2016
  23. By: Mohammad Kemal (Division of Economics and Business, Colorado School of Mines)
    Abstract: During the 1970s, many oil-producing countries gave National Oil Companies (NOC's) ownership rights to oil and gas resources. Following the success of Norway in managing its oil and gas resources, development institutions have tried to push oil-producing countries to change their oil governance. Over the past two decades, several countries have enacted laws that create a regulatory entity and establish the NOC only as a business entity. Thus, these NOCs now are only given access rights to explore and produce oil and gas like other international oil companies. Employing a difference-in-difference method, this paper aims to empirically investigate the impact of changes in oil governance, specifically of changes in allocation of ownership rights versus access rights, to aggregate domestic income. Using data from 35 countries in the period 1990-2012, our results suggest that a country which creates a separate regulatory entity and makes the NOC merely a business entity increases its aggregate domestic income by around 10%.
    Keywords: oil governance, access rights regulation, economic growth
    JEL: Q3 O13 L5
    Date: 2016–04
  24. By: Rini Yayuk Priyati (Business School, University of Western Australia); Rod Tyers (Business School, University of Western Australia and Research School of Economics, ANU)
    Abstract: The markets for vegetable oils have expanded significantly in recent decades in association with the diversification in their use across final consumption as food, industrial inputs and fuels. International markets for such products remain critically important for several developing countries yet they have become more integrated globally and volatility has increased as financial determinants of demand have become more prominent. This paper reviews these developments in vegetable oil and energy markets and tests for changes in their level of integration over time. It further examines the dependence of prices in these markets on financial volatility and overall economic performance, offering scenarios for vegetable oil market behaviour in response to low energy prices, tighter monetary policy and strong demand in importing regions. The results are particularly strong in response to changes in interest rates, supporting the perspective that financial determinants of demand have strengthened.
    Date: 2016
  25. By: Soren T. Anderson; James M. Sallee
    Abstract: We review what is known about the economic efficiency of fuel taxes relative to efficiency standards aimed at mitigating environmental externalities from automobiles. We present a simplified model of car choice that allows us to emphasize the relationships between fuel economy, other car attributes, and miles traveled. We focus on greenhouse gas emissions, although we note how other environmental externalities affect our conclusions. Our main conclusion—that standards are substantially less efficient than a fuel tax—is already familiar. Less familiar are points we make about the relative importance of the rebound effect, on the effects of attribute-based policies, and the implications of behavioral biases. We point to areas where we believe future research can have the greatest contribution, including work on uncertainty, heterogeneity, and empirical work in low and middle-income countries.
    JEL: H23 Q48 Q54
    Date: 2016–05
  26. By: Pablo Pintos (Universidad Pontificia Comillas and Economics for Energy); Pedro Linares (Instituto de Investigación Tecnológica, Universidad Pontificia Comillas,Harvard Kennedy School; and Economics for Energy.)
    Abstract: The European Emissions Trading System (EU ETS) is the main instrument of the European Union (EU) against climate change. This mechanism is considered, from the theoretical point of view, as the most cost-effective method to reduce greenhouse gases (GHG). However, previous studies show that the agents who participate in these markets can behave in a way which may lead to inefficient CO 2 prices, creating doubts about the effectiveness of the system. This paper analyzes these possible anomalies by modeling the EU ETS under a rational market hypothesis and comparing the results with real market transactions. For this, we have built a bottom-up model, which represents the EU ETS in an integrated way, paying particular attention to the interactions among the most emissions intensive industries. The results show the benefits of this integrated modeling approach and how it better reflects real market conditions. We also present some preliminary conclusions regarding the behavior of the agents in the ETS market.
    Keywords: Keywords: EU ETS; industry; GHG emissions; behavior modeling; costs
    JEL: Q31 Q37 Q48 Q56 Q58
    Date: 2016–02
  27. By: Stefan P. Schleicher (Wegener Center for Climate and Global Change at the University of Graz); Angela Köppl (Austrian Institute of Economic Research); Alexander Zeitlberger (Wegener Center for Climate and Global Change at the University of Graz)
    Abstract: Pursuing an evidence based approach we summarize the key elements of the European Commission’s proposal of July 2015 for a reform of the EU Emissions Trading System and offer facts about the current state of EU ETS that underline the needs for such a reform. We supply key data for understanding the current state of EU ETS and report in particular the share of freely allocated allowances in emissions for the various sectors since the start of EU ETS in 2005. This is the most relevant parameter for evaluating the stringency and cost impacts of the EU ETS on sectors and installations. We provide propositions for enhancing the allocation procedure of both free and auctioned allowances, the fundamental element in the cap and trade design of this system. We link this procedure closely to the relevant suggestions of the Commission proposal and offer extensions that can make in particular the allocation of free allowances more targeted and effective. We indicate how the impacts of free allowances can be calculated both for sectors and installations and conclude that these reform steps could reduce the administrative burden of the system.
    Keywords: EU Emissions Trading System, Reform Options, EU Commission’s Proposal
    JEL: Q53 Q54
    Date: 2016–03
  28. By: Lovcha, Yuliya; Pérez Laborda, Àlex
    Abstract: A structural multivariate long memory model of the US gasoline market is employed to disentangle structural shocks and to estimate the own-price elasticity of gasoline demand. Our main empirical findings are: 1) there is strong evidence of nonstationarity and mean-reversion in the real price of gasoline and in gasoline consumption; 2) accounting for the degree of persistence present in the data is essential to assess the responses of these two variables to structural shocks; 3) the contributions of the different supply and demand shocks to fluctuations in the gasoline market vary across frequency ranges; and 4) long memory makes available an interesting range of convergent possibilities for gasoline demand elasticities. Our estimates suggest that after a change in prices, consumers undertake a few measures to reduce consumption in the short- and medium-run but are reluctant to implement major changes in their consumption habits. Keywords: fractional integration, gasoline demand, price elasticity, structural model Classification: Q41, Q43, C32
    Keywords: Gasolina, Oferta i demanda, Sèries temporals -- Anàlisi, 33 - Economia,
    Date: 2016
  29. By: Stefan Pauliuk; Karsten Neuhoff; Anne Owen; Richard Wood
    Abstract: After the Paris Climate Agreement, it is anticipated that carbon prices will differ across regions for some time. If countries use free allowance allocation as carbon leakage protection, only a fraction of carbon prices are passed through to consumers particularly by carbon intensive materials producers. Adding a consumption charge based on benchmarks applied to the material content can reinstate the carbon price signal. The paper investigates the implications of such a consumption charge for industry and consumers based on material flow analysis and material flow cost accounting. The material‐related carbon liabilities for production, import, export, and consumption are estimated for 4000 commodity groups that contain one or more of the five bulk materials steel, aluminium, plastics, paper, and cement. Assuming an underlying carbon price of 30 Euros per ton of CO2, the total charge to European final consumers is estimated to be about 17 billion EUR. The total charges levied on imports and those waived for exports are each of similar size and roughly amount to half of the total charge to European final consumers. To reduce administrative efforts, the charge is not levied on imported products for which the value of the consumption charge compared to product price falls below a threshold. Thus administrative efforts for 77 to 83% of imports could be avoided while still 85% to 90% of import‐related carbon liabilities are included.
    Keywords: Material flow analysis, material flow cost accounting, carbon pricing, inclusion of consumption
    JEL: F18 H23 Q56
    Date: 2016
  30. By: Gabriel Di Bella; Francesco Grigoli
    Abstract: Poor performance of the electricity sector remains a drag to economic efficiency and a bottleneck to economic activity in many low-income countries. This paper proposes a number of models that account for different equilibria (some better, some worse) of the electricity sector. They show how policy choices (affecting insolvency prospects or related to rules for electricity dispatching or tariff setting), stochastic generation costs, and initial conditions, affect investment in generation and electricity supply. They also show how credible (non-credible) promises of stronger enforcement to reduce theft result in larger (smaller) electricity supply, lower (higher) government subsidies, and lower (higher) tariffs and distribution losses, which in turn affect economic activity. To illustrate these findings, the paper reviews the experience of Haiti, a country stuck in a bad equilibrium of insufficient supply, high prices, and electricity theft; and that of Nicaragua, which is gradually transitioning to a better equilibrium of the electricity sector.
    Keywords: Electricity;Low-income developing countries;Subsidies;Tariffs;Supply and demand;Haiti;Nicaragua;Cross country analysis;Econometric models;Credible and Non-Credible Promises, Economic efficiency, Economic infrastructure, Electricity Sector, Electricity Theft, Haiti, Nicaragua
    Date: 2016–04–08
  31. By: Kyle C. Meng
    Abstract: This paper develops a method for forecasting the marginal abatement cost (MAC) of climate policy using three features of the failed Waxman-Markey bill. First, the MAC is revealed by the price of traded permits. Second, the permit price is estimated using a regression discontinuity design (RDD) comparing stock returns of firms on either side of the policy's free permit cutoff rule. Third, because Waxman-Markey was never implemented, I extend the RDD approach to incorporate prediction market prices which normalize estimates by policy realization probabilities. A final bounding analysis recovers a MAC range of $5 to $18 per ton CO 2 e.
    JEL: G14 Q52 Q54
    Date: 2016–05
  32. By: Aragon,Fernando M.; Miranda Montero,Juan Jose; Oliva,Paulina
    Abstract: This paper examines the effect of air pollution on labor supply in Lima, Peru. It focuses on fine particulate matter (PM2.5), an important pollutant for health according to the medical literature, and shows that moderate levels of pollution reduce hours worked for working adults. The research design takes advantage of rich household panel data in labor outcomes to address omitted variables and allows investigation of whether the response to air pollution is non-linear. The analysis finds that the effect of moderate pollution levels on hours worked is concentrated among households with susceptible dependents, that is small children and elderly adults, while the highest concentrations affect all households. This suggests that caregiving is likely a mechanism linking air pollution to labor supply at moderate levels. Further evidence of this mechanism is provided using DHS data on children morbidity for the same time period. Finally, no evidence is found of intra-household attenuation behavior. For instance, there is no re-allocation of labor across household members, and earnings decrease with air pollution.
    Keywords: Air Quality&Clean Air,Brown Issues and Health,Health Monitoring&Evaluation,Environmental Economics&Policies,Population Policies
    Date: 2016–04–28
  33. By: Congressional Budget Office
    Abstract: In fiscal year 2015, the federal government supported the development, production, and use of fuels and energy technologies through tax preferences totaling $15.8 billion and spending by the Department of Energy totaling $5.4 billion.
    JEL: H23 O32 Q20 Q30 Q40 Q50
    Date: 2015–11–18
  34. By: Doruk Iris (School of Economics, Sogang University, Mapo-gu, Seoul); Alessandro Tavoni (Grantham Research Institute on Climate Change and the Environment, London School of Economics, London)
    Abstract: We study the impact of loss-aversion and the threat of catastrophic damages, which we jointly call threshold concerns, on international environmental agreements. We aim to understand whether a threshold for dangerous climate change is as an effective coordination device for countries to overcome the global free-riding problem and abate sufficiently to avoid disaster. We focus on loss-averse countries negotiating either under the threat of either high environmental damages (loss domain), or low damages (gain domain). Under symmetry, that is when countries display identical degrees of threshold concern, we show that such beliefs have a positive effect on reducing the emission levels of both signatories to the treaty and non-signatories, leading to higher global welfare and weakly larger coalitions of signatories. We then introduce asymmetry, by allowing countries to differ in the degree of concern about the threat of disaster. We show that stable coalitions are mostly formed by the countries with higher threshold concern. When enough countries having no threshold concern could cause the coalition size to diminish, regardless of the other countries have strong or mild threshold concerns.
    Keywords: Catastrophic Climate Change, Threshold, Loss-Aversion, International Environmental Agreements, Coalition Formation Game
    JEL: D0 D03 Q5 Q50 Q58
    Date: 2016–03
  35. By: Huiban, J.P.; Mastromarco, C.; Musolesi, A.; Simioni, M.
    Abstract: This paper attempts to estimate the impact of pollution abatement investments on the production technology of firms by pursuing two new directions. First, we take advantage of recent econometric developments in productivity and efficiency analysis and compare the results obtained with two complementary approaches: parametric stochastic frontier analysis and conditional nonparametric frontier analysis. Second, we focus not only on the average effect but also on its heterogeneity across ?rms and over time and search for potential nonlinearities. We provide new results suggesting that such an effect is heterogeneous both within ?rms and over time and indicating that the effect of pollution abatement investments on the production process is not monotonic. These results have relevant implications both for modeling and for the purposes of advice on environmentally friendly policy. ....French Abstract : Cet article estime l’impact des investissements anti-pollution sur la technologie en suivant deux nouvelles directions. Premièrement, il s’inspire de travaux économétriques récents en analyse de la productivité et de l’efficacité et compare les résultats obtenus en utilisant deux approches complémentaires : l’approche paramétrique des frontières stochastiques de production et celle non paramétrique de frontières de production. Deuxièmement, l’analyse de se concentre plus sur le seul comportement moyen mais s’intéresse à l’hétérogénéité des effets des investissements anti-pollution entre les firmes dans le temps. Une attention particulière est ainsi donnée à la détection de non linéarités. Les résultats empiriques apportent un éclairage nouveau sur ces effets en montrant qu’ils sont hétérogènes à la fois entre les firmes et dans le temps et qu’ils ne sont pas monotones. De tels résultats ont une implication en termes non seulement de modélisation des effets des investissements anti-pollution sur la technologie mais aussi de recommandations pour la politique environnementale de réduction des émissions polluantes des firmes.
    JEL: C14 C23 D24 Q50
    Date: 2016
  36. By: Claudio Morana (Università di Milano Bicocca, CeRP-Collegio Carlo Alberto and Rimini Centre for Economic Analysis)
    Abstract: The paper investigates 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 (Q.E.). Yet, in so far as Q.E 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.
    Keywords: Oil Price Shocks, Oil Price-macroeconomy Relationship, Risk Factors, Semiparametric Dynamic Conditional Correlation Model, Time-varying Parameter Models
    JEL: E30 E50 C32
    Date: 2016–03
  37. By: Olufolajimi Oke; Daniel Huppmann; Max Marshall; Ricky Poulton; Sauleh Siddiqui
    Abstract: We present a medium-term market equilibrium model of the North American crude oil sector via which we develop a scenario analysis to investigate strategies to mitigate the environmental and public-safety risks from crude-by-rail transportation across the United States. The model captures crude oil movements across rail- roads, pipelines and waterways, while distinguishing between light and heavy crude qualities. We find that restricting rail loads or increasing pipeline capacity from areas driving production will significantly reduce rail movements. However, lifting the United States crude oil export ban in isolation will only increase rail transportation volumes. We show that an integrated policy of targeted rail caps, pipeline investments and lifting the export ban sustainably addresses medium-term crude-by-rail risks in the United States.
    Keywords: Crude-by-rail, market equilibrium, mixed complementarity problem, transportation capacity, infrastructure investment
    JEL: Q31 Q38 L71 C61 C72
    Date: 2016
  38. By: Werner, Max (Helmut Schmidt University, Hamburg); Eißing, Klaus (Olympus AG); Langton, Sebastian (GUS Group)
    Abstract: This research estimates the shared value created by constructing a hypothetical Hyperloop to transport cargo along 300 km in Northern Germany. Following Porter-Kramer (2011), we identified and evaluated eight factors that create shared value: travel speed, operating costs, safety, noise pollution, air pollution, climate effect/carbon footprint, separation effect/ property efficiency, and maintenance. Using official data compiled by several German institutes and organizations, we conducted comparative analysis to quantify and compare the abovementioned factors for Hyperloop and over-the-road cargo transport in Germany. Then, we monetized the individual and collective benefits of the shared value created by Hyperloop replacing a significant share of cargo transported by truck. Our findings indicate that the hypothetical Hyperloop project in Northern Germany would create €660 to €900 million of shared value annually. Our research method establishes a framework for assessing future transportation projects like Hyperloop, and our findings can be generalized to industrialized nations beyond Germany.
    Keywords: Transportation; Technology; Innovation; Logistic; Shared Value; Cargo transportation
    JEL: L99 Q55 R49
    Date: 2016–05–11
  39. By: Karimu, Amin (CERE and the Department of Economics, Umeå University); Brännlund, Runar (CERE and the Department of Economics, Umeå University); Lundgren, Tommy (CERE and the Department of Economics, Umeå University); Söderholm, Patrik (Department of Business Administration, Technology and Social Sciences, Economics Unit, Luleå University of Technology)
    Abstract: This paper analyzes the determinants of energy intensity and tests for convergence across 14 Swedish industrial sectors. The analysis builds on a non-parametric regression analysis of an intensity index constructed at the industry sector level as well as indexes constructed from a decomposition of this index. The latter isolates two key determinants of changes in energy intensity and convergence patterns: energy efficiency improvements and changes in economic output (activity). The empirical analysis relies on a detailed sectorial dataset covering the period 1990-2008. The findings indicate that input prices, including the price of energy, have been significant determinants of energy intensity in the Swedish industrial sectors. This effect can primarily be attributed to the efficiency channel and with a less profound influence from the activity channel. These results suggest that a well-designed tax system could be effective in delivering significant energy efficiency improvements in Swedish industry. We also find evidence of energy intensity convergence among the industrial sectors, and this primarily stems from the activity channel rather than from the efficiency channel. The above implies that during the studied time period Swedish industry shifted away from more to less energy-intensive production, in part perhaps driven by moving energy-intensive manufacturing abroad.
    Keywords: energy intensity; convergence; index numbers; decomposition; industrial sectors.
    JEL: C14 O13 O47 Q43
    Date: 2016–03–30
  40. By: Yao Li (School of Management, University of Science and Technology, China); Jin Fan (School of Management, University of Science and Technology, China); Dingtao Zhao (School of Management, University of Science and Technology, China); Yanrui Wu (Business School, University of Western Australia); Jun Li (School of Management, University of Science and Technology, China)
    Abstract: This paper proffers a tiered gasoline pricing (TGP) method from a personal carbon trading (PCT) perspective. An optimization model of personal carbon trading is proposed, and then, an equilibrium carbon price is derived according to the market clearing condition. Based on the derived equilibrium carbon price, this paper proposes a calculation method of tiered gasoline pricing. Then, sensitivity analyses and consumers’ surplus analyses are conducted. It can be shown that a rise in gasoline price or a more generous allowance allocation would incur a decrease in the equilibrium carbon price, making the first tiered price higher, but the second tiered price lower. It is further verified that the proposed tiered pricing method is progressive because it would relieve the pressure of the low-income groups who consume less gasoline while imposing a greater burden on the high-income groups who consume more gasoline. Based on these results, implications, limitations and future studies are provided.
    Date: 2016
  41. By: Ahmed, Khalid
    Abstract: In the light of urban environmental transition (UET) theory, this study explores the relationship between carbon dioxide (CO2) emissions, economic growth, urbanization and trade openness using updated Chinese data over the extended period (1971-2013). After confirming that all the underlying series are stationary and adjusted with single structural break point, the results of auto-regressive distributed lag (ARDL) bounds test approach to cointegration confirms the cointegration between the variables. The long- and short-run dynamics reveal that urbanization reduces the CO2 emissions both in short- and long-run, but statistically insignificant. These findings contrast with previous literature and sounds the validation of urban environmental transition theory (UET). However, economic growth and trade openness contribute environmental degradation both in long- and short-run paths. The causality analysis reports bi-directional causal link between trade openness and urbanization in the short-run. However, in the long-run, economic growth ranger cause carbon dioxide emissions, urbanization and trade openness. Similarly, trade openness Granger cause carbon dioxide emissions, economic growth and urbanization in the long-run. The overall results imply that rural to urban immigration is still mostly driven by exports related manufacturing sectors. In addition, the higher GDP also contributes to urbanization as a feedback effect. In the end, stability of the model is also checked, model found stable and findings are suitable for environmental policy control use.
    Keywords: Carbon dioxide; Urbanization; Long-run dynamics; Multiple structural breaks; Bounds test; China.
    JEL: Q5 Q54 Q56
    Date: 2015
  42. By: Jaco Pieter Weideman and Roula Inglesi-Lotz
    Abstract: South Africa has been struggling to cope with its energy demand. In order to remedy the problem, the government of South Africa has committed itself to pursuing renewable energy as a viable alternative to traditional sources such as fossil fuels. The aim of this study is to understand whether or not the policies pursued by the South African government in the period 1990-2010 have had any effect on the behaviour of consumers and producers of renewable energy. To this end, the Bai & Perron (1998, 2003) break test methodology is employed to understand how renewable energy production and consumption series have evolved over this period. Deviations from the base case are then explained in the South African economic and policy context.
    Date: 2016
  43. By: Johnston, Dylan; Whitacre, Brian
    Keywords: Energy Economics, Rural Economics, Oil & Natural Gas, Community/Rural/Urban Development, Resource /Energy Economics and Policy,
    Date: 2016
  44. By: Sumana Chaudhuri (Durgadevi Saraf Institute of Management Studies); Shovan Ray (Indira Gandhi Institute of Development Research)
    Abstract: The paper is a case study of Vadinar refinery in Gujarat. It examines the costs and benefits associated with one of the world's mega refinery projects highlighting the welfare impacts on society. The paper briefly examines whether refining at Vadinar by Essar is of net economic benefit to the region, state and the country by constructing a Social Cost Benefit Analysis of the Vadinar Refinery Project. The paper analyses the local-level economic impacts (on-site labor impacts, local revenue and supply chain impacts and induced impacts) and jobs supported by Vadinar refinery construction and ongoing operations. The paper also analyses the regional (state and country) level economic impacts; multiplier effect of income, tax and savings generated as a result of the refinery operations, including other externalities associated with the project. There is abundance of scope to reflect the strategic food and oil security of India from the macroeconomic perspective; the gradual increase in investor and consumer confidence with respect to self-reliance in production and consumption of oil and natural gas resources in the country and the broader social impact of the project, which may be taken up in subsequent research. A sequel to this paper will explore an approach to integrating the methods with a CGE model framework.
    Keywords: Social Cost Benefit Analysis, Economic Impact, Externalities, Oil Refinery
    JEL: B41 D60 D61 D62 H23 H43 L71 O22 Q43
    Date: 2016–04
  45. By: Rimawan Pradiptyo (Faculty of Economics and Business, Universitas Gadjah Mada); Gumilang Aryo Sahadewo (Faculty of Economics and Business, Universitas Gadjah Mada)
    Keywords: subsidy, Indonesia, fuel
    Date: 2016–04
  46. By: Sang-Chul Suh (Department of Economics, University of Windsor); Yuntong Wang (Department of Economics, University of Windsor)
    Abstract: We consider a pollution permit sharing problem in which a ?nite number of countries, each identi?ed by a unique technology that transforms the pollution permits into an output, share a given amount of permits. We de?ne a Pollution Permit Sharing (PPS) game that assigns to each coalition of countries the maximal value of output they can generate collectively with their technologies and permits available to them. We show that the game is totally balanced. We also show that, for the well-known Cap and Trade (CAT) mechanism, namely the competitive equilibrium allocation which generates an efficient allocation of the permits, its corresponding (net) output distribution is in the core of the PPS game. We consider two other coalitional games whose de?nitions depend on the availability of either the total permits or the technologies. The Aspiration Upper Bound with given Permits (AUBP) game assigns to each coalition the maximal value they can generate by using the technologies available from all countries, but only with the permits available to the coalition. And the Aspiration Upper Bound with given Technologies (AUBT) game assigns to each coalition the maximal value they can generate using only the technolo-gies available to the coalition with the permits available from all countries. We show that the core of the AUBP game is nonempty. More importantly, we show that the competitive equilibrium allocation violates the above two aspiration upper bound restrictions. Finally, we suggest the Shapley value as one of the possible alternative solutions to the permit sharing problem.
    Keywords: Pollution Permits; Cap and Trade; Cooperative Games; Aspiration Upper Bounds.
    JEL: C71 D60 Q20
    Date: 2016–05–03
  47. By: Gabrielle McGrath (Business School, University of Western Australia); Kelly Neill (Business School, University of Western Australia)
    Abstract: There is considerable interest in understanding the proportion of resources income that accrues to Australian households. Yet few such estimates, if any, exist. This paper quantifies the share of before tax profits from the Western Australian natural gas industry that remains in Australia and in the state. In contrast to previous studies, which narrowly focus on domestic ownership of resources companies, we focus on the share of profits remaining in Australia, taking tax and royalty payments into account. This aids an understanding of how the development of natural resources contributes to Australian living standards. We also estimate the share of profits from gas consumers that remain in the country, to give a fuller picture of Australian involvement in the Western Australian gas market. A detailed firm-by-firm database is constructed and used to calculate these shares. Around 47 per cent of before tax profits generated by WA gas producers are estimated to have accrued to Australian households in 2014. Gas projects currently under construction in the state rely heavily on foreign investment, and once these projects are operational, this share could be 34 per cent. Similarly, 45 per cent of before tax profits from gas users in the state are estimated to accrue to Australian households.
    Date: 2016
  48. By: Cuicui Chen; Richard J. Zeckhauser
    Abstract: A central authority, possessing tax and expenditure responsibilities, can readily provide an efficient level of a public good. Climate change mitigation lacks a central authority. Thus, voluntary arrangements must replace coercive arrangements; significant under-provision must be expected. Potential contributors have strong incentives to free ride or ride cheaply. The players – the many nations of the world – are quite disparate. They thus frame negotiations from their own standpoints, making stalemate likely. Moreover, the focal-point solution where contributions are proportional to benefits clashes with the disproportionate cheap-riding incentives of little players. Our proposed solution, the Cheap-Riding Efficient Equilibrium (CREE), defines the relative contributions of players of differing size (or preference intensity) to reflect cheap riding incentives, yet still achieves Pareto optimality. CREE establishes the Alliance/Nash Equilibrium as a base point. From that point it proceeds to the Pareto frontier by applying the principles of the Lindahl Equilibrium (a focal point) or the Nash Bargaining Solution (a standard approach). We test the Alliance Equilibrium model using nations' Intended Nationally Determined Contributions at the Paris Climate Change Conference. As hypothesized, larger nations made much larger pledges in proportion to their Gross National Incomes. We apply our theory to examine the Nordhaus Climate Club proposal.
    JEL: C72 F53 H87
    Date: 2016–05
  49. By: Sharat Ganapati (Dept. of Economics, Yale University); Joseph S. Shapiro (Cowles Foundation, Yale University); Reed Walker (University of California, Berkeley, IZA, & NBER)
    Abstract: This paper studies how increases in energy input costs for production are split between consumers and producers via changes in product prices (i.e., pass-through). We show that in markets characterized by imperfect competition, marginal cost pass-through, a demand elasticity, and a price-cost markup are sucient to characterize the relative change in welfare between producers and consumers due to a change in input costs. We find that increases in energy prices lead to higher plant-level marginal costs and output prices but lower markups. This suggests that marginal cost pass-through is incomplete, with estimates centered around 0.7. Our confidence intervals reject both zero pass-through and complete pass-through. We find heterogeneous incidence of changes in input prices across industries, with consumers bearing a smaller share of the burden than standards methods suggest.
    Date: 2016–05

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