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on Energy Economics |
| By: | Heesen, Florian (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)) |
| Abstract: | This paper separates technological from human capabilities with regard to the operating of advanced heating systems. Our study shows that attitudes towards using such systems are equally influenced by a system's ease of use and its related thermal comfort as perceived by the user. However, the user does not perceive either of these influences directly; they are both mediated through the latent construct “perceived usefulness”. Our results reveal that in order to maximize the technology acceptance of advanced heating systems, the focus of interventions needs to be a twofold one. It is not only perceived thermal comfort – in its technological capacity of a delivered energy service – which is relevant; an easy-to-use system is equally important. The underlying psychological theory of this paper is that of the Theory of Planned Behavior (TPB). Using an adapted version of the technology acceptance model (TAM) – the energy TAM (eTAM) – we draw on questionnaire data from a field experiment conducted in Germany. The statistical inference is based on a partial least squares patch modeling (PLS-PM) approach. |
| Keywords: | heat energy consumption; technology acceptance; rebound effect; perceived utility |
| JEL: | D12 D81 O33 Q47 R22 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2014_025&r=ene |
| By: | Kojima, Michikazu; Watanabe, Mariko |
| Abstract: | This paper aims to identify the magnitude of energy efficiency improvement, which has been promoted through energy efficiency labeling and the Minimum Energy Performance Standard, and to compare this against the increase in the number of products and the average increase in cooling capacity. Air conditioners (ACs) are one of the major contributors to energy consumption in a household. To assess the magnitude of this factor, we developed a formula to decompose total energy consumption from ACs into the number of ACs, their average cooling capacity, and energy efficiency. In the case of ACs in Thailand, energy efficiency improvement has offset the increase in the average AC cooling capacity. However, energy consumption from ACs increases with the number of ACs. |
| Keywords: | Energy, Household, Energy Efficiency, Standard and Labeling, Thailand |
| JEL: | D19 Q49 Z00 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper577&r=ene |
| By: | Benjamin Volland (Institute of economic research IRENE, Faculty of Economics, University of Neuchâtel, Switzerland) |
| Abstract: | Improvements in energy efficiency are increasingly seen as a key strategy to reduce energy consumption in the domestic sector. Yet, concerns are mounting that households rebound, meaning that they adapt to efficiency gains by increasing their demand, as efficiency improvements reduce relative costs of energy. This study investigates the elasticity of household energy consumption for space heating with respect to changes in household heating efficiency. We account for the simultaneity of energy efficiency and energy consumption by applying an instrumental variable approach. Using data from the 2009 Residential Energy Consumption Survey, we document that while there is substantial ‘takeback’ among US households, rebound rates are far too small to dominate energy savings from these improvements. Estimates of the direct rebound effect in domestic heating are about 30%. Moreover, we find no evidence for a substantial indirect rebound at the household level. However, we document that the degree of ‘takeback’ increases in energy prices, suggesting that price-based and efficiency-based policy instruments may counteract each other. |
| Keywords: | Energy efficiency, rebound effect, space heating. |
| JEL: | D12 Q51 Q41 R22 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:16-01&r=ene |
| By: | Jaco P. Weideman (Department of Economics, University of Pretoria); Roula Inglesi-Lotz (Department of Economics, University of Pretoria) |
| 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 and 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. |
| Keywords: | Renewable energy, policy analysis, Bai and Perron, breakpoint |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201636&r=ene |
| By: | Gawel, Erik; Lehmann, Paul; Purkus, Alexandra; Söderholm, Patrik; Witte, Katherina |
| Abstract: | In order to achieve cost-effective RES-E deployment it is often argued that technology-neutral support schemes for renewables are indispensable. Against this background, RES-E support policies making widely use of technology differentiation in remuneration settings, e.g. across the EU, are frequently criticized from a theoretical point of view. However, in this paper we provide a systematic critique of the technology neutrality concept as a foundation for designing policy support schemes in the RES-E technology field. Specifically, the main objective of the paper is to scrutinize the arguments for technology-neutrality, and discuss three conceptual arguments for why technology-specific support schemes could in fact help minimize the societal costs of reaching future RES-E targets. We also briefly address different political economy concerns, which could constrain the choice of cost-effective policy support schemes, and that have to be taken into account for economic policy advice. For empirical illustration of the key arguments we refer to the case of German RES-E support. |
| Keywords: | renewable energy technologies,technology-specific support,market failures,Germany |
| JEL: | O38 Q42 Q48 Q55 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ufzdps:42016&r=ene |
| By: | Alsayyed, Nidal; Zhu, Weihang |
| Abstract: | Framing sustainable environmental laws in regulating Natural Capital funds for Renewable Energy (RE) is central to the discussion on sustainability strategies. Natural Capital is that limited form of capital assets or service (tangible or intangible) that satisfies basic and social conditions for human existence and protection. This paper proposes an analytical regulatory model utilizing Neural Network (NN) of substantive and procedural issues framing the regulatory parameters associated with Natural capital funding. The model proposed recognizes the fact that the purpose of any legal system is not only to assign duties and responsibilities in protecting rights of individuals and groups in their respective endeavors; but for effective modelling of natural structures as well. Through a preliminary discussion of European and USA markets’; regulatory systems with a focus on market and social values, it attempts to discern a practical model to formulate social and regulatory measures on financial structures and energy matters that are considered rights and obligations of individuals and organizations in conducting their businesses. As it has been a subject of academic, government, and public discussions with intense controversies, finding the differences of methodological, and analytical foundation will most probably lead to deeper insight into regulating funds for renewable energy. |
| Keywords: | Natural Capital, sustainable, ISO: International Organization for Standardization, climate change, Neural Network (NN) |
| JEL: | N7 O13 P28 Q0 Q42 Q47 Q5 Q56 |
| Date: | 2016–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71321&r=ene |
| By: | Daniel Rais |
| Abstract: | Abstract This paper outlines the interlinkages between the water policies integration objective and the decarbonisation objective. It concludes that low-carbon renewable electricity policy scenario may have negative externalities on the water body under the existing regulatory framework in the EU. The analysis is mainly dealt within the framework of the European Union’s Renewable Energy Directive of 2009 (RES Directive). |
| Date: | 2015–02–09 |
| URL: | http://d.repec.org/n?u=RePEc:wti:papers:855&r=ene |
| By: | Crampes, Claude; Moreaux, Michel |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:ide:wpaper:30421&r=ene |
| By: | Paunić, Alida |
| Abstract: | Current large energy consumer potential of Asian and Pacific region as well as rise in GDP, population indicates further potential for energy needs. Part of solution at least in China is energy import. While electricity production so far is done in China and Australia with coal that causes high CO2 emissions proposed project Solar Australia suggests renewable production from Concentrated Solar. Negative impact of CO2 is hindered with competitive technology of solar from China, innovative technical solution in transmission process and incorporating environmental and social benefits and costs into calculation in order to provide a solution to high emissions in Asia Pacific Region. |
| Keywords: | energy, solar, renewable |
| JEL: | Q2 Q20 Q21 |
| Date: | 2016–05–09 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71201&r=ene |
| By: | Shrimali, Gireesh; Konda, Charith; Farooquee, Arsalan Ali; Nelson, David |
| Abstract: | Auctions for renewable energy are gaining popularity around the world. In this context, we examined 20 renewable energy auctions in India and elsewhere to answer two questions: first, have auctions been effective; and second, how can they be designed to achieve India’s renewable energy targets? We found that auctions are almost always cost-effective, with savings up to 58% from baseline feed-in tariffs. However, auctions have not resulted in adequate deployment, with only 17% of the auctions with greater than 75% deployment. We then examined how to best design auctions by assessing seven major risks, and found the following: first, for every 1% increase in total risk, deployment effectiveness decreased by 2 percentage points; second, project specific risks have 60% greater impact than auction specific risks; and third, deployment effectiveness is most affected by auction design, completion, and financial risks. We also found that right policy design can lower these risks to improve both deployment and cost effectiveness. |
| Keywords: | Renewable energy auctions, competitive bidding, electricity auctions, effectiveness of auctions |
| JEL: | Q4 Q5 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71211&r=ene |
| By: | Anadon, Laura Diaz; Baker, Erin; Bosetti, Valentina; Reis, Lara Aleluia |
| Abstract: | Mitigating climate change will require innovation in energy technologies. Policy makers are faced with the question of how to promote this innovation, and whether to focus on a few technologies or to spread their bets. We present results on the extent to which public R&D might shape the future cost of energy technologies by 2030. We bring together three major expert elicitation efforts carried out by researchers at UMass Amherst, Harvard, and FEEM, covering nuclear, solar, Carbon Capture and Storage (CCS), bioelectricity, and biofuels. The results show experts believe that there will be decreasing returns to R&D and report median cost reductions around 20% for most of the technologies at the R&D budgets considered. Although the returns to solar and CCS R&D show some promise, the lack of consensus across studies, and the larger magnitude of the R&D investment involved in these technologies, calls for caution when defining what technologies would benefit the most from additional public R&D. Indeed, the wide divergence of opinions suggests that it is still too early to pick winners and that a broad portfolio of investments may be the best option. |
| Keywords: | R&D Investments, Energy Technology, Expert Elicitation, Risk and Reward, Low-carbon Innovation, Research and Development/Tech Change/Emerging Technologies, Q40, |
| Date: | 2016–03–18 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemmi:232924&r=ene |
| By: | Francis Bismans; Igor N. Litvine |
| Abstract: | This paper deals with so-called feedforward neural network model which we consider from a statistical and econometric viewpoint. It was shown how this model can be estimated by maximum likelihood. Finally, we apply the ANN methodology to model demand for electricity in South Africa. The comparison of forecasts based on a linear and ANN model respectively shows the usefulness of the latter. |
| Keywords: | Artificial neural networks (ANN), electricity consumption, forecasting, linear and non-linear models, recessions. |
| JEL: | C45 C53 E17 E27 Q43 Q47 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2016-28&r=ene |
| By: | B. Sudhakara Reddy (Indira Gandhi Institute of Development Research) |
| Abstract: | There is a growing concern among policy makers about how electricity is generated and consumed in the context of energy security and global climate change. In such a scenario, renewable energy sources, especially solar and wind energy, are likely to play a significant role in providing reliable and sustainable electricity to consumers as they are locally available and their carbon foot print is small. The future share of power by renewables will greatly depend on the expected generation cost and the government's support to investments in the sector. Using levelised cost approach, capital cost, operating and fuel costs of major electricity generation technologies are compared. Then, a forecast is made for electricity generation in India, using non-linear Bass diffusion model over 15-year horizon, until 2030 for all major energy technologies, viz., coal, natural gas, hydro, solar, wind, and biomass. The results show how present trends and future forecasts of electricity-generating technologies change the electricity generation mix, and how solar and wind power may increase their share in the total generation. However, fossil fuels will continue to remain competitive relative to renewables due to their cost advantage. The main issue considered here is whether each energy technology has reached its maximum penetration level. This helps set out a path for renewable energy technology diffusion in the Indian power sector. |
| Keywords: | Cost, Diffusion, Power, Renewables, Technology |
| JEL: | P28 Q41 Q42 Q48 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ind:igiwpp:2016-014&r=ene |
| By: | Nina Boogen (ETH Zurich, Switzerland); Souvik Datta (ETH Zurich, Switzerland); Massimo Filippini (ETH Zurich, Switzerland) |
| Abstract: | In this paper we use panel data from a survey conducted on 30 Swiss utilities to estimate the impact of demand-side management (DSM) activities on residential electricity demand using DSM spending and an energy efficiency score. Using the variation in DSM activities within utilities and across utilities over time we identify the impact of these programs and find that their presence reduce per customer residential electricity consumption by around 5%. If we consider monetary spending, the effect of a 10% increase in DSM spending causes around a 0.14% reduction in per customer residential electricity consumption. The cost of saving a kilowatt hour is around CHF 0.04 while the average cost of producing and distributing electricity in Switzerland is around CHF 0.18 per kilowatt hour. We conclude that current DSM practices in Switzerland have a statistically significant effect on reducing the demand for residential electricity. |
| Keywords: | Residential electricity, demand-side management, energy efficiency score, difference-in-differences, Switzerland |
| JEL: | C33 C36 Q41 Q48 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:16-247&r=ene |
| By: | Alexander Kunith; Roman Mendelevitch; Dietmar Goehlich |
| Abstract: | The deployment of battery-powered electric bus systems within the public transportation sector plays an important role to increase energy efficiency and to abate emissions. Rising attention is given to bus systems using fast charging technology. This concept requires a comprehensive infrastructure to equip bus routes with charging stations. The combination of charging infrastructure and bus batteries needs a reliable energy supply to maintain a stable bus operation even under demanding conditions. An efficient layout of the charging infrastructure and an appropriate dimensioning of battery capacity are crucial to minimize the total cost of ownership and to enable an energetically feasible bus operation. In this work, the central issue of jointly optimizing the charging infrastructure and battery capacity is described by a capacitated set covering problem. A mixed-integer linear optimization model is developed to determine the minimum number and location of required charging stations for a bus network as well as the adequate battery capacity for each bus line of the network. The bus energy consumption for each route segments is determined based on individual route, bus type, traffic and other information. Different scenarios are examined in order to assess the influence of charging power, climate and changing operating conditions. The findings reveal significant differences in terms of needed infrastructure depending on the scenarios considered. Moreover, the results highlight a trade-off between battery size and charging infrastructure under different operational and infrastructure conditions. The paper addresses upcoming challenges for transport authorities during the electrification process of the bus fleets and sharpens the focus on infrastructural issues related to the fast charging concept. |
| Keywords: | Electric bus, charging infrastructure, fast charging, cost optimization, capacitated set-covering problem |
| JEL: | C61 L92 R42 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1577&r=ene |
| By: | Medhi Ben Slimane; Marilyne Huchet-Bourdon; Habid Zitouna |
| Abstract: | The ability of a country to import food depends on several factors. Considering food security as a priority issue, we focus in this paper on the FDI inflows and the energy price as determinants of food import dependency. Indeed, on the one hand FDI as a substitute/complement to trade flows could impact the depending nation. On the other hand, energy price affects production and transport costs, thereby impacting international trade in food productions. To investigate this relationship, we follow the methodology of Love and Zicchino (2006) by estimating a panel vector autoregressive model (PVAR) of 40 developing countries for the period between 1990 and 2012. The panel is split into two sub-samples. We found that FDI inflows explain food import dependency in low and lower middle-income countries and the energy price proxy influences food import dependency in upper-middle income countries. The impulse response functions’ results are close to those from panel VAR, where an increase in FDI inflows or in energy price leads to more food import dependency in low and lower-middle income countries or in upper-middle income countries, respectively. |
| Keywords: | FDI, energy price, food security, Panel VAR, developing countries, food import dependency |
| JEL: | F1 Q4 O1 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:rae:wpaper:201604&r=ene |
| By: | Siddique, Hafiz Muhammad Abubakar; Majeed, Muhammad Tariq |
| Abstract: | This study contributes to the literature by exploring the impact of energy consumption, trade and financial development on growth in five South Asian countries over 1980-2010. The panel co-integration approach is employed to examine the long run association and granger causality analysis for direction. The PMG estimation approach is used to address the problem of heterogeneity. Panel co-integration test expresses a long run relationship between growth, energy, trade and financial development. Our findings express that financial development, energy and trade positively affect the economic growth. In long run, bidirectional relationship exists among growth and energy, unidirectional causality is running from trade and financial development to growth. |
| Keywords: | economic growth, energy consumption, south asia |
| JEL: | A10 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71245&r=ene |
| By: | Anna Matas Prat (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Josep Lluís Raymond Bara (Departament d'Economia i Història Econòmica, Universitat Autonoma de Barcelona); Jorge Andrés Domínguez Moreno (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona) |
| Abstract: | This paper estimates the role that technological change and car characteristics have played in the rate of fuel consumption of vehicles over time. Using data from the Spanish car market from 1988 to 2013, we estimate a reduced form equation that relates fuel consumption with a set of car characteristics. The results for the sales-weighted sample of vehicles show that energy efficiency would have improved by 30% and 42% for petrol and diesel cars respectively had car characteristics been held constant at 1988 values. However, the shift to bigger and more fuelconsuming cars reduced the gains from technological progress. Additionally, using the results of the fuel equation we show that, besides a natural growth rate of 1.1%, technological progress is affected by both the international price of oil and the adoption of mandatory emission standards. Moreover, according to our estimations, a 1% growth in GDP would modify car characteristics in such a way that fuel consumption would increase by around 0.23% for petrol cars and 0.35% for diesel cars. |
| Keywords: | fuel efficiency, technological change, car characteristics |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:uab:wprdea:wpdea1608&r=ene |
| By: | Andor, Mark Andreas; Frondel, Manuel; Guseva, Maja; Sommer, Stephan |
| Abstract: | Im Zuge der Energiewende schreitet der Ausbau der alternativen Stromerzeugungsanlagen in Deutschland mit hohem Tempo voran. Damit verbunden sind steigende Umlagen für die Förderung der Erneuerbaren und zunehmende Entgelte für den unvermeidlichen Ausbau der Stromnetze und somit weiter zunehmende Strompreise. Vor diesem Hintergrund untersucht der vorliegende Beitrag die Zahlungsbereitschaft der privaten Haushalte für grünen Strom auf Basis der Ergebnisse zweier Erhebungen unter jeweils mehr als 6 000 Haushalten des forsa-Haushaltspanels aus den Jahren 2013 und 2015. Es zeigt sich, dass zwar die grundsätzliche Befürwortung für die Förderung erneuerbarer Energien weiter gestiegen ist, sich die Zahlungsbereitschaft für reinen Grünstrom gegenüber 2013 jedoch verringerte. Angesichts dieser Ergebnisse stellt sich die Frage nach der Akzeptanz der Bürger für die im Zuge der Energiewende weiter wachsenden Belastungen. |
| Keywords: | EEG-Umlage,erneuerbare Energien,hypothetische Zahlungsbereitschaft |
| JEL: | D12 Q21 Q41 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwimat:105&r=ene |
| By: | Matthew Doyle (Division of Economics and Business, Colorado School of Mines); Harrison Fell (Division of Economics and Business, Colorado School of Mines) |
| Abstract: | Switching from coal-fired to natural gas-fired generation and increasing the thermal efficiency (energy generated per unit of energy burned) of fossil fuel fired electricity generation plants has been identified as ways of achieving meaningful emission reductions. In this study, we examine the fuel-price responsiveness across gas plant technologies and across the market structures in which the plants operate. We find that there are significant differences in the generation and efficiency responses of gas plants to fuel prices across generation technologies and market structures. Specifically, our results indicate that, regardless of market structure, generation from natural gas combined cycle (NGCC) plants is responsive to both coal and gas prices, but that generation from simple cycle (NGSC) plants only respond to gas prices. On the other hand, with respect to efficiency, we generally find that only NGCC plants operating in deregulated regions show statistically significant efficiency improvements in response to coal price increases and that, generally, neither NGCC or NGSC plants, regardless of market structure, respond in any significant way to gas prices. Finally, using these parameter estimates, we calculate emissions savings from efficiency improvements and fuel-switching possibilities. |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:mns:wpaper:wp201603&r=ene |
| By: | Dewenter, Ralf; Heimeshoff, Ulrich; Lüth, Hendrik |
| Abstract: | Increasing horizontal as well as vertical transparency in oligopolistic markets can be advantageous for consumers, due to reduced search costs. However, market transparency can also affect incentives to deviate from collusive agreements and the punishment by rival firms in the market. Using a panel of 27 European countries, we analyze the impact of increased market transparency via the introduction of a market transparency unit for fuels in Germany. Applying a difference-in-differences approach, we find evidence that both gasoline and diesel prices have increased. While consumers may be better off using a retail price app for fuels, gas stations are also able to compare prices at almost no cost. |
| Keywords: | market transparency unit,regulation,fuel prices,difference-in-differences |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:220&r=ene |
| By: | Torfinn Harding (NHH Norwegian School of Economics); Radoslaw Stefanski (University of St Andrews); Gerhard Toews (University of Oxford) |
| Abstract: | We estimate the effect of giant oil and gas discoveries on bilateral real exchange rates. The size and plausibly exogenous timing of such discoveries make them ideal for identifying the effects of an anticipated resource boom on prices. We find that a giant discovery with the value of a country's GDP increases the real exchange rate by 14% within 10 years following the discovery. The appreciation is nearly exclusively driven by an appreciation of the prices of non-tradable goods. We show that these empirical results are qualitatively and quantitatively in line with a calibrated model with forward looking behaviour and Dutch disease dynamics. |
| Keywords: | Carbon Subsidies; Subsidies; Fossil Fuels; Pollution; Energy; Carbon |
| JEL: | O44 O41 Q53 Q54 H23 |
| Date: | 2016–05–21 |
| URL: | http://d.repec.org/n?u=RePEc:san:cdmawp:1604&r=ene |
| 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 |
| URL: | http://d.repec.org/n?u=RePEc:cbo:report:514211&r=ene |
| By: | Alban Kitous (European Commission – JRC - IPTS); Bert Saveyn (European Commission – JRC - IPTS); Kimon Keramidas (European Commission – JRC - IPTS); Toon Vandyck (European Commission – JRC - IPTS); Luis Rey Los Santos (European Commission – JRC - IPTS); Krzysztof Wojtowicz (European Commission – JRC - IPTS) |
| Abstract: | The report describes the importance of oil for oil exporting countries and analyses the potential economic effects that current low oil prices may have in their economy and political stability. Firstly, the report describes the main drivers that have led to the present low oil prices. Secondly, descriptive statistics are employed to show the exposure of the main oil exporting countries to the oil price, where GDP and government revenue is found to be closely correlated to the oil price. In general, several Sub-Saharan African and North African countries show high risk due to the high exposure of their economy and of their government revenue combined with limited reserves per capita. Secondly, the macro-economic effects of a 60% fall in the price of oil is analysed with the GEM-E3 model, which is an stylized representation of the oil market change over the last two years. The results show that such an oil price drop has different effects across oil exporting countries, unsurprisingly strongly correlated with export dependence to oil. For instance, a 60% fall in the price of oil could lead to a reduction of the GDP of Sub-Saharan Africa by around 8.5%. The final section discusses the migration patterns from the studied countries, as a proxy of what might happen be they destabilised because of a lasting low oil price. |
| Keywords: | oil price, modelling, GEM-E3, energy security |
| JEL: | C68 Q43 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc101562&r=ene |
| By: | Annastiina Silvennoinen (QUT); Susan Thorp (Sydney Uni) |
| Abstract: | Correlations between oil and agricultural commodities have varied over previous decades, impacted by renewable fuels policy and turbulent economic conditions. We estimate smooth transition conditional correlation models for 12 agricultural commodities and WTI crude oil. While a structural change in correlations occurred concurrently with the introduction of biofuel policy, oil and food price levels are also key influences. High correlation between biofuel feedstocks and oil is more likely to occur when food and oil price levels are high. Correlation with oil returns is strong for biofuel feedstocks, unlike with other agricultural futures, suggesting limited contagion from energy to food markets. |
| Keywords: | Smooth transition conditional correlation; Structural breaks; Return comovement; |
| Date: | 2015–10–29 |
| URL: | http://d.repec.org/n?u=RePEc:qut:auncer:2015_07&r=ene |
| By: | Brock Smith |
| Abstract: | This paper evaluates the impact of major natural resource discoveries since 1950 on GDP per capita and its proximate causes. Using panel fixed-effects estimation and resource discoveries in countries that were not previously resource-rich as a plausibly exogenous source of variation, I find a positive effect on GDP per capita levels following resource exploitation that persists in the long term. Results vary significantly between OECD and non-OECD treatment countries, with effects concentrated within the non-OECD group. I further test GDP effects with synthetic control analysis on each individual treated country, yielding results consistent with the average effects found with the fixed-effects model. Productivity, capital formation and education were also positively affected by resource discovery, while growth accounting analysis suggests productivity gains were a major distinguishing factor in GDP effects. |
| Keywords: | natural resource curse, economic growth, growth regressions, growth accounting, oil |
| JEL: | F12 Q37 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:oxcrwp:165&r=ene |
| By: | Njindan Iyke, Bernard |
| Abstract: | Sudden changes in oil prices have been a major concern for countries – oil producing and non-oil producing countries alike. Due to this, we assessed the effects of such an uncertainty on the real output of Nigeria, an oil producing country, during the period 1980:1 to 2014:4. We achieved this objective by using a bivariate GARCH-in-mean VAR model that allows for an uncertainty measure. We then quantified the responses of real output to positive and negative real oil price shocks. Using the conditional standard deviation of the forecast revision of the growth in the composite refiners’ acquisition cost of crude oil deflated by US GDP deflator as our measure of oil price uncertainty, we found that uncertainty about oil prices exerted negative and significant impact on the real output of Nigeria. In addition, real output responded to positive and negative shocks to real oil prices symmetrically. |
| Keywords: | Oil Price Uncertainty, Real Output, GARH-in-mean VAR, Nigeria |
| JEL: | C32 E23 E3 E32 |
| Date: | 2016–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71307&r=ene |
| By: | Blaise Gnimassoun (University of Lorraine - BETA UMR CNRS 7522, France); Marc Joets (Banque de France, International Macroeconomics Division, France); Tovonony Razafindrabe (CREM, UMR CNRS 6211, Université de Rennes 1, France) |
| Abstract: | This study revisits the important link between oil prices and current account for oil exporting countries by paying a particulary attention to the time-varying nature of this link. To this end, we rely on an innovative methodology which is the time-varying parameter vector autoregressive (TVP-VAR) model with sign restriction. We find that while an oil supply shock has a non-significant impact on the current account, an oil demand shock has a positive and significant impact which tends to increase over time. In addition, by studying the economic factors underlying the growing evolution of this relationship, we find that, although the propensity to import of oil revenues has a significant negative influence on the pass-through of oil demand shocks on the current account, deepening of the domestic financial market and accumulation of foreign exchange reserve have a significant positive effect. |
| Keywords: | curent account, oil prices, time-varying parameters |
| JEL: | F32 Q43 C32 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:tut:cremwp:2016-08&r=ene |
| By: | Stutzmas, Sarah; Weiland, Brandon; Preckel, Paul; Wetzstein, Michael |
| Keywords: | real options, Brownian motion, investment, stochastic, power plant, coal-fired, wood pellets, Agricultural and Food Policy, Agricultural Finance, Financial Economics, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea16:234940&r=ene |
| By: | David E. Allen (University of Sydney, and University of South Australia, Australia); Chialin Chang (National Chung Hsing University, Taiwan); Michael McAleer (National Tsing Hua University, Taiwan; Erasmus University Rotterdam, the Netherlands; Complutense University of Madrid, Spain); Abhay K. Singh (Edith Cowan University, Australia) |
| Abstract: | This paper features an analysis of the cointegration relationships among agricultural commodity, ethanol and Cushing crude oil spot and futures prices. The use of grains for the creation of bio-fuels has sparked fears that these demands are inflating food prices. We analyse approximately 10 years of daily spot and futures prices for corn, wheat, sugar ethanol and oil prices from Datastream for the period 19 July 2006 to 2 July 2015. The analysis, featuring Engle-Granger pairwise cointegration and Markov-switching VECM and Impulse Response Analysis, confirms that these markets have significant linkages which vary according to whether they are in low or high volatility regimes. |
| Keywords: | Bio-fuels ; time series; cointegration ; Markov-switching ; VECM; Impulse Responses; Volatility |
| JEL: | C22 Q02 Q35 Q42 |
| Date: | 2016–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20160038&r=ene |
| By: | Richard G. Lipsey (Simon Fraser University) |
| Abstract: | Advocates of green-growth policies and those who advocate policies to stop growth both accept that the world faces serious environmental problems. They disagree on and debate about appropriate remedies. Green-growth advocates argue that it is possible to create a green economy compatible with sustained growth. The no-growth advocates argue that the whole growth process must be stopped if the planet is to be saved from catastrophe. This short paper argues that choosing the optimal policy for dealing with these serious problems does not require deciding which group is right. Instead it is argued that the optimal policy is to act as if the green-growth advocates are right and only if they are proved wrong by the failure of their policies to do the job, should no-growth policies be attempted. |
| Keywords: | climate change, green growth, no-growth policies, environmental policies, carbon pricing. |
| JEL: | Q28 Q38 Q48 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:sfu:sfudps:dp16-05&r=ene |
| By: | Bing Zhang (Department of Environmental Planning and Management, School of Environment, Nanjing University); Yongliang Zhang (Nanjing University) |
| Keywords: | emission trading, impact, China |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:eep:pbrief:pb20160437&r=ene |
| By: | Manish Pandey; Wenbiao Cai |
| Abstract: | We examine the differential effects of using taxes and tradable permits to regulate emissions in an economy with financial frictions. We construct a two-sector model, where the regulated sector output is produced by entrepreneurs who differ in their endowment of managerial skills and assets and face a borrowing constraint. Government uses either an output tax or sets up a market for permits to restrict emissions by reducing the regulated sector output. We analytically show that tradable permits generate misallocation of resources while taxes do not. We parameterize the model and quantitatively examine the effects of using taxes or tradable permits to restrict the regulated sector output to the same level. We find that compared to taxes, using tradable permits results in lower aggregate productivity, welfare, and government revenue. Our findings suggest that taxes would be a better instrument than tradable permits for regulating emissions in countries with less-developed financial markets. |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:win:winwop:2016-01&r=ene |
| By: | Roland Ismer; Manuel Haussner; Karsten Neuhoff; William Acworth |
| Abstract: | A world of unequal carbon prices requires measures aimed at preventing carbon leakage. Climate policy imperatives demand that such measures must be compatible with the goal of sending a carbon price signal down the value chain. For carbon intensive materials, the combination of dynamic free allocation combined with Inclusion of Consumption (IoC) into emissions trading systems such as the European Union Emissions Trading Scheme (EU ETS) arguably fulfils both the aims of preventing carbon leakage and of sending the price signal. The paper presents concrete proposals regarding the legal design and practical administration of this mechanism. It argues that the IoC is, provided appropriate choices are made, ripe for implementation. |
| Keywords: | Carbon pricing, value chain, consumption charge |
| JEL: | H23 K23 L61 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:diw:diwwpp:dp1579&r=ene |
| By: | Robert J.R. Elliott (University of Birmingham); Toshihiro Okubo (Faculty of Economics, Keio University) |
| Abstract: | The need for developed countries to take a lead in the global fight against climate change is generally acknowledged and was intrinsic to the recent Paris climate change agreement. An understanding of the way in which environmental policy in advanced nations has developed and which policies had a significant impact on the reduction in the emissions of various pollutants may yield important policy prescriptions relevant to the current climate change negotiations. In this paper we consider how Japan's little known environmental interest rate policy and voluntary pollution control agreements contributed to Japan's ecological modernisation and how these policies compared to the more traditional regulatory approach. Our results show that Japan's use of an environmental interest rate policy was an effective policy as a complement to the more traditional regulatory approach. |
| Keywords: | Environmental regulations |
| JEL: | O13 O31 H2 H23 |
| Date: | 2016–03–29 |
| URL: | http://d.repec.org/n?u=RePEc:keo:dpaper:2016-008&r=ene |
| By: | Jianxin Wu (Business School, University of Western Australia and School of Economics, Institute of Resources, Environment and Sustainable Development Research, Jinan University, China); Yanrui Wu (Business School, University of Western Australia); Bing Wang (School of Economics, Institute of Resources, Environment and Sustainable Development Research, Jinan University, China) |
| Abstract: | This paper investigates carbon dioxide (CO2) emission and its determinants in 286 Chinese cities. The findings strongly support an inverted U-shaped relationship between per capita CO2 emission (PCE) and urban development. However the realization of this relationship depends on stringent governmental policy interventions. The regression analysis in this paper shows that city size is positively correlated with CO2 emission efficiency, but negatively correlated with PCE. This result suggests that population restrictions in large cities tend to increase CO2 emission. It is also shown that regional development programs are likely to encourage economic activities in regions with low CO2 emission efficiency and may have significant environmental consequences in the future. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:uwa:wpaper:16-12&r=ene |
| By: | Moutaz Altaghlibi (University of Amsterdam, the Netherlands, and Université Paris 1 Panthéon-Sorbonne, France); Florian Wagener (University of Amsterdam, the Netherlands) |
| Abstract: | Environmentally motivated aid can help developing countries to achieve economic growth while mitigating the impact on emission levels. We argue that the usual practice of giving aid conditionally is not effective, and we therefore study aid that is given unconditionally. Our framework is a differential open-loop Stackelberg game between a developed country (leader) and a developing country (follower). The leader chooses the amount of mitigation aid given to the follower, which the follower either consumes or invests in costly nonpolluting capital or cheap high-emission capital. The leader gives unconditional mitigation aid only when sufficiently rich or caring sufficiently about the environmental quality, while the follower cares about environmental quality to some extent. If aid is given in steady state, it decreases the steady state level of high-emission capital and capital investments in the recipient country and the global pollution stock, but it has no effect on the levels of non-polluting capital and non-polluting investments. It accelerates the economic growth of the follower; this effect is however lower than what static growth theory predicts since most of the aid is consumed. Moreover, we find that the increase in growth takes place in the nonpolluting sector. |
| Keywords: | Development aid; Green growth; Conditionality; Open loop Stackelberg equilibrium |
| JEL: | Q56 O13 |
| Date: | 2016–05–17 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20160037&r=ene |
| By: | Daniel Rais |
| Abstract: | AbstractEffective policies combating global warming and incentivising reduction of greenhouse gases face fundamental collective action problems. States defending short term interests avoid international commitments and seek to benefit from measures combating global warming taken elsewhere. The paper explores the potential of Common Concern as an emerging principle of international law, in particular international environmental law, in addressing collective action problems and the global commons. It expounds the contours of the principle, its relationship to common heritage of mankind, to shared and differentiated responsibility and to public goods. It explores its potential to provide the foundations not only for international cooperation, but also to justify, and delimitate at the same time, unilateral action at home and deploying extraterritorial effects in addressing the challenges of global warming and climate change mitigation. As unilateral measures mainly translate into measures of trade policy, the principle of Common Concern is inherently linked and limited by existing legal disciplines in particular of the law of the World Trade Organization. |
| Date: | 2014–06–06 |
| URL: | http://d.repec.org/n?u=RePEc:wti:papers:730&r=ene |
| By: | Ferreira, Pedro; Trejos, Alberto |
| Abstract: | We develop an intertemporal model of the international economy, where tradeable intermediate goods are produced with capital, labor and hydrocarbons, and used in the production of non-tradeable consumption and investment goods. The model is calibrated to 176 countries, grouped according to their characteristics. We conduct simulations about key events that are currently reshaping the world e.g., fracking and China's new model of development. The model reproduces closely the recent fall in oil prices and delivers results about the impact on global output and con- sumption, but also about the propagation to di¤erent countries through terms of trade and capital accumulation. |
| Date: | 2016–05–04 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:epgewp:777&r=ene |
| By: | Yu, Liu; Meng, Bo; Hubacek, Klaus; Xue, Jinjun; Feng, Kuishuang; Gao, Yuning |
| Abstract: | Using an augmented Chinese input–output table in which information about firm ownership and type of traded goods are explicitly reported, we show that ignoring firm heterogeneity causes embodied CO2 emissions in Chinese exports to be overestimated by 20% at the national level, with huge differences at the sector level, for 2007. This is because different types of firm that are allocated to the same sector of the conventional Chinese input–output table vary greatly in terms of market share, production technology and carbon intensity. This overestimation of export-related carbon emissions would be even higher if it were not for the fact that 80% of CO2 emissions embodied in exports of foreign-owned firms are, in fact, emitted by Chinese-owned firms upstream of the supply chain. The main reason is that the largest CO2 emitter, the electricity sector located upstream in Chinese domestic supply chains, is strongly dominated by Chinese-owned firms with very high carbon intensity. |
| Keywords: | Environmental problems, Global warming, Input-output tables, Embodied CO2 emissions, Carbon intensity, Supply chains, Ownership, Processing trade |
| JEL: | C67 E01 F18 H23 F64 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:jet:dpaper:dpaper592&r=ene |
| By: | Francesco Bosello (FEEM, CMCC and University of Milan); Marinella Davide (FEEM, CMCC and University of Venice); Isabella Alloisio (FEEM and CMCC) |
| Abstract: | The EU has a consolidated climate and energy regulation: it played a pioneering role by adopting a wide range of climate change policies and establishing the first regional Emission Trading Scheme (EU ETS). These policies, however, raise several concerns regarding both their environmental effectiveness and their potentially negative effect on the economy, especially in terms of growth and competitiveness. The paper reviews the European experience in order to understand if these concerns are supported by quantitative evidence. It thus focuses on key economic indicators, such as costs, competitiveness and carbon leakage as assessed by quantitative ex-ante and ex-post analyses. A dedicated section, extends the investigation to the potential extra-EU spillover of the EU mitigation policy with a particular attention to developing countries. The objective of the paper is to highlight both the limits and the opportunities of the EU regulatory framework in order to offer policy insights to emerging and developing countries that are on the way to implement climate change measures. Overall, the European experience shows that the worries about the costs and competitiveness losses induced by climate regulation are usually overestimated, especially in the long term. In addition, a tightening climate policy regime in the EU might in fact negatively impact developing countries via deteriorated trade relations. Nonetheless it tends to facilitate a resource relocation that if well governed could be beneficial to those countries where the poor are mainly involved in rural activities. |
| Keywords: | Climate Change, Climate Policy, Mitigation, Economic Impacts, GDP, Competitiveness |
| JEL: | F64 H23 O44 O52 Q54 R11 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2016.34&r=ene |
| By: | Catherine Hausman; Lucija Muehlenbachs |
| Abstract: | Price regulations are widely used to reduce inefficiencies from natural monopolies, but they can introduce other inefficiencies, such as the failure to cost-minimize. We examine a previously unstudied distortion in the natural gas distribution sector that allows firms to pass the cost of lost gas on to their customers. We show that firms abate leaks below what is theoretically optimal for a private firm – expenditure on abatement is well below the cost of lost gas. Additionally, natural gas, primarily composed of methane, is both explosive and a potent greenhouse gas. Thus the climate impacts of leaked methane greatly exacerbate the inefficiencies created by imperfect price regulation. |
| JEL: | D22 D42 L95 Q41 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22261&r=ene |
| By: | Rafael Morales-Lage (Department of Economics, Universidad Jaume I, Castellón, Spain); Aurelia Bengochea-Morancho (Department of Economics, Universidad Jaume I, Castellón, Spain); Inmaculada Martínez-Zarzoso (Department of Economics and Center for Statistics, Georg-August Universitaet Goettingen, Göttingen, German and Department of Economics, Universidad Jaume I, Castellón, Spain) |
| Abstract: | This paper applies the stochastic formulation of the IPAT model for analysing the determinants of CO2 emissions in the 28 countries of the European Union (EU) from 1971 to 2012. We apply different methodologies in order to fit the best model: a model with cross-static and time effects and dynamic models to solve some problems related to the structure of the data. The best model is estimated using the Generalized Method of Moments (GMM). As far as the population is concerned, the whole set of countries have a unitary elasticity with respect to carbon dioxide emissions, similar to the elasticity related to GDP per capita and energy intensity. However, we find different effects in CO2 emissions, depending on the group of countries considered. For the subset of EU-15 the influence of population, industry and energy use is lower than the influence shown by these factors in the 13 countries belonging to Central and Eastern Europe. |
| Keywords: | IPAT equation, STIRPAT model, CO2 emissions, European Union |
| JEL: | Q43 Q48 Q53 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2016/04&r=ene |
| By: | Barbara Annicchiarico; Susan Battles; Fabio Di Dio; Pierfrancesco Molina; Pietro Zoppoli |
| Abstract: | We build up a large scale, New Keynesian dynamic general equilibrium model embodying a cap on pollutant emissions, an electricity sector and fuel consumption to analyse climate-energy policies for the Italian economy. We consider several applications to illustrate how emission mitigation policies are likely to affect the economy. Our results show that a major trade-off may emerge between environmental quality and economic activity. However, we show how this potential trade-off can be effectively overcome by recycling the revenues from the sales of emission permits. Also,we find that the presence of an emission cap may significantly limit the expansionary effects of fiscal interventions as well as of policies aimed at fostering competition and productivity. Finally, a negative shock on gas and oil prices has a positive effect on the level of economic activity but is also found to increase investment in renewable sources. |
| Keywords: | Environmental policy, GHG emissions, dynamic general equilibrium model, simulation analysis, Italy |
| JEL: | E27 E60 Q40 Q58 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:itt:wpaper:2016-3&r=ene |
| By: | Jamil Paolo S. Francisco (Ateneo de Manila University) |
| Keywords: | cleaner air, Metro Manila, willingness to pay |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:eep:pbrief:pb20160453&r=ene |
| By: | Daniel Rais |
| Abstract: | Abstract This paper examines concerns about the impact that TTIP could have on existing and future climate policies and laws from the inclusion of provisions on investment protection including investor-to-State dispute settlement (ISDS), the reduction of non-tariff barriers and the introduction of rules for trade in energy and raw materials. It argues that from an environmental perspective, ISDS should not necessarily be seen as a regime that goes against the defence of the environment or prevention of climate change. Although it might be used to challenge policies of an EU home State that increase levels of environmental protection, it can also be used to contest changes in an EU home State’s environmental policies that would reduce the protection of the environment, if foreign investment is affected. To a large extent, this also holds true for other areas of TTIP negotiations. While the achievement of a balance between rules that promote trade and those that maintain policy space for governments to respond to environmental concerns has to be closely monitored, benefits for climate could be seized from harmonisation of carbon laws at the level of the strictest regulations of two parties, provisions that promote trade in low carbon technologies and renewable energy and bilateral cooperation on climate change. |
| Date: | 2015–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:wti:papers:852&r=ene |
| By: | Carolyn Fischer (Resources for the Future, Gothenburg University, FEEM, and CESifo Research Network) |
| Abstract: | Globally and locally, government support policies for green goods (like renewable energy) are much more popular internationally than raising the cost of bads (as through carbon taxes). These support policies may encourage downstream consumption (renewable energy deployment) or upstream development and manufacturing of those technologies. The use of subsidies—particularly upstream ones—is disciplined by World Trade Organization agreements, and its subsidies code lacks exceptions for transboundary externalities like human health or resource conservation, including those related to combating global climate change. The strategic trade literature has devoted little attention to the range of market failures related to green goods. This paper considers the market for a new environmental good that when consumed downstream may provide external benefits like reduced emissions. The technology is traded internationally but provided by a limited set of upstream suppliers that may operate in imperfect markets, such as with market power or external scale economies. We examine the national incentives and global rationales for offering production and consumption subsidies in producer countries, allowing that some of the downstream market may lie in nonregulating third-party countries. Although technology producer countries can benefit from restraints on upstream subsidies, global welfare is higher without them, and market failures imply that optimal subsidies are even higher. We supplement the analysis with numerical simulations of the case of renewable energy, exploring optimal subsidies for the major renewable energy producing and consuming regions and the cost of restrictions on upstream subsidies. |
| Keywords: | International Trade, Subsidies, Imperfect Competition, Externalities, Emissions Leakage |
| JEL: | F13 F18 H21 Q5 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2016.30&r=ene |
| 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: | Southeast Asia is vulnerable to climate change, yet is also on a carbon intensive development trajectory. |
| Keywords: | southeast asia, sea, climate change, carbon dioxide emissions, greenhouse gas emissions,emissions mitigation, climate stabilization, energy efficiency, witch model, world induced technical change hybrid |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:asd:wpaper:abf157788-2&r=ene |
| By: | NERİMAN ÇELİK (SELCUK UNIVERSITY) |
| Abstract: | Humanity is at the parting of the ways because of the climate change taking place in the whole planet, draining of world's resources and destructions which are not easy to redeem. As a result of the activities of people during the past century, it has spread into the atmosphere in large amounts of carbon dioxide and other greenhouse gases. Global warming has negatively effect on environment, our water resources, agricultural conditions, energy production and transport system, our health and safety. The outcomes of the effects should be taken into consideration. Rapidly changing world order brings back changing of the business model in the business world. In this study, the necessity of the sustainability and the action that are taken to achieve this aim will be examined. |
| Keywords: | Sustainability, Entrepreneurship,Environmental |
| JEL: | L26 |
| URL: | http://d.repec.org/n?u=RePEc:sek:iacpro:3605569&r=ene |
| By: | Batten,, Sandra (Bank of England); Sowerbutts, Rhiannon (Bank of England); Tanaka, Misa (Bank of England) |
| Abstract: | This paper examines the channels via which climate change and policies to mitigate it could affect a central bank’s ability to meet its monetary and financial stability objectives. We argue that two types of risks are particularly relevant for central banks. First, a weather-related natural disaster could trigger financial and macroeconomic instability if it severely damages the balance sheets of households, corporates, banks, and insurers (physical risks). Second, a sudden, unexpected tightening of carbon emission policies could lead to a disorderly re-pricing of carbon-intensive assets and a negative supply shock (transition risks). Climate-related disclosure could facilitate an orderly transition to a low-carbon economy if it helps a wide range of investors better assess their financial risk exposures. |
| Keywords: | Climate change; natural disasters; financial stability; monetary policy; |
| JEL: | E58 G21 G22 Q43 Q54 |
| Date: | 2016–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:boe:boeewp:0603&r=ene |
| By: | Allen Bellas (College of Management, Metropolitan State University); Lea Kosnik (Department of Economics, University of Missouri-St. Louis) |
| Abstract: | How do ideas flow through economics research journals? Do the general interest journals set the trends in research attention to particular topics, or is it the field journals that have greater initial influence? In this paper we focus on the subfield of environmental economics and attempt to empirically identify whether it has been the leading general interest journals or the top environmental economics field journal that has set the research trends on climate change, air pollution, water pollution, and other topics. Results indicate that leadership depends on the topic, however, there is some evidence that the top field journal in environmental economics generally took the lead in more controversial topics. |
| Keywords: | idea diffusion, knowledge diffusion, research, textual analysis, Granger causality. |
| JEL: | A10 Q50 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:msl:workng:1013&r=ene |
| By: | Matthew J. Kotchen |
| Abstract: | This paper develops a theoretical foundation for the social cost of carbon (SCC). The model highlights the source of debate over whether countries should use the global or domestic SCC for regulatory impact analysis. I identify conditions under which a country's decision to internalize the global SCC, as currently practiced in the United States, is individually rational. Nevertheless, I show how obtaining international consensus on a particular value will be more challenging than often appreciated. I introduce the notion of "strategic SCC" to reflect each country's preference for a globally internalized shadow value on emissions conditional on a true value of the global SCC and a distribution of the domestic SCCs among countries. While all countries have a strategic SCC greater than their domestic SCC, a country's strategic SCC can be greater than or less than the global SCC. How these preferences translate into agreement depends on institutional arrangements for collective decision-making, for which I provide empirical evidence based on various decision rules. A central contribution of the paper is demonstration of the need for more research on the theoretical underpinnings of the SCC for policy analysis, because establishing and using the SCC among sovereign countries is not simply an application of estimating and internalizing an externality. |
| JEL: | Q00 Q4 Q5 Q58 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22246&r=ene |