nep-ene New Economics Papers
on Energy Economics
Issue of 2016‒06‒25
forty papers chosen by
Roger Fouquet
London School of Economics

  1. Undressing the emperor: A critical review of IEA’s WEO By Mohn, Klaus
  2. Questioning the EU Target Electricity Model – how should it be adapted to deliver the Trilemma? By David Newbery
  3. Integration and Efficiency of European Electricity Markets: Evidence from Spot Prices By Klaus Gugler; Adhurim Haxhimusa; Mario Liebensteiner
  4. An Examination of Energy Efficiency Retrofit Depth in Ireland By Collins, Matthew; Curtis, John
  5. The good, the bad and the ugly? Balancing environmental and economic impacts towards efficiency By Halkos, George; Polemis, Michael
  6. Towards a political economy framework for wind power : Does China break the mould? By Michael Davidson; Fredrich Kahrl; Valerie Karplus
  7. An Examination of the Abandonment of Applications for Energy Efficiency Retrofit Grants in Ireland By Collins, Matthew; Curtis, John
  8. Coordinated Balancing of the European Power System By Neuhoff, Karsten; Richstein, Jörn
  9. Financing Renewable Energy: Who is Financing What and Why it Matters By Mariana Mazzucato; Gregor Semieniuk
  10. Implementing EU renewable energy policy at the subnational level Navigating between conflicting interests By Gilles Lepesant
  11. Support policies for renewables Instrument choice and instrument change from a Public Choice perspective By Erik Gawel; Sebastian Strunz; Paul Lehmann
  12. An inquiry into the political economy of the global clean energy transition policies and Nigeria.s federal and state governments. fiscal policies By David Onyinyechi Agu; Evelyn Nwamaka; Ogbeide Osaretin
  13. Bring Back our Light: Power Outages and Industrial Performance in Sub-Saharan Africa By Mensah, Justice Tei
  14. Going the Extra Mile: Intelligent Energy Management of Plug-in Hybrid Electric Vehicles By Boriboonsomsin, Kanok; Wu, Guoyuan; Barth, Matthew
  15. Operational Conditions in Regulatory Benchmarking Models: A Monte Carlo Analysis By Maria Nieswand; Stefan Seifert
  16. The social shaping of nuclear energy technology in South Africa By Britta Rennkamp; Radhika Bhuyan
  17. Energy consumption and economic growth in Ethiopia: A dynamic causal linkage By Nyasha , Sheilla; Gwenhure, Yvonne; Odhiambo, Nicholas M
  18. Road Transport, Economic Growth and Carbon Dioxide Emissions in the BRIICS: Conditions For a Low Carbon Economic Development By Barakatou Atte-Oudeyi; Bruno Kestemont; Jean Luc De Meulemeester
  19. High Frequency Evidence on the Demand for Gasoline By Laurence Levin; Matthew S. Lewis; Frank A. Wolak
  20. Automated and Autonomous Driving: Regulation under Uncertainty By OECD
  21. Changes in fuel economy: An analysis of the Spanish car market By Anna Matas; José-Luis Raymond; Andrés Domínguez
  22. A Quantitative Description of State-Level Taxation of Oil and Gas Production in the Continental U.S. By Weber, Jeremy G.; Wang, Yongsheng; Chomas, Maxwell
  23. Oil discoveries and democracy By Tania Masi; Roberto Ricciuti
  24. The Wealth of Natural Resources and Economic Growth: Stories of Success and Failure By Lyubimov, I.L.
  25. Institutional differences across resource-based economies By Utku Teksoz; Katerina Kalcheva
  26. The Links between Crude Oil Prices and GCC Stock Markets: Evidence from Time-Varying Granger Causality Tests By Mehmet Balcilar; İsmail H. Genç; Rangan Gupta
  27. Time-varying correlation between oil and stock market volatilities: Evidence from oil-importing and oil-exporting countries By Boldanov, Rustam; Degiannakis, Stavros; Filis, George
  28. Biofuel Mandating and the Green Paradox By Okullo, Samuel; Reynes, F.; Hofkes, M.
  29. The linkages of energy, water, and land use in Southeast Asia Challenges and opportunities for the Mekong region By Kim Do; Ariel Dinar
  30. Subjective Risks and Barriers to Perennial Bioenergy Production: Estimating a Structural Model with Data from a Hypothetical Market Experiment By Smith, David
  31. Business Strategy for Nanotechnology based Products and Services By Aithal, Sreeramana; Aithal, Shubhrajyotsna
  32. Innovation and Entrepreneurship for the growth and diversification of the GCC Economies By Miniaoui, Hela; Schilirò, Daniele
  33. Directed Technical Change and Economic Growth Effects of Environmental Policy By Peter K. Kruse-Andersen
  34. The Clean Development Mechanism and Dynamic Capabilities of Implementing Firms: Evidence from India By Aradhna Aggarwal
  35. Enforcing environmental policies in China -- The “indecisive” role of the market in SO2 and COD emissions trading By Xu, Yuan
  36. Climate Change Assessments: Confidence, Probability and Decision By Hill , Brian; Bradley , Richard; Helgeson, Casey
  37. Transition Into A Green Economy: Are There Limits To Government Intervention? By Daniel Rais
  38. Environmental Taxation By Roberton C. Williams III
  39. Are constitutional states able to drive the global technological change? By Waśniewski, Krzysztof
  40. Analysing the implications of the Paris Climate Summit for Australia By McInnes, Dougal; Betz, Regina; Jotzo, Frank; Kuch, Declan

  1. By: Mohn, Klaus (UiS)
    Abstract: Since the turn of the century The International Energy Agency (IEA) has assumed a gradually more important role in defining the agenda and outlook for energy and climate policies. This essay reviews the methodology and methods behind IEA’s World Energy Outlook, and then offers a critical review of assumptions and projections, focusing in particular on the outlook for economic growth, technological change, and investment in new renewable energy. The analysis suggests that important aspects of IEA’s scenarios are driven by critical exogenous assumptions. Moreover, vast resources and a competent research organization offer limited mitigation for outlook uncertainty, and IEA’s outlook should therefore be approached with the same caution as other global energy projections.
    Keywords: Energy economics; macroeconomics; modelling
    JEL: Q41 Q43 Q47
    Date: 2016–06–03
  2. By: David Newbery
    Abstract: Britain considers the energy-only EU Target Electricity Model (TEM) wanting in delivering the trilemma of reliability, sustainability and affordability and argues that a capacity auction with long-term contracts for new entrants is the least-cost solution compared to relying on expectations of future prices to deliver adequate generation and demand side response. The Energy Union argues against feed-in tariffs (FiTs) for renewables, pressing for premium FiTs (pFiTs), just as GB has abandoned PFiTs in favour of FiTs. This paper draws on the GB experience of Electricity Market Reform before and after the 2015 change of government, to highlight promising resolutions of the energy trilemma, and the problems that have arisen between the diagnosis of the problem and the delivery of solutions. It sets out the theory and practice of delivering capacity, energy and quality of supply, gives a brief history of GB electricity from the CEGB to its current unbundled, liberalized and privatized structure. That sheds light on the trilemma problem and discusses possible solutions. The island of Ireland Single Electricity Market reforms illustrate the problem and possible answer of how best to deliver quality of service with high intermittency.
    Keywords: Reliability, sustainability and affordability, capacity auctions, contract design, renewables
    JEL: D47 H23 L94 Q48 Q54
    Date: 2016–06–03
  3. By: Klaus Gugler (Department of Economics, Vienna University of Economics and Business); Adhurim Haxhimusa (Research Institute for Regulatory Economics, Vienna University of Economics and Business); Mario Liebensteiner (Department of Economics, Vienna University of Economics and Business)
    Abstract: This paper seeks to investigate the current state of market integration among European electricity day-ahead spot prices. We provide reasoning that market integration brings about benefits, such as lower average prices and increased welfare from allocative efficiency. Yet, price convergence leads to higher prices in the low-price market and to lower prices in the high-price market, which creates winners and losers and thus makes the political implementation of market integration cumbersome. In our empirical analysis, we utilize a large sample of hourly spot prices of 25 European markets for the period 01.01.2010–30.06.2015 and combine it with other relevant data such as interconnector capacities and the existence of market coupling. Firstly, empirical results from cointegration analysis indicate that market integration increased from 2010 to 2012 but then declined until 2015, most likely due to increased feed-in from intermittent renewables. Secondly, we empirically assess the speed of adjustment from price shocks and reach the conclusion that the resulting efficiency of integration is rather modest. In general, our findings suggest that integration among European electricity markets has a large potential for improvements from additional capacity investments and further promotion of market coupling.
    Keywords: Market integration, Spot Price, Convergence, Internal Market, Electricity
    JEL: F15 L81 L98 Q48
    Date: 2016–06
  4. By: Collins, Matthew; Curtis, John
    Abstract: This study examines energy efficiency retrofit depth in Ireland using data from a national residential grant scheme for energy efficiency upgrades. We specifically examine both the number of retrofit measures adopted per dwelling, and also the comprehensiveness of retrofits upgrades, which are retrofits in excess of the most common and simple retrofit combinations. We find that certain obligated parties, who are obliged by the State to reduce energy consumption in Ireland, vary both positively and negatively in terms of number of retrofit measures relative to private retrofits, but perform negatively with regard to comprehensive retrofits. All parties are found to perform negatively with regard to comprehensive retrofits, relative to private applications. Newer homes, relative to older homes are more likely to invest in more retrofit measures but less likely to engage in more comprehensive retrofits. Regionally, homes in the Greater Dublin Area are less likely to undertake more retrofit measures but more likely to engage in more comprehensive retrofits, while the opposite is true of rural areas. A seasonal trend also exists, with applications made during autumn and winter much less likely to be made for more comprehensive retrofits. Demand for more measures and more comprehensive retrofits does not appear to be affected by financial incentives as the introduction of a bonus for three- and four-measure retrofits has not coincided with any increases in the demand for such retrofits.
    Date: 2016–05
  5. By: Halkos, George; Polemis, Michael
    Abstract: This paper estimates the efficiency of the power generation sector in the USA by using Window Data Envelopment Analysis (W-DEA). We integrate radial and non-radial efficiency measurements in DEA using the hybrid measure while we extend the proposed model by considering inputs and good and bad outputs as separable and non separable. Then in the second stage analysis we perform various econometric techniques (parametric and non-parametric) in order to model the relationship between the calculated environmental efficiencies and economic growth in attaining sustainability. Our empirical findings indicate an N-shape relationship between environmental efficiency and regional economic growth in the case of global and total pollutants but an inverted N-shape in the case of assessing local pollutants and using the appropriate dynamic specification. This implies that attention is required when considering local and global pollutants and the extracted environmental efficiencies.
    Keywords: Energy; Efficiency; Sustainability; Window DEA; Electricity; EKC hypothesis; USA.
    JEL: C23 C67 O13 Q01 Q53 Q56
    Date: 2016–06–20
  6. By: Michael Davidson; Fredrich Kahrl; Valerie Karplus
    Abstract: We propose a general taxonomy of the political economy challenges to wind power development and integration, highlighting the implications in terms of actors, interests, and risks. Applying this framework to three functions in China.s electricity sector.planning and project approval, generator cost recovery, and balancing area coordination.we find evidence of challenges common across countries with significant wind investments, despite institutional and industry characteristics that are unique to China.We argue that resolving these political economy challenges is as important to facilitating the role of wind and other renewable energies in a low carbon energy transition as providing dedicated technical and policy support. China is no exception.
    Keywords: Renewable energy sources
    Date: 2016
  7. By: Collins, Matthew; Curtis, John
    Abstract: The Sustainable Energy Authority of Ireland (SEAI) operates the Better Energy Homes (BEH) grant scheme to incentivise residential energy efficient retrofits, an ongoing scheme which was implemented in 2009. This scheme provides a financial incentive for home owners to engage in energy efficient retrofits, provided the upgrades meet appropriate energy efficiency standards. This study analyses the BEH data, which is comprised of all applications from March 2009 to October 2015, in order to examine the extent to which applications are abandoned and the determinants thereof. We find that more complicated retrofits are more likely to be abandoned, with variation across certain retrofit measure combinations. We find lower probabilities of abandonment among certain obligated parties, who are energy retailers obliged by the State to reduce energy consumption in Ireland, while others possess greater likelihoods of abandonment, relative to private retrofits. We find that newer homes are less likely to abandon an application than older homes, as are applications made for apartments, relative to houses. Regional variations exist in abandonment, with rural households more likely to abandon than urban households. A seasonal trend in abandonment is also present, with higher likelihoods of abandonment among applications made during winter.ile-URL:
    Date: 2016–05
  8. By: Neuhoff, Karsten; Richstein, Jörn
    Date: 2016
  9. By: Mariana Mazzucato (Science Policy Research Unit, University of Sussex.); Gregor Semieniuk (Science Policy Research Unit, University of Sussex.)
    Abstract: Accelerating innovation in renewable energy (RE) requires not just more finance, but finance servicing the entire innovation landscape. Given that finance is not "neutral", more information is required on the quality of finance that meets technology and innovation stage-specific financing needs for the commercialization of RE technologies. We investigate the relationship between different financial actors with investment in different RE technologies. We construct a new deal-level dataset of global RE asset finance from 2004 to 2014 based on Bloomberg New Energy Finance data, that distinguishes 10 investor types (e.g. private banks, public banks, utilities) and 11 RE technologies into which they invest. We also construct a heuristic investment risk measure that varies with technology, time and country of investment. We nd that particular investor types have preferences for particular risk levels, and hence particular types of RE. Some investor types invested into far riskier portfolios than others, and financing of individual high-risk technologies depended on investment by specific investor types. After the 2008 financial crisis, state-owned or controlled companies and banks emerged as the high-risk taking locomotives of RE asset finance. We use these preliminary results to formulate new questions for future RE policy, and encourage further research.
    Keywords: renewable energy nance, direction of innovation, nancial actor types, deployment, technology risk, investment portfolio
    Date: 2016–12
  10. By: Gilles Lepesant
    Abstract: The European Union (EU) has set targets for gradually reducing greenhouse gas emissions through 2050. One of the instruments involved is the 2009 Renewable Energy Directive, which specifies a 20 per cent renewable energy target for the EU by 2020. This paper reviews tensions and institutional innovations that can arise at local and regional levels within the context of the implementation of this policy.Drawing on empirical evidence collected in two regions, one in a federal country (Brandenburg in Germany), one in a unitary state (Aquitaine in France), the paper describes the factors that determine community and market acceptance of renewable energies, suggesting that appropriate multi-level governance schemes are instrumental in the successful adoption and implementation of EU priorities at the local level.
    Keywords: Forests and forestry, Renewable energy sources, State governments
    Date: 2016
  11. By: Erik Gawel; Sebastian Strunz; Paul Lehmann
    Abstract: This paper frames the transition towards clean energies as a sequential process of instrument choice and instrument change. First, regulators decide how to initiate the transition away from fossil energies. Here, support policies for renewable electricity are politically convenient because they face low resistance from fossil energies. interest groups. In the second stage, regulators need to adapt support policies for renewables to challenges arising along the transition pathway.We empirically substantiate our arguments by tracing the development of support policies in Germany. Against the backdrop of this analysis, we point towards small-step policies that could foster the transition process.
    Keywords: Environmental policy, Management, Renewable energy sources
    Date: 2016
  12. By: David Onyinyechi Agu; Evelyn Nwamaka; Ogbeide Osaretin
    Abstract: In order to implement clean energy transition programmes, the national and subnational governments in Nigeria will incur some cost. In the same way, failure to implement the policies will come with some costs. This paper therefore considers the fiscal policy implications of Nigerian governments. implementation of clean energy transition policies in the country. The analysis also reveals that the observed reluctance of Nigerian governments in implementing the policies is obviously unconnected with their dependence on oil revenues. The paper further presents the fiscal policy implications of Nigerian governments. inaction even when other countries implement their clean energy transition policies.
    Keywords: fossil fuel, clean energy, federal government, state governments, fiscal policies, fiscal shocks Handle: RePEc:unu:wpaper:wp2016-031
    Date: 2016
  13. By: Mensah, Justice Tei
    Abstract: Power cuts have become a characteristic feature of many Sub-Saharan African economies. This paper attempts to estimate the firm level impact of power out- ages using panel data on firms from 15 Sub-Saharan African countries. Further, I evaluate the impact of electricity self-generation in ameliorating the effects of power outages on firm performance using a quasi-experimental approach. Results from the analysis reveal significant negative effects of electricity short- ages on firm productivity, size and labor employment. Finally, contrary to the notion that self-generation may be helpful for firms during outage periods, evidence from this paper suggest that reliance on self-generation is associated with productivity losses albeit short run revenue gains.
    Keywords: Power outages, Sub-Saharan Africa, Electricity, Productivity, Firms, Productivity Analysis, Resource /Energy Economics and Policy, D04, D24, L11, L94, O12, O13, Q41,
    Date: 2016–06
  14. By: Boriboonsomsin, Kanok; Wu, Guoyuan; Barth, Matthew
    Keywords: Architecture, Arts and Humanities, Social and Behavioral Sciences
    Date: 2016–04–01
  15. By: Maria Nieswand; Stefan Seifert
    Abstract: Benchmarking methods are widely used in the regulation of firms in network industries working under heterogeneous exogenous environments. In this paper we compare three recently developed estimators, namely conditional DEA (Daraio and Simar, 2005, 2007b), latent class SFA (Orea and Kumbhakar, 2004; Greene, 2005), and the StoNEZD approach (Johnson and Kuosmanen, 2011) by means of Monte Carlo simulation focusing on their ability to identify production frontiers in the presence of environmental factors. Data generation replicates regulatory data from the energy sector in terms of sample size, sample dispersion and distribution, and correlations of variables. Although results show strengths of each of the three estimators in particular settings, latent class SFA perform best in nearly all simulations. Further, results indicate that the accuracy of the estimators is less sensitive against different distributions of environmental factors, their correlations with inputs, and their impact on the production process, but performance of all approaches deteriorates with increasing noise. For regulators this study provides orientation to adopt new benchmarking methods given industry characteristics.
    Keywords: Monte Carlo Simulation, Environmental Factors, StoNEZD, Latent Class SFA, Conditional DEA, Regulatory Benchmarking
    JEL: L50 Q50 C63
    Date: 2016
  16. By: Britta Rennkamp; Radhika Bhuyan
    Abstract: This paper analyses the question why the South African government intends to procure nuclear energy technology, despite affordable and accessible fossil and renewable energy alternatives. We analyse the social shaping of nuclear energy technology based on the statements of political actors in the public media. We combine a discourse network analysis with qualitative analysis to establish the coalitions in support and opposition of the programme. The central arguments in the debate are cost, safety, job creation, the appropriateness of nuclear energy, emissions reductions, transparency, risks for corruption, and geopolitical influences. The analysis concludes that the nuclear programme is not primarily about generating electricity, as it creates tangible benefits for the coalition of supporters.
    Keywords: nuclear energy, energy policy, science and technology policy, discourse network analysis South Africa
    Date: 2016
  17. By: Nyasha , Sheilla; Gwenhure, Yvonne; Odhiambo, Nicholas M
    Abstract: In this study, we have explored the causal relationship between energy consumption andeconomic growth in Ethiopia, during the period from 1971 to 2013. We have employed amultivariate Granger-causality framework that incorporates financial development,investment and trade openness as intermittent variables ??? in an effort to address theomission-of-variable bias. Based on the newly developed ARDL bounds testing approach toco-integration and the Error-Correction Model-based causality model, our results show thatin Ethiopia, there is a distinct unidirectional Granger-causality from economic growth toenergy consumption. These results apply, irrespective of whether the estimation is done in theshort run or in the long run. We recommend that policy makers in Ethiopia should considerexpanding their energy-mix options, in order to cope with the future demand arising from anincrease in the real sector growth.
    Keywords: Ethiopia, Energy Consumption, Economic Growth, Granger-Causality
    Date: 2016–05
  18. By: Barakatou Atte-Oudeyi; Bruno Kestemont; Jean Luc De Meulemeester
    Abstract: In this article, we investigate the relationship between economic growth and CO2 emissions per capita due to road transport in order to test the validity of the Environmental Kuznets Curve (EKC) hypothesis. We test an EKC model on a sample of six emerging countries (Brazil, Russia, India, Indonesia, China and South Africa so-called BRIICS) using yearly data from 2000 to 2010. Empirical results reveal an inverted U-shaped EKC curve relating CO2 emissions per capita due to road transport to the level of economic development (level of GDP percapita). In all models tested, the turning point exceeds the current GDP per capita of the richest country of the group, which means that it would happen virtually in a far future or after a strong growth episode. Results show that the turning point of this EKC for road transport depends on population density and the integration of government effectiveness into the BRIICS’s economic development policy. However, when Russia is omitted from the group, the EKC hypothesis does not hold anymore and CO2 emissions per capita are uniformly increasing with per capita GDP. The main policy implication from our results is that policy makers should not base their policy on the EKC hypothesis: increasing the per capita GDP level alone cannot reduce CO2 emissions per capita from road transport and without a significant change in policy, economic growth will exacerbate CO2 emissions.
    Keywords: BRIICS; Road Transport; Economic Growth; CO2 Emissions; Environmental Kuznets Curve; Panel Data; Pooled OLS Regression Model; Fixed- Effects and Random-Effects Regression Models
    JEL: Q53 Q56 Q58 R42
    Date: 2016–06–01
  19. By: Laurence Levin; Matthew S. Lewis; Frank A. Wolak
    Abstract: Daily city-level expenditures and prices are used to estimate the price responsiveness of gasoline demand in the U.S. Using a frequency of purchase model that explicitly acknowledges the distinction between gasoline demand and gasoline expenditures, we consistently find the price elasticity of demand to be an order of magnitude larger than estimates from recent studies using more aggregated data. We demonstrate directly that higher levels of spatial and temporal aggregation generate increasingly inelastic demand estimates, and then perform a decomposition to examine the relative importance of several different sources of bias likely to arise in more aggregated studies.
    JEL: L91
    Date: 2016–06
  20. By: OECD
    Abstract: Many cars sold today are already capable of some level of automated operation, and prototype cars capable of driving autonomously have been - and continue to be - tested on public roads in Europe, Japan and the United States. These technologies have arrived rapidly on the market and their future deployment is expected to accelerate. Autonomous driving promises many benefits: improved safety, reduced congestion and lower stress for car occupants, among others. Authorities will have to adapt existing rules and create new ones in order to ensure the full compatibility of these vehicles with the public’s expectations regarding safety, legal responsibility and privacy. This report explores the strategic issues that will have to be considered by authorities as more fully automated and ultimately autonomous vehicles arrive on our streets and roads.
    Date: 2015–04–01
  21. By: Anna Matas (Universitat Autònoma de Barcelona & Barcelona Institute of Economics (IEB)); José-Luis Raymond (Universitat Autònoma de Barcelona); Andrés Domínguez (Universitat 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 32% and 40% for petrol and diesel cars respectively had car characteristics been held constant at 1988 values. However, the shift to bigger and more fuel-consuming 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
    JEL: L62 Q50 R4
    Date: 2016
  22. By: Weber, Jeremy G.; Wang, Yongsheng; Chomas, Maxwell
    Abstract: We provide a quantitative description of state-level taxation of oil and gas production in the Continental U.S. for 2004 to 2013. Aggregate revenues from production taxes nearly doubled in real terms over the period, reaching $10.3 billion and accounting for 20 percent of tax receipts in the top ten revenue states. The average state had a tax rate of 3.6 percent; nationally, the average dollar of production was taxed at 4.2 percent. The oil-specific rate estimated for the study period is $2.4 per barrel or $5.5 per ton of carbon. Lastly, state-level tax rates are two-thirds higher in states excluding oil and gas wells from local property taxes, suggesting that the policies are substitutes for one another.
    Keywords: state policy, oil and gas taxation, effective tax rates
    JEL: Q38 Q48
    Date: 2016–06–03
  23. By: Tania Masi; Roberto Ricciuti
    Abstract: We evaluate the effect of natural resources on political regimes. We use the synthetic control method to compare evolution of the democracy level of countries affected by giant oil discoveries with the weighted democracy level of countries that do not incur the same event and have similar pre-event characteristics. Focusing on 12 countries affected by the peak of oil discovery from the 1970s, we find that the exogenous variation in oil endowment does not have the same effect on all countries. In most of cases, the event has a negative effect in the long run, but countries with a high level of democracy in the pre-event period are not affected by the peak of oil discoveries. These results support heterogeneity and non-linearities claimed in the more recent theoretical literature.
    Keywords: people with disabilities, paid employment, basic education, Ghana
    Date: 2016
  24. By: Lyubimov, I.L. (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: Perception of natural wealth as a curse, leading to the emergence of a variety of economic issues, from civil war and to reduce tech sector or the destruction of the institutions of power, is very common among both economists and the general public. While many countries endowed with natural resources stocks actually faced with serious economic and institutional problems, one can hardly speak about the negative impact on economic development resources of both stable laws. To change the potential of natural resources as a cause of economic failure, then we will talk in detail about how the success stories related to mining, and stories about the failures of the ownership of natural resources.
    Keywords: natural wealth, natural resources, economic issues
    Date: 2016–04–25
  25. By: Utku Teksoz; Katerina Kalcheva
    Abstract: To predict economic success and failure, academics and policymakers alike are interested in the differences in institutional structures across natural resource-based economies. This paper uses a political economy framework to examine the effect of institutional variables on per capita Gross-Domestic-Product in resource-rich economies. After controlling for institutions, natural resource rents cease to have a negative impact on long-term growth. Institutions in resource-based economies foster economic growth when voice and accountability are in place; broad-based rule of law is enforced with secure property rights, and control of corruption; and when government effectiveness, regulatory quality, and political stability are positively perceived.
    Keywords: institutions, growth, political power, rents, property rights, resource-based economies
    Date: 2016
  26. By: Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, Turkey and Department of Economics, University of Pretoria, South Africa.); İsmail H. Genç (Department of Economics, School of Business and Management, American University, United Arab Emirates); Rangan Gupta (Department of Economics, University of Pretoria)
    Abstract: This paper investigates the impact of crude oil price movements on the stock markets of Gulf Corporation Council (GCC) countries using weekly data for the period of February 2, 1994-February 26, 2010. The causal link between oil and stock markets are modeled using a Markov switching vector autoregressive (MS-VAR) model in order to reflect changes in Granger causality over time. The MS-VAR model allows testing for both conditional Granger causality and regime predicting causality. The parameter instability tests indicate that causal links between crude oil prices and stock market indexes are highly time varying. The full sample conditional Granger causality tests based on the MS-VAR model, which identifies four regimes each corresponding to causal relationships, rejects both the causal impact of lagged stock market prices on oil prices and the causal impact from crude oil spot prices to stock market indexes in the full sample. However, regime prediction causality from oil prices to GCC stock markets is not rejected for all countries we consider, indicating that oil prices have predictive content for the regime of GCC stock markets. These results encompass the previous findings and offer new insights into the nature of causal relationships between oil price and stock markets in GCC countries.
    Keywords: Oil Price; Stock Market, Gulf Corporation Council (GCC) countries, Markov Switching Model, Time-Varying Granger-causality
    JEL: E44 Q43 C32
    Date: 2016–06
  27. By: Boldanov, Rustam; Degiannakis, Stavros; Filis, George
    Abstract: This paper investigates the time-varying conditional correlation between oil price and stock market volatility for six major oil-importing and oil-exporting countries. The period of the study runs from January 2000 until December 2014 and a Diag-BEKK model is employed. Our findings report the following regularities. (i) The correlation between the oil and stock market volatilities changes over time fluctuating at both positive and negative values. (ii). Heterogeneous patterns in the time-varying correlations are evident between the oil-importing and oil-exporting countries. (iii) Correlations are responsive to major economic and geopolitical events, such as the early-2000 recession, the 9/11 terrorist attacks and the global financial crisis of 2007-2009. These findings are important for risk management practices, derivative pricing and portfolio rebalancing.
    Keywords: Conditional volatility, realized volatility, time-varying correlation, Diag-BEKK, GARCH, oil-importing countries, oil-exporting countries
    JEL: C32 C51 G15 Q40
    Date: 2015–10–01
  28. By: Okullo, Samuel (Tilburg University, Center For Economic Research); Reynes, F.; Hofkes, M.
    Abstract: The theory on the green paradox has focused primarily on the consumption of a clean substitute produced using a static technology. In reality, we observe the gradual accumulation of the clean substitute’s capacity, suggesting that supply decisions for the clean substitute and finite carbon resource should both be treated as dynamic. This paper shows that when climate policy is preannounced, and with simultaneous consumption of a finite carbon resource and a clean substitute, myopia in the supply of the latter leads to the green paradox. When clean substitute producers can accumulate capacity and are forward looking, the green paradox may or may not arise, however. In this setting, its occurrence depends on both the size of the discount rate and the remaining stock of carbon resource. These and other drivers of the green paradox are investigated in a multi-producer game-theoretic model calibrated to real-world global oil market data. The timing of mandating policy is shown to be the single most important variable for mitigating the green paradox. Moreover, for EU-2020 and US-2022 style biofuel mandating targets, a rather robust 0.3% decline in production is observed during the premandate phase, suggesting that concerns over the green paradox may be seriously overstated.
    Keywords: green paradox; climate change; peak oil; biofuel mandates; unconventional crude oil
    JEL: C61 C70 H25 H32 Q28 Q42 Q58
    Date: 2016
  29. By: Kim Do; Ariel Dinar
    Abstract: This paper aims to contribute to understanding the existing knowledge gaps in the linkages of energy, water, and land use in Southeast Asia and explores the political economy of energy transition in the Mekong region (MR). Investigating the struggle over hydropower development and decision-making on water and land across the region, this study shows that countries that are the winners or losers in the hydropower development schemes are not the only ones managing the Mekong; rather, it is part of the region-wide strategy of nations to sustain the MR.The analysis also explores the key issues involved in each nation, as the rush to acquire sources of alternative energy and other benefits to meet rapid growth demand has led to circumstances of risk within the MR. The relationship between MR cooperation programmes and China is a main concern, and the paper discusses the roles of issue linkages as a mechanism for achieving sustainable development.
    Keywords: Natural resources, Power resources, Water
    Date: 2016
  30. By: Smith, David
    Abstract: Due in part to concerns over energy security and the environmental impacts of fossil fuels, recent United States energy policy has included provisions to promote renewable energy. The Energy Policy Act includes provisions for advanced biofuels from cellulosic biomass. Perennial bioenergy crops such as perennial grasses and woody crops are an alternative source of feedstock for biofuel with lower environmental impacts than their annual counterparts. Previous work has shown that, when perennial grasses are financially competitive with a farmer’s current crops, a majority of farmers will produce perennial grasses but only on a small portion of their land. One potential explanation for this is the risk posed by growing a new crop and selling it into a new emerging market. Therefore this study uses the land allocation under risk framework developed by Just and Zilberman (1988) to estimate structural parameters. The structural system is estimated using full information maximum likelihood. Observation of the acreage choice is condi- tional on the risk-adjusted profits being positive making the estimation method analogous to Heckman’s simultaneous sample correction method. As a result of using a structural mixed-processes system the scale parameter of the discrete choice equation can be identi- fied. Results suggest that agricultural landowners perceive an order of magnitude higher risk to perennial bioenergy production than their current production system. These results are partly driven by the risk management options currently available for commodity crops such as crop insurance, futures markets, and risk reducing inputs. Agricultural landowners also perceive woody crops as risker and with higher adoption costs than perennial grasses.
    Keywords: Crop Production/Industries, Production Economics, Resource /Energy Economics and Policy, Risk and Uncertainty, Q12, Q15, Q16,
    Date: 2016–05–25
  31. By: Aithal, Sreeramana; Aithal, Shubhrajyotsna
    Abstract: The applications of nanotechnology in different identified areas provide lots of business opportunities. It includes Food, Medicine, Cleaner water, Better quality air, Electronics, Fuel Cells, Solar Cells, Batteries, Space Travels, Chemical sensors, Sporting goods, Fabrics, Cleaning products, Energy, Environment, Health, and Life span increase. The paper covers the applications, and benefits of nanotechnology innovations in different industries, possible business opportunities for new nanotechnology based products and services due to challenges for human prosperity on earth, and the global strategy on nanotechnology business with an expected time scale and future possibilities of nanotechnology innovations based on products and services in the field and the magic (like science fictions) going to happen in human life. In this paper, important nanotechnology features and their usage in industry, various products and services based on nanotechnology innovations and Business Strategy for them are identified. Applications & benefits of NT in Agriculture, Food packing & Clean water, in Renewable Energy & Storage, and in Medicine are discussed. Various Business Opportunities for New Nanotechnology based Products and Services, Developing a global strategy for Nanotechnology Business including PEST analysis model and ABCD analysing framework. Finally, some of the Future possibilities of nanotechnology innovations are mentioned and discussed.
    Keywords: Nanotechnology applications, Business based on Nanotechnology products & services, Global strategies to be used in Nanotechnology business.
    JEL: M1 M10 M2
    Date: 2016–04
  32. By: Miniaoui, Hela; Schilirò, Daniele
    Abstract: The region of Gulf Arab states has vast reserves of petroleum that make it a vital source of the global economy. The reduction in oil prices and, in general, their high volatility pose strong challenges to the GCC economies. In the present contribution we argue that innovation and entrepreneurship can be the main drivers to diversify and develop the GCC countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE). In fact, in the long-run, diversified economies perform better than mono-sector economies. Moreover, innovation and entrepreneurship are key factors that trigger economic development and contribute to the degree of competitiveness, playing also an important stakeholder role in boosting the overall economic growth rates. Therefore, having an entrepreneurial and innovative capacity is very important in order to facilitate competitiveness and growth in a region such as that of GCC countries. More specifically, in this article we analyze the innovation environment in the GCC countries and their innovation performance. Also we consider the innovation policies, underlining the important role of institutions for innovation. To support our analysis, we take into account of several data and information sources, and surveys. In addition, we provide an overview on entrepreneurship in the GCC countries and grasp the current state of entrepreneurship in these countries. We also aim to identify the conditions to stimulate entrepreneurship and qualify the human capital in order to diversify and develop the non-oil private sector and improve the competitiveness of the GCC economies.
    Keywords: Innovation; Entrepreneurship; Diversification; Competitiveness; Growth; GCC countries
    JEL: L10 L26 M13 O31 O38
    Date: 2016–06
  33. By: Peter K. Kruse-Andersen (Department of Economics, University of Copenhagen)
    Abstract: A Schumpeterian growth model is developed to investigate how environmental policy affects economic growth when environmental policy also affects the direction of technical change. In contrast to previous models, production and pollution abatement technologies are embodied in separate intermediate good types. A set of stylized facts related to pollution emission, environmental policy, and pollution abatement expenditures is presented, and it is shown that the developed model is consistent with these stylized facts. It is shown analytically that a tightening of the environmental policy unambiguously directs research efforts toward pollution abatement technologies and away from production technologies. This directed technical change reduces economic growth and pollution emission growth. Simulation results indicate that even large environmental policy reforms have small economic growth effects. However, these economic growth effects have relatively large welfare effects which suggest that static models and exogenus growth models leave out an important welfare effect of environmental policy.
    Keywords: Directed technical change, endogenous growth, pollution, environmental policy, Schumpeterian growth model
    JEL: O30 O41 O44 Q55 Q58
    Date: 2016–06–14
  34. By: Aradhna Aggarwal
    Abstract: This study assesses the impact of the Clean Development Mechanism (CDM) on the dynamic capabilities of implementing firms in India. While doing so, it uses three indicators of firms' dynamic capabilities: R&D expenditures to sales ratio, fuel consumption to sales ratio and total factor productivity growth. It moves away from the analysis of technology transfer claims made in either Project Development Documents or primary surveys to use actual information on firms' performance for the analysis. A difference-in-difference design is used by defining CDM-implementing firms as the treatment group and non-CDM firms as the control group for the pre- and post-CDM implementation periods. We control for unobserved fixed effects of firms and time periods and observed characteristics of firms and CDM projects. The analysis draws on the balance sheet data of 612 firms from India between 2001 and 2012 from the PROWESS database. Our results reveal that the CDM implementation does not have significant outcome effects on the dynamic capabilities of firms. Much depends on the type and size of the project, and size of the firm.
    Keywords: CDM, Dynamic capability, R&D, Fuel efficiency, Total factor productivity, India
  35. By: Xu, Yuan
    Keywords: Environmental Economics and Policy,
    Date: 2016–02
  36. By: Hill , Brian; Bradley , Richard; Helgeson, Casey
    Abstract: The Intergovernmental Panel on Climate Change has developed a novel framework for assessing and communicating uncertainty in the findings published in their periodic assessment reports. But how should these uncertainty assessments inform decisions? We take a formal decision-making perspective to investigate how scientific input formulated in the IPCC's novel framework might inform decisions in a principled way through a normative decision model.
    Keywords: climate; change; confidence
    Date: 2016–01–28
  37. By: Daniel Rais
    Abstract: SECO Working Paper 5/2015
    Date: 2015–11–30
  38. By: Roberton C. Williams III
    Abstract: This paper examines potential environmental tax policy reforms. It focuses primarily on a carbon tax, but also more briefly considers a range of other possible changes. These include revising or eliminating various energy and environmental tax credits and deductions (many of which might become unnecessary in the presence of a carbon tax), as well as changes to energy taxes that have substantial environmental implications (such as the federal gasoline tax). The paper draws on recent theoretical and empirical research to evaluate the effects of such reforms on tax revenue, pollution emissions, economic efficiency, and income distribution.
    JEL: H21 H22 H23 Q50 Q58
    Date: 2016–06
  39. By: Waśniewski, Krzysztof
    Abstract: The present paper aims at assessing the possible efficiency of the principle of national contributions, assumed in the 2015 Paris Framework Convention on Climate Change. Strong historical evidence indicates that any significant development of constitutional states used to take place, in the past, on the rising tide of demographic growth. Presently, we are facing global demographic slowdown, and contesters argue that constitutional states are not the right address to write to if we want breakthrough technological change. This paper assumes that the capacity of constitutional states to carry out the obligations declared in the Framework Convention, i.e. to carry out deep technological changes in the global economy, depends on their economic power, which can be estimated as their capacity to appropriate capital. Empirical data, examined in this article, indicates that since the 1980s, constitutional states have been losing their economic power, and that the overall technological progress is more and more disconnected from that economic power of governments. Moreover, constitutional states seem to be losing their capacity to experiment with their own institutions.
    Keywords: Institutions; constitutional state; political economy
    JEL: B0 B5 H0 H1 H3 H8
    Date: 2016–05–25
  40. By: McInnes, Dougal; Betz, Regina; Jotzo, Frank; Kuch, Declan
    Keywords: Environmental Economics and Policy,
    Date: 2016–02

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