nep-ene New Economics Papers
on Energy Economics
Issue of 2016‒07‒02
35 papers chosen by
Roger Fouquet
London School of Economics

  1. A New Approach to an Age-Old Problem: Solving Externalities by Incenting Workers Directly By Greer K. Gosnell; John A. List; Robert Metcalfe
  2. Post-apartheid electricity policy and the emergence of South Africa.s renewable energy sector By Lucy Baker
  3. Is feed-in-tariff policy effective for increasing deployment of renewable energy in Indonesia? By Dewi Yuliani
  4. All you want to know about the Economics of Wind Power By G. Cornelis van Kooten
  5. Development of low-carbon energy supply system in Romania By Timilsina,Govinda R.; Jorgensen,Erika A.
  6. Laboratory experiments on the regulation of European network industries By Henze, B.
  7. Nuclear Power and the Uranium Market: Are Reserves and Resources Sufficient? By Roman Mendelevitch; Thanh Thien Dang
  8. The effects of climate risk on hydropower P3 contract value : Preliminary study of the Inga 3 Dam By Richard Swanson; Vivek Sakhrani
  9. Electricity Market Mergers with Endogenous Forward Contracting By Brown, David P.; Eckert, Andrew
  10. Dirty history versus clean expectations: Can energy policies provide momentum for growth? By Lucas Bretschger; Andreas Schaefer
  11. Green startups and local knowledge bases: Newborn suppliers of energy-related technologies in Italian Provinces By Colombelli, Alessandra; Quatraro, Francesco
  12. Long-term energy demand forecasting in Romania : an end-use demand By Malla,Sunil; Timilsina,Govinda R.
  13. An Amplification Mechanism in a Model of Energy By Anna Kormilitsina
  14. Sustainable Green Market Consumption in Thailand: Teenagers’ Perception and Attitudes By Jiumpanyarach, Waripas
  15. Integrating clean energy use in national poverty reduction strategies Opportunities and challenges in Rwanda.s Girinka programme By Chika Ezeanya; Abel Kennedy
  16. Uncertainty, Ambiguity and implications for Coal Seam Gas development: An experimental investigation By Ancev, Tiho; Taylor, Eloise; Merrett, Danielle
  17. Natural Gas Contract Decisions for Electric Power By Matthew Doyle; Ian Lange
  18. The allocation of energy resources in the very long run By Roger Fouquet
  19. The Perception of People Regarding Selection of Petrol Pump in Karachi By Alvi, Mohsin; Ikram, Midra; Mirza, Mohammad Haris; Khan, M. Mubashir Q.
  20. The legal configuration of hydrocarbon infrastructure By Ross Astoria
  21. The Oil Price Crash in 2014/15: Was There a (Negative) Financial Bubble? By Fantazzini, Dean
  22. Energy, Water and Food under Climate Change: Tradeoffs and Policies By Rosegrant, Mark W.
  23. Understanding Gasoline Price Dispersion By Demet Yilmazkuday; Hakan Yilmazkuday
  24. The Resource Curse Hypothesis Revisited: Evidence from a Panel VAR By Antonakakis, Nikolaos; Cunado, Juncal; Filis, George; Perez de Gracia, Fernando
  25. The Effect of Pollution on Worker Productivity: Evidence from Call-Center Workers in China By Tom Chang; Joshua Graff Zivin; Tal Gross; Matthew Neidell
  26. Firm-level environmentally sensitive productivity and innovation in China By Fujii, Hidemichi; Cao, Jing; Managi, Shunsuke
  27. Reducing Sulphur Emissions from Ships: The Impact of International Regulation By OECD
  28. Consumption and production indexes: options for contextualising EU GHG emissions data By Lavric, Lucia
  29. Does Export Product Quality Matter for CO2 Emissions? Evidence from China By Gozgor, Giray; Can, Muhlis
  30. Australian Emissions Reduction Subsidy Policy under Persistent Productivity Shocks By Ramezani, Fariba; Harvie, Charles; Arjomandi, Amir
  31. Environmental Policy and Endogenous Market Structure By Barbara Annicchiarico; Luca Correani; Fabio Di Dio
  32. Voting Behavior on Carbon Pollution from Power Plants By Joshua Hall; Elham Erfanian; Caleb Stair
  33. Carbon pricing under binding political constraints 1 and By Jesse D. Jenkins; Valerie J. Karplus
  34. Worldwide carbon shadow prices during 1990–2011 By Zhiyang Shen; Jean-Philippe Boussemart
  35. Carbon is Forever: a Climate Change Experiment on Cooperation By G. Calzolari; M. Casari; R. Ghidoni

  1. By: Greer K. Gosnell; John A. List; Robert Metcalfe
    Abstract: Understanding motivations in the workplace remains of utmost import as economies around the world rely on increases in labor productivity to foster sustainable economic growth. This study makes use of a unique opportunity to “look under the hood” of an organization that critically relies on worker effort and performance. By partnering with Virgin Atlantic Airways on a field experiment that includes over 40,000 unique flights covering an eight-month period, we explore how information and incentives affect captains’ performance. Making use of more than 110,000 captain-level observations, we find that our set of treatments—which include performance information, personal targets, and prosocial incentives—induces captains to improve efficiency in all three key flight areas: pre-flight, in-flight, and post-flight. We estimate that our treatments saved between 266,000-704,000 kg of fuel for the airline over the eight-month experimental period. These savings led to between 838,000-2.22 million kg of CO2 abated at a marginal abatement cost of negative $250 per ton of CO2 (i.e. a $250 savings per ton abated) over the eight-month experimental period. Methodologically, our approach highlights the potential usefulness of moving beyond an experimental design that focuses on short-run substitution effects, and it also suggests a new way to combat firm-level externalities: target workers rather than the firm as a whole.
    JEL: D01 J3 Q5 R4
    Date: 2016–06
  2. By: Lucy Baker
    Abstract: This paper situates South Africa.s new renewable energy sector within the context of the country.s electricity system and in turn its unique political economy. I chart major developments in the country.s energy policy and governance since the end of apartheid and show how electricity policy is determined by economic, political, and technological factors. I examine the contested negotiation of key policies, which have been fundamental to the introduction of a renewable energy sector. I consider how the new renewable energy sector has evolved thus far and raise key challenges and concerns for its future development.
    Keywords: South Africa, electricity, renewable energy, political economy, policy
    Date: 2016
  3. By: Dewi Yuliani
    Abstract: To accelerate the deployment of renewable energy technologies and to secure the electricity supply, the Government of Indonesia has issued several feed-in-tariff regulations for various renewable energy sources, which were previously predominated by pilot projects using government funding. The feed-in tariff is a policy instrument that has been successfully applied in many other countries to support renewable electricity, and it is known for its simplicity in implementation. This study undertakes exploratory research to evaluate how the policy works in Indonesia, not only as stated in official reports, but also in the field. The study's results show that while the policy triggers investment interest in renewable power plants, there are many obstacles encountered at the deployment stage due to imperfections in the feed-in-tariff policy package and some non-cost factors. In addition, several unanticipated side effects were identified at the local level as a consequence of the upturn in investment interest. The study indicates that the transition to cleaner energy is much more challenging for developing countries such as Indonesia.
    Keywords: feed-in-tariff policy, renewable energy, deployment
    Date: 2016
  4. By: G. Cornelis van Kooten
    Abstract: Mitigating climate change will require reduced use of fossil fuels to generate electricity. To do so and eschewing nuclear power, countries have turned to wind energy. In this paper, the economics of wind energy are investigated by first examining the social costs and benefits of replacing fossil fuels, with the deciding factor favoring wind based on externalities. The externality costs of fossil fuels relate to adverse health effects of pollutants and the contribution of carbon dioxide emissions to global warming, while the adverse spillovers from wind energy relate to the nature of wind turbines. In general, economic studies find that, when allowance is made for the negative externalities associated with fossil fuel burning, the benefits of wind energy exceed their costs, thereby justifying public intervention. Wind energy is only viable because of generous subsidies, which are shown to be generally effective in bringing about the investments governments desire. Economic studies that only examine costs and benefits on a macro scale, however, neglect or underestimate the indirect costs of wind energy, which are associated with the impact that intermittent supply has on the operation and management of an electricity grid. To gain a handle on these costs, electricity systems are discussed from generation through transmission and distribution to retail demand. One aspect of this discussion relates to the adequacy of investment in marginal (peak time) generating capacity. In the analysis, it is assumed that the wholesale market for electricity is competitive and that demand responds to changes in spot prices; the implications of these assumptions are also discussed. While most studies are generally optimistic about the potential for integrating wind energy, researchers have identified problems with the inability to store energy (except behind hydroelectric dams), the need for fast-responding backup generating capacity, network instability, low capacity factors for wind power, et cetera, that could limit the usefulness of wind at the high penetration rates now envisioned. Overall, it may turn out that there are economic and physical limits to the proportion of electricity that can be generated by wind and other intermittent energy sources.
    Keywords: Electricity; regulated industries; peak load pricing; intermittent energy; storing wind energy; climate change; wholesale spot market for electricity; demand management; fossil fuels and externalities
    JEL: H41 L51 L94 Q42 Q48 Q54
    Date: 2015–09
  5. By: Timilsina,Govinda R.; Jorgensen,Erika A.
    Abstract: Despite the declining trends in total energy consumption, greenhouse gas emissions, energy intensity, and emission intensity over the past two decades, Romania still emits more greenhouse gas per unit of output than many other members of the European Union. The country is looking for further greening of its energy supply system to achieve the clean energy and climate change mitigation goals included in the European Union's 2030 target and 2050 Roadmap. Using an energy supply optimization model, TIMES, this study develops energy supply mixes for Romania under a baseline scenario that satisfies the European Union's current energy and climate targets for 2020, a green scenario that satisfies the European Union's 2030 energy and climate targets, and a super green scenario that satisfies the European Union's prospective 2050 energy road map. The study finds that although Romania could achieve the green scenario at a moderate cost, it would be challenging and costly to achieve the super green scenario.
    Date: 2016–06–07
  6. By: Henze, B. (Tilburg University, School of Economics and Management)
    Abstract: The main objective of this thesis is to use economic laboratory experiments in order to evaluate the performance of regulatory schemes and market designs in addressing challenges encountered in the regulation of European network industries. Chapter 2 assesses whether regulatory holidays and Long Term Financial Transportation Rights (LTFTR) can provide a network operator with incentives for optimal network expansion. However, in the studied environment which captures essential features of gas transportation networks, neither of the two schemes generates improvements over a baseline of price cap regulation. Chapter 3 investigates whether auctions can be used to successfully implement two-part tariff Incremental Surplus Subsidy (ISS) schemes under aggregate demand uncertainty. Depending on the method used for determining the network users’ individual contributions to the subsidy, multi-unit Vickrey auctions yield promising results. Chapter 4 finally studies the effects of providing varying degrees of transparency in a duopolistic market for experience goods. Under full transparency, the two sellers are found not to maximally differentiate the quality of their products as theory would predict but to rather engage in fierce price competition at high quality levels. Moreover, even intermediate levels of transparency result in significantly higher consumer surplus and total welfare when compared to a situation without any transparency
    Date: 2016
  7. By: Roman Mendelevitch; Thanh Thien Dang
    Abstract: The increase of the use of atomic power in some emerging economies, in particular South Korea and China, has revitalized a discussion regarding the availability of uranium resources. Despite the fact that global uranium resources are more than sufficient to supply reactor-related demand for the rest of the century, some voices in the nuclear community expect a supply shortage for the upcoming decades, and the risk of prices tippling in the next 20 years. They argue with delayed construction times, untimely mining expansion and unfavorable market conditions. This Roundup takes a closer look at the arguments of the debate.
    Date: 2016
  8. By: Richard Swanson; Vivek Sakhrani
    Abstract: Large hydropower dams are at the centre of a debate weighing the value and costs of renewable energy against the risks of climate change. The debate is especially relevant on the African continent, which offers vast hydropower potential, but which is exposed to possible climatic changes.This paper presents one possible framework for analysing, valuing, and mitigating the possible impacts of climate change on investment returns. It applies the framework to the proposed series of Inga projects. We find that project concessions can recapture value by phasing dam build-out. Our optionality framework can help structure P3 contracts to improve hydropower project value as well as insure sponsors against climate risk.
    Keywords: Environment, Renewable energy sources
    Date: 2016
  9. By: Brown, David P. (University of Alberta, Department of Economics); Eckert, Andrew (University of Alberta, Department of Economics)
    Abstract: We analyze the effects of electricity market mergers in an environment where firms endogenously choose their level of forward contracts prior to competing in the wholesale market. We apply our model to Alberta's wholesale electricity market. Firms have an incentive to reduce their forward contract coverage in the more concentrated post-merger equilibrium. We demonstrate that endogenous forward contracting magnifies the price increasing impacts of mergers, resulting in larger reductions in consumer surplus. Current market screening procedures used to analyze electricity mergers consider firms' pre-existing forward commitments. We illustrate that ignoring the endogenous nature of firms' forward commitments can yield biased conclusions regarding the impacts of market structure changes such as mergers. In particular, we show that the price effects of mergers can be largely underestimated when forward contract quantities are held at pre-merger levels. Whether the profits of the merged firm are greater with fixed or endogenous forward quantities is ambiguous.
    Keywords: Electricity; Mergers; Forward Contracts; Market Power; Regulation
    JEL: D43 L40 L51 L94 Q40
    Date: 2016–06–07
  10. By: Lucas Bretschger (ETH Zurich, Switzerland); Andreas Schaefer (ETH Zurich, Switzerland)
    Abstract: We study the impact of economic policy on the importance of history and expectations for the macroeconomic performance of an economy. In our model the energy mix is based on the conversion of heterogeneous energy sources. Markups over marginal costs are endogenous so that the marginal revenue product of capital becomes non-monotonic in capital. We derive multiple steady states and identify regions in which initial conditions are insufficient as a selection criterion for development. In these situations, pure expectations determine the equilibrium selection process which is crucial for long-run performance. Energy policy affects the interplay between history and expectations by shifting the region where expectations matter and by affecting the location of the equilibria in the dirty and the clean economy. We find that taxes and subsidies should be used simultaneously to guide an energy transition. We argue that expectations and momentum effects are important for the energy transition because they decrease policy costs and thus raise political acceptance.
    Keywords: Clean production, multiple equilibria, history vs. expectations, energy transformation, endogenous markups
    JEL: Q43 O44 Q50 O11
    Date: 2016–05
  11. By: Colombelli, Alessandra; Quatraro, Francesco (University of Turin)
    Abstract: There is wide consensus about the importance of green technologies for achieving superior economic and environmental performances. The literature on their determinants has neglected the creation of green start-ups as a channel to bring about green technologies in the market. Drawing upon the knowledge spillovers theory of entrepreneurship, we test the relevance of local knowledge stocks, distinguishing between clean and dirty stocks, for the creation of green start-ups. Moreover, the effects of the technological composition of local stocks is investigated, by focusing on technological variety, both related and unrelated, as well as on coherence. Consistently with recent literature, green start-ups are associated to higher levels of variety, pointing to the relevance of diverse and heterogeneous knowledge sources, but in related and complementary technological fields.
    Date: 2016–04
  12. By: Malla,Sunil; Timilsina,Govinda R.
    Abstract: This study develops an end-use energy demand analysis model for Romania to project energy demand by sector and end-use for 2015-50. The study finds that Romania's energy demand in 2050 would be 34 percent higher than the level in 2013. The industry sector would be the largest final energy-consuming sector, surpassing the residential sector from 2025 onward. The services sector would exhibit the fastest growth of energy consumption in line with the expected structural change from manufacturing to services. Although population in the country is projected to drop by 7 percent in 2050 from the 2013 level, electricity demand would increase by 46 percent over the same period, because of increased household income and the expanded service sector, which is relatively electricity intensive. Still, per capita electricity consumption in Romania will be about half the European Union 28 average. At the end-use level, thermal processes in the industry sector, space heating in the residential and services sectors, and road transportation in the transport sector would be dominant throughout the study period. The study also shows that improvement of energy efficiency in the heating system would be the main channel to cut energy demand in the country.
    Keywords: Energy Demand,Climate Change Economics,Energy Production and Transportation,Energy and Environment,Transport Economics Policy&Planning
    Date: 2016–06–07
  13. By: Anna Kormilitsina (Southern Methodist University)
    Abstract: This paper investigates a propagation mechanism of the energy price shock in a model where capital utilization is associated with costly energy consumption. Endogenous depreciation is an important element of the model, as it has been shown to produce a significant negative effect of energy prices on output. I show that the amplifying effect of endogenous depreciation is determined by the choice of the functional form and calibration strategy for the energy cost function. My estimates of the energy cost function allow to conclude that the energy price shock has only a moderate effect on output in this model, while endogenous depreciation mitigates rather than amplifies the effect of the energy price shock.
    Keywords: energy price, oil price shock, RBC model, endogenous depreciation
    JEL: E32 Q43
    Date: 2015–11
  14. By: Jiumpanyarach, Waripas
    Keywords: Agricultural and Food Policy, Environmental Economics and Policy,
    Date: 2016–02
  15. By: Chika Ezeanya; Abel Kennedy
    Abstract: The disappearance of Rwanda. forests and attendant change in climatic conditions prompted the government to explore clean energy alternatives such as biogas. Unlike at any other time in Rwanda.s history, more and more Rwandans in rural areas are becoming owners of cattle because of Government of Rwanda.s agricultural direct assistance and poverty reduction programme known as Girinka.This paper focuses on the various strategies employed by the government of Rwanda in achieving increased biogas use among the rural poor Girinka beneficiaries who use cow dung for their domestic biogas plants. Conditions necessary for successful implementation of clean energy pro-poor reforms in rural communities are explored.
    Date: 2016
  16. By: Ancev, Tiho; Taylor, Eloise; Merrett, Danielle
    Keywords: Risk and Uncertainty,
    Date: 2016–02
  17. By: Matthew Doyle (Division of Economics and Business, Colorado School of Mines); Ian Lange (Division of Economics and Business, Colorado School of Mines)
    Abstract: Natural gas power plants can further specify their procurement contracts with pipeline distributors using a firm contract option that guarantees delivery at an additional cost. Using transaction level data from 2008-2012 we empirically test what characteristics lead to use of firm contracts and how the premium for firm contracts changes with these characteristics. Using variation in power plants technology type (combined vs. simple cycle) and electricity market structure (restructured vs. regulated), we generally find support for transaction cost theory in the data. Smaller plants, plants located in states with more variance in electricity demand, and plants in states with more inflow pipeline capacity are statistically less likely to use a firm contract. Firm contracts are on average 2.5% (14 cents per Mcf) more expensive and this premium increases as the weather is colder and the state a plant is located in has less inflow capacity.
    Keywords: Natural Gas, Procurement Contracts, Pipelines, Electricity
    JEL: Q40 L94 L95 L14
    Date: 2016–06
  18. By: Roger Fouquet
    Abstract: This paper investigates the Nordhaus (1973) model developed to understand how markets allocate energy resources. In particular, the model proposes that royalties earned by non-renewable energy producers are closely related to the cost of the backstop energy source, the interest rate and the switching date to the backstop energy source. Here, the paper presents the prices of the main and backstop energy sources, extraction costs and royalties, as well as transport costs, taxes and interest rates, over more than five hundred years in Britain to test the model’s ability to explain very long run market behavior. While the model needs a more rigorous analysis, the very long run data and this crude test suggests that certain episodes might be explained by the model and that others do not appear to be. Also, each of the three explanatory variables do appear to be relevant in these explained episodes. In general, though, energy markets appear to be myopic, unaware of the limits of the non-renewable resource being traded, and only in moments of crisis do they consider the finiteness of the resource and, then, perhaps too dramatically, triggering major new technological, infrastructure and R&D investments.
    JEL: N0
    Date: 2015
  19. By: Alvi, Mohsin; Ikram, Midra; Mirza, Mohammad Haris; Khan, M. Mubashir Q.
    Abstract: The objective of the study is to get an idea about people’s perception on the choice of petrol pumps in Karachi. To accomplish the purpose, it was hypothesized that (1) Location has a significant impact on the choice of Petrol Service Stations (2) Quality has a significant impact on the choice of Petrol Service Stations (3) Rewards has a significant impact on the choice of Petrol Service Stations. A sample of 200 respondents was randomly selected who filled a self reporting questionnaire. One sample t-test was applied on gathered data to assess the observations. It was revealed that neither quality nor location and reward have an influence on the consumer choice over selection of petrol pump.
    Keywords: Consumer Choice, fuel refilling station, Karachi, One Sample T-test
    JEL: D2 D3 D4 M1 M2 M3
    Date: 2016–01–29
  20. By: Ross Astoria
    Abstract: The United States. greenhouse gas mitigation strategy decentralizes mitigation responsibility to the states and states have primary regulatory jurisdiction over electrical power utilities. Using the biophysical approach, this paper introduces the notion of hydrocarbon infrastructure. Focusing on a utility rate case from the state of Wisconsin, I argue that the law and the electrical markets which it organizes presuppose hydrocarbon infrastructure. A necessary aspect of greenhouse gas mitigation and transition to renewable energy is a state-level reconfiguration of law and legal institutions around renewable energy generation. Length: 17 pages
    Keywords: Keywords: electric utilities, energy returned on energy invested, law
    Date: 2016
  21. By: Fantazzini, Dean
    Abstract: This paper suggests that there was a negative bubble in oil prices in 2014/15, which decreased them beyond the level justified by economic fundamentals. This proposition is corroborated by two sets of bubble detection strategies: the first set consists of tests for financial bubbles, while the second set consists of the log-periodic power law (LPPL) model for negative financial bubbles. Despite the methodological differences between these detection methods, they provided the same outcome: the oil price experienced a statistically significant negative financial bubble in the last months of 2014 and at the beginning of 2015. These results also hold after several robustness checks which consider the effect of conditional heteroskedasticity, model set-ups with additional restrictions, longer data samples, tests with lower frequency data and with an alternative proxy variable to measure the fundamental value of oil.
    Keywords: Oil, WTI, Brent, Generalized sup ADF test, LPPL, Bubble
    JEL: C15 C22 C51 C53 G17 O13 Q47
    Date: 2016–06–06
  22. By: Rosegrant, Mark W.
    Keywords: Agricultural and Food Policy, Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2016–02
  23. By: Demet Yilmazkuday (Department of Economics, Florida International University); Hakan Yilmazkuday (Department of Economics, Florida International University)
    Abstract: This paper models and estimates the gasoline price dispersion across time and space by using a unique data set at the gas-station level within the U.S.. Nationwide effects (measured by time Â…fixed effects or crude oil prices) explain up to about 51% of the gasoline price dispersion across stations. RefiÂ…nery-specific costs, which have been ignored in the literature due to using local data sets within the U.S., contribute up to another 33% to the price dispersion. While state taxes explain about 12% of the price dispersion, spatial factors such as local agglomeration externalities, land prices, distribution costs of gasoline explain up to about 4%. The contribution of brand-specifiÂ…c factors is relatively minor.
    Keywords: Gasoline Prices, Gas-Station Level Analysis, Nighttime Lights, Land Prices, the United States
    JEL: L11 L81 R32 R41
    Date: 2016–06
  24. By: Antonakakis, Nikolaos; Cunado, Juncal; Filis, George; Perez de Gracia, Fernando
    Abstract: The objective of this paper is to revisit the resource curse hypothesis both within and between countries of different democratic footprint, based on a dynamic model that properly accounts for endogeneity issues. To achieve that, we apply a panel Vector Auto-Regressive (PVAR) approach along with panel impulse response functions to data on oil abundance variables, economic growth and several political institutional variables in 76 countries classified by different income groupings, level of development and oil importing or exporting status, over the period 1980-2012. Our results suggest that controlling for the quality of political institutions is important in rendering the resource course hypothesis significant. Doing so, the resource curse hypothesis is documented mainly for developing economies, net oil-exporters and medium-high income countries. Specifically, when economies from the aforementioned groups are characterised by weak quality of political institutions, then oil abundance is not growth-enhancing.
    Keywords: Resource curse, Oil abundance, Economic growth, Institutions, Panel VAR.
    JEL: C33 O47 Q32 Q33 Q34
    Date: 2015–12–15
  25. By: Tom Chang; Joshua Graff Zivin; Tal Gross; Matthew Neidell
    Abstract: We investigate the effect of pollution on worker productivity in the service sector by focusing on two call centers in China. Using precise measures of each worker’s daily output linked to daily measures of pollution and meteorology, we find that higher levels of air pollution decrease worker productivity by reducing the number of calls that workers complete each day. These results manifest themselves at commonly found levels of pollution in major cities throughout the developing and developed world, suggesting that these types of effects are likely to apply broadly. When decomposing these effects, we find that the decreases in productivity are explained by increases in time spent on breaks rather than the duration of phone calls. To our knowledge, this is the first study to demonstrate that the negative impacts of pollution on productivity extend beyond physically demanding tasks to indoor, white-collar work.
    JEL: J22 J24 Q51 Q53
    Date: 2016–06
  26. By: Fujii, Hidemichi; Cao, Jing; Managi, Shunsuke
    Abstract: This study analyzes productive efficiency in relation to CO2 emissions using a unique dataset of 562 Chinese manufacturing firms for the period from 2005 to 2009. We develop a directional distance function approach to identify technical innovators in the area of CO2 emissions. The results indicate that a large number of technical innovators are observed in the textile, paper, steel, and computer industries. Furthermore, there are clearly different trends in productivity change and corporate performance across industries and provinces. This result implies that policy makers need to consider industrial and regional characteristics to develop effective policies that conserve energy and reduce CO2 emissions.
    Keywords: Technical innovator; total factor productivity; technology adoption; CO2 emissions; Chinese manufacturing firm
    JEL: D24 O14 Q55
    Date: 2016–05
  27. By: OECD
    Abstract: This study assesses the impact of international sulphur emission reduction regulations on global shipping. Ships emit a large amount of sulphur oxides that have significant health impacts. To mitigate these, international regulations cap the sulphur content of ship fuel. In certain parts of the world, emission control areas (ECAs) with even stricter standards have been established. In the emission control areas, new requirements introduced in 2015 limit the sulphur content of ship fuel to 0.10%. A new, lower global sulphur cap of 0.50% is planned for 2020. This report examines the 2015 cap effects on shipping and the potential effects of the new requirements foreseen for 2020. It assesses the cost increase for maritime transport associated with the sulphur caps, impacts on shipping operations as well as on other transport modes, and on the environment. The report also highlights policy gaps and challenges for the enforcement of sulphur emissions regulation for shipping.
    Date: 2016–05–01
  28. By: Lavric, Lucia
    Abstract: Using simple indexes of consumption alongside GHG emissions trends can help understand how trade may affect emissions and whether short term fluctuations in emissions are sustainable. An illustration for the old EU Member States based on Prodcom and EU ETS data is presented here.
    Keywords: sustainable consumption, consumption-based GHG accounting
    JEL: Q5
    Date: 2016–06
  29. By: Gozgor, Giray; Can, Muhlis
    Abstract: This paper re-estimates the environmental Kuznets curve over the period 1971–2010 in China. To this end, it uses the unit root tests with one structural break and the autoregressive-distributed lag (ARDL) estimations. The special role is given to the impacts of export product quality and energy consumption on CO2 emissions in the empirical models. The paper finds that the environmental Kuznets curve hypothesis is valid in China. It also observes the positive effect from energy consumption to CO2 emissions. In addition, it finds that the export product quality is negatively associated with CO2 emissions. The paper also argues potential implications.
    Keywords: environmental Kuznets curve; energy consumption; export product quality; ARDL estimation; structural break
    JEL: C32 L15 O13 Q56
    Date: 2016–06–09
  30. By: Ramezani, Fariba; Harvie, Charles; Arjomandi, Amir
    Keywords: Environmental Economics and Policy, Resource /Energy Economics and Policy,
    Date: 2016–02
  31. By: Barbara Annicchiarico (DEF and CEIS, Università di Roma "Tor Vergata"); Luca Correani (Dipartimento di Economia e Impresa, Università degli Studi della Tuscia); Fabio Di Dio (Sogei S.p.a. - IT Economia)
    Abstract: This paper presents a simple dynamic general equilibrium model with supply-side strategic interactions to study the economic effects of mitigating greenhouse gas emissions in an economy with an emission cap and oligopolistic firms competing on prices. With such endogenous market structure a gradual decarbonization policy is likely to induce higher markups, while the number of active firms displays a U-shaped behavior, first decreasing and then increasing. In the long run more firms are active, but they transfer a part of the compliance cost to households by charging a higher markup. The negative effects on the level of economic activity of this anti-competitive outcome are strongly mitigated by recycling policies.
    Keywords: Environmental Policy, Dynamic General Equilibrium Model, Endogenous Market Structure.
    JEL: E32 Q54 Q58
    Date: 2016–06–22
  32. By: Joshua Hall (West Virginia University, Department of Economics); Elham Erfanian (West Virginia University, Agricultural and Natural Resource Economics); Caleb Stair (West Virginia University, Agricultural and Natural Resource Economics)
    Abstract: Environmental regulation is a polarizing issue. In 2014, a bill came to a vote in the U.S. House of Representatives that would limit the powers of the Environmental Protection Agency. This empirical note identifies the characteristics that influenced the voting behavior of House Representatives on this bill. Political party, educational background, the location quotient of the mining industry in the representative’s state, and the amount of emissions in the Representative’s state are considered. A member’s political party is the primary factor influencing voting behavior but the location quotient of the mining industry also plays an important role.
    Keywords: EPA regulations; carbon emissions; fossil fuel-fired; electric utility generating
    JEL: H7 Q4 Q58
    Date: 2016–06
  33. By: Jesse D. Jenkins; Valerie J. Karplus
    Abstract: The economic prescription for climate change is clear: price carbon dioxide (CO2) and other greenhouse gas emissions to internalize climate damages. In practice, a variety of political economy constraints prevent the introduction of a carbon price equal to the full social cost of emissions. This paper develops insights about the design of climate policy in the face of binding political constraints, formulated here as limits on the CO2 price itself, on increases in energy prices, and on energy consumer and producer surplus loss. We employ a stylized model of the energy sector to develop intuition about the welfare-maximizing combination of CO2 price, subsidy for clean energy production, and lump-sum transfers to energy consumers or producers under each constraint. We find that the strategic use of subsidies or transfers can compensate for or relieve political constraints and significantly improve the efficiency and environmental efficacy of carbon pricing policies..
    Keywords: political economy, carbon pricing, environmental economics, public economics, climate change, instrument choice, carbon tax, emissions trading
    Date: 2016
  34. By: Zhiyang Shen (IESEG School of Management (LEM 9221-CNRS)); Jean-Philippe Boussemart (University of Lille 3 and IESEG School of Management (LEM 9221-CNRS); CNRS-LEM 9221 and IESEG School of Management)
    Abstract: Unlike most previous research, which has focused on estimating carbon shadow prices at regional or sectoral levels, this paper attempts to estimate carbon shadow prices at a worldwide level. A non-parametric robust framework estimates carbon shadow prices for 119 countries from all continents in 12 large groups. Our empirical results reveal that the global carbon shadow price is increasing by around 2.24% per annum and reached 2845 US dollars per ton in 2011. Regional carbon shadow prices present significant disparities and evolve within different categories over the analyzed period. We find a substantial sigma convergence process of carbon shadow prices among countries during 1990–2007 while divergence appears after the global financial crisis. We then analyze the relationship between carbon shadow prices and the implementation of the Kyoto Protocol.
    Keywords: Undesirable Output, Carbon Shadow Price, Robust Frontier, Weak Disposability
    JEL: D24 Q56
    Date: 2016–01
  35. By: G. Calzolari; M. Casari; R. Ghidoni
    Abstract: Greenhouse gases generate impacts that can last longer than human civilization itself. Such persistence may affect the behavioral ability to cooperate. Here we study mitigation efforts within a framework that reflects key features of climate change and then contrasts a dynamic versus a static setting. In a treatment with persistence, the pollution cumulates and generates damages over time while in another treatment it has only immediate effects and then disappears. We find that cooperation is not hampered, on average, by pollution persistence. Mitigation efforts, though, should not be delayed, because cooperation levels appear to deteriorate for high stocks of pollution.
    JEL: C70 C90 D03 Q54
    Date: 2016–05

This nep-ene issue is ©2016 by Roger Fouquet. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.