|
on Energy Economics |
| By: | Geoffrey Heal |
| Abstract: | I investigate the cost and feasibility of reducing US GHG emissions by 80% from 2005 levels by 2050. The US has stated in its Paris COP 21 submission that this is its aspiration, and Hillary Clinton has chosen this as one of the goals of her climate policy. I suggest that this goal can be reached at a cost in the range of $42 to $176 bn/year, but that it is challenging. I assume that the goal is to be reached by extensive use of solar PV and wind energy (66% of generating capacity), in which case the cost of energy storage plays a key role in the overall cost. I conclude tentatively that more limited use of renewables (less than 50%) together with increased use of nuclear power might be less costly. |
| JEL: | Q40 Q42 Q54 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22525&r=ene |
| By: | Kyle C. Meng |
| Abstract: | Addressing climate change requires transitioning away from coal-based energy. Recent structural change models demonstrate that temporary interventions could induce permanent fuel switching when transitional dynamics exhibit strong path dependence. Exploiting changes in local coal supply driven by subsurface coal accessibility, I find that transitory shocks have strengthening effects on the fuel composition of two subsequent generations of U.S. electricity capital. To facilitate a structural interpretation, I develop a model which informs: tests that find scale effects as the relevant mechanism; recovery of the elasticity of substitution between coal and non-coal electricity; and simulations of future carbon emissions following temporary interventions. |
| JEL: | N51 N52 O41 Q35 Q43 Q54 Q58 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22536&r=ene |
| By: | Ponta, Linda; Raberto, Marco; Teglio, Andrea; Cincotti, Silvano |
| Abstract: | Major structural changes to the current fossil-fuel based economic system are needed in order to address the climate change challenge. To this purpose, effective Renewable Energy Sources (RES) support policies, along with concrete efforts towards the improvement of energy efficiency, have been adopted in many countries. One of these policies is the feed-in-tariff (FiT) mechanism, according to which electricity produced by RES is sold at guaranteed prices (feed-in tariffs), which are higher than market ones, for fixed periods of time. In this paper, we investigate how to foster a sustainability transition of the energy system towards an economically and ecologically sustainable growth path by using an enriched version of the Eurace model. Eurace has been enriched by including an energy sector where electricity is demanded by domestic producers and is supplied by a fossil-fuel based power producer as well as a renewable-energy based one. Both power producers undertake pricing and capacity investment decisions based on the price of imported fossil fuel and feed-in tariff government policy. In particular, we investigate how the economy is affected by the fiscal costs of financing the feed-in tariff mechanism and by the benefits of lower fossil fuels imports, in order to devise the policy with the best cost-benefit trade-off for the macroeconomy as a whole. Results show that the feed-in-tariff policy is effective in fostering the sustainability transition of the energy sector and that it increases the level of investments in the economy with a slightly positive impact on the unemployment rates. Moreover, we observe that its financing costs do not impact government finances in a relevant way. On the other hand, the higher level of investments occurs at the expense of the production of consumption goods, therefore with a negative impact for the living standards, at least according to the perspective of a consumerist society. However, if factors like better employment rates and the reduced GHG emissions are also taken into account, along with consumption, by an appropriate preference function, the final outcome on well-being should be probably deemed as favourable. |
| Keywords: | sustainability transition, energy sector, feed-in tariff, agent-based modelling |
| JEL: | C63 Q01 Q42 Q43 Q56 |
| Date: | 2016–08–18 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73183&r=ene |
| By: | De Groote, Olivier; Verboven, Frank |
| Abstract: | Many countries have relied on subsidies to promote the adoption of renewable energy technologies. We study a generous program to promote the adoption of solar photovoltaic (PV) systems through subsidies on future electricity production, rather than through upfront investment subsidies. We develop and estimate a tractable dynamic model of technology adoption, also accounting for local market heterogeneity. We exploit rich variation at pre-announced dates in the future production subsidies. Although the program led to a massive adoption, we find that households significantly undervalued the future benefits from the new technology. This implies that an upfront investment subsidy program would have promoted the technology at a much lower budgetary cost, so that the government essentially shifted the subsidy burden to future generations of electricity consumers. |
| Keywords: | dynamic discrete choice; myopia; renewable energy technologies |
| JEL: | C51 Q48 Q58 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11438&r=ene |
| By: | - |
| Abstract: | This document presents the evaluation report of the “Regional dialogue on energy efficiency and renewable energy policy” meeting, aimed at presenting one of the key targeted outputs of the GIZ/ECLAC project titled: “Sustainable energy in the Caribbean: Reducing the carbon footprint in the Caribbean through the promotion of energy efficiency and the use of renewable energy technologies.” The objective of the meeting was to foster dialogue and to share experiences among Caribbean countries on issues related to energy efficiency and renewable energy policy, with a view towards crafting better strategies for enhancing the subregion’s energy security in the face of the challenge of global climate change. |
| Keywords: | ENERGIA, RECURSOS ENERGETICOS, RENDIMIENTO ENERGETICO, POLITICA ENERGETICA, FUENTES DE ENERGIA RENOVABLES, ENERGY, ENERGY RESOURCES, ENERGY EFFICIENCY, RENEWABLE ENERGY SOURCES, ENERGY POLICY |
| Date: | 2016–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col094:40457&r=ene |
| By: | - |
| Abstract: | This document identifies mechanisms for financing investments in energy efficiency and renewable energy initiatives in the Commonwealth of Dominica. The overall objective of this study is to examine financing opportunities which will provide greater incentives for the development of energy efficiency measures and implementation of renewable energy technologies. |
| Keywords: | ENERGIA, POLITICA ENERGETICA, FUENTES DE ENERGIA RENOVABLES, RENDIMIENTO ENERGETICO, PROYECTOS DE DESARROLLO, FINANCIACION, ENERGY, ENERGY POLICY, RENEWABLE ENERGY SOURCES, ENERGY EFFICIENCY, DEVELOPMENT PROJECTS, FINANCING |
| Date: | 2016–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col095:40460&r=ene |
| By: | Guerra, Sergio |
| Abstract: | This paper was prepared to guide the first session of the training workshop Introduction to Financial Feasibility Assessment of EE and RE Projects in the Caribbean. It explores two potential reasons that might be hindering the adoption of energy efficiency policies in the Caribbean. The first reason is related to the availability of primary infrastructure. Countries with deficits on their primary infrastructure might not consider energy efficiency policies as a priority for a national discussion. The second reason is debt overhang. In this type of scenario, countries might be dissuaded to conduct new investments since earnings/savings from projects would go directly to debt holders. Having a clear understanding of a country’s macro environment and its competing needs is an important preliminary step before promoting energy efficiency projects. |
| Keywords: | ENERGIA, RECURSOS ENERGETICOS, POLITICA ENERGETICA, RENDIMIENTO ENERGETICO, MANUALES, ENERGY, ENERGY RESOURCES, ENERGY POLICY, ENERGY EFFICIENCY, MANUALS |
| Date: | 2016–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col095:40459&r=ene |
| By: | - |
| Abstract: | Saint Lucia is highly dependent on imported fossil fuels for energy production, which makes the country vulnerable to price volatility and supply shortages. Also, it is well known that the initial cost of investing in renewable technologies can be prohibitive so there is a need to find ways to avert and/or reduce these costs to consumers. In addition, Saint Lucia has substantial natural energy resources with a high potential in geothermal as a reliable energy source, and a smaller scale with solar, wind and hydro power. However, renewable energy contributes less than 1 per cent to the country’s energy matrix. Therefore, the overall objective of this study is to examine financing opportunities which could provide greater incentives for the development of energy efficiency measures and deployment of renewable energy technologies. |
| Keywords: | ENERGIA, POLITICA ENERGETICA, FUENTES DE ENERGIA RENOVABLES, RENDIMIENTO ENERGETICO, PROYECTOS DE DESARROLLO, FINANCIACION, ENERGY, ENERGY POLICY, RENEWABLE ENERGY SOURCES, ENERGY EFFICIENCY, DEVELOPMENT PROJECTS, FINANCING |
| Date: | 2016–05–20 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col095:40461&r=ene |
| By: | McGuire, Gregory |
| Abstract: | The objective of this study is to research barriers to the identification and implementation of mechanisms for enhancing energy efficiency and investment in renewable energy in the Caribbean. Specifically the study aims to provide an assessment of the region’s status with respect to energy efficiency and renewable energy and to identify mechanisms for the enhancement of energy initiatives. |
| Keywords: | ENERGIA, RENDIMIENTO ENERGETICO, FUENTES DE ENERGIA RENOVABLES, INNOVACIONES TECNOLOGICAS, ENERGY, ENERGY EFFICIENCY, RENEWABLE ENERGY SOURCES, TECHNOLOGICAL INNOVATIONS |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col095:40458&r=ene |
| By: | Willems, Bert (Tilburg University, TILEC); Mulder, M. |
| Abstract: | This paper examines a decade of retail competition in the Dutch electricity market and discusses market structure, regulation, and market performance. We find a proliferation of product variety, in particular by the introduction of quality-differentiated green-energy products. Product innovation could be a sign of a well-functioning market that caters to customer’s preferences, but it can also indicate a strategic product differentiation to soften price competition. Although slightly downward trending, gross retail margins remain relatively high, especially for green products. Price dispersion across retailers for identical products remains high, as also across products for a single retailer. We do not find evidence of asymmetric pass-through of wholesale costs. Overall, the retail market matured as evidenced by fewer consumer complaints and higher switching rates. A fairly intensive regulation of mature energy retail markets appears to be needed to create benefits for consumers. |
| Keywords: | retail electricity market; competition; regulation; ex-post assessment |
| JEL: | L94 L43 L11 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:tiu:tiutil:072ddbca-1c36-4c2c-a4eb-eb9b3fc3d837&r=ene |
| By: | Mónica Paola Flórez Estrada; Beatriz Mercedes Gómez Duque; John Jairo García Rendón |
| Abstract: | El Mercado ele?ctrico colombiano ha venido enfrentando dificultades con la ocurrencia del Feno?meno de El Nin?o 2015-2016 que evidenciaron fallas en el disen?o del mercado. El presente trabajo de grado hace un referenciamiento internacional de diferentes tipos de disen?o de mercados ele?ctricos enfocado principalmente a los mecanismos utilizados para garantizar la suficiencia en capacidad de generacio?n, describe la problema?tica actual y hace algunas recomendaciones para el mercado colombiano con base en las ventajas, desventajas y adaptabilidad evidenciadas en los mercados analizados de Nord Pool, Alberta, PJM, Chile, Brasil y Panama?. |
| Keywords: | Desregulación de la industria de suministro deelectricidad, Mercados eléctricos, Suficiencia en capacidad degeneración |
| JEL: | L13 L94 |
| Date: | 2016–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:col:000122:014997&r=ene |
| By: | Arvaniti, Maria (CERE and the Department of Economics, Umeå University); Carvajal, Andrés (University of California–Davis) |
| Abstract: | The BP Deepwater Horizon oil spill of 2010 has focused considerable attention on the potential liability and the operating conduct of big oil companies. This paper shows that, limiting the ability of a company to insure and diversify its risks, creates incentives to internalize the welfare effects of catastrophic events, leading to a welfare improvement. We model an economy with complete financial markets where one agent’s actions impose an externality on other agents by altering the probability distribution of their risks. Then, a Pareto improved allocation can be reached via an asset reallocation, essentially restricting this agent’s choice of portfolio of assets. Hence, in the presence of externalities, disturbing the functioning of perfect financial markets can be socially beneficial. |
| Keywords: | externalities; financial markets; constrained suboptimality |
| JEL: | D52 D53 D62 Q50 |
| Date: | 2016–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2016_015&r=ene |
| By: | Resul Cesur; Erdal Tekin; Aydogan Ulker |
| Abstract: | There has been a widespread displacement of coal by natural gas as space heating and cooking technology in Turkey in the last two decades, triggered by the deployment of natural gas networks. In this paper, we examine the impact of this development on mortality among adults and the elderly. Our research design exploits the variation in the timing of the deployment and the intensity of expansion of natural gas networks at the provincial level using data from 2001 to 2014. The results indicate that the expansion of natural gas services has caused significant reductions in both the adult and the elderly mortality rates. According to our point estimates, a one-percentage point increase in the rate of subscriptions to natural gas services would lower the overall mortality rate by 1.4 percent, the adult mortality rate by 1.9 percent, and the elderly mortality rate by 1.2 percent. These findings are supported by our auxiliary analysis, which demonstrates that the expansion of natural gas networks has indeed led to a significant improvement in air quality. Furthermore, we show that the mortality gains for both the adult and the elderly populations are primarily driven by reductions in cardio-respiratory deaths, which are more likely to be due to conditions caused or exacerbated by air pollution. Finally, our analysis does not reveal any important gender differences in the estimated relationship between the deployment of natural gas networks and mortality. |
| JEL: | I10 I15 I18 O13 O18 Q42 Q48 Q53 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22522&r=ene |
| By: | Richard G. Newell; Brian C. Prest; Ashley Vissing |
| Abstract: | We analyze the relative price elasticity of unconventional versus conventional natural gas extraction. We separately analyze three key stages of gas production: drilling wells, completing wells, and producing natural gas from the completed wells. We find that the important margin is drilling investment, and neither production from existing wells nor completion times respond strongly to prices. We estimate a long-run drilling elasticity of 0.7 for both conventional and unconventional sources. Nonetheless, because unconventional wells produce on average 2.7 times more gas per well than conventional ones, the long-run price responsiveness of supply is almost 3 times larger for unconventional compared to conventional gas. |
| JEL: | D24 L71 Q41 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22532&r=ene |
| By: | Gilbert E. Metcalf |
| Abstract: | This paper presents a novel methodology for estimating impacts on domestic supply of oil and natural gas arising from changes in the tax treatment of oil and gas production. It corrects a downward bias when the ratio of aggregate tax expenditures to domestic production is used to measure the subsidy value of tax preferences. That latter approach underestimates the value of the tax preferences to firms by ignoring the time value of money. The paper introduces the concept of the equivalent price impact, the change in price that has the same impact on aggregate drilling decisions as a change in the tax provisions for oil and gas drilling and production. Using this approach I find that removing the three largest tax preferences for the oil and gas industry would likely have very modest impacts on global oil production, consumption or prices. Domestic oil and gas production is estimated to decline by 4 to 5 percent over the long run. Global oil prices would rise by less than one percent. Domestic natural gas prices are estimated to rise by 7 to 10 percent. Changes to these tax provisions would have modest to negligible impacts on greenhouse gas emissions or energy security. |
| JEL: | H23 Q40 Q48 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22537&r=ene |
| By: | William Barnett (Department of Economics, The University of Kansas; Center for Financial Stability, New York City; IC2 Institute, University of Texas at Austin); Hajar Aghababa (Department of Economics, The University of Kansas;) |
| Abstract: | This paper assess nonlinear structures in the time series data generating mechanism of crude oil prices. We apply well-known univariate tests for nonlinearity, with distinct power functions over alternatives, but with different null hypotheses reflecting the existence of different concepts of linearity and nonlinearity in the time series literature. We utilize daily data on crude oil spot prices for over 26 years, as well as monthly data on crude oil spot prices for 41 years. Investigating the monthly price process of crude oil distinguishes this paper from existing studies of the time series structure of energy markets. All the tests detect strong evidence of general nonlinear serial dependence, as well as nonlinearity in the mean, variance, and skewness functions in the daily spot price process of crude oil. Since evidence of nonlinear dependence is less dramatic in monthly observations, nonlinear serial dependence is moderated by time aggregation in crude oil prices. |
| Keywords: | Nonlinearity, energy market, time series analysis, crude oil prices |
| JEL: | C22 Q43 C46 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:kan:wpaper:201602&r=ene |
| By: | Rick van der Ploeg |
| Abstract: | Policy prescriptions for managing natural resource windfalls are based on the permanent income hypothesis: none of the windfall is invested at home and saving in an intergenerational SWF is dictated by smoothing consumption across different generations. Furthermore, with Dutch disease effects the optimal response is to intertemporally smooth the real exchange rate, smooth public and private consumption, and limit sharp fluctuations in the intersectoral allocation of production factors. We show that these prescriptions need to be modified for the following reasons. First, to cope with volatile commodity prices precautionary buffers should be put in a stabilisation fund. Second, with imperfect access to capital markets the windfall must be used to curb capital scarcity, invest domestically and bring consumption forward. Third, with real wage rigidity consumption must also be brought forward to mitigate transient unemployment. Fourth, the real exchange rate has to temporarily appreciate to signal the need to invest in the domestic economy to gradually improve the ability to absorb the extra spending from the windfall. Fifth, with finite lives the timing of handing back the windfall to the private sector matters and consumption and the real exchange rate will be volatile. Finally, with nominal wage rigidity we show that a Taylor rule is a better short-run response to a crash in commodity prices than a nominal exchange rate peg. |
| Keywords: | Dutch disease, permanent income, volatility, capital scarcity, domestic investment, absorption constraints, overlapping generations, nominal wage rigidity |
| JEL: | E60 F34 F35 F43 H21 H63 O11 Q33 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:oxf:oxcrwp:178&r=ene |
| By: | Barnett, William; Aghababa, Hajar |
| Abstract: | This paper assess nonlinear structures in the time series data generating mechanism of crude oil prices. We apply well-known univariate tests for nonlinearity, with distinct power functions over alternatives, but with different null hypotheses reflecting the existence of different concepts of linearity and nonlinearity in the time series literature. We utilize daily data on crude oil spot prices for over 26 years, as well as monthly data on crude oil spot prices for 41 years. Investigating the monthly price process of crude oil distinguishes this paper from existing studies of the time series structure of energy markets. All the tests detect strong evidence of general nonlinear serial dependence, as well as nonlinearity in the mean, variance, and skewness functions in the daily spot price process of crude oil. Since evidence of nonlinear dependence is less dramatic in monthly observations, nonlinear serial dependence is moderated by time aggregation in crude oil prices. |
| Keywords: | Nonlinearity, energy market, time series analysis, crude oil prices |
| JEL: | C22 C46 Q43 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73240&r=ene |
| By: | Mohammad Kemal (SKKMIGAS); Ian Lange (Division of Economics and Business, Colorado School of Mines) |
| Abstract: | The impact of expropriation risk on the extraction path of non-renewable resources has been shown as theoretically ambiguous. It depends on capital intensity of the extraction process and the size of resource stocks. By employing producing field-level data in the South East Asia region, we observe the impact of a change in institutional design of oil governance in Indonesia on expropriation risk and extraction path. From the empirical results, we make an inference that a change in oil governance reduces expropriation risk, and the impact of the reduction on the extraction path is different for different sizes of resource stock. The results confirm the theory that for small resource stocks, reduction in expropriation risk leads to a slower extraction path. This reiterates the importance of strengthening ownership rights such that expropriation risk can be reduced, over-extraction can be avoided and more sustainable economic welfare can be achieved. |
| Keywords: | oil governance, expropriation risk, extraction path |
| JEL: | Q32 Q35 Q48 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:mns:wpaper:wp201606&r=ene |
| By: | Guglielmo Maria Caporale; Alanoud Al-Maadid; Fabio Spagnolo; Nicola Spagnolo |
| Abstract: | This paper estimates a bivariate VAR-GARCH(1,1) model to examine linkages between food and energy prices. The adopted framework is suitable to analyse both mean and volatility spillovers, and also allows for possible parameter shifts resulting from four recent events, namely: 1) the 2006 food crisis, 2) the Brent oil bubble, 3) the introduction of the Renewable Fuel Standard (RFS) policy, and 4) the 2008 global financial crisis. The empirical findings suggest that there are significant linkages between food and both oil and ethanol prices. Further, the four events considered had mixed effects, the 2006 food crisis and 2008 financial crisis leading to the most significant shifts in the (volatility) spillovers between the price series considered. |
| Keywords: | Energy and food prices; VAR K-model; mean and volatility spillovers |
| JEL: | C32 F36 G15 |
| Date: | 2015–10 |
| URL: | http://d.repec.org/n?u=RePEc:nva:unnvaa:wp02-2016&r=ene |
| By: | Effiong, Ekpeno; Oisaozoje, Alex |
| Abstract: | This paper revisits the Environmental Kuznets Curve hypothesis and applies a flexible semi-parametric panel fixed effects technique to identify a definite shape of the income-pollution relationship for a sample of 49 African countries for the period 1990-2010. Compared with standard panel data techniques which yield different conclusions, the former reveals that the income-pollution nexus is monotonically increasing and decreasing for CO2 and PM10 emissions respectively. Hence, the effect of economic growth differs with each atmospheric pollutant; and is not sufficient for improving environmental quality. There is need for policies that emphasizes sustainable economic growth and the use of cleaner energy sources. |
| Keywords: | Environmental Kuznets Curve; Air pollutants; Semi-parametric method; Africa. |
| JEL: | C14 C33 O55 Q5 |
| Date: | 2016–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73163&r=ene |
| By: | Wang, Huizhi |
| Abstract: | With the highest energy use and greenhouse gas emissions around the world, China has begun to adopt comprehensive approaches to control its CO2 emissions and fight climate change. China has committed to reduce its carbon intensity by 40% to 45% compared to 2005 levels by 2020. In 2011, China initiated the development of seven regional carbon trading scheme (ETS) pilots in two provinces (Guangdong and Hubei) and five cities (Beijing, Tianjin, Shanghai, Chongqing and Shenzhen) and has embarked on an ambitious pathway for establishing a national carbon market in 2017. This paper provides an overview and analysis of China’s carbon emission trading market. A background and design characters of China’s seven ETS pilots are introduced. Market performance and compliance are summarized. Linkage existed in China’s carbon emission trading market is identified. |
| Keywords: | China, emissions trading schemes, performance, China, emissions trading schemes, performance |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:agi:wpaper:00000098&r=ene |
| By: | Effiong, Ekpeno |
| Abstract: | Africa’s rapid urbanization pose challenges for her sustainable development. This paper investigates the environmental impact of urbanization for 49 African countries from 1990 to 2010. Using the Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT) framework, a recently developed semi-parametric panel fixed-effects regression technique, and two atmospheric air pollutants, namely carbon dioxide (CO2) and ambient particulate matter PM10 emissions, the evidence indicates that urbanization reduces environmental pollution. The semi-parametric analysis reveals that the result is more pronounced with PM10 but weaker for CO2 emissions. Moreover, there is no evidence to confirm the Kuznets hypothesis of an inverted U-shaped curve between urbanization and environmental pollution. To reap the benefits of urbanization, there is need for a strategic urban planning with basic infrastructure investment that promotes a green environment. |
| Keywords: | Urbanization; Environmental Quality; STIRPAT; Semi-parametric method; Africa. |
| JEL: | C14 C33 O55 Q2 Q20 Q5 R11 |
| Date: | 2016–07–31 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:73224&r=ene |
| By: | Luis Alberiko Gil-Alaña; Carlos Pestana Barros; Zhongfei Chen |
| Abstract: | This paper analyses long range fractional dependence of China pollution in four major cities, namely Beijing, Shangai, Guangzhou and Shenzhen from September 28 of 2013 to December 12 of 2015. Unit roots hypotheses are tested by using fractional integration methods using both uncorrelated and autocorrelated errors. The results reveal that the pollution is persistent, meaning that it will continue until strong anti-pollution measures are adopted. Policy implication is derived. |
| Keywords: | Chinese cities, pollution, unit roots, AR |
| JEL: | C22 O11 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:nva:unnvaa:wp04-2016&r=ene |
| By: | Malina, Christiane |
| Abstract: | A core political strategy for reducing greenhouse gas emissions from road transportation in Germany is to incentivize the purchase of motor vehicles with relatively low tailpipe CO2 emissions. Consequently, since mid-2009, owners of new cars in Germany face an annual vehicle circulation tax that is partially levied according to vehicles' CO2 emission index. In this paper, I estimate the effect of CO2 -based vehicle circulation taxation in Germany on annual CO2 combustion emissions from passenger cars and CO2 climate costs using a nested logit approach on a novel panel-dataset containing registration, cost and vehicle characteristic information on approximately 7,000 unique vehicle models and approximately 19.5 million new vehicle registrations in Germany from 2007 to 2013. This approach first yields vehicle model specific estimates for the elasticity of new vehicle registrations with regard to the circulation tax. These elasticities are used to estimate changes in new vehicle registrations by model, which are then combined with model-specific CO2 emission factors and segment-specific annual distances driven to yield total emission changes attributable to the change in vehicle circulation tax. Finally, physical changes in emissions are converted into changes in monetary climate damages. Uncertainty in the elasticity of new vehicle registrations by segment with regard to vehicle circulation tax, the fuel economy and corresponding CO2 emission indices of vehicles, distances traveled by market segment, and in the monetary damages resulting from CO2 emissions are propagated through the analysis. Overall I find statistically significant, but relatively small reductions in CO2 emissions and climate costs due to the change in taxation: When simulating the ceteris paribus effect of the most stringent taxation regime implemented in 2014 on the pre-tax change models available in 2008, median registrations are estimated to decrease by approx. 9,500 vehicles, or 0.3 per cent of total new registrations. In addition, changes in registrations of individual vehicle models within each market segment lead to a relatively small reduction of segment- specific CO2 emission indices (0.03 to 0.1 per cent across segments). The reduction in new registrations and reduction in CO2 emission indices decrease median CO2 combustion emissions from newly registered vehicles by 35,000 t (90 per cent confidence interval: 31.000 to 39.000 t), and climate costs by € 1.1 Million (90 per cent confidence interval: € 0.1 to 2.2 Million), or 0.4 per cent of total CO2 emissions and climate costs from newly registered cars. |
| Keywords: | vehicle circulation tax,road transportation,climate costs,nested logit model |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cawmdp:86n&r=ene |
| By: | Bandyopadhyay, Kaushik Ranjan |
| Abstract: | The paper reviews two schemes in India that have some degree of resemblance with the market based emission trading mechanism like EU-ETS. The first scheme is an innovative emission trading scheme on an air pollutant namely respiratory solid particulate matter (RSPM) with serious potential health implication. The scheme has been piloted in industrial clusters of three polluting states in India (Gujarat, Maharashtra and Tamilnadu). Although the scheme is not on CO2, this happens to be the first of its kind emission trading system in a developing country that mimics the EU-ETS system. The scheme shifts away from the traditional command and control regulation where the industrial point sources have to comply with the norms set by the Central Pollution Control Board (CPCB) or else pay a high penalty. It instead sets a pollution target for an area based on ambient air quality standard and allocates permits to industrial point sources that would then be traded based on gains or shortfalls from compliance after verification. For setting the baseline and verification the scheme relies on a continuous emission monitoring system (CEMS) that provides real-time information on emission and resolves much of the problems that are otherwise prevalent with spot checking and also minimises the problem that potentially arises with suspicious or wrong reporting by third-party auditors. The second scheme known as Perform Achieve and Trade (PAT) scheme is a flagship programme of the Bureau of Energy Efficiency, Ministry of Power, Government of India, under the National Mission on Enhanced Energy Efficiency (NMEEE). The programme also resembles a cap and trade mechanism and involves trading in energy saving certificates between energy intensive industrial production units identified as designated consumers (DCs). Although the scheme does not involve any direct trading based on absolute or relative CO2 emissions but the potential unit of energy saved (expressed in tonnes of oil equivalent) could easily be converted into CO2 emission equivalent. The scheme has the potential to pave the way for creating a more holistic market for emission trading in India. The scheme also holds lot of promises in linking with the international carbon offsets market through adjustments and harmonisation in monitoring, reporting and verification (MRV). In the light of this, the paper also provides a review of the operation and institutional mechanism of the scheme and explores the potential in its linking with other international carbon offsetting schemes. |
| Keywords: | emission trading, air pollution, energy efficiency, emission trading, air pollution, energy efficiency, Q490, Q480, Q530, Q580 |
| Date: | 2016–01 |
| URL: | http://d.repec.org/n?u=RePEc:agi:wpaper:00000100&r=ene |
| By: | Johansson, Per-Olov (CERE and HHS) |
| Abstract: | There are di fferent views with respect to the treatment of tradable permits for greenhouse gases in cost-benefi t analysis. This note aims at illustrating numerically within a simple general equilibrium model how to treat tradable permits in economic evaluations of projects. The note looks at a cost-benefi t rule for a large project providing a public good interpreted as a shortcut for infrastructure, using a fossil fuel and a renewable as inputs. The paper also evaluates a small or marginal project involving the same output and inputs. In addition, it illustrates the Samuelson condition for the optimal provision of the public good. The note is a supplement to CERE Working Paper No 2015:11 and SSE Working Paper in Economics No 2015:3. The model used here may also be useful in advanced courses to illustrate general equilibrium cost-benefi t analysis. |
| Keywords: | Cost{bene t analysis; greenhouse gases; tradable permits; general equilibrium; Samuelson condition; numerical illustration |
| JEL: | H21 H23 H41 H43 I30 L13 |
| Date: | 2016–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2016_014&r=ene |
| By: | Johansson, Per-Olov (CERE and HHS) |
| Abstract: | There are conflicting views on how to handle permits for greenhouse gases in cost-bene fit analysis. This paper aims at clarifying within a simple general equilibrium model how to treat di fferent kinds of tradable permits in economic evaluations of projects. Within a framework that reminds of the EU Emissions Trading System (EU ETS), the paper looks at cost-benefi t rules for a small project providing a public good, interpreted as a shortcut for infrastructure, using a fossil fuel and a renewable as inputs. In addition, it illustrates the Samuelson condition for the optimal provision of the public good, discusses briefly how to assess the EU permit system for sectors not covered under the EU ETS, as well as taxes and permits used to combat acid rain, and provides an illustration of the magnitude of the bias incurred if permits are valued at the marginal damage cost. The paper also introduces electricity ("green") certi ficates, a cousin to tradable permits, as well as well as energy savings ("white") certi ficates. Finally, a cap on the output of a commodity is considered. |
| Keywords: | Cost-benefit analysis; greenhouse gases; emissions trading; tradable permits; general equilibrium; Samuelson condition; EU ETS; non-ETS; acid rain; electricity certificates; renewable portfolio standards; energy savings certificates; output cap |
| JEL: | H21 H23 H41 H43 I30 L13 |
| Date: | 2016–08–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slucer:2016_013&r=ene |
| By: | Ravi Bansal; Dana Kiku; Marcelo Ochoa |
| Abstract: | We use the forward-looking information from the US and global capital markets to estimate the economic impact of global warming, specifically, long-run temperature shifts. We find that global warming carries a positive risk premium that increases with the level of temperature and that has almost doubled over the last 80 years. Consistent with our model, virtually all US equity portfolios have negative exposure (beta) to long-run temperature fluctuations. The elasticity of equity prices to temperature risks across global markets is significantly negative and has been increasing in magnitude over time along with the rise in temperature. We use our empirical evidence to calibrate a long-run risks model with temperature-induced disasters in distant output growth to quantify the social cost of carbon emissions. The model simultaneously matches the projected temperature path, the observed consumption growth dynamics, discount rates provided by the risk-free rate and equity market returns, and the estimated temperature elasticity of equity prices. We find that the long-run impact of temperature on growth implies a significant social cost of carbon emissions. |
| JEL: | G0 G12 Q43 Q5 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22529&r=ene |
| By: | Antony Millner; Thomas K. J. McDermott |
| JEL: | J1 |
| Date: | 2016–07–18 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:67122&r=ene |
| By: | Richard S. J. Tol |
| Abstract: | First-best climate policy is a uniform carbon tax which gradually rises over time. Civil servants have complicated climate policy to expand bureaucracies, politicians to create rents. Environmentalists have exaggerated climate change to gain influence, other activists have joined the climate bandwagon. Opponents to climate policy have attacked the weaknesses in climate research. The climate debate is convoluted and polarized as a result, and climate policy complex. Climate policy should become easier and more rational as the Paris Agreement has shifted climate policy back towards national governments. Changing political priorities, austerity, and a maturing bureaucracy should lead to a more constructive climate debate. |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1608.05597&r=ene |
| By: | Hugh Rockoff (Rutgers Department of Economics) |
| Abstract: | During World War II the United States rapidly transformed its economy to cope with a wide range of scarcities, such as shortfalls in the amounts of ocean shipping, aluminum, rubber, and other raw materials needed for the war effort. This paper explores the mobilization to see whether it provides lessons about how the economy could be transformed to meet scarcities produced by climate change or other environmental challenges. It concludes that the success of the United States in overcoming scarcities during World War II without a major deterioration in living standards provides a basis for optimism that environmental challenges can be met, but that the unique political consensus that prevailed during the war limits the practical usefulness of the wartime model. |
| Keywords: | World War II, Climate Change, Infrastructure |
| JEL: | N4 |
| Date: | 2016–08–25 |
| URL: | http://d.repec.org/n?u=RePEc:rut:rutres:201609&r=ene |