nep-ene New Economics Papers
on Energy Economics
Issue of 2016‒11‒20
thirty papers chosen by
Roger Fouquet
London School of Economics

  1. Preferences for Energy Efficiency vs. Renewables: How Much Does a Ton of CO2 Emissions Cost? By Anna Alberini; Andrea Bigano; Milan Šcasný; Iva Zverinová
  2. Quantifying the Effects of Expert Selection and Elicitation Design on Experts’ Confidence in their Judgments about Future Energy Technologies By Nemet, Gregory F.; Anadon, Laura Diaz; Verdolini, Elena
  3. Social impacts of renewable energy in Germany – size, history and alleviation By Dr. Jochen Dieckmann; Dr. Barbara? Breitschopf; Dr. Ulrike Lehr
  4. A Turbine is not only a Turbine: The Role of Social Context and Fairness Characteristics for the Local Acceptance of Wind Power By Ulf Liebe; Anna Bartczak; Jürgen Meyerhoff
  5. Wertschöpfungsketten in NRW im Kontext der Energiewende: Eine Metaanalyse bezüglich Stahl, polymeren Werkstoffen und dem Anlagenbau in der erneuerbaren Energiewirtschaft By Kobiela, Georg; Vallentin, Daniel
  6. Does social interaction make bad policies even worse? Evidence from renewable energy subsidies By Inhoffen, Justus; Siemroth, Christoph; Zahn, Philipp
  7. Are promotion programs needed to establish off-grid solar energy markets? Evidence from rural Burkina Faso By Bensch, Gunther; Grimm, Michael; Huppertz, Max; Langbein, Jörg; Peters, Jörg
  8. Investing in Photovoltaics: Timing, Plant Sizing and Smart Grids Flexibility By Marina Bertolini; Chiara D’Alpaos; Michele Moretto
  9. Optimal taxation with intermittent generation By Fadoua CHIBA
  10. What Drives People’s Opinions of Electricity Infrastructure? Empirical Evidence from Ireland By Valentin Bertsch; Hyland, Marie; Mahony, Michael
  11. Electricity Supply and System losses in Ghana. What is the red line? Have we crossed over? By Adom, Philip Kofi
  12. Effects of Privatization on Price and Labor Efficiency: The Swedish Electricity Distribution Sector By Lundin, Erik
  13. Analysis of Price and Income Elasticities of Energy Demand in Ecuador: A Dynamic OLS Approach By Kathia Pinz\'on
  14. Measuring Knowledge with Patent Data: an Application to Low Carbon Energy Technologies By Clément Bonnet
  15. Entropy Man, Chapter 2 A Short History of Human Development By John Bryant
  16. Entropy Man, Chapter 1 Setting the Entropy Scene By John Bryant
  17. Entropy Man, Chapter 6 Money By John Bryant
  18. The Thermo-Economic 'Progress' of Social/Global Poverty By Ternyik, Stephen I.
  19. Estimating GDP and Foreign Rents of the Oil and Gas Sector in the USSR then and Russia now By Kuboniwa, Masaaki
  20. Extreme dependence between crude oil and stock markets in Asia-Pacific regions: Evidence from quantile regression By Zhu, Huiming; Huang, Hui; Peng, Cheng; Yang, Yan
  21. La política de precios de la gasolina en Colombia: Antecedentes, impacto distributivo y su relación con la crisis fiscal. By Parra, Juan Felipe
  22. Energy Consumption and Health Outcomes in Africa By Youssef, Adel Ben; Lannes, Laurence; Rault, Christophe; Soucat, Agnes
  23. Electoral incentives and firm behavior: Evidence from U.S. power plant pollution abatement By Matthew Doyle; Corrado Di Maria; Ian Lange; Emiliya Lazarova
  24. The Strategic Use of Abatement by a Polluting Monopoly By Guiomar Martín-Herrán; Santiago J. Rubio
  25. Carbon taxation and market financial instruments for mobilizing climate finance By Oleksandr Sushchenko; Reimund Schwarze
  26. Do Natural Disasters Make Sustainable Growth Impossible? By Lee Endress; James Roumasset; Christopher Wada
  27. Carbon Dioxide Emission-Intensity in Climate Projections: Comparing the Observational Record to Socio-Economic Scenarios By Felix Pretis; Max Roser
  28. Time Series Analysis and Forecasting of Carbon Dioxide Emissions: A Case of Kenya’s Savanna Grasslands By Olila, Dennis Opiyo; Wasonga, Oliver V.
  29. Intermediate Input Linkage and Carbon Leakage By Zengkai Zhang; ZhongXiang Zhang
  30. Climate change impacts: Understanding the synergetic interactions using graph computing By Halkos, George; Tsilika, Kyriaki

  1. By: Anna Alberini (AREC, University of Maryland and FEEM); Andrea Bigano (FEEM and CMCC); Milan Šcasný (Charles University, Environment Center); Iva Zverinová (Charles University, Environment Center)
    Abstract: Concerns about climate change are growing, and so is the demand for information about the costs and benefits of mitigating greenhouse gas emissions. This paper seeks to estimate the benefits of climate change mitigation, as measured by the public’s willingness to pay for such policies. We investigate the preferences of Italian and Czech households towards climate change mitigation policy options directly related to residential energy use. We use discrete choice experiments, which are administered in a standardized fashion to representative samples in the two countries through computer-assisted web interviews. The willingness to pay per ton of CO2 emissions avoided is €132 Euro for the Italians and 94 Euro for the Czech respondents (at 2014 purchasing power parity). We find evidence of considerable heterogeneity in WTP driven by income. The two samples differ in their “domestic” income elasticities of WTP, but comparison across the two countries suggests an income elasticity of WTP of one.
    Keywords: Energy-efficiency Incentives, Stated Preferences, CO2 Emissions Reductions, CO2 Mitigation Policies, Conjoint Choice Experiments, WTP for CO2 Emissions Reductions
    JEL: Q41 Q48 Q54 Q51
    Date: 2016–11
  2. By: Nemet, Gregory F.; Anadon, Laura Diaz; Verdolini, Elena
    Abstract: Expert elicitations are frequently used to characterize future technology outcomes. However their usefulness is limited, in part because: estimates across studies are not easily comparable; choices in survey design and expert selection may bias results; and over-confidence is a persistent problem. We provide quantitative evidence of how these choices affect experts’ estimates of the costs of future energy technologies. We harmonize data from 19 elicitations, involving 215 experts, on the 2030 costs of 5 energy technologies: nuclear, biofuels, bioelectricity, solar, and carbon capture. We control for expert characteristics, survey design, and public R&D investment levels on which the elicited values are conditional. We find that, on average, when experts respond to elicitations in person, they ascribe lower confidence (larger uncertainty) to their estimates than when responding via mail or online. In-person interviews also produce more optimistic assessments of best-case (10th percentile) outcomes. The impacts of expert affiliation—government, private sector, or academic—and geography—US or EU—are also significant; academics and US experts have lower confidence than other types of experts. Higher R&D investment levels have no effect on the confidence of experts’ judgments. R&D reduces both the median and breakthrough (10th percentile) cost estimates, although the size of the effect varies across technologies. These results indicate the source, direction, and size of bias in energy technology elicitations. They also point to the technology specificity of some of the effects. These biases should be seriously considered, both in interpreting the results of existing elicitations and in designing new ones.
    Keywords: Expert Elicitations, Uncertainty, Energy Technologies, Heuristic Biases, Survey Design, Research and Development/Tech Change/Emerging Technologies, O13, O14, Q4,
    Date: 2016–11–04
  3. By: Dr. Jochen Dieckmann (GWS - Institute of Economic Structures Research); Dr. Barbara? Breitschopf (GWS - Institute of Economic Structures Research); Dr. Ulrike Lehr (GWS - Institute of Economic Structures Research)
    Date: 2016
  4. By: Ulf Liebe (Institute of Sociology, University of Bern); Anna Bartczak (Faculty of Economic Sciences, University of Warsaw); Jürgen Meyerhoff (Institute for Landscape and Environmental Planning, Technische Universität Berlin)
    Abstract: To gain acceptance for renewable energy production sites it is not sufficient just to develop the appropriate technology without taking the social context and fairness concerns into account. Using a factorial survey experiment we investigate the influence of both on the local acceptance of wind turbine developments in Germany and Poland, two countries differing in installed wind power capacity. Respondents were confronted with hypothetical situations describing the construction of wind farms varying, among others, in the opportunity to participate in the planning process (participatory justice), the distribution of turbines across regions (distributive justice) and ownership. We find higher acceptance levels in Poland than in Germany. Respondents in both countries are willing to accept new turbines in their vicinity if they can participate in decision making, the turbines are owned by a group of citizens and if the generated electricity is consumed in the region instead of being exported. Overall, participatory justice is more important than distributive justice. Confirming previous results, we also find that respondents who have already turbines in their vicinity show higher acceptance levels than those who are not yet affected. Thus, the negative externalities are likely to be overestimated in the planning and implementation process.
    Keywords: Distributive Justice, Factorial Survey Experiment, Participatory Justice, Wind Power
    JEL: Q42 Q48 Q54 Q56 R11 R12
    Date: 2016
  5. By: Kobiela, Georg; Vallentin, Daniel
    Abstract: Im Zuge der Energiewende steht die Industrie in NRW vor der substantiellen Herausforderung großer infrastruktureller Veränderungen. Dies bezieht sich auf den Energiebedarf, die Treibhausgasemissionen und den allgemeinen Ressourcenbedarf. Hierzu ist ein Zusammenspiel der industriellen mit den öffentlichen Akteuren vonnöten. Dies umfasst neben politischer Unterstützung und dem Nutzen von Marktmechanismen ist auch Regulierung, um diese Transformation zu unterstützen und voranzubringen. Die Steuerbarkeit solcher Prozesse hängt jedoch auch stark davon ab, in welchem Umfang die entlang der oftmals komplexen Wertschöpfungsketten ablaufenden industriellen Prozesse innerhalb NRWs angesiedelt sind. Hierzu muss neben dem technischen und wirtschaftlichen Möglichkeiten einer solchen Veränderung der Grad der Geschlossenheit der entsprechenden Wertschöpfungsketten betrachtet werden. Hierzu werden hier exemplarisch drei Wertschöpfungsketten betrachtet: Eisen- und Stahlproduktion, Chemie mit dem Fokus auf polymere Faserverbundwerkstoffe, und der Anlagenbau für die erneuerbare Energiewirtschaft. Diese wurden so ausgewählt, dass sie sowohl eine große strategische, wirtschaftliche bzw. seitens des Energiebedarfs und der Treibhausgasemissionen quantitative Relevanz für die Energiewende speziell in NRW haben, als auch unterschiedliche Arten der äußeren Anbindung, der internationalen Konkurrenz und der internen Governancestruktur aufweisen. Alle drei betrachteten Wertschöpfungsketten weisen eine ungenügende Geschlossenheit auf. Dies impliziert die Notwendigkeit einer Einbindung weiterer Regionen und höherer politischer Ebenen in den Transformationsprozess. NRW kann somit als eine Schlüsselregion verstanden werden, die zum Gelingen der Energiewende entscheidende Beiträge leisten kann - jedoch ist eine enge Kooperation mit weiteren deutschen Bundesländern wie auch den umgebenden Industrieregionen des europäischen Auslands notwendig.
    Abstract: The industrial landscape in North Rhine-Westphalia faces substantial challenges in the context of the German energy transition (Energiewende). To facilitate a successful transition, large parts of the industrial infrastructure need to be transformed. This is both about the overall energy consumption, as well as the emission of greenhouse gases. Further on, the general consumption of natural resources needs to be considered. For such a transition, the interplay between industry and public actors is important. Political support, as well as regulation, play crucial roles. This reaches from setting up an appropriate market frame to enable self-improving process via market forces, over public support via funding and pilot projects, up to tariffs and other regulatory means. In how far it is possible to influence and shape these processes depends to large extents upon the level up to which the frequently rather complex value chains are located in NRW. Together with the technical and economic options for such changes, the degree to which a value chain can be regarded as closed is therefore a crucial factor. In this study, three exemplary value chains from different industry sectors are considered. These were selected in such a way that they yield strategic, economic and ecologic (in terms of energy consumption and greenhouse gas emissions) relevance for NRW. Further more, they display different ways how they are connected to the outside, face international competition and possess different kinds of internal governance structures. The selected value chains were those of iron and steel production, chemistry with a focus on fiber enforced polymers, and plant manufacturing for renewable energy generation with a focus on wind energy. A set of both quantitative and qualitative criteria was generated, yielding deeper insight into these value chains. This study rests on a meta analysis of already existing academic studies and sources from the respecting industries. The data from these sources was brought together to form a synthesis. Beyond this, potential ways to influence and support the desired transformation processes are sketched. All three value chains are only insufficiently closed. Therefore, further regions and political levels need to be part of the transformational process. NRW can be understood as a key region, with the potential to offer crucial support - but the challenges can only be met in close cooperation with other German states as well as with the surrounding industrial regions in the neighboring European countries. The results can help support the discussion for a competitive transformation of the industry in NRW toward a less unsustainable economic conduct. In this, it is not yet set whether such a necessary transition might simply align with the paradigm of so-called "green growth", or might also have the potential to help a transition toward a post growth economy, if appropriately combined with further concepts.
    Date: 2016
  6. By: Inhoffen, Justus; Siemroth, Christoph; Zahn, Philipp
    Abstract: Minimum prices above the market level can lead to ineffcient production and oversupply. We investigate whether this effect is even more pronounced when decision makers are influenced by their social environment. Using data of minimum prices for renewable energy production in Germany, we analyze if individual decisions to install solar panels are affected by the investment decisions of others. We implement a propensity score matching routine on municipality level and estimate that existing panels in the municipality increase the probability and number of further installations considerably, even in areas with minimal solar potential. This social effect is stronger in areas with more solar potential and less unemployment. A higher number of existing panels and more concentrated installations increase the social effect further. We discuss policy implications of these social effects.
    Keywords: EEG , Minimum Prices , Peer Effects , Public Policy , Renewable Energy , Social Interaction , Social Effect , Social Multiplier , Solar Power , Solar Panels , Subsidy
    JEL: H23 L14 Q42 Q48 Q58
    Date: 2016
  7. By: Bensch, Gunther; Grimm, Michael; Huppertz, Max; Langbein, Jörg; Peters, Jörg
    Abstract: Off-grid solar electric power is a promising technology for remote regions in rural Africa where expansion of the electricity grids is prohibitively expensive. Using household data from a target region of an off-grid solar promotion program in Burkina Faso, this paper explores the role of quality-verified branded solar home systems (SHS) versus non-branded ones. We find that the adoption rate of non-branded SHS is considerably higher at 36 percent compared to eight percent for branded SHS. We compare potential quality differences as well as the cost-effectiveness of branded and non-branded solar. We show that non-branded SHSs provide a similar service level as branded solar, that they do not fall behind in terms of consumer satisfaction and durability, and that non-branded products are more cost-effective. These findings suggest that promotion programs and branded solar products might not be needed to establish sustainable off-grid solar markets. The challenge however is to reach the very poor who are unable to bring up investment costs for any electricity.
    Abstract: Netzunabhängige Solarenergie ist eine vielversprechende Technologie für abgelegene Regionen im ländlichen Afrika, in denen der Ausbau von Stromnetzen prohibitiv teuer ist. Anhand von Haushaltsdaten aus der Zielregion eines Solarförderprogramms in Burkina Faso wird in diesem Papier die Rolle von qualitätsgesicherten Haushalts-Solarsysteme ("branded SHS") im Vergleich zu nicht qualitätsgesicherten Systemen ("non-branded SHS") erforscht. Zunächst zeigt sich, dass die Verbreitungsraten von non-branded SHS deutlich höher bei 36 Prozent gegenüber acht Prozent für Marken-Solarsysteme liegen. Wir vergleichen sowohl mögliche Qualitätsunterschiede als auch die Kosteneffizienz von branded und non-branded SHS. Es lässt sich beobachten, dass non-branded SHS ähnliche Energiedienste zu günstigeren Preisen erlauben und dabei in Bezug auf Verbraucher-Zufriedenheit und Haltbarkeit mit branded SHS konkurrieren können. Diese Ergebnisse deuten darauf hin, dass Förderprogramme und Marken-Solarprodukte nicht zwingend benötigt werden, um nachhaltige Solarmärkte in netzfernen Regionen zu etablieren. Die Herausforderung besteht jedoch darin, die ärmsten Schichten zu erreichen, die nicht in der Lage sind, die notwendigen Investitionskosten für einen Stromzugang zu erbringen.
    Keywords: energy access,energy poverty,technology adoption,branded products,cost-effectiveness,rural Africa
    JEL: D12 D40 O13 O33 Q41
    Date: 2016
  8. By: Marina Bertolini (University of Padova and Centro Studi "Giorgio Levi Cases"); Chiara D’Alpaos (University of Padova and Centro Studi "Giorgio Levi Cases"); Michele Moretto (University of Padova, Fondazione Eni Enrico Mattei (FEEM) and Centro Studi "Giorgio Levi Cases")
    Abstract: In Italy and in many EU countries, the last decade was characterized by a large development of distributed generation power plants. Their presence determined new critical issues for the design and management of the overall energy system and the electric grid due to the presence of discontinuous production sources. It is commonly agreed that contingent problems that affect local grids (e.g. inefficiency, congestion rents, power outages, etc.) may be solved by the implementation of a “smarter” electric grid. The main feature of smarts grid is the great increase in production and consumption flexibility. Smart grids give producers and consumers, the opportunity to be active in the market and strategically decide their optimal production/consumption scheme. The paper provides a theoretical framework to model the prosumer’s decision to invest in a photovoltaic power plant, assuming it is integrated in a smart grid. To capture the value of managerial flexibility, a real option approach is implemented. We calibrate and test the model by using data from the Italian energy market.
    Keywords: Smart Grids, Renewable Energy Sources, Real Options, Prosumer
    JEL: Q42 C61 D81
    Date: 2016–09
  9. By: Fadoua CHIBA
    Abstract: The paper analyses the development of the intermittent technologies to produce electricity, facing the competition of the incumbent sector, using conventional technologies. In our analysis of the interaction between these two sectors, we consider the environmental damage caused by the electricity production from fossil fuel. This allowed us to represent the social cost of electricity production. We show that it is socially favorable to keep some conventional capacities in reserve. We then investigate the efficiency of environmental taxes in the internalization of the environmental damage. The paper shows that there is not a rate tax capable of implementing the first-best equilibrium. Effectively, this requires a variable tax rate, which seems unrealistic in practice. We also determine the constrained second-best equilibrium and the tax rate that decentralizes it. Interestingly, we find that the interaction between a retail price and tax, both constant and the intermittency of renewable energy, yield to two phenomena that, on average, promote the investment in intermittent capacities.
    Keywords: Electricity, Intermittency, Tax, Renewable Energy, Pollution.
    JEL: D24 D61 Q41 Q42 Q48
    Date: 2016
  10. By: Valentin Bertsch; Hyland, Marie; Mahony, Michael
    Abstract: Across the EU, significant infrastructure investment is needed in both generation from renewable energy sources (RES) and the electricity transmission system to meet the European targets on emission reduction and RES expansion. Experiences show, however, that citizens may object to new energy infrastructure in their localities which may cause delays in achieving the targets. To avoid such delays, it is crucial to understand what drives people’s opinions. To explore people’s opinions of different electricity generation and transmission technologies in Ireland, we conducted a nationally-representative survey. Concerning the drivers, we explicitly distinguish between socio-demographics, socio-psychological/political beliefs, and contextual/local factors. Our results show that people generally have positive views of RES technologies. While this indicates that Irish citizens agree with the move towards cleaner electricity sources, we find a reluctance amongst people to have these technologies located close to their homes. As for the drivers, we find that the respondents’ socio-psychological and political beliefs are generally more important than most socio-demographics in driving their opinions and their tendency to oppose infrastructure development locally. This finding underlines the relevance for policy makers to understand which objectives people consider most important and how these judgements are related to their opinions of different energy technologies.
    Date: 2016–10
  11. By: Adom, Philip Kofi
    Abstract: Electricity supply and sustainable economic development are two complementary forces. However, in Ghana, the capacity limitations in the electricity sector has restraint production levels threatening the sustainable development of the country. The aim of this study is to investigate the key drivers of electricity supply in Ghana. Specifically, we determine the red line in system losses and whether we have crossed over the red line. Further, the effects of pricing, climate change, investment, and economic growth are examined. We identified the major constraints to electricity supply as inefficient pricing, rising fuel cost, higher system losses, and climate change. Adopting the marginal cost pricing rule and reducing distribution losses below 5% will help improve electricity supply security significantly in the country. Further, achieving a sustained economic growth will help boost supply security as well as investing in renewable energies.
    Keywords: Electricity supply; system losses; climate change; electricity price; fuel cost; Ghana
    JEL: Q4 Q41 Q48
    Date: 2016–10–05
  12. By: Lundin, Erik (Research Institute of Industrial Economics (IFN))
    Abstract: I examine the effects of privatization, in the form of acquisitions, in the Swedish electricity distribution sector. As the majority of the distribution networks remained publicly owned, I use a synthetic control method to identify the effects on price and labor efficiency. In comparison to their synthetic counterparts, I find that the acquired networks increased labor efficiency by on average 18 percent, while no effect is found on the price. Thus, the evidence suggests substantial efficiency gains but that these are not fed through to consumer prices. Since each acquisition involved several bordering networks that were separately operated by each municipality prior to the acquisitions, I examine to what extent the efficiency gains are likely to be driven by increased economies of scale. Results suggest that the entire effect can be explained by increased economies of scale, questioning the causal effect of privatization per se.
    Keywords: Incentive regulation; Electricity distribution; Natural monopoly; Norm model regulation; Privatization; Acquisitions
    JEL: L33 L52 L94
    Date: 2016–11–03
  13. By: Kathia Pinz\'on
    Abstract: Energy consumption in Ecuador has increased significantly during the last decades, affecting negatively the financial position of the country since large energy consumption subsidies are provided in its internal market and Ecuador is mostly a crude oil exporter and oil derivatives importer country. This research seeks to state the long run price and income elasticities of energy demand in Ecuador, by analyzing information spanning the period from 1970 to 2015. A cointegration analysis and an estimation by using a Dynamic Ordinary Least Squares approach considering structural breaks is carried out. Results obtained are robust and suggest that in the long run energy demand in Ecuador is highly income elastic, has no relationship with its price and has an almost unitary but inverse relationship with the industrial production level. Conclusions and economic policy suggestions are also provided.
    Date: 2016–11
  14. By: Clément Bonnet
    Abstract: We estimate a latent factor model (LFM) to compute an index that measures the quality of an extensive data set of inventions related to Low Carbon Energy Technologies (LCETs) and patented by seven countries during 1980-2010. We use the quality index to compute the stock of knowledge accumulated in the fifteen analyzed LCETs. We investigate the composition of the stock of knowledge and find that important substitutions between technologies have taken place: technologies such as solar thermal and nuclear have been progressively replaced by wind power, solar photovoltaic and to a less extent by few other technologies. This substitution effect can be decomposed into quantity (the number of inventions) and quality (the quality of inventions). Investigating the latter, the quality of nuclear-related inventions has decreased whereas it has increased for solar photovoltaic (PV), wind power and energy storage inventions. Few newer technologies, i.e. hydrogen and sea energy, also show signs of an increase of their average quality of inventions over the last years of the data set. We go further and investigate the inventions distribution in terms of quality and conclude that the potential for signifcant inventions related to nuclear technology has decreased over time whereas higher levels of quality have been reached in newer technological areas. A cross-country comparison is conducted to assess the innovation performance of the seven countries covered by our study. We conclude that technology policies are less efficient when demand-pull and supply-push approaches are not coupled.
    Keywords: patent data, latent factor model, energy technologies, carbon.
    JEL: C30 C11 Q40 Q55
    Date: 2016
  15. By: John Bryant (Vocat International)
    Abstract: Chapter from a book entitled Entropy Man, which deals with the relationships between the disciplines of thermodynamics and economics. Chapter 1 illusrates how entropy impacts on the world in which we live. Chapter 2 is a short history of human development. Chapter 3 covers such concepts as the distribution of income, elasticity, the first and second laws of thermodynamics and utility. Chapter 4 explores production and consumption. Chapter 5 explores the relationship between economic entropy and money, illustrated by data of the UK and USA economies. Chapter 7 explores the relationship between economic entropy and employment. Chapter 8 sets out the key dynamics of resources.Chapter 9 illustrates trends in non-renewable resources of oil, gas, coal, nuclear power, steel, cement and Aluminium. Chapter 10 illustrates trends in renewable resources, including humankind, water, land and soil, cereals and grain, meat, fish, the greeen revolution, and renewable energy, including hydro-electric power, wind and solar energy. Chapter 11 is a summary of trends relating to climate change and economic output, and chapter 12 summarises how economics and entropy relate to a sustainable world.
    Keywords: Thermodynamics, economics, Le Chatelier, entropy, utility, money, equilibrium, value, energy, interest, elasticity, employment, climate change
    JEL: A1 C02 C68 D5 E O
    Date: 2015–03
  16. By: John Bryant (Vocat International)
    Abstract: Chapter from a book entitled Entropy Man, which deals with the relationships between the disciplines of thermodynamics and economics. Chapter 1 illustrates how entropy impacts on the world in which we live. Chapter 2 is a short history of human development. Chapter 3 covers such concepts as the distribution of income, elasticity, the first and second laws of thermodynamics and utility. Chapter 4 explores production and consumption. Chapter 5 explores the relationship between economic entropy and money, illustrated by data of the UK and USA economies. Chapter 7 explores the relationship between economic entropy and employment. Chapter 8 sets out the key dynamics of resources. Chapter 9 illustrates trends in non-renewable resources of oil, gas, coal, nuclear power, steel, cement and Aluminium. Chapter 10 illustrates trends in renewable resources, including humankind, water, land and soil, cereals and grain, meat, fish, the greeen revolution, and renewable energy, including hydro-electric power, wind and solar energy. Chapter 11 is a summary of trends relating to climate change and economic output, and chapter 12 summarises how economics and entropy relate to a sustainable world.
    Keywords: Thermodynamics, economics, Le Chatelier, entropy, utility, money, equilibrium, value, energy, interest, elasticity, employment, climate change
    JEL: A1 C02 C68 D5 E O
    Date: 2015–03
  17. By: John Bryant (Vocat International)
    Abstract: Chapter from a book entitled Entropy Man, which deals with the relationships between the disciplines of thermodynamics and economics. Chapter 1 illusrates how entropy impacts on the world in which we live. Chapter 2 is a short history of human development. Chapter 3 covers such concepts as the distribution of income, elasticity, the first and second laws of thermodynamics and utility. Chapter 4 explores production and consumption. Chapter 5 explores the relationship between economic entropy and money, illustrated by data of the UK and USA economies. Chapter 7 explores the relationship between economic entropy and employment. Chapter 8 sets out the key dynamics of resources.Chapter 9 illustrates trends in non-renewable resources of oil, gas, coal, nuclear power, steel, cement and Aluminium. Chapter 10 illustrates trends in renewable resources, including humankind, water, land and soil, cereals and grain, meat, fish, the greeen revolution, and renewable energy, including hydro-electric power, wind and solar energy. Chapter 11 is a summary of trends relating to climate change and economic output, and chapter 12 summarises how economics and entropy relate to a sustainable world.
    Keywords: Thermodynamics, economics, Le Chatelier, entropy, utility, money, equilibrium, value, energy, interest, elasticity, employment, climate change
    JEL: A1 C02 C68 D5 E O
    Date: 2015–03
  18. By: Ternyik, Stephen I.
    Abstract: The statistical method, based on physical and observable quantities, can very precisely describe universal patterns of human progress and poverty, in terms of money, energy and wealth distribution over time. This research proposal points to the non-natural root cause of all social inequalities in the empirical history of human civilization and possible economic remedies. Poverty is not a natural phenomenon, but the economic result of the human privatization of nature.
    Keywords: rent, capital, thermo-economics, economic cycles, singularity, progress, poverty
    JEL: B41
    Date: 2016–11
  19. By: Kuboniwa, Masaaki
    Abstract: A Soviet legacy for present-day Russia is found in its resource dependency as well as its implicit exposition of resource rents from foreign trade in the national accounting. Estimating rents from the oreign trade of oil and gas, we demonstrate how large the GDP of the oil and gas sector had been in the Soviet Union and has been in present-day Russia, as well.
    Keywords: Soviet legacy, oil and gas, rent, GDP
    JEL: E01 P33 P51
    Date: 2016–10
  20. By: Zhu, Huiming; Huang, Hui; Peng, Cheng; Yang, Yan
    Abstract: This paper investigates the extreme dependence between the Asia-Pacific stock markets and the international crude oil market by applying the quantile regression theory and using daily data from January 4th, 2000 to July 4th, 2016. The authors obtain a more detailed result on the degree and structure of the dependence, and furthermore, the results present an asymmetric and heterogeneous dependence. Moreover, the dependence increases dramatically after a structural break point, meaning a crisis. Additionally, the authors observe a more significant dependence at the lower tails than the upper tails. They demonstrate the positive relationship at low quantiles, which is evidence of positive dependence in recessions or bearish markets.
    Keywords: Extreme dependence,Crude oil,Asia-Pacific stock market,Quantile regression,Structural breaks
    JEL: E44 Q43
    Date: 2016
  21. By: Parra, Juan Felipe
    Abstract: This paper studies the pricing policy of gasoline in Colombia from when it was subsidized until recent years. It uses the economic theory of the public sector to outline the changes which occurred in the central government in terms of technical pricing. It also emphasizes the role played by the state petroleum company on the Colombian fiscal crisis in beginning of the century and it refers to the place of oil in the productive activity. Finally, this paper estimates the distributional characteristic of Feldstein (1972) in order to understand the effect of removing the gasoline subsidy.
    Keywords: Fuels, Subsidies, Redistributive Effects
    JEL: D3 D4 H2 H5
    Date: 2016–10
  22. By: Youssef, Adel Ben (Université Côte d’Azur); Lannes, Laurence (World Bank); Rault, Christophe (University of Orléans); Soucat, Agnes (World Health Organization)
    Abstract: We examine causal links between energy consumption and health indicators (Mortality rate under-5, life expectancy, greenhouse effect, and government expenditure per capita) for a sample of 16 African countries over the period 1971-2010 (according to availability of countries' data). We use the panel-data approach of Kónya (2006), which is based on SUR systems and Wald tests with country specific bootstrap critical values. Our results show that health and energy consumption are strongly linked in Africa. Unilateral causality is found from energy consumption to life expectancy and child under-5 mortality for Senegal, Morocco, Benin, DRC, Algeria, Egypt, and South Africa. At the same time, we found a bilateral causality between energy consumption and health indicators in Nigeria. In particular, our findings suggest that electricity consumption Granger causes health outcomes for several African countries.
    Keywords: energy consumption, electricity, health, Panel VAR
    JEL: Q43 Q53 Q56
    Date: 2016–10
  23. By: Matthew Doyle (Colorado School of Mines); Corrado Di Maria (University of East Anglia); Ian Lange (Colorado School of Mines); Emiliya Lazarova (University of East Anglia)
    Abstract: Researchers have utilized the fact that many states have term limits (as opposed to being eligible for re-election) for governors to determine how changes in electoral incentives alter state regulatory agency behavior. This paper asks whether these impacts spill over into private sector decision-making. Using data from gubernatorial elections in the U.S., we find strong evidence that power plants spend less in water pollution abatement if the governor of the state where the plant is located is a term-limited democrat. We show that this evidence is consistent with compliance cost minimization by power plants reacting to changes in the regulatory enforce- ment. Finally, we show that the decrease in spending has environmental impacts as it leads to increased pollution.
    Keywords: political economy, electoral incentives, term limits, environmental policy, pollution abatement, compliance costs, power plants, water pollution, regression discontinuity
    JEL: H32 H76 Q25 Q53 Q58
    Date: 2016–09–30
  24. By: Guiomar Martín-Herrán (Department of Applied Economics and IMUVa, University of Valladolid); Santiago J. Rubio (Department of Economic Analysis and ERI-CES, University of Valencia)
    Abstract: This paper evaluates the effects of the lack of regulatory commitment on emission tax applied by the regulator, abatement effort made by the monopoly and social welfare comparing two alternative policy games. The first game assumes that the regulator commits to an ex-ante level of the emission tax. In the second one, in a first stage the regulator and the monopolist simultaneously choose the emission tax and abatement respectively, and in a second stage the monopolist selects the output level. We find that the lack of commitment leads to lower taxation and abatement that yield larger emissions and, consequently, a larger steady-state pollution stock. Moreover, the increase of environmental damages because of the increase in the pollution stock more than compensates the increase in consumer surplus and the decrease in abatement costs resulting in a reduction of social welfare. Thus, our analysis indicates that the lack of commitment has a negative impact of welfare although this detrimental effect decreases with abatement costs.
    Keywords: Monopoly, Commitment, Emission Tax, Abatement, Stock Pollutant
    JEL: H23 L12 L51 Q52 Q55
    Date: 2016–09
  25. By: Oleksandr Sushchenko (Kyiv National Economic University named after V. Hetman, 03680, Kyiv, Ukraine); Reimund Schwarze (Europa University Viadrina and Helmholtz Centre for Environmental Research (UFZ))
    Abstract: The aim of this paper is to conduct an evaluation of the financial instruments and their role in mobilizing climate finance, provide a set of recommendations aimed at easing the process of climate finance mobilization for both developed and developing countries (especially, for Ukraine). It is also important to show the shift from voluntary corporate social responsibility (CSR) to the new principles of investing (ESG) and business models in the climate change area and how it affects mobilization of climate finance. Another important goal of this paper is to show the importance of transaction costs, and ways how the accounting, reporting and evaluation of the results of emission reduction projects could reduce existing costs and improve access to the financial market, i.e. to the relatively “cheap” financial resources. We also highlights ways for establishing the necessary infrastructure on the financial market needed to minimize the transaction costs while getting financial resources for the purpose of greenhouse gases reduction (GHG reduction).
    Keywords: climate finance, carbon taxation, market financial instruments, climate- aligned bonds, non-financial reporting
    JEL: G15 Q58
    Date: 2016–10
  26. By: Lee Endress (Department of Economics, University of Hawaii at Manoa; UHERO); James Roumasset (Department of Economics, University of Hawaii at Manoa; UHERO); Christopher Wada (Department of Economics, University of Hawaii at Manoa; UHERO)
    Abstract: We consider the prospects for sustainable growth using expected utility models of optimal investment under threat from a natural disaster. Extension of a discrete, two-period model, to continuous time over an infinite time horizon permits the analysis of sustainability under uncertainty regarding adverse events, including both one-time and recurrent disasters. Natural disasters, with destruction of productive capital, disrupt the optimal consumption and utility paths, but the Arrow et al. (2004) sustainability criterion is still satisfied even without adding strong or weak sustainability constraints. We also consider a separate natural resource sector and show that, except for extreme cases, the optimal steady state level of the renewable resource is not affected by the possibility of natural disasters. In the case of catastrophic events, however, damage to the resource system may be severe enough to push the system below a critical value tipping point, undermining the prospects of long-run sustainability.
    Keywords: sustainable growth, natural disaster, expected utility, golden rule, Hotelling, Ramsey
    JEL: O4 Q2
    Date: 2016–11
  27. By: Felix Pretis; Max Roser
    Abstract: The large span of long-run projected temperature changes in climate projections does not predominately originate from uncertainty across climate models; instead it is the wide range of different global socio-economic scenarios and the implied energy production that results in high uncertainty about climate change. It is therefore important to assess the observational tracking of these scenarios. For the first time observations over two decades are available against which the initial sets of socio-economic scenarios used in IPCC reports can be assessed. Here we compare these socio-economic scenarios created in both 1992 and 2000 against the recent observational record to investigate the coupling of economic growth and fossil-fuel CO2 emissions. We find that the growth rate in fossil fuel CO2 emission intensity – fossil fuel CO2 emissions per GDP – over the 2000s exceeds the projections of all main emission scenarios. Proposing a method to disaggregate differences in global growth rates to country-by-country contributions, we find that the relative discrepancy is driven by high growth rates in Asia and Eastern Europe, in particular in Russia and China. The growth of emission intensity over the 2000s highlights the relevance of unforeseen local shifts in projections on a global scale.
    Keywords: Climate, Energy, Scenarios, Emission Intensity
    JEL: Q40 Q47 Q54
    Date: 2016–11–01
  28. By: Olila, Dennis Opiyo; Wasonga, Oliver V.
    Abstract: Climate change and climate variability is perhaps one of the major challenges facing the world today. There is an equivocal agreement that climate change is not only a threat to the economies of developing world, but also to those of the developed economies. One of the key drivers of global warming is the greenhouse gas (GHG) emissions. Even though several studies have in the recent past evaluated various sources of GHG emissions and their associated impacts, little empirical information exists on the role played by burning savanna grasslands as far as global warming is concerned. This study is an attempt to determine the emission pattern over time and consequently forecast the linear trend in GHG emissions from the Kenya’ Savanna. Using Autoregressive (AR) modelling, the study analyzes and forecasts time series data ranging from the year 1993 to 2012. The key finding of the study indicate that emissions resulting from continual burning of Savanna grasslands will continue in an upward trend if no serious mitigation measure is put in place to revert the statusquo. Averting the current state of affairs requires policies aimed at reducing the levels of GHGs in the atmosphere for instance promotion of Climate Smart Agricultural (CSA) Practices.
    Keywords: Climate Change, Savanna grassland, Autoregressive model, Time series data, Environmental Economics and Policy, Land Economics/Use, Research Methods/ Statistical Methods,
    Date: 2016–09
  29. By: Zengkai Zhang (College of Management and Economics, Tianjin University); ZhongXiang Zhang (College of Management and Economics, Tianjin University)
    Abstract: Climate regulations tend to target energy intensive sectors whose products are widely used in industrial production as intermediate inputs, such as electricity, and the carbon abatement may be partially offset by intermediate input-led leakage. This paper aims to examine the impact of intermediate input linkage on the carbon leakage both theoretically and empirically. On the theoretical part, we develop a Harberger-type model with an input-output linkage structure, identify four leakage effects and derive closed-form solutions for these leakage effects. On the empirical part, we build a computable general equilibrium model of China for empirical simulation and introduce Structural Decomposition Analysis to link both the theoretical and empirical models. By imposing a carbon price on the electricity generation sector, our results show significant carbon leakage. Our decomposition analysis further suggests that such a leakage is mainly through the production substitution effect, followed by the multiplier effect. Both of the two effects are closely related to the intermediate input linkage, and thus shed some light on importance of considering sectoral linkage when discussing the carbon leakage issue of climate policies.
    Keywords: Carbon Leakage, Sectoral Linkage, Climate Regulation, General Equilibrium Model, Production Substitution Effect, Multiplier Effect
    JEL: Q55 Q58 Q43 Q48 O13 O31 O33 O44 F18
    Date: 2016–11
  30. By: Halkos, George; Tsilika, Kyriaki
    Abstract: In this study we provide a computerized graph structure for synthesizing and displaying the data on a region’s ecosystem-economic system. By applying Mathematica-based graph modelling we create a causal network of the synergistic impact mechanism among certain climate related factors. Our computational approach identifies a climate factor that affects most immediately or most strongly the others. Important factors are indicated through the use of graph theoretical tools. Our graph-based approach and its computational aspects allow for factor ranking(s) according to their importance to the network both numerically and visually, for certain settlement types. Our contribution provides quantitative estimates of impacts and adaptation potentials of five potential effects of climate change (migration, flooding- landslides- fire, air and water pollution, human health and energy-water-other resources) which play a substantial role at the synergistic impact mechanism. Results allow having a picture of the structure of synergistic impact mechanism in a glimpse. Specifically, visual output is created to detect i) the causal relationships of the synergetic mechanism under study ii) the most influential factor(s) in the synergistic mechanism and iii) classify the factor’s roles (based on the degree of their impact) within the coping mechanism.
    Keywords: Graph theory; vertex centrality; Mathematica; climate related factors; environmental economics computation.
    JEL: C63 C88 P28 Q51 Q54 Q58
    Date: 2016–11

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