nep-ene New Economics Papers
on Energy Economics
Issue of 2016‒12‒18
39 papers chosen by
Roger Fouquet
London School of Economics

  1. Monitoring energy efficiency in Latin America By -
  2. An Examination of Energy Efficiency Retrofit Depth in Ireland By Collins, Matthew; Curtis, John
  3. Technical note Proposed model for regional power sector integration in Africa By Amy Rose; Ignacio Pérez-Arriaga
  4. Using a spatial econometric approach to mitigate omitted variables in stochastic frontier models: An application to Norwegian electricity distribution networks By Orea, L.; Álvarez, I; Jamasb, T.
  5. Do Fossil fuel Taxes Promote Innovation in Renewable Electricity Generation? By Lazkano, Itziar; Pham, Linh
  6. The distribution dynamics of Carbon Dioxide Emission intensity across Chinese provinces: A weighted Approach By Jian-Xin Wu; Ling-Yun He
  7. Accounting for local impacts of photovoltaic farms: two stated preferences approaches By Anabela Botelho; Lina Sofia Lourenço-Gomes; Lígia Costa Pinto; Sara Sousa; Marieta Valente
  8. Dynamic Modeling of Price Responsive Demand in Real-time Electricity Market: Empirical Analysis By Jaeyong An; P. R. Kumar; Le Xie
  9. Economic zones for future complex power systems By Greve, T.; Charalampos, P.; Pollitt, M.; Phil Taylor
  10. Fiscal policy and CO2 emissions of new passenger cars in the EU By Gerlagh, Reyer; Van Den Bijgaart, Inge; Nijland, Hans; Michielsen, Thomas
  11. Using Unobtrusive Sensors to Measure and Minimize Hawthorne Effects: Evidence from Cookstoves By Simons, Andrew M.; Beltramo, Theresa; Blalock, Garrick; Levine, David I.
  12. Heterogeneity in Price Responsiveness for Residential Space Heating in Germany By Hendrik Schmitz; Reinhard Madlener
  13. Can Black Gold Shine? The Effect of Oil Prices on Nighttime Light in Brazil By Gradstein, Mark; Klemp, Marc P B
  14. A liability approach to climate policy: A thought experiment By Billette de Villemeur, Etienne; Leroux, Justin
  15. Offshore CCS and ocean acidification : A global long-term probabilistic cost-benefit analysis of climate change mitigation By van der Zwaan, B.C.C.; Gerlagh, Reyer
  16. Harvesting the Commons By Partha Dasgupta; Tapan Mitra; Gerhard Sorger
  17. How to trigger mass market adoption of electric vehicles? Factors predicting interest in electric vehicles in Germany By Wesche, Julius P.; Plötz, Patrick; Dütschke, Elisabeth
  18. Are Chinese transport policies effective? A new perspective from direct pollution rebound effect, and empirical evidence from road transport sector By Lu-Yi Qiu; Ling-Yun He
  19. Established sectors expediting clean technology industries? The Norwegian oil and gas sector's influence on offshore wind power By Tuukka Mäkitie; Allan D. Andersen; Jens Hanson; Håkon E. Normann; Taran M. Thune
  20. Does It Pay to Live in Big(ger) Cities?: The Role of Agglomeration Benefits, Local Amenities, and Costs of Living By Rudiger Ahrend; Alexander C. Lembcke
  21. How green are green economists By Stefano Carattini; Alessandro Tavoni
  22. The geography of interstate resource wars By Francesco Caselli; Massimo Morelli; Dominic Rohner
  23. To Rebate or Not to Rebate: Fuel Economy Standards vs. Feebates? By Durrmeyer, Isis; Samano, Mario
  24. Integrating market and bilateral power trading in the South African Power By Amy Rose; Robert Stoner; Ignacio Pérez-Arriaga
  25. Analysis of Distributed Energy Systems and Implications for Electrification: The Case of ASEAN Member States By Han Phoumin; Shigeru Kimura
  26. The Distinct Economic Effects of the Ethanol Blend Wall, RIN Prices and Ethanol Price Premium due to the RFS By de Gorter, Harry; Drabik, Dusan
  27. Batteries in Offshore Support vessels - Pollution, climate impact and economics By Lindstad, Haakon Elizabeth; Eskeland, Gunnar S.; Rialland, Agathe
  28. The Determinants of Entry in The Electricity Generation Sector in OECD Countries: A Focus on Renewable Energy By David Benatia; Tomasz Koźluk
  29. Projections and uncertainties about climate change in an era of minimal climate policies By William D. Nordhaus
  30. Asset Ownership, Windfalls, and Income: Evidence from Oil and Gas Royalties By Brown, Jason; Fitzgerald, Timothy; Weber, Jeremy G.
  31. Evaluating the Effectiveness of Voluntary Programs: Did Ohio's Tox-Minus Initiative Affect Participants' TRI Emissions? By Ann Wolverton; Charles Griffiths; William Wheeler
  32. Informed trading in oil-futures market By Rousse, O.; Sévi, B.
  33. Demystifying RINs: A Partial Equilibrium Model of U.S. Biofuels Markets By Korting, Christina; Just, David R.
  34. Environmental performance index and economic welfare By Halkos, George; Zisiadou, Argyro
  35. Wind turbine and photovoltaic generating efficiency in Africa By Charles Fant*
  36. A future auction mechanism for distributed generation By Greve, T.; Pollitt, M.
  37. China building energy consumption: definitions and measures from an operational perspective By Ling-Yun He; Wei Wei
  38. The Environmental Impact of Sharing: Household and Urban Economies in CO2 Emissions By Anders Fremstad; Anthony Underwood; Sammy Zahran
  39. Essays in environmental policy and household economics By Motavasseli, Ali

  1. By: -
    Abstract: After analyzing the strengths and weaknesses of the energy efficiency programmes that the region's countries have been implementing, the Natural Resources and Infrastructure Division's (DRNI) Natural Resources Unit (NRU) has reached the conclusion that one of the main obstacles has been the lack of information and indicators to facilitate a quantitative, full and integrated analysis of the evolution of said policies with the objective of making policy interventions based on solid information. The quality of the statistics and the performance indicators to quantify results of national energy efficiency programmes in Latin American and Caribbean countries has been deficient. As a way to overcome this shortcoming, the ECLAC has created the Regional Program BIEE (Energy Efficiency Indicators Database for Latin America and the Caribbean).
    Date: 2016–11
  2. By: Collins, Matthew; Curtis, John
    Keywords: energy efficiency/Ireland
    Date: 2016–06
  3. By: Amy Rose; Ignacio Pérez-Arriaga
    Abstract: Regional power pools present a significant and potentially defining opportunity for African power systems to develop domestic energy resources, improve system reliability, and contribute to overall economic development. Hydropower is expected to play a significant role in many regional power pools in Africa. Feasible power transmission highways from Grand Inga in the Democratic Republic of the Congo and the Grand Renaissance Dam in Ethiopia to other regions on the continent create the possibility of a pan-African electricity grid. However, in the medium and long term, global climate change is expected to cause major variations in Africa’s hydrological resources and it is not known how these changes may impact the value of regional power sector integration. This paper presents a model developed to study the value of different levels of regional integration in sub-Saharan Africa and how this value may change in the face of climate change. This work builds on previous studies by incorporating the ability to trade between different regional pools, co-optimisation of generation and transmission, the ability to share reserves, and detailed simulation of the major hydropower basins in Africa. Numerical results of the analysis will be presented in a parallel paper.
    Keywords: climate change, capacity expansion planning, power pools, Africa
  4. By: Orea, L.; Álvarez, I; Jamasb, T.
    Abstract: An important methodological issue for the use of efficiency analysis in incentive regulation of regulated utilities is how to account for the effect of unobserved cost drivers such as environmental factors. This study combines the spatial econometric approach with stochastic frontier techniques to control for unobserved environmental conditions when measuring firms’ efficiency in the electricity distribution sector. Our empirical strategy relies on the geographic location of the firms as a useful source of information that has previously not been explored in the literature. The underlying idea in our empirical proposal is to utilise variables from neighbouring firms that are likely to be spatially correlated as proxies for the unobserved cost drivers. We illustrate our approach using the data of Norwegian distribution utilities for the years 2004 to 2011. We find that the lack of information on weather and geographic conditions can likely be compensated with data from surrounding firms using spatial econometric techniques. Combining efficiency analysis and spatial econometrics methods improve the goodness-of-fit of the estimated models and, hence, more accurate (fair) efficiency scores are obtained. The methodology can also be used in efficiency analysis and regulation of other types of utility sectors.
    Keywords: Spatial econometrics, stochastic frontier models, environmental conditions, electricity distribution networks.
    JEL: D24 L51 L94
    Date: 2016–12–12
  5. By: Lazkano, Itziar (Dept. of Economics, Norwegian School of Economics and Business Administration); Pham, Linh (University of Wisconsin-Milwaukee)
    Abstract: We evaluate the role of a fossil fuel tax and research subsidy in directing innovation from fossil fuel toward renewable energy technologies in the electricity sector. Using a global firm-level electricity patent database from 1978 to 2011, we find that the impact of fossil fuel taxes on renewable energy innovation varies with the type of fossil fuel. Specifically, a tax on coal reduces innovation in both fossil fuel and renewable energy technologies while a tax on natural gas has no statistically significant impact on renewable energy innovation. The reason is that easily dispatchable energy sources like coal-fired power plants need to complement renewable energy Technologies in the grid because renewables generate electricity intermittently. Our results suggest that a tax on natural gas, combined with research subsidies for renewable energy, may effectively shift innovation in the electricity sector towards renewable energy. In contrast, coal taxation or a carbon tax that increases coal prices has unintended negative consequences for renewable energy innovation.
    Keywords: Electricity; Energy taxes; Renewable; coal; natural gas technologies
    JEL: L90 O30 Q40
    Date: 2016–11–16
  6. By: Jian-Xin Wu; Ling-Yun He
    Abstract: This paper examines the distribution dynamics of carbon dioxide (CO2) emission intensity across 30 Chinese provinces using a weighted distribution dynamics approach. The results show that CO2 emission intensity tends to diverge during the sample period of 1995-2014. However, convergence clubs are found in the ergodic distributions of the full sample and two sub-sample periods. Divergence, polarization and stratification are the dominant characteristics in the distribution dynamics. Weightings with economic and population sizes have important impacts on current distributions and hence long run steady distributions. Neglecting economic size may under-estimate the deterioration in the long run steady state. The result also shows that conditioning on space and income cannot eliminate the multimodality in the long run distribution. However, capital intensity has important impact on the formation of convergence clubs. Our findings have contributions in the understanding of the spatial dynamic behaviours of CO2 emissions across Chinese provinces, and have important policy implications for CO2 emissions reduction in China.
    Date: 2016–10
  7. By: Anabela Botelho (Universidade de Aveiro, GOVCOPP); Lina Sofia Lourenço-Gomes (University of Trás-os-Montes and Alto Douro); Lígia Costa Pinto (Universidade do Minho, NIMA); Sara Sousa (Instituto Politéctnico de Coimbra, ISCAC); Marieta Valente (Universidade do Minho, NIMA)
    Abstract: Renewable energy sources for electricity generation are unequivocally more environmentally friendly than the traditional sources, but are not impact-free. Given the potential for solar photovoltaic energy to contribute to the energy mix in some countries, it is timely to carefully consider the potential environmental costs of operation of photovoltaic farms, which are experienced by the local population, while the general benefits accrue to all. These adverse impacts should be identified and acknowledged. This paper proposes and applies economic valuation methods to estimate the value of those environmental impacts. We apply the contingent valuation method to a sample of local residents close to three selected photovoltaic farms in Portugal. We design a discrete choice experiment to elicit the valuation of specific adverse impacts of electricity generation through photovoltaic energy by national residents. Our results show that the value elicited in the vicinity of the photovoltaic farms is non-negligible and national residents value positively and differently the different adverse local impacts. Both of these estimates, in conjunction or independently, can be used to fully account for this often neglected cost of solar energy. The asymmetric equity implications of photovoltaic projects should not be neglected when deciding their construction and location.
    Keywords: Photovoltaic Farms; Stated Preference Methods; Contingent Valuation; Discrete Choice Experiments; Environmental Impacts
    JEL: Q4
    Date: 2016–12
  8. By: Jaeyong An; P. R. Kumar; Le Xie
    Abstract: In this paper, we study the price responsiveness of electricity consumption from empirical commercial and industrial load data obtained from Texas. Employing a dynamical system perspective, we show that price responsive demand can be modeled as a hybrid of a Hammerstein model with delay following a price surge, and a linear ARX model under moderate price changes. It is observed that electricity consumption therefore has unique characteristics including (1) qualitatively distinct response between moderate and extremely high prices; and (2) a time delay associated with the response to high prices. It is shown that these observed features may render traditional approaches to demand response and retail pricing based on classical economic theories ineffective. In particular, ultimate real-time retail pricing may be limitedly beneficial than as considered in classical economic theories.
    Date: 2016–12
  9. By: Greve, T.; Charalampos, P.; Pollitt, M.; Phil Taylor
    Abstract: This paper examines the economics of the electricity market out to 2050. We propose a flexible zoning concept, built up around economic and technical layers, in networks of the order of hundreds of thousands or millions of nodes. The Economic Layer runs auctions to determine the electricity to be delivered and prices. The Economic Layer delivers suggestions after a fixed ordering, starting with suppliers and demands that generates the lowest overall system cost, then second-lowest overall network cost etc. These suggestions are delivered to the Technical Layer that checks for feasibility in terms of technical constraints. The first match between the ranked suggestions and non-violation of technical constraints is chosen. We demonstrate why this paper should be considered for future power systems. This paper extends previous work on reactive power exchange by introducing market considerations in zoning mechanisms for active power exchanges. We are also exhibit the potential for much higher price resolution in distribution networks via our concept of economic zoning.
    Keywords: future power systems, zones of control, auctions
    JEL: D44 D85 Q42
    Date: 2016–12–12
  10. By: Gerlagh, Reyer (Tilburg University, School of Economics and Management); Van Den Bijgaart, Inge (Tilburg University, School of Economics and Management); Nijland, Hans; Michielsen, Thomas (Tilburg University, School of Economics and Management)
    Abstract: To what extent have national fiscal policies contributed to the decarbonisation of newly sold passenger cars? We construct a simple model that generates predictions regarding the effect of fiscal policies on average CO2 emissions of new cars, and then test the model empirically. Our empirical strategy combines a diverse series of data. First, we use a large database of vehicle-specific taxes in 15 EU countries over 2001–2010 to construct a measure for the vehicle registration and annual road tax levels, and separately, for the CO2 sensitivity of these taxes. We find that for many countries the fiscal policies have become more sensitive to CO2 emissions of new cars. We then use these constructed measures to estimate the effect of fiscal policies on the CO2 emissions of the new car fleet. The increased CO2-sensitivity of registration taxes have reduced the CO2 emission intensity of the average new car by 1.3 %, partly through an induced increase of the share of diesel-fuelled cars by 6.5 percentage points. Higher fuel taxes lead to the purchase of more fuel efficient cars, but higher diesel fuel taxes also decrease the share of (more fuel efficient) diesel cars; higher annual road taxes have no or an adverse effect.
    Date: 2016
  11. By: Simons, Andrew M.; Beltramo, Theresa; Blalock, Garrick; Levine, David I.
    Abstract: People act differently when they know they are being observed. This phenomenon, the Hawthorne effect, can bias estimates of program impacts. Unobtrusive sensors substituting for human observation can alleviate this bias. To demonstrate this potential, we used temperature loggers to measure fuel-­‐efficient cookstoves as a replacement for three-­‐stone fires. We find a large Hawthorne effect: when in-­‐person measurement begins, participants increase fuel-­‐efficient stove use approximately three hours/day (54%) and reduce three-­‐stone fire use by approximately two hours/day (30%). When in-­‐person measurement ends, participants reverse those changes. We then examine how this Hawthorne effect biases estimates of fuel use and particulate matter concentrations. Our results reinforce concerns about Hawthorne effects, especially in policy-­‐relevant impact evaluations. We demonstrate that sensors can sometimes provide a solution.
    Keywords: observation bias, Hawthorne effect, sensors, improved cookstoves, monitoring and evaluation, impact evaluation, Agricultural and Food Policy, Research and Development/Tech Change/Emerging Technologies,
    Date: 2016–05
  12. By: Hendrik Schmitz; Reinhard Madlener
    Abstract: Space heating and hot water expenditures make up the majority of household energy demand in Germany, at 83.2%, making them an attractive target for energy policies. Using a panel dataset derived from yearly residential household surveys covering the years 1996 to 2014, we identify the determinants of heating expenditures for German households. We discover significant heterogeneity in expenditures depending on socioeconomic variables. For the full sample, we find a price elasticity of heating expenditures of 0.629. Elasticities vary significantly between individual groups, with values ranging from 0.523 to 0.716. Furthermore, a large number of technical and socio-demographic factors are significant in determining energy use. Our findings have implications for evaluating the effectiveness of policy measures that aim at influencing energy use across different groups of consumers.
    Keywords: Germany, heating demand, heating expenditures, heterogeneity, space heating
    JEL: C23 D12 Q41
    Date: 2016
  13. By: Gradstein, Mark; Klemp, Marc P B
    Abstract: We explore the existence of a local "resource curse" related to Brazi's oil reserves. To this end, we examine the effect of changes in international oil prices interacted with measures of oil access on nighttime light - a measure of economic activity - across the country's localities. We detect no evidence of a resource curse: in fact, better access to oil enhances the positive effect of oil prices on economic activity. Our estimates indicate that a doubling of oil prices causes an average increase in luminosity of some 50 percent more in oil rich than in oil poor states; and 30 percent more, on average, in localities within 100 km dis-tance to the nearest oil field relative to more remote localities.
    Date: 2016–12
  14. By: Billette de Villemeur, Etienne; Leroux, Justin
    Abstract: We observe that a Pigovian climate policy need not exact full payment of the social cost of carbon upon emission to yield optimal incentives. Following this insight, we propose the creation of a carbon liabilities market to address climate change. Each period, countries would be made liable for their share of responsibility in current climate damage. This yields first-best emissions patterns. Also, because liabilities could be traded like financial debt, it decentralizes the choice a discount rate as well as beliefs about the severity of the climate problem. From an informational standpoint, implementation relies only on realized harm and on the well-documented emission history of countries, unlike a carbon tax or tradable permits scheme, which are based on a sum of discounted expected future marginal damage. We offer a discussion of the differences between a liability scheme and a carbon tax along the dimensions of information, participation, commitment, intergenerational fairness, and exposure to risk.
    Keywords: Carbon Liability; Climate Policy; Market Instruments; Pigovian Tax.
    JEL: H23 Q54
    Date: 2016–12
  15. By: van der Zwaan, B.C.C.; Gerlagh, Reyer (Tilburg University, School of Economics and Management)
    Abstract: Public fear over environmental and health impacts of CO2 storage, or over potential leakage of CO2 from geological reservoirs, is among the reasons why over the past decade CCS has not yet been deployed on a scale large enough so as to meaningfully contribute to mitigate climate change. Storage of CO2 under the seabed moves this climate mitigation option away from inhabited areas and could thereby take away some of the opposition towards this technology. Given that in the event of CO2 leakage through the overburden in the case of sub-seabed CCS, the ocean could function as buffer for receiving this greenhouse gas, instead of it directly being emitted into the atmosphere, offshore CCS could also address concerns over the climatic impacts of CO2 seepage. We point out that recent geological studies provide evidence that to date CO2 has been safely stored under the seabed. Leakage for individual offshore CCS operations could thus be unlikely from a technical point of view, if storage sites are well chosen, well managed and well monitored. But we argue that on a global longterm scale, for an ensemble of thousands or millions of storage sites, leakage of CO2 could take place in certain cases and/or countries for e.g. economic, institutional, legal or safety-cultural reasons. In this paper we investigate what the impact could be in terms of temperature increase and ocean acidification if leakage occurs at a global level, and address the question what the relative roles could be of on- and offshore CCS if mankind desires to divert the damages resulting from climate change. For this purpose, we constructed a top-down energy-environment-economy model, with which we performed a probabilistic Monte-Carlo cost-benefit analysis of climate change mitigation with on- and offshore CCS as specific CO2 abatement options. One of our main conclusions is that, even under conditions with non-zero (permille/year) leakage for CCS activity globally, both onshore and offshore CCS should probably – on economic grounds at least - still account for anywhere between 20 % and 80 % of all future CO2 abatement efforts under a broad range of CCS cost assumptions.
    Date: 2016
  16. By: Partha Dasgupta; Tapan Mitra; Gerhard Sorger
    Abstract: We study a socio-ecological model in which a continuum of consumers harvest a common property renewable natural resource. Markov perfect Nash equilibria of the cor- responding non-cooperative game are derived and are compared with collectively optimal harvesting policies. The underlying mechanisms that drive open-access commons in our model are shaped by population size, harvesting costs, and the ecosystem's productivity. If other things equal population is small relative to harvesting costs, unmanaged commons do not face destruction. More strikingly, they are harvested at the collectively optimal rate. Property rights do not matter in that parametric regime because the resource has no social scarcity value. However, if other things equal population is large relative to harvesting costs, open-access renewable natural resources suffer from the tragedy of the commons. Property rights matter there because the resource has a social scarcity price. The pop- ulation size relative to harvesting costs at which the socio-ecological system bifurcates is an increasing function of the ecosystem's productivity. A sudden crash in productivity, population overshoot, or decline in harvesting costs can tip an unmanaged common into ruin. The model provides a way to interpret historical and archaeological ndings on the collapse of those societies that have been studied by scholars.
    JEL: D01 C73 Q20
    Date: 2016–12
  17. By: Wesche, Julius P.; Plötz, Patrick; Dütschke, Elisabeth
    Abstract: Plug-in electric vehicles (PPEVs) have noteworthy potential to reduce global and local emissions and are expected to become a relevant future market for vehicle sales. Both policy makers and car manufacturers have an interest to understand the future PEV user groups, also those beyond the current 'early adopter'. However, there are only a few empirical results available about potential future PEV users. Here, we use data from a representative survey on PEV interest from Germany to analyse factors that are related to interest in PEVs of private car buyers. Interest in PEV implies a positive attitude towards this new technology and is thus a prerequisite for later adoption. Our results show that technology affinity and the feeling that an PEV can serve the user's driving need are positively connected to interest in PEVs. Furthermore, persons that connect a strong feeling of independence with conventional vehicles are less likely to be interested in PEVs. Our results indicate that automakers promoting PEVs should focus their marketing on the new yet ready technology in the next years.
    Keywords: electric vehicles,early adopter,early majority,market diffusion,consumer behaviour
    Date: 2016
  18. By: Lu-Yi Qiu; Ling-Yun He
    Abstract: The air pollution has become a serious challenge in China. Emissions from motor vehicles have been found as one main source of air pollution. Although the Chinese government has taken numerous policies to mitigate the harmful emissions from road transport sector, it is still uncertain for both policy makers and researchers to know to what extent the policies are effective in the short and long terms. Inspired by the concept and empirical results from current literature on energy rebound effect (ERE), we first propose a new concept of pollution rebound effect (PRE). Then, we estimate direct air PRE as a measure for the effectiveness of the policies of reducing air pollution from transport sector based on time-series data from the period 1986-2014. We find that the short-term direct air PRE is -1.4105, and the corresponding long-run PRE is -1.246. The negative results indicate that the direct air PRE does not exist in road passenger transport sector in China, either in the short term or in the long term during the period 1986-2014. This implies that the Chinese transport policies are effective in terms of harmful emissions reduction in the transport sector. This research, to the best of our knowledge, is the first attempt to quantify the effectiveness of the transport policies in the transitional China.
    Date: 2016–10
  19. By: Tuukka Mäkitie (TIK Center for Technology, Innovation and Culture, University of Oslo, Norway); Allan D. Andersen (TIK Center for Technology, Innovation and Culture, University of Oslo, Norway); Jens Hanson (TIK Center for Technology, Innovation and Culture, University of Oslo, Norway); Håkon E. Normann (TIK Center for Technology, Innovation and Culture, University of Oslo, Norway); Taran M. Thune (TIK Center for Technology, Innovation and Culture, University of Oslo, Norway)
    Abstract: The development and deployment of clean energy technologies must be accelerated to avoid a more than 2-degree warmer world, which poses a major policy challenge. Utilization of the vast resources concentrated in established sectors is one possible way to advance clean technology industries. However, prior research on energy transitions tends to emphasize competition and conflict between established sectors and clean-tech industries. There is thus a need for studying how established sectors may positively contribute to clean-tech industries. We propose an extended analytical framework of the technological innovation systems (TIS) approach to study how established sectors influence clean-tech industries, and present new definitions and indicators. We present a case study of oil and gas sector and offshore wind power industry development in Norway. Our results show that while the oil and gas sector has several positive implications for offshore wind power, wavering priorities and commitment of diversified oil and gas firms to the new industry have negative implications. We conclude by discussing the relevance of our findings for policy and research targeting the development of clean-tech industries.
    Date: 2016–12
  20. By: Rudiger Ahrend; Alexander C. Lembcke
    Abstract: This study approaches the question whether it “pays” to live in big(ger) cities in a three-fold manner: first, it estimates how city size affects worker productivity (agglomeration benefits) in Germany, based on individual-level wage data. Second, it considers whether productivity benefits translate into real gains for workers by taking local price levels into account. Third, it examines the role of amenities in explaining differences in real benefits across cities. The estimated elasticity for agglomeration benefits is around 0.02, implying that comparable workers in Hamburg (3 million residents) are about 6% more productive than in Recklinghausen (150 000). But agglomeration benefits are, on average, offset by higher prices, i.e. city size does not systematically translate into real pecuniary benefits for workers. Amenities, e.g. seaside access, theatres, universities, or “disamenities”, e.g. air pollution, explain – to a large degree – variation in real pecuniary benefits, i.e. real wages are higher in low-amenity cities.
    Keywords: agglomeration benefits, agglomeration costs, cities, cost of living, Functional Urban Areas, local amenities
    JEL: J31 R23 R12
    Date: 2016–12–15
  21. By: Stefano Carattini; Alessandro Tavoni
    Abstract: This paper analyzes the decision of “green” economists to participate in the carbon offset market, and how this decision is related with the views that these experts hold on offsets. It also compares the preferences of economists with those of the general public, as emphasized in the literature. The paper exploits a unique dataset examining the decision to purchase carbon offsets at two academic conferences in environmental and ecological economics. We find that having the conference expenses covered by one's institution increases the likelihood of offsetting, but practical and ethical reservations as well as personal characteristics and preferences also play an important role. We focus on the effect of objecting to the use of offsets and discuss the implications for practitioners and policy-makers. Based on our findings, we suggest that ecological and environmental economists should be more involved in the design and use of carbon offsets.
    JEL: N0
    Date: 2016
  22. By: Francesco Caselli; Massimo Morelli; Dominic Rohner
    Abstract: We establish a theoretical and empirical framework to assess the role of resource endowments and their geographic location in interstate conflict. The main predictions of the theory are that conflict is more likely when at least one country has natural resources, when the resources in the resource-endowed country are closer to the border, and, in the case where both countries have natural resources, when the resources are located asymmetrically vis-à-vis the border. We test these predictions on a novel data set featuring oilfield distances from bilateral borders. The empirical analysis shows that the presence and location of oil are significant and quantitatively important predictors of interstate conflicts after World War II.
    JEL: J1
    Date: 2015
  23. By: Durrmeyer, Isis; Samano, Mario
    Abstract: We compare the welfare effects in equilibrium of two environmental regulations that aim at increasing the new cars fleet’s average fuel efficiency: the fuel economy standards and the feebate policies. Maintaining the same environmental benefit and tax revenue, we simulate the implementation of each policy in France and the United States. Standard-type policies have larger negative welfare effects, up to 3.2 times those from the feebate. Effects on manufacturers are heterogeneous: some are better of under the standard regulation. The addition of a market to trade levels of fuel efficiency dominates the simple standard regulation but not always the feebate. We also consider the attribute-based standard, technological improvements, and the equivalence with fuel taxes as extensions.
    Keywords: Environmental regulation, automobile market, structural model, policy simulations
    JEL: C51 L50 Q51
    Date: 2016–11
  24. By: Amy Rose; Robert Stoner; Ignacio Pérez-Arriaga
    Abstract: High levels of inflexible bilateral trade in southern Africa have limited the participation in the competitive short-term markets, leading to inefficient use of energy infrastructure and blocking the South African Power ’s long-term goal of transitioning from a cooperative to competitive market. Under the current supply and investment climate, governments and market participants are unlikely to forego their preference for long-term contracts owing to concerns about security of supply and risk mitigation. In this paper, we demonstrate that the current method for integrating bilateral and market trading introduces inefficiencies in the use of generation and transmission infrastructure, reduces total trade, and increases system costs. We propose and test an alternative method based on contracts for differences and implicit auctions to ensure the same level of security of supply for contract holders while minimising market distortions. Keywords: bilateral contract, market design, power
  25. By: Han Phoumin; Shigeru Kimura (Economic Research Institute for ASEAN and East Asia (ERIA))
    Abstract: The study of distributed energy systems (DES) in the Association of Southeast Asian Nations (ASEAN) highlights the potential role of DES to enhance electricity access and provide energy solutions as a modern energy system in response to increasing energy demand. This study grasps the overall status and policies of DES in selected ASEAN member states through literature survey and information exchanges from meetings and conferences within the region. The study also attempts to estimate the DES-related renewable energy capacity and investment needed for 2013-2040. At the ASEAN level, the estimates of DES-related renewable capacity and needed investment for combined renewable energy such as wind, solar photovoltaic (PV), geothermal, hydropower, and biomass will increase significantly from the investment opportunity of US$34 billion in the business-as-usual (BAU) scenario to US$56 billion in the alternative policy scenario (APS). At the same time, the application of DES-related renewable energy also implies reduced CO2 emissions of 46.1 million metric tonnes for BAU and 64.6 million metric tonnes for APS. Thailand's case study of DES in the form of small power producers (SPPs) and very small power producers (VSPPs) demonstrated the likelihood of DES expansion in ASEAN member states in the future. Finally, the study suggests that the DES-related investment opportunity is large, and will provide jobs and business opportunities to the community. DES is a modern generation system and its deployment will also help address the electricity supply shortage in ASEAN member states.
    Keywords: distributed energy system (DES), electricity access, investment opportunity, energy demand, energy security
    JEL: Q40 Q41 Q47 Q48
    Date: 2016–12
  26. By: de Gorter, Harry; Drabik, Dusan
    Abstract: The ethanol blend wall and high RIN prices has become a controversial policy issue. We develop a model showing how RIN prices reflect the costs of overcoming the blend wall, namely biodiesel consumed in excess of its mandate and expansion of E85 sales. These costs are very high and are shown to be borne by producers and consumers of ethanol and gasoline. Although RIN prices reduce consumer prices of ethanol in both the E10 and E85 blends, the net price of E10 rises because obligated parties, who are required to purchase RINs, recoup the cost by passing on higher gasoline prices to blenders. This tax on gasoline production to pay for the subsidy on all ethanol consumption and RIN prices are a means of payment for “excess” RINs that are required to pay for costs overcoming the blend wall. Burkholder (2015) and EPA (2015) emphasize this first round subsidy that also increases ethanol market prices. But these papers downplay the overall increased costs of fuel to consumers due to RINs taxing gasoline producers, and the separate adverse market effects of a binding blend mandate. The latter has been missing in the debate where it is often implied that the RIN price represents the degree to which the ethanol mandate is binding. We show the RIN price represents the costs of overcoming the blend wall and the ethanol price premium due to the binding blend mandate reflects costs of the RFS itself. Our model determines RIN prices, the costs of overcoming the blend wall and the relationship with the ethanol price premium due to the binding mandate. We use economic theory consistent with the reality of the RFS and its associated complexities. From our empirical simulations, we find RIN prices went up because of the costs of the blend wall. Increasing the mandate with a blend wall caused E10 prices and market gasoline prices to increase, along with an increase in ethanol consumption and market prices. But ethanol and market prices would increase far more without a blend wall for the same increase in the mandated volume. In addition to the costs of overcoming the blend wall, our analysis finds the cost of the mandate price premium for ethanol to fuel consumers is $53.7 billion between 2007 and 2014, and to consumers of crops (including animal agriculture) by $285.4 billion per year worldwide. Our model also obtains the result that the RFS of the 2007 EISA is infeasible with exponentially increasing volume mandates under two situations. First, the E85 price goes to zero with ever increasing RIN prices. Second, when we assume costs of E85 sales expansion levels off at $2 per gallon with the ethanol price peaking and then slowly declines (with E85 and E10 consumption). This may explain why the EPA scaled back the RFS.
    Keywords: RIN prices, blend wall, blend mandate price premium, E85, ethanol, Environmental Economics and Policy, Resource /Energy Economics and Policy, Q18, Q28, Q42, Q48,
    Date: 2015–11
  27. By: Lindstad, Haakon Elizabeth (Norwegian Marine Technology Research Institute (MARINTEK)); Eskeland, Gunnar S. (Dept. of Business and Management Science, Norwegian School of Economics); Rialland, Agathe (Norwegian Marine Technology Research Institute (MARINTEK))
    Abstract: This paper assesses the pros and the cons of installing batteries on offshore support vessels. These vessels are specially designed to provide services to oil and gas operations, such as anchor handling, supply and subsea operations. They have multiple engines and advanced dynamic positioning systems to ensure that they can perform their duties with high reliability at nearly any sea state. Combined with high safety requirements, this has resulted in general operational patterns with vessels running multiple combustion engines even at calm water conditions. For emissions, low engine loads yield high emissions of exhaust gases such as nitrogen oxides (NOx) and aerosols such as black carbon (BC), due to less favorable combustion conditions. The high span for these vessels between low loads and high, and their great need for potential power at short notice, motivate our examination of hybrid setups with electric: the vessel segment should be more favorable than many. We find that combining batteries with combustion engines reduces local pollution and climate impact, while the economics with current battery cost and fuel prices is good enough for new vessels, but not good enough for retrofits.
    Keywords: Maritime transport; Marine Operations; Greenhouse gases; Abatement cost and options; Hybrid power options; Batteries
    JEL: L92 Q50 Q52
    Date: 2016–12–07
  28. By: David Benatia; Tomasz Koźluk
    Abstract: Ease of entry is crucial to well-functioning electricity markets. This paper investigates the patterns of entry in the generation segment of the electricity industry of OECD countries and seeks to provide an understanding of their key determinants. It aims to derive implications for the design of policies aimed at spurring competition under significant renewable policy objectives. The analysis focuses on investments in renewable-based electricity generation in all OECD countries over the period 1990-2007. Hypotheses drawn from the literature are tested empirically with using a panel data set based on UDI’s World Electric Power Plant Database. Findings suggest that the likelihood and the volume of entry in renewable-based power generation technologies are significantly affected by industry regulation, renewable support policies, local structural industry characteristics, such as concentration, sectoral expansion and the share of renewable-based capacity already present in the host country. Finally, micro-level factors such as the size of the (parent) firm, its experience with renewables, and whether it is a utility company, are found to significantly affect firm-level investment and entry decisions. La facilité d’entrée sur les marchés de l’électricité est cruciale pour leur bon fonctionnement. Ce rapport étudie les schémas d’entrée dans le segment « production » du secteur de l’électricité dans les pays de l’OCDE, et s’efforce d’en élucider les principaux déterminants. Il vise à en tirer les conséquences pour la conception de politiques destinées à stimuler la concurrence en tenant compte d’objectifs ambitieux concernant les énergies renouvelables. L’analyse s’intéresse principalement aux investissements dans les moyens de production électrique renouvelables de tous les pays de l’OCDE sur la période 1990-2007. Des hypothèses tirées d’une revue de la littérature sont testées empiriquement en appliquant divers modèles économétriques à des jeux de données de panel provenant, pour l’essentiel, de la base de données World Electric Power Plant Database de l’Utility Data Institute (UDI). Les résultats obtenus permettent de conclure que de nombreux facteurs affectent la probabilité d’entrée sur le marché et le volume de ces entrées dans la production d’électricité renouvelable au niveau régional, notamment la réglementation du secteur, les politiques de soutien aux renouvelables, l’innovation, l’expansion sectorielle et la part de puissance installée reposant sur les renouvelables dans le pays concerné. Enfin, il apparaît que certains facteurs au niveau microéconomique, par exemple la taille de l’entreprise, son expérience dans le domaine des énergies renouvelables ou le fait qu’elle soit ou non une compagnie d’électricité, exercent une influence considérable sur les investissements au niveau des entreprises et les décisions d’entrée.
    Keywords: competition, Electricity generation, electricity market liberalisation, energy policy, market entry, market structure, regulation, renewable energy
    JEL: Q40 L10 L94
    Date: 2016–12–15
  29. By: William D. Nordhaus (Cowles Foundation, Yale University)
    Abstract: Climate change remains one of the major international environmental challenges facing nations. Yet nations have to date taken minimal policies to slow climate change. Moreover, there has been no major improvement in emissions trends as of the latest data. The current study uses the updated DICE model to present new projections and the impacts of alternative climate policies. It also presents a new set of estimates of the uncertainties about future climate change and compares the results will those of other integrated assessment models. The study confirms past estimates of likely rapid climate change over the next century if there are not major climate-change policies. It suggests that it will be extremely difficult to achieve the 2°C target of international agreements even if ambitious policies are introduced in the near term. The required carbon price needed to achieve current targets has risen over time as policies have been delayed.
    Keywords: Climate change, DICE model, Uncertainty, Social cost of carbon
    JEL: Q5 C6 Q54 H41
    Date: 2016–12
  30. By: Brown, Jason (Federal Reserve Bank of Kansas City); Fitzgerald, Timothy; Weber, Jeremy G.
    Abstract: In 2013, total oil and gas royalty-related income exceeded $64 billion. Each dollar in royalties generated an additional $0.52 of local income. Areas with locally owned resources capture $0.29 more of each dollar earned on production.
    Keywords: Oil; Gas; Royalties; Resource ownership; Shale; Income growth
    JEL: D23 Q32 Q33 R11
    Date: 2016–12–08
  31. By: Ann Wolverton; Charles Griffiths; William Wheeler
    Abstract: In this paper we evaluate whether Ohio’s Tox-Minus Initiative had a discernible effect on participants’ emission reductions relative to non-participants. We expect this to be the case if there are private benefits of program participation that outweigh its costs. To investigate whether the Tox-Minus Initiative resulted in greater reductions in TRI-reported air emissions from the top 100 emitters, we use a triple difference approach to compare emissions before and after the program. This is done using both the simple difference in emissions between 2003 and 2012 and a fixed-effects, panel regression. To form an appropriate comparison for participants, we use propensity score matching estimation techniques based on pre-participation attributes. Our results suggest that being invited to the program, regardless of whether a facility joined the Tox-Minus Initiative, produced a significant decline in the absolute level of air emissions. Degree of regulatory attention also appears important, though we find that participants reduced emissions subject to the Clean Air Act by significantly more than non-participants in the post policy period.
    Keywords: voluntary programs, toxic releases, air emissions, program effectiveness
    JEL: Q53 Q58
    Date: 2016–12
  32. By: Rousse, O.; Sévi, B.
    Abstract: The weekly release of the U.S. inventory level by the DOE-EIA is known as the market mover in the U.S. oil futures market and to be a significant piece of information for all world oil markets in which the WTI is a price benchmark. We uncover suspicious trading patterns in the WTI futures markets in days when the inventory level is released that are higher than economists' forecasts: there are significantly more orders initiated by buyers in the two hours preceding the official release of the inventory level. We also show a clear drop in the average price of -0.25% ahead of the news release. This is consistent with informed trading. We also provide evidence of an asymmetric response of the oil price to the news, and highlight an over-reaction that is partly compensated in the hours following the announcement.
    JEL: G13 G14 Q4
    Date: 2016
  33. By: Korting, Christina; Just, David R.
    Abstract: We explore four fundamental channels of mandate compliance available under current U.S. bio- fuels policy: increased ethanol blending through E10 or E85, increased biodiesel blending, and a reduction in the overall compliance base. Simulation results highlight the interplay and varying importance of these channels at increasing blend mandate levels. In addition, we establish how RIN prices are formed: The value of a RIN in equilibrium is shown to re ect the marginal cost of compensating the blender for employing one additional ethanol-equivalent unit of biofuel. This contrasts with existing research equating the price of RINs to the gap between free-market ethanol supply and demand at the mandate level. We demonstrate the importance of this distinction in case of binding demand side infrastructure constraints such as the ethanol blend wall: as percent- age blend mandates increase, the market for low-ethanol blends may contract in order to reduce the overall compliance base. This has important implications for implied ethanol demand in the economy.
    Keywords: Biofuels, Renewable Fuels Standards, blend mandate, Resource /Energy Economics and Policy, H23, Q21, Q42,
    Date: 2016–09
  34. By: Halkos, George; Zisiadou, Argyro
    Abstract: This study relies in the proposed methodology by the Universities of Yale and Columbia for constructing an environmental performance index. Two different versions of the index are considered and compared having as reference point our country (Greece) and comparing it with other countries in the Mediterranean as well as in Northern Europe. Both versions (the one of 2014 and the other of 2016) of the index consists of two components, the environmental health and the ecosystem vitality. These two components are constructed with the help of nine variables (and nineteen indicators behind) relevant to the environment. These variables are health impact, air quality, water and sanitation, water resources, agriculture, forestry, fisheries, biodiversity and habitat and climate and energy. In the case of EPI 2016 the construction of the index has improved relying on the same two components and 9 variables but in twenty (in most cases different) indicators. Next the index is used with some socio-economic variables in order to model its behavior. The empirical findings and the associated policy implications are discussed together with future extensions.
    Keywords: Environmental performance index; economic welfare.
    JEL: D60 Q01 Q50 Q58
    Date: 2016–12
  35. By: Charles Fant*
    Abstract: As the technology of climate-dependent energy sources is improving—both cheaper and more efficient—the energy sources are becoming more accessible for many of the nations in Africa. However, little is known about the underlying climate that would therefore be harvested by renewable technologies—namely, wind and solar—because these have not been well measured in this region in the past. Here, we present a study that uses publicly available data and methods to develop hourly onshore wind and solar photovoltaic (PV) electricity generation for the years 1979–2010. To do this, we use reanalysis climate data and well-trusted wind farm and solar PV simulation models as well as publicly available geospatial data. The primary purpose of this dataset is to be used in an energy-expansion-planning model of the African continent in a forthcoming study. We find that wind resources vary more over time and space than solar across Africa. Due mostly to these variations in wind resources, we find that the East African Power Pool shows the most potential for wind and solar and the Central African Power Pool shows the least potential. Using an aggregation of areas with the highest potential during the peak demand hours, we develop ‘representative sites’, one for each country. With these sites, we identify pairs of countries that have potential to participate in mutually beneficial power trade because these resources exhibit negative correlation in reference to each other. Most notably, we find that wind in Kenya and wind in Uganda, which are neighbouring countries, exhibit particularly beneficial characteristics in relation to each other. Keywords: renewable energy, energy planning, energy trade, Africa
  36. By: Greve, T.; Pollitt, M.
    Abstract: Auction designs in current electricity markets will need to be adjusted to cope with massively increased small-scale distributed generation and demand response, as these are integrated into the electricity system. We present a VCG mechanism that addresses the two most important challenges facing future power systems, namely uncertainty of costs and complexity of bidding strategies. The mechanism is built up around heterogeneous goods, useful for different levels of response time of electricity or different Quality of Service agreements, package bidding and a proxy agent. The proxy agent will ensure optimal bids from non-professional suppliers. Our mechanism has the expected desirable properties by design.
    Keywords: Future electricity networks, electricity subscriptions, proxy agent, VCG auction mechanism
    JEL: D44 Q41
    Date: 2016–12–12
  37. By: Ling-Yun He; Wei Wei
    Abstract: There is an increasing awareness of the significance of Chinese building energy consumption(BEC). However, something worth discussing is that estimate the building energy consumption adopting the definition of life cycle or operation. In the existing studies with various evaluation methods, the issue about the amount of energy consumed by China buildings has not been understood. In order to settle the disputes over the calculation of BEC, this paper establish an appropriate accounting method of building energy to present BEC situation in China and lay the foundation for building energy efficiency. Adopting the conception of building operational energy consumption, we find that the energy consumption of buildings just accounts for 15% - 16% of the final total energy consumption in China; by contrast, the previous calculations usually have double accounting through top-down approach if central heat-supply of buildings was given into additional consideration.
    Date: 2016–10
  38. By: Anders Fremstad (Economics Department, Colorado State University, Fort Collins); Anthony Underwood (Department of Economics, Dickinson College); Sammy Zahran (Economics Department, Colorado State University, Fort Collins)
    Abstract: Studies find that per capita carbon dioxide emissions (CO2) decrease with household size and urban density, so the demographic trends of declining household size and dense urbanization produce countervailing effects with respect to emissions. We posit that both trends operate on a common scaling mechanism realized through the sharing of carbon- intensive expenditures. With detailed data from the United States Consumer Expenditure Survey, we construct a dataset of CO2 emissions at the household level and leverage a unique measure of residential density to estimate household and urban economies. We find that dense urban areas have per capita emissions 23 percent lower than rural areas, and that adding an additional member to a household reduces per capita emissions by about 6 percent. We also show that household economies are about twice as large in rural as compared to dense urban areas. These results suggest that the carbon benefits of dense urbanization have the potential to offset the effects of declining household size.
    Keywords: Emissions, Urban Density, Sharing, Household Size, Energy
    JEL: D1 Q4 R2 R3
    Date: 2016–12
  39. By: Motavasseli, Ali (Tilburg University, School of Economics and Management)
    Abstract: This dissertation addresses several issues regarding the consequences of environmental policy and its optimal level, as well as household's decisions on energy consumption and labor supply. In chapter two, a theoretical analysis investigates whether fossil fuel taxation or a consumption cap is sufficient for the adoption of both biofuels and solar energy. It is shown that under these policies solar adoption can crowd out biofuels consumption. Chapter three addresses the link between longevity and optimal environmental policy. It is shown that the significant rise of life expectancy in the recent decades, which is common across different countries, calls for tighter environmental policies. Chapter 4 investigates households's decisions on the utilization of energy-using appliances. Households tend to increase energy service consumptions, like driving or indoor lighting, once they adopt a more efficient appliance, like fuel-efficient cars and LED light bulbs. This increase in the utilization of appliances is called the rebound effect. According to empirical evidence, the rebound effect declines with households' income. The chapter investigates why households with lower income tend to have larger rebound effects. Chapter 5 investigates differences in households decisions from a different perspective. Here, the labor supply decisions of households in urban and rural areas is analyzed in a historical background. Different patterns of the labor supply of rural and urban households is explained based on the changes in market productivities and non-market opportunities.
    Date: 2016

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