|
on Energy Economics |
| By: | Lucas W. Davis; Christopher R. Knittel |
| Abstract: | Despite widespread agreement that a carbon tax would be more efficient, many countries use fuel economy standards to reduce transportation-related carbon dioxide emissions. We pair a simple model of the automakers' profit maximization problem with unusually-rich nationally representative data on vehicle registrations to estimate the distributional impact of U.S. fuel economy standards. The key insight from the model is that fuel economy standards impose a constraint on automakers which creates an implicit subsidy for fuel-efficient vehicles and an implicit tax for fuel-inefficient vehicles. Moreover, when these obligations are tradable, permit prices make it possible to quantify the exact magnitude of these implicit subsidies and taxes. We use the model to determine which U.S. vehicles are most subsidized and taxed, and we compare the pattern of ownership of these vehicles between high- and low-income census tracts. Finally, we compare these distributional impacts with existing estimates in the literature on the distributional impact of a carbon tax. |
| JEL: | H22 L5 L91 Q48 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22925&r=ene |
| By: | Philippe Quirion (CNRS and CIRED) |
| Abstract: | While most developed and emergent countries support renewable energies in the power sector, they do so in a different manner. The three main existing support systems are feed-in-tariffs, feed-in-premiums and tradable renewable quotas. We provide a survey of the literature which compares these support systems. We conclude that tradable renewable quotas suffer from many weaknesses compared to the other two: bad reaction to uncertainty, important risk for funders which increases investment cost, higher transaction costs. Both feed-in-tariffs and premiums have pros and cons and there is little evidence that the transition from the former to the latter, currently occurring in Germany and France, is justified. Finally, beyond the choice between tariff and premium, many concrete choices are at least as important such as the way to finance the support and the differentiation between market segments, necessary to limit the rents but potentially a source of inefficiency. |
| Keywords: | renewable energy, windpower, photovoltaic, subsidy |
| JEL: | H23 Q28 |
| Date: | 2015–05 |
| URL: | http://d.repec.org/n?u=RePEc:fae:ppaper:2015.02&r=ene |
| By: | Alexandros Dimitropoulos; Walid Oueslati |
| Abstract: | The rebound effect is the phenomenon underlying the disproportionality between energy efficiency improvements and observed energy savings. This paper presents a meta-analysis of 76 primary studies and 1138 estimates of the direct rebound effect in road transport to synthesise past work and inform ongoing discussions about the determinants and magnitude of the rebound effect. The magnitude of rebound effect estimates varies with the time horizon considered. On average, the direct rebound effect is around 12% in the short run and 32% in the long run. Indirect and macroeconomic effects would come on top of these estimates. Heterogeneity in rebound effect estimates can mainly be explained by variation in the time horizon considered, the elasticity measure used and the econometric approach employed in primary studies, and by macro-level economic factors, such as real income and gasoline prices. In addition to identifying the factors responsible for the variation in rebound effect estimates, the meta-regression model developed in this paper can serve as a relevant tool to assist policy analysis in contexts where rebound effect estimates are missing. L'effet de rebond est un phénomène qui sous-tend la disproportionnalité entre les améliorations de l'efficacité énergétique et les économies d'énergie observées. Ce papier présente une méta-analyse de 76 études primaires et 1138 estimations de l'effet de rebond direct dans le transport routier pour synthétiser les travaux passés et informer les discussions en cours sur les déterminants et l'ampleur de l'effet de rebond. L'ampleur des estimations de l'effet de rebond varie selon l'horizon temporel considéré. En moyenne, l'effet de rebond est d'environ 12% à court terme et 32% à long terme. Les effets indirects et macroéconomiques viendront s'ajouter à ces estimations. L'hétérogénéité des estimations de l'effet de rebond s'explique principalement par la variation de l'horizon temporel considéré, la mesure d'élasticité utilisée et l'approche économétrique déployée dans les études primaires, ainsi que par des facteurs macroéconomiques tels que le revenu réel et les prix de l'essence. En plus de l'identification des facteurs responsables de la variation des estimations des effets de rebond, la méta-régression, développée dans ce papier, fournit un outil pertinent pour analyser les politiques en vigueurs dans les contextes où les estimations de l'effet rebond sont manquantes. |
| Keywords: | fuel efficiency, gasoline price, meta-analysis, Rebound effect, road transport |
| JEL: | D12 R48 Q48 Q58 R41 Q41 |
| Date: | 2016–12–20 |
| URL: | http://d.repec.org/n?u=RePEc:oec:envaaa:113-en&r=ene |
| By: | Marc Gronwald; Ngo Van Long; Luise Roepke |
| Abstract: | We analyze the effects of two popular second-best clean energy policies, using an extended resource extraction framework. This model features, first, heterogeneous energy sources and, second, a capacity-constrained backstop technology. This setup allows for capturing the following two empirical observations. First, different types of energy sources are used simultaneously despite different production costs. Second, experiences from various European countries show that a further expansion of the use of climate friendly technologies faces substantial technological as well as political constraints. We use this framework to analyze if under two policy scenarios a so-called “Green Paradox” occurs. A subsidy for the clean energy as well as an expansion of the capacity of the clean energy are considered. The analysis shows that while both policy measures lead to a weak Green Paradox, a strong Green Paradox is only found for the capacity expansion scenario. In addition, the subsidy is found to be welfare enhancing while the capacity increase is welfare enhancing only if the cost of adding the capacity is sufficiently small. Nous analysons les effets de deux politiques encourageant l’énergie verte, en utilisant un cadre élargi d’extraction des ressources. Ce modèle comporte, d’une part, des sources d’énergie hétérogènes et, d’autre part, une technologie verte dont l’exploitation est sous une contrainte de capacité. Cette configuration permet de capturer les deux observations empiriques suivantes. Tout d’abord, plusieurs sources d’énergie sont utilisées simultanément malgré l’écart de coûts de production. Deuxièmement, les expériences de divers pays européens montrent qu’une expansion accrue de l’utilisation de technologies respectueuses du climat fait face à des contraintes technologiques et politiques importantes. Nous utilisons ce cadre pour analyser si sous deux scénarios de politique un soi-disant « Paradoxe Vert » se produit. Une subvention sur le coût de l’énergie verte ainsi qu’une expansion de la capacité de l’énergie verte sont prises en considération. L’analyse montre que tandis que les deux mesures politiques conduisent à un Paradoxe Vert faible, un Paradoxe Vert fort est seulement trouvé pour le scénario d’expansion de la capacité. En outre, la subvention améliore le bien-être, alors que l’accroissement de la capacité ne favorise le bien-être que si le coût d’ajout de la capacité est suffisamment faible. |
| Keywords: | Capacity constraints, Green Paradox, Climate change, Simultaneous resource use, Contrainte de capacité, Paradoxe Vert, Changements climatiques, Utilisation simultanée des ressources |
| JEL: | Q38 Q54 H23 |
| Date: | 2016–12–22 |
| URL: | http://d.repec.org/n?u=RePEc:cir:cirwor:2016s-61&r=ene |
| By: | Mario Mureddu; Hildegard Meyer-Ortmanns |
| Abstract: | An increase in energy production from renewable energy sources is viewed as a crucial achievement in most industrialized countries. The higher variability of power production via renewables leads to a rise in ancillary service costs over the power system, in particular costs within the electricity balancing markets, mainly due to an increased number of extreme price spikes. This study focuses on forecasting the behavior of price and volumes of the Italian balancing market in the presence of an increased share of renewable energy sources. Starting from configurations of load and power production, which guarantee a stable performance, we implement fluctuations in the load and in renewables; in particular we artificially increase the contribution of renewables as compared to conventional power sources to cover the total load. We then forecast the amount of provided energy in the balancing market and its fluctuations, which are induced by production and consumption. Within an approach of agent based modeling we estimate the resulting energy prices and costs. While their average values turn out to be only slightly affected by an increased contribution from renewables, the probability for extreme price events is shown to increase along with undesired peaks in the costs. |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1612.05525&r=ene |
| By: | MORI, Takahito |
| Abstract: | In the urban history of Germany, it was the theory of Dieter Schott, the ‘networking of the city’, that turned historians' attention to the socioeconomic changes caused due to the introduction of electricity into a city. However, the paradigm shift in urban energy brought by electricity was not adequately elucidated as most studies were limited to the period before WWI, when electric lights were still a luxury and less than 10% of households used them. In this context, this paper examines the socioeconomic dynamism of urban electrification— fixation of the electricity as necessary energy in the urban life —using Frankfurt am Main as a case study. |
| Keywords: | Paradigm shift in the electricity consumption, Change of the tariff system, Innovation of illumination techniques, Experiment of the completely electrified life, Strategy of the municipal electric service |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:hit:econdp:2016-12&r=ene |
| By: | Marten Ovaere; Evelyn Heylen; Stef Proost; Geert Deconinck; Dirk Van Hertem |
| Abstract: | The value of lost load (VOLL) is an essential parameter for transmission system reliability management. It represents the cost of unserved energy of electricity interruptions. Various empirical studies have estimated this parameter for different countries and more recently, for different interruption characteristics - such as interruption duration, time of interruption and interrupted consumer. However, most applications only use one constant VOLL. Our theoretical analysis shows that using more-detailed VOLL data allows to make better-informed transmission reliability decisions. To illustrate this, we estimate the efficiency gains of including consumer and time characteristics in short-term transmission reliability management using VOLL data from Norway, Great Britain and the United States. Depending on the VOLL data and the method of demand curtailment, our five-node network indicates efficiency gains up to 43%. However, increased efficiency leads to decreased equity. Striking the balance between these opposing objectives is crucial for social acceptance. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:ete:ceswps:558061&r=ene |
| By: | Florian K\"uhnlenz; Pedro H. J. Nardelli |
| Abstract: | We present a simple, yet realistic, agent-based model of an electricity market. The proposed model combines the spot and balancing markets with a resolution of one minute, which enables a more accurate depiction of the physical properties of the power grid. As a test, we compare the results obtained from our simulation to data from Nord Pool. |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1612.04512&r=ene |
| By: | Danielle Devogelaer; Benoît Laine |
| Abstract: | In this paper, the impact of a nuclear downtime and subsequent restart on wholesale electricity prices on the Belgian power exchange is investigated by means of a dual methodology. First, publicly available market data is used to construct a stable statistical model that is deployed to examine the effect of nuclear power generation variations on market price outcomes. Quantifying this phenomenon, also called the merit-order effect, with the aid of econometric methods translates into an esti-mated price decrease of around 10 €/MWh for a nuclear capacity hike of 2.5 GW. The importance and impact of the openness of the Belgian market, that is, its strong reliance on cross-border energy exchanges is highlighted. Next to this empirical evidence, the optimisation tool Crystal Super Grid is used to assess the impact of the resumed availability of the nuclear reactors on several indicators characterising the Belgian and European power landscape. A positive effect on overall welfare, consumer surplus and CO2 emissions can be noticed. As regards prices, this analysis confirms the negative merit-order effect which is calculated to equal, on average over a year, 3.8 €/MWh. Nevertheless, temporary hourly excesses of 30 €/MWh can occur. The paper then describes the possible causes of divergence between the two approaches.Our findings have important policy implications as they demonstrate the need to take the downward influence of prolonged nuclear power generation on wholesale prices into consideration when revising the (timetable in the) nuclear phase-out law since it may have a delaying effect on the compulsory energy transition towards a low-carbon economy. |
| Keywords: | Electricity, Energy policy, Econometric model |
| JEL: | C51 L94 Q41 |
| Date: | 2016–10–12 |
| URL: | http://d.repec.org/n?u=RePEc:fpb:wpaper:1609&r=ene |
| By: | Tagliapietra, Simone |
| Abstract: | This paper explores how Turkey’s politics and economy are affected by changes in global energy. To define which are the most relevant developments, the paper opens with an overview of the country's economic landscape. This analysis illustrates that energy, being the key driver behind its large current account deficit, represents a major point of vulnerability for the country. On this basis, the paper illustrates Turkey's energy matrix, an analysis that outlines the rising role of gas in the country's energy sector, both under the internal (i.e. growing share of the mix) and external (i.e. the country's potential role as regional gas hub) points of view. Finally, these issues are discussed with the aim of assessing the prospects for Turkey to turn gas into a geopolitical and economic asset for the country. |
| Keywords: | Turkey, Energy Security, Gas, TANAP, TAP, TurkStream, Resource /Energy Economics and Policy, Q40, Q42, Q48, |
| Date: | 2016–12–23 |
| URL: | http://d.repec.org/n?u=RePEc:ags:feemes:251812&r=ene |
| By: | Frédéric Branger (AgroParisTech ENGREF et CIRED); Louis-Gaëtan Giraudet (CIRED); Céline Guivarch (CIRED); Philippe Quirion (CNRS et CIRED) |
| Abstract: | In this paper, we discuss the results of a sensitivity analysis of Res-IRF, an energy-economy model of the demand for space heating in French dwellings. Res-IRF has been developed for the purpose of increasing behavioral detail in the modeling of energy demand. The different drivers of energy demand, namely the extensive margin of energy efficiency investment, the intensive one and building occupants’ behavior are disaggregated and determined endogenously. The model also represents the established barriers to the diffusion of energy efficiency: heterogeneity of consumer preferences, landlord-tenant split incentives and slow diffusion of information. The relevance of these modeling assumptions is assessed through the Morris method of sensitivity analysis, which allows for the exploration of uncertainty over the whole input space. We find that the Res-IRF model is most sensitive to energy prices. It is also found to be quite sensitive to the factors parameterizing the di fferent drivers of energy demand. In contrast, inputs mimicking barriers to energy efficiency have been found to have little influence. These conclusions build confidence in the accuracy of the model and highlight occupants’ behavior as a priority area for future empirical research. |
| Keywords: | Sensitivity analysis, Monte Carlo, Morris method, Energy efficiency, Building sector |
| JEL: | C63 Q47 |
| Date: | 2015–06 |
| URL: | http://d.repec.org/n?u=RePEc:fae:ppaper:2015.01&r=ene |
| By: | Aklilu, Abenezer Zeleke (Department of Economics, Swedish University of Agricultural Sciences) |
| Abstract: | Several studies have examined gasoline and diesel demand elasticities. These studies usually cover a single country or a group of countries that belong to a specific economic alliance such as the OECD. Even though consistent elasticities are necessary to analyze and forecast the effects of EU-level fuel policy, there has not yet been a study that provides consistent gasoline and diesel demand elasticity across the EU-28. This study sets out to address this literature gap by estimating price and income elasticities for gasoline and diesel. For this purpose, an ARDL Bounds testing approach was used to test the existence of a long-run relationship and estimate the elasticities. The estimation provided short and long-run price and income elasticities of gasoline and diesel demand for the EU-28 countries and showed the countries in which a long-run equilibrium relationship was confirmed. The results show that there was a high variation in elasticity estimates between the EU-28 countries. The estimated long-run elasticities were higher than their short-run counterparts, which was in line with expectations based on the existing literature. The short and long-run income elasticities of gasoline and diesel demand were both found to be more elastic than their price equivalents. This implies that if a charge on fuel is designed to decrease emissions by increasing the price, the charge needs to rise at a higher rate than income. An analysis of the EU’s long-term emission and fuel consumption reduction targets shows that, with the current tax scheme, it cannot be guaranteed that emission targets will be achieved and thus a more stringent fuel tax policy is essential. |
| Keywords: | fuel demand; income and price elasticities; EU countries; ARDL bounds testing |
| JEL: | Q42 Q48 |
| Date: | 2016–12–18 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:slueko:2016_012&r=ene |
| By: | Cristiano Codagnone; Giuseppe Alessandro Veltri; Francesco Bogliacino; Francisco Lupiáñez-Villanueva; George Gaskell; Andriy Ivchenko; Pietro Ortoleva; Francesco Mureddu |
| Abstract: | This article presents the results of a laboratory experiment and an online multi-country experiment testing the effect of motor vehicle eco-labels on consumers. The laboratory study featured a discrete choice task and questions on comprehension, while the ten countries online experiment included measures of willingness to pay and comprehension. Labels focusing on fuel economy or running costs are better understood, and influence choice about money-related eco-friendly behaviour. We suggest that this effect comes through mental accounting of fuel economy. In the absence of a cost saving frame, we do not find a similar effect of information on CO2 emissions and eco-friendliness. Labels do not perform as well as promotional materials. By virtue of being embedded into a setting designed to capture the attention, the latter are more effective. We found also that large and expensive cars tend to be undervalued once fuel economy is highlighted. |
| Keywords: | Eco-label; Nudge; Willingness to pay; Fuel economy; Experiments; CO2 emission |
| JEL: | C9 D3 Q56 Q58 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:68683&r=ene |
| By: | Coria, Jessica (Department of Economics, School of Business, Economics and Law, Göteborg University); Zhang, Xiao-Bing (School of Economics, Renmin University of China.) |
| Abstract: | Road pricing can improve air quality by reducing and spreading traffic flows. Nevertheless, air quality does not depend only on traffic flows, but also on pollution dispersion. In this paper we investigate the effects of the temporal variation in pollution dispersion on optimal road pricing, and show that time-varying road pricing is needed to make drivers internalize the social costs of both time-varying congestion and time- varying pollution. To this end, we develop an ecological economics model that takes into account the effects of road pricing on integrated daily commuting patterns. We characterize the optimal road pricing when pollution dispersion varies over the day and analyze its effects on traffic flows, arrival times, and the number of commuters by car. |
| Keywords: | Air pollution; Road transportation; Road pricing; Pollution dispersion |
| JEL: | Q53 Q58 R41 R48 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:gunwpe:0682&r=ene |
| By: | Pyddoke , Roger (VTI) |
| Abstract: | The purpose of this paper is to review the modelling used for the planning of infrastructure and design of policy instruments for transport in cities in Scandinavia, and to survey elasticities of transport demand with respect to policy instruments and important background variables. There are a number important objectives governing policy, maximizing welfare, reducing CO2 and other emissions, curbing congestion on roads and crowding in public transport in cities and improving the conditions for walking and cycling. The current transport demand models in Sweden and Norway were originally built to serve the purpose of forecasting for national infrastructure planning, primarily outside cities. They were not designed to represent the adaption of car use, congestion on roads or crowding in public transport or the effects of improving of conditions for walking and cycling. Therefore, recent discussions on the needs to develop planning for cities has raised these issues. The central results from the survey of effects are that, car use is shown to be more price sensitive in urban than in rural areas, and larger the larger the city. Although the benefits of a given congestion charging system are considerably and non-linearly dependent on initial congestion levels, traffic effects and adaptation costs are surprisingly stable across transport system modifications. car and energy use in many cross-sectional studies. The idea that density could induce |
| Keywords: | Traffic |
| JEL: | R40 |
| Date: | 2016–12–16 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2016_029&r=ene |
| By: | Michael Gelman; Yuriy Gorodnichenko; Shachar Kariv; Dmitri Koustas; Matthew D. Shapiro; Dan Silverman; Steven Tadelis |
| Abstract: | This paper estimates how overall consumer spending responds to changes in gasoline prices. It uses the differential impact across consumers of the sudden, large drop in gasoline prices in 2014 for identification. This estimation strategy is implemented using comprehensive, daily transaction-level data for a large panel of individuals. The estimated marginal propensity to consume (MPC) is approximately one, a higher estimate than estimates found in less comprehensive or well-measured data. This estimate takes into account the elasticity of demand for gasoline and potential slow adjustment to changes in prices. The high MPC implies that changes in gasoline prices have large aggregate effects. |
| JEL: | E21 Q41 Q43 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22969&r=ene |
| By: | Ramez Abubakr Badeeb; Hooi Hooi Lean; Russell Smyth |
| Abstract: | We empirically examine the existence of an oil curse in the finance-growth nexus in Malaysia. We provide new insights into the oil curse phenomenon in Malaysia that challenges the conventional argument that Malaysia is a counter-example of an oil curse country. We do not find any significant evidence of direct effects of financial development on economic growth and TFP. However, there are direct and positive effects on the level of investment due to financial development and oil dependence. While we do not find statistical evidence of a direct negative impact of oil rent on economic growth, our results reveal that the symptoms of an oil curse exist. Specifically, we find that oil rent has a weak, indirect, impact on the finance-growth nexus through the quantitative channel or investment quantity. The policy implications of our findings are that the financial sector should be more involved in productive investment activities that can strengthen its role in economic growth and that policymakers should reduce dependence on oil and promote economic diversification. |
| Keywords: | Oil Curse; Financial Development; Economic Growth; Investment; Malaysia. |
| JEL: | O13 O16 C22 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2016-26&r=ene |
| By: | Roger Alejandro Banegas-Rivero (Instituto de Investigaciones Económicas y Sociales 'José Ortiz Mercado' (IIES-JOM), Universidad Autónoma Gabriel René Moreno.); Luis Fernando Escobar Caba (Instituto de Investigaciones Económicas y Sociales 'José Ortiz Mercado' (IIES-JOM), Universidad Autónoma Gabriel René Moreno.); Marco Alberto Núñez Ramírez (Instituto tecnológico de Sonora) |
| Abstract: | In this document the transmission channel between natural resource dependence and its dynamic effects on growth is evaluated (Dutch disease hypothesis). An exemplification is done through a small open economy (Bolivia case) according to representative characteristics of high concentration in exports of hydrocarbon and minerals, and their implications in the productive sectors: boom (B), tradable (T), and non-tradable (NT) [Boom TNT model], plus the addition of domestic demand and relative prices (foreign and domestic) in alternative econometric specifications by structural restrictions (SVAR) for quarterly period from 2000 to 2015. The results show statistical predominance of long-terms responses over short-term specifications, and different magnitudes between positive and negative shocks. |
| Keywords: | Dutch disease, Growth, Resource booms, Dependence, Tradable, Non-tradable. |
| JEL: | O13 P28 Q33 O41 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:grm:wpaper:201610&r=ene |
| By: | Claudio Morana (Università di Milano - Bicocca and CeRP-Collegio Carlo Alberto) |
| Abstract: | The paper investigates the macroeconomic and financial effects of oil prices shocks in the euro area since its creation in 1999, with a special focus on the recent slump. The analysis is carried out episode by episode, within a time-varying parameter framework, consistent with the view that “not all the oil price shocks are alike”, yet without imposing any a priori identification assumption. We find evidence of recessionary effects triggered not only by oil price hikes, but also by oil price slumps in some cases, likewise for the most recent episode, which is also rising deflation risk and financial distress. In addition through uncertainty effects, the current slump might then be depressing aggregate demand by increasing the real interest rate, as ECB monetary policy is already conducted at the zero lower bound. The increase in real money balances following the slump points to the accommodation of the shock by the ECB, concurrent with the implementation of the Quantitative Easing policy (Q.E.). Ye,in so far as Q.E failed to generate inflationary expectations within the current and expected environment of soft oil prices, the case for a more expansionary use of fiscal policy than in the past would become compelling, in order to counteract the deflationary and recessionary threats to the euro area. |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:crp:wpaper:158&r=ene |
| By: | Haucap, Justus; Heimeshoff, Ulrich; Siekmann, Manuel |
| Abstract: | We use a novel data set with exact price quotes from virtually all German gasoline stations to empirically investigate how a temporary variance in local market structure - induced by restricted opening hours of specific players - affects price competition. We focus on stations selling gasoline as a by-product and find that, during their exogenously determined hours of opening, they have a significant negative price effect on nearby major-brand competitors. Applying a difference-in-difference framework with hourly average prices, our findings explicitly account for counterfactual market scenarios. |
| Keywords: | Gasoline Markets,Intraday Pricing,Supermarkets,Difference-in-Difference |
| JEL: | L11 L71 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:dicedp:240&r=ene |
| By: | Erik Gilje; Robert Ready; Nikolai Roussanov |
| Abstract: | We quantify the effect of a significant technological innovation, shale oil development, on asset prices. Using stock returns on major news announcement days allows us to link aggregate stock price fluctuations to shale technology innovations. We exploit cross-sectional variation in industry portfolio returns on days of major shale oil-related news announcements to construct a shale mimicking portfolio. This portfolio can explain a significant amount of variation in aggregate stock market returns, but only during the time period of shale oil development, which begins in 2012. Our estimates imply that $3.5 trillion of the increase in aggregate U.S. equity market capitalization since 2012 can be explained by this mimicking portfolio. Similar portfolios based on major monetary policy announcements do not explain the positive market returns over this period. We also show that exposure to shale oil technology has significant explanatory power for the cross-section of employment growth rates of U.S. industries over this period. |
| JEL: | G12 G13 Q43 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22914&r=ene |
| By: | Ujjayant Chakravorty (Department of Economics, Tufts University (TSE, CESifo)); Marie-Hélène Hubert (CREM, Department of Economics, University of Rennes 1); Michel Moreaux (Toulouse School of Economics (IDEI, LERNA)); Linda Nostbakken (Department of Economics, Norwegian School of Economics) |
| Abstract: | More than 40% of US corn is now used to produce biofuels, which are used as substitutes for gasoline in transportation. Biofuels have been blamed universally for past increases in world food prices, and many studies have shown that these energy mandates in the US and EU may have a large (30-60%) impact on food prices. In this paper, we use a partial equilibrium framework to show that demand-side effects – in the form of population growth and income-driven preferences for meat and dairy products rather than cereals – may play as much of a role in raising food prices as biofuel policy. By specifying a Ricardian model with differential land quality, we find that a significant amount of new land will be converted to farming, which is likely to cause a modest increase in food prices. However, biofuels may increase aggregate world carbon emissions, due to leakage from lower oil prices and conversion of pasture and forest land for farming. |
| Keywords: | Clean Energy, Food Demand, Land Quality, Renewable Fuel Standards, Transportation |
| JEL: | Q24 Q32 Q42 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:fae:ppaper:2015.04&r=ene |
| By: | Chen, Qiu; Mirzabaev, Alisher |
| Abstract: | As crop straw and firewood are generated as by-products of food production systems, they are perceived to be sustainable energy sources that do not threaten food security by Chinese government for a long time. However, the time spent on collecting straw and firewood may create a burden on rural household, as it could reduce the available labor inputs for agricultural production, which in turn, possibly brings negative impact on food security. Building on an integrated agriculture-energy production system, a Symmetric Normalized Quadratic (SNQ) multi-output profit function (which includes labor allocations as quasi-fixed factors) is estimated to investigate the impacts of traditional biomass energy use on agricultural production in this paper. The negative signs of the calculated cross-price elasticities of supply (agricultural products and biomass energy) confirm that the relationship between biomass collection and agricultural production is competition. Moreover, the cross-price elasticities of biomass collection with respect to inputs are positive, implying that indirect link between biomass collection and agricultural production perhaps lies in household consumption decisions. The important implication of this study is that potential policy interventions for developing biomass energy in rural China could aim at enhancing food security by improving household motivation of engaging in agricultural production and slowing down the competition between biomass collection and agricultural production. It is suggested that government should attach more importance to simultaneously promote the prices of agricultural products and control the prices of intermediate inputs. |
| Keywords: | biomass collection, agricultural production, labor allocation, China, Demand and Price Analysis, Farm Management, Resource /Energy Economics and Policy, O13, Q01, Q12, Q41, |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:ubzefd:250213&r=ene |
| By: | Mathias Reynaert; James M. Sallee |
| Abstract: | Firms sometimes comply with externality-correcting policies by gaming the measure that determines policy. We show theoretically that such gaming can benefit consumers, even when it induces them to make mistakes, because gaming leads to lower prices by reducing costs. We use our insights to quantify the welfare effect of gaming in fuel-consumption ratings for automobiles, which we show increased sharply following aggressive policy reforms. We estimate a structural model of the car market and derive empirical analogs of the price effects and choice distortions identified by theory. We find that price effects outweigh distortions; on net, consumers benefit from gaming. |
| JEL: | H2 L5 Q5 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22911&r=ene |
| By: | W. Walker Hanlon |
| Abstract: | While the Industrial Revolution brought economic growth, there is a long debate in economics over the costs of the pollution externalities that accompanied early industrialization. To help settle this debate, this paper introduces a new theoretically-grounded strategy for estimating the impact of industrial pollution on local economic development and applies this approach to data from British cities for 1851-1911. I show that local industrial coal use substantially reduced long-run city employment growth over this period. Moreover, a counterfactual analysis suggests that plausible improvements in coal use efficiency would have led to substantially higher urbanization rates in Britain by 1911. |
| JEL: | N13 N53 Q52 R11 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22921&r=ene |
| By: | Laurent Meunier (Economics Department of the French Environment and Energy Management Agency (ADEME)); Frédéric Gilbert (Ecole des Ponts ParisTech); Eric Vidalenc (Economics Department of the French Environment and Energy Management Agency (ADEME)) |
| Abstract: | In order to fight against climate change, ambitious targets have been set, such as decreasing carbon emissions by 75% in France compared to 1990. Yet, focusing on territorial impacts leads to overlook import-embedded impacts. As a matter of fact, French territorial greenhouse gases (henceforth GHG) emissions have slightly decreased since 1990, whereas consumption-based emissions have been shown to increase. This is why we focus in this paper on consumption-based emissions rather than territorial emissions. Moreover, our analysis is not carbon-emissions focused. Indeed, the following environmental impacts are taken into account: air acidification, photochemical oxidation and non-dangerous industrial wastes. This a first contribution. Secondly, we build a scenario of French households final consumption in 2030 aiming at decreasing its environmental impacts. Finally, a deep matrix algebra analysis gives us precious hints on the reliability of the results. |
| Keywords: | input-output analysis, environmental externalities, scenario analysis |
| JEL: | Q40 Q53 Q54 |
| Date: | 2015–09 |
| URL: | http://d.repec.org/n?u=RePEc:fae:ppaper:2015.06&r=ene |
| By: | Shuddhasattwa Rafiq; Ingrid Nielsen; Russell Smyth |
| Abstract: | We examine the effect of inter-provincial migration on air and water pollution for a panel of Chinese provinces over the period 2000-2013. To do so, we employ linear and non-linear panel data models in a Stochastic Impacts by Regression on Population, Affluence and Technology (STIRPAT) framework. Our findings from both the linear and non-linear models suggest that inter-provincial migration has contributed to air and water pollution. Results from the second-generation linear panel data models suggest that for every additional 10,000 inter-provincial migrants, chemical oxygen demand (COD) increases 0.33-0.58 per cent and sulphur dioxide (SO2) increases 0.15-0.33 per cent. Our results from the non-linear threshold panel model are that for every additional 10,000 inter-provincial migrants, COD increases 0.2-0.5 per cent and SO2 increases 0.10-0.20 per cent. These estimates mean that over the period 2000-2013 average interprovincial migration was responsible for 7-12.4 per cent of wastewater discharge and 3.2-7 per cent of SO2 emissions in China based on the second-generation linear panel data models and 4.3-10.7 per cent of wastewater discharge and 2.1-4.3 per cent of SO2 emissions based on the non-linear threshold panel model. |
| Keywords: | China, internal migration, air pollution, water pollution. |
| JEL: | J10 Q20 Q25 R11 R23 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:mos:moswps:2016-27&r=ene |
| By: | Xiaoyu Chen; |
| Abstract: | There are few multicity studies to address the effect of short-term effect of particulate matter air pollution on daily Coronary Heart Disease (CHD) mortality in developing countries, much fewer to further discuss its threshold and seasonal effect. This study investigates the season-varying association between particulate matter less than or equal to 10 μm in aerodynamic diameter (PM10) and daily CHD mortality in seven cities of China. Time series threshold Poisson regression model is specified to estimate the health effect for four cities with the threshold effect, and conventional linear Poisson model is used to analyze the effect for three cities without threshold. We apply the Bayesian hierarchical model to pool the city-specific estimates into overall level. On average, a 10μg/m3 increase of the moving average concentrations of current-day and previous-day PM10 is associated with an increase of 0.81% (95% Posterior Interval, PI: -0.04%, 1.67%) in daily CHD mortality for all the cities as a whole. The associations are smaller than reported in developed countries or regions with lower polluted level, which is consistent to the findings in the literature. The hazardous effect are higher in hot summer and cold winter (1.15% and 0.89%) but lower in relative warm spring and fall (0.85% and 0.69%). In summary, we found significant associations between short-term exposure to PM10 and CHD mortality in China. The sensitivity analyses in the study support the robustness of our results. |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:hum:wpaper:sfb649dp2016-055&r=ene |
| By: | Timothy Laing; Luca Taschini; Charles Palmer |
| Keywords: | REDD+ ; private sector engagement; carbon credits; offsetting |
| JEL: | N0 |
| Date: | 2016–06–24 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:66720&r=ene |
| By: | Raha, Saudia; Holvoet, Nathalie |
| Abstract: | This paper is based on a diagnostic exercise of the monitoring and evaluation instrument (MEI) for the Regional Framework for addressing climate change in the Caribbean. The MEI, which operates at the supranational level, was diagnosed to provide insights into the strengths and weaknesses of the system, understand why they exist and provide guidance on improvements required. The diagnosis covered seven dimensions: institutional readiness; unified system (supply side); results measurement and data management; plans, guidelines, and budgeting; evaluation; verification and demand side. It was elucidated that some of the core requirements for an M&E system shift at various scales (local, national, supranational). For instance, target setting at the supranational level is not driven by the baseline and existing resources, but more so by the aggregation of national priorities which is a function of each country’s political processes. A notable discovery is that there are almost no incentives to promote M&E of mitigation actions outside of the UNFCCC system in the Caribbean. This can result in limited evaluations to detect leakages and document best practices for mitigation programs. Further, the research strongly signaled that investing in a bottom-up approach encourages a unified supply side through the rationalization of indicators and information flows, and can secure buy-in, ownership and ultimately use. Better mainstreaming of M&E across the Caribbean might be attainable through the establishment of a community of practice; release of a policy statement by the CARICOM Secretariat regarding the M&E roles and responsibilities for member states and regional specialized agencies; and the promotion of monitoring, reporting and verification (MRV) within the ambit of the newly established Caribbean Centre for Renewable Energy and Energy Efficiency. |
| Keywords: | climate change; Caribbean; monitoring and evaluation; M&E |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:iob:dpaper:2016002&r=ene |
| By: | Sven Rudolph; Takeshi Kawakatsu; Toru Morotomi |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:kue:epaper:d-16-001&r=ene |
| By: | Nachtigall, Daniel |
| Abstract: | The allocation of free allowances for firms belonging to the carbon leakage list of the European Union Emissions Trading Scheme (EU ETS) was found to lead to substantial overcompensation, which is why some stakeholders recently have called for a phasing out of free allowances in the near term. This paper analyzes the consequences of phasing out free allowances in a dynamic two-period model when one group of countries unilaterally implements climate policies such as an emissions trading scheme. A carbon price induces firms to invest in abatement capital, but may also lead to the relocation of some firms. The social planner addresses the relocation problem by offering firms transfers, i.e. free allowances, conditional on maintaining the production in the regulating country. If transfers are unrestricted in both periods, then the social planner can implement the first best by setting the carbon price equal to the marginal environmental damage and using transfers to prevent any relocation. However, if transfers in the future period are restricted, it is optimal to implement a declining carbon price path with the first period price exceeding the marginal environmental damage. A high carbon price triggers investments in abatement capital and thus creates a lock-in effect. With a larger abatement capital stock, firms are less affected by carbon prices in the future and therefore less prone to relocate in the second period where transfers are restricted. |
| Keywords: | unilateral climate policy,relocation,lock-in effect,rebating |
| JEL: | Q54 Q56 Q58 H23 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:201625&r=ene |
| By: | Mark C. Freeman; Ben Groom; Ekaterini Panopoulou; Theologos Pantelidis |
| Abstract: | Uncertain and persistent real interest rates underpin one argument for using a declining term structure of social discount rates in the Expected Net Present Value (ENPV) framework. Despite being controversial, this approach has influenced both the Inter-Agency Working Group on Cost–Benefit Analysis and the UK government׳s guidelines on discounting. We first clarify the theoretical basis of the ENPV approach. Then, rather than following previous work which used a single series of U.S. Treasury bond returns, we treat nominal interest rates and inflation as co-integrated series and estimate the empirical term structure of discount rates via the ‘Fisher Effect’. This nests previous empirical models and is more flexible. It also addresses an irregularity in previous work which used data on nominal interest rates until 1950, and real interest rates thereafter. As we show, the real and nominal data have very different time series properties. This paper therefore provides a robustness check on previous discounting advice and updated methodological guidance at a time when governments around the world are reviewing their guidelines on social discounting. The policy implications are discussed in the context of the Social Cost of Carbon, nuclear decommissioning and public health. |
| Keywords: | Social discounting; declining discount rates; fisher Effect; real and nominal interest rates; social cost of carbon. |
| JEL: | C13 C53 E43 Q48 |
| Date: | 2015 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64143&r=ene |
| By: | Joshua Graff Zivin; Matthew E. Kahn |
| Abstract: | How will a nation’s aggregate urban productivity be affected by climate change? The joint distribution of climate conditions and economic activity across a nation’s cities will together determine industrial average exposure to climate risk. Air conditioning (AC) can greatly reduce this heat exposure. We develop a simple model of air conditioning adoption by heterogeneous firms within an industry. Our analysis suggests that high productivity firms are more likely to adopt AC since they suffer larger productivity losses when it is hot. Given that the most productive firms produce a disproportionate share of industry-level output, we present aggregation results highlighting how the industry’s output is insulated from the heat. Our empirical analysis of the impacts of heat on total factor productivity in U.S manufacturing yields findings broadly consistent with our model’s predictions. |
| JEL: | L25 L6 O44 O47 Q54 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:22962&r=ene |