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on Energy Economics |
| By: | Collins, Matthew; Curtis, John |
| Abstract: | Understanding the drivers of energy efficient behaviour in the household can provide significant insights on how best to provide incentives for homes to engage in energy efficiency retrofits. This can have wide-reaching effects in reducing the demand for energy and in turn reducing carbon emissions. Many national grant aid schemes exist to support homes in engaging in retrofits, but these can also be availed of by free-riders, which are homes that would engage in a retrofit even in the absence of financial support. This paper explores retrofit choice, willingness-to-pay for retrofit works and free-riding in a grant aid scheme for residential energy efficiency retrofits. Household preferences are revealed through energy efficiency retrofits undertaken by Irish home owners, after having been presented with an array of retrofit measures and combinations thereof. We use a McFadden’s choice model to estimate willingness-to-pay for energy efficiency renovation works using revealed preference data (McFadden, 1984). The results of this analysis are then used to estimate the extent to which freeriding has occurred in the scheme to date. We find that less efficient and larger homes are willing to pay more for energy efficiency improvements, and find that households which had previously engaged in a retrofit via the grant scheme were willing to pay over twice as much as those retrofitting for the first time. Free-riding varies by retrofit measure, with solar collector retrofits possessing close to zero free-riders, while free-riders comprised over 33% of heating controls retrofits. |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp551&r=ene |
| By: | Mary Jialin Li |
| Abstract: | Yes, from an energy-saving perspective. No, once we factor in the negative output and productivity adoption effects. These are the main conclusions we reach by conducting the first large-scale study on cogeneration technology adoption – a prominent form of energy-saving investments – in the U.S. manufacturing sector, using a sample that runs from 1982 to 2010 and drawing on multiple data sources from the U.S. Census Bureau and the U.S. Energy Information Administration. We first show through a series of event studies that no differential trends exist in energy consumption nor production activities between adopters and never-adopters prior to the adoption event. We then compute a distribution of realized returns to energy savings, using accounting methods and regression methods, based on our difference-in-difference estimator. We find that (1) significant heterogeneity exists in returns; (2) unlike previous studies in the residential sector, the realized and projected returns to energy savings are roughly consistent in the industrial sector, for both private and social returns; (3) however, cogeneration adoption decreases manufacturing output and productivity persistently for at least the next 7-10 years, relative to the control group. Our IV strategies also show sizable decline in TFP post adoption. |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cen:wpaper:17-05&r=ene |
| By: | Roger Fouquet |
| Abstract: | Energy systems are subject to strong and long-lived path dependence, owing to technological, infrastructural, institutional and behavioural lock-ins. Yet, with the prospect of providing accessible cheap energy to stimulate economic development and reduce poverty, governments often invest in large engineering projects and subsidy policies. Here, I argue that while these may achieve their objectives, they risk locking their economies onto energy-intensive pathways. Thus, particularly when economies are industrializing, and their energy systems are being transformed and are not yet fully locked-in, policymakers should take care before directing their economies onto energy-intensive pathways that are likely to be detrimental to their long-run prosperity. |
| Keywords: | energy economics; energy policy; political economy of energy |
| JEL: | N0 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:67119&r=ene |
| By: | Yeboah Asuamah, Samuel |
| Abstract: | The study modelled the long run and short run link between financial development and aggregate energy consumption in Ghana for the period 1970 to 2011 using Autoregressive Distributed Lad Model (ARDL). The results produced significant evidence of cointegration between the variables. The results seem to suggest that financial development is a key explanatory variable in aggregate energy consumption. Financial development is recommended as a policy tool to manage energy consumption. Causality issues as well as the effect of structural breaks in modelling should be the subject of future research. |
| Keywords: | Financial development; Aggregate energy consumption; Long run |
| JEL: | O13 P28 P48 |
| Date: | 2017–01–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76199&r=ene |
| By: | Alessandro Rubino |
| Abstract: | The EU external energy policy has triggered heated debate among policymakers, regulators, academia and industrial stakeholders over recent decades. This article maintains that the gas sector has been of less interest to all these parties, because of its inertia and relative backwardness, compared to the electricity and renewable energy industries. However, since the Russia-Ukraine gas disputes, matters related to Euro-Mediterranean gas cooperation are back at the forefront of the energy agenda. The ever-changing nature of the EU external energy policy in the Middle East and North Africa (MENA) region is analysed in this paper by looking at the influence that EU economic interests and approach have had on the southern neighbourhood. The paper provides an overview of the political economy of gas industry development in the EU and its relationship with exporting countries in the Mediterranean basin. It further explores how EU actions and influence as rule promoter are able to provide a valid template for the emerging regulatory framework in the region. While the changing relationship with its southern neighbourhood can be described as part of the process of progressive securitization of energy matters, EU influence can hardly be described as the focal point of gas dynamics in the Mediterranean region. Member States’ gas policies appear to have a greater traction, in consideration also of their vast and long term economic commitments. |
| Keywords: | Energy Security, Energy Market Integration, Natural Gas, Mediterranean Basin |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:rsc:rsceui:2016/53&r=ene |
| By: | Ali Jadidzadeh; Apostolos Serletis (University of Calgary) |
| Abstract: | In this paper we use monthly data (over the period from January 1976 to December 2012) and a structural VAR model to disentangle demand and supply shocks in the global crude oil market and investigate their effects on the real price of natural gas in the United States. We identify the model by assuming that innovations to the real price of crude oil are predetermined with respect to the natural gas market and show that close to 45% of the variation in the real price of natural gas can be attributed to structural supply and demand shocks in the global crude oil market. |
| Date: | 2017–01–16 |
| URL: | http://d.repec.org/n?u=RePEc:clg:wpaper:2017-02&r=ene |
| By: | Nouf Alsharif (Department of Economics, University of Sussex); Sambit Bhattacharyya (Department of Economics, University of Sussex); Maurizio Intartaglia (Department of Economics, University of Sussex) |
| Abstract: | Diversification is often presented as a desirable policy objective for petroleum rich nations. Yet very little is known about the causes and consequences of diversification in petroleum rich states. In this paper we review the recent literature on diversification in oil-exporting states. We identify gaps and shortcomings in this literature along with documenting some trends in non-oil exports and non-oil private sector employment in hydrocarbon rich countries. We conclude with an agenda for research addressing the potential gaps in the literature. |
| Keywords: | petroleum wealth, economic diversification |
| JEL: | D72 O11 |
| Date: | 2016–10 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:09816&r=ene |
| By: | hayat, arshad |
| Abstract: | This paper uses a threshold regression model and split the sample into groups of low-natural resource and high-natural resource groups. This paper used data from 70 countries for the period 1996-2015 and found evidence that FDI has a positive impact on economic growth of the host country if the host country’s natural resource sector is below the threshold. However, FDI inflow doesn’t have any significant impact on growth in countries with natural resource sector larger than the threshold. |
| Keywords: | FDI, Economic Growth, Natural Resources, Threshold Model |
| JEL: | O47 P28 P45 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76205&r=ene |
| By: | BESSO, Christophe Raoul; FEUBI PAMEN, Eric Patrick |
| Abstract: | The objective of this paper is to evaluate the impact of oil shocks on the growth rate of Growth Domestic Product (GDP) in CEMAC countries. We use a panel VAR model approach to the variation of the real GDP growth rate, oil price inflation rate and money supply between 2000 and 2015. Our main results show that CEMAC countries mostly depend on oil pension. Consequently, the analysis of impulsion response functions and the decomposition of variance show that, the shock on oil price negatively affects the growth rate of the GDP. We then suggest CEMAC countries to diversify their production, the destination of their exports and the sources of budgetary income or takings. |
| Keywords: | oil shock,GDP, Panel VAR |
| JEL: | C33 E61 F1 F15 |
| Date: | 2016–11–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76034&r=ene |
| By: | Martimort, David; Pouyet, Jérôme; Ricci, Francesco |
| Abstract: | We characterize the optimal extraction path when a concessionaire has private information on the initial stock of resource. Under asymmetric information, a "virtual Hotelling rule" describes how the resource price evolves over time and how extraction costs are compounded with information costs along an optimal extraction path. In sharp contrast with the case of complete information, fields which are heterogeneous in terms of their initial stocks follow different extraction paths. Some resource might be left unexploited in the long-run as a way to foster incentives. The optimal contract may sometimes be implemented through royalties and license fees. With a market of concessionaires, asymmetric information leads to a "virtual Herfindahl principle" and to a new form of heterogeneity across active concessionaires. Under asymmetric information, the market price converges faster to its long-run limit, exhibiting more stability. |
| Keywords: | asymmetric information; Delegated Management; Non-Renewable resource; Optimal Contract |
| JEL: | D86 Q38 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11769&r=ene |
| By: | Ogunjimi, Joshua; Amune, Benjamin |
| Abstract: | This study examines the roles infrastructure play in attracting foreign direct investment (FDI) into Nigeria for the period between 1981 and 2014. It also investigates the type of infrastructure that has more impact on FDI attraction. The unit root test results show that none of the variables in the study is integrated of order two, that is, I(2), a condition which justifies the use of Autoregressive Distribution Lag (ARDL) framework. The ARDL Bounds Test approach to cointegration was employed to determine the long-run relationship among the variables in our model and the result shows that there is a long-run relationship between infrastructure and FDI in Nigeria. The result of the estimation of the selected ARDL Error Correction Model shows that none of the infrastructure variables (tractor, telephone lines and electricity) employed in this study is significant to attract FDI into Nigeria in the short-run although electricity production (power supply) was found to influence FDI in the long-run. The study thus recommends that the power sector be revitalized and should be given priority as it will attract FDI, increase national output and move Nigeria closer to actualizing her dream of becoming one of the twenty leading economies in the world by the year 2020. |
| Keywords: | Foreign Direct Investment, Infrastructure, Autoregressive Distributed Lag (ARDL). |
| JEL: | F21 |
| Date: | 2017–01–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:75996&r=ene |
| By: | Mogilevskii, Roman |
| Abstract: | The selected paper presented at the IAMO Samarkand Conference |
| Keywords: | Demand and Price Analysis, International Development, International Relations/Trade, |
| Date: | 2016–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iamc16:250071&r=ene |
| By: | Ilysov, Jarilkasin |
| Abstract: | The selected paper presented at the IAMO Samarkand Conference |
| Keywords: | Crop Production/Industries, Demand and Price Analysis, Resource /Energy Economics and Policy, |
| Date: | 2016–11–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iamc16:250086&r=ene |
| By: | Suh, Dong Hee |
| Keywords: | Environmental Economics and Policy, Resource /Energy Economics and Policy, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea17:251888&r=ene |
| By: | Pizer, William; Tavoni, Massimo; Reis, Lara; Akimoto, Keigo; Aldy, Joseph Edgar; Blanford, Geoffrey; Carraro, Carlo; Clarke, Leon; Edmonds, James; Iyer, Gokul; McJeon, Haewon; Richels, Richard; Rose, Steven; Sano, Fuminori |
| Abstract: | The Paris Agreement culminates a six-year transition toward an international climate policy architecture based on parties submitting national pledges every five years. An important policy task will be to assess and compare these contributions. We use four integrated assessment models to produce metrics of Paris Agreement pledges, and show differentiated effort across countries: wealthier countries pledge to undertake greater emission reductions with higher costs. The pledges fall in the lower end of the distributions of the social cost of carbon (SCC) and the cost-minimizing path to limiting warming to 2⠰C, suggesting insufficient global ambition in light of leaders’ climate goals. Countries’ marginal abatement costs vary by two orders of magnitude, illustrating that large efficiency gains are available through joint mitigation efforts and/or carbon price coordination. Marginal costs rise almost proportionally with income, but full policy costs reveal more complex regional patterns due to terms of trade effects. |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:hrv:hksfac:29914190&r=ene |
| By: | Sharat Ganapati (Dept. of Economics, Yale University); Joseph S. Shapiro (Cowles Foundation, Yale University); Reed Walker (University of California, Berkeley, IZA, & NBER) |
| Abstract: | This paper estimates how increases in production costs due to energy inputs affect consumer versus producer surplus (i.e., incidence). In doing so, we develop a general methodology to measure the incidence of changes in input costs that can account for three first-order issues: factor substitution amongst inputs used for production, incomplete pass-through of input costs, and industry competitiveness. We apply this methodology to a set of U.S. manufacturing industries for which we observe plant-level output prices and input costs. We find that about 70 percent of energy price-driven changes in input costs are passed through to consumers. This implies that the share of welfare cost borne by consumers is 25-75 percent smaller (and the share borne by producers is correspondingly larger) than most existing work assumes. |
| Keywords: | Pass-through, incidence, energy prices, productivity, climate change |
| JEL: | H22 H23 Q40 Q54 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cwl:cwldpp:2038r&r=ene |
| By: | Tobon Orozco, David; Molina Guerra, Carlos; Vargas Cano, John Harvey |
| Abstract: | This paper presents a general equilibrium model to analyze the influence that a contaminating sector has on a natural system’s capacity of resilience, the provision of a public utility service and social welfare, in which the level and capacity to respond to resilience are uncertain, so a probability distribution for the growing loss of resilience with pollution going from a prudent state to an imprudent is defined. And examines first the incidence of expected Pigouvian taxes and finds that these taxes are not enough to maintain resilience because of the cumulative effect of pollution and also that society prefers a prudent tax. Furthermore, the transaction of Permits for Environmental Services (PES) between sector that provides the public utility service and the contaminating sector is allowed. This shows a redistribution of resources very much in favor of the contaminating sector, and there are no incentives to invest in these payments unless the affected have additional objectives for the maximization of private benefit. |
| Keywords: | Contaminación ambiental, incertidumbre, resiliencia, modelo de equilibrio general, impuestos pigouvianos, pagos por servicios ambientales |
| JEL: | D58 H21 Q56 |
| Date: | 2016–11–01 |
| URL: | http://d.repec.org/n?u=RePEc:col:000196:015258&r=ene |
| By: | Sheldon, Ian |
| Keywords: | Agricultural and Food Policy, International Relations/Trade, |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iats16:252439&r=ene |
| By: | Liu, Liyuan; Peng, Fei |
| Abstract: | Environmental protection against pollution has become a common issue faced by the whole world. In the case of the international cooperation on controlling the environmental pollution, the developing and developed countries have different understanding on the principle of “common but differentiated responsibilities”. This paper has set up an optimal pollution controlling model for the developing and developed countries to incorporate environmental protection and economic growth. Based on a dynamic differential game, we find that the increasing environmental expenditure of developed countries in the initial stage of the economic growth path of the developing country can stimulate more international cooperation on pollution controlling. The developing and developed countries can control the environment pollution without significant loss of social welfare. |
| Keywords: | Environment pollution; Economic growth; Game theory |
| JEL: | C71 O44 Q52 Q56 |
| Date: | 2015–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76261&r=ene |
| By: | de Melo, Jaime |
| Abstract: | The Paris Agreement (PA) signed by 175 parties is now a Treaty since a quorum of signatories has been obtained. This Treaty is really the first important step taken to limit temperature increase, as pledges, if sustained and far more ambitious beyond 2030, would drastically limit the projected temperature increase from projections in the absence of measures to limit emissions of greenhouse gases. Contributions however fall short of the intentions to limit temperature increase to the +1.5° to +2° Celsius range since the onset of industrialization. Drawing on recent contributions, this paper reviews where we stand in tackling four challenges ahead: (i) taking fuller cognizance of the accumulating scientific evidence calling for urgent action; (ii) designing an architecture that will render effective the blend of 'bottom-up' and 'top-down' approaches; (iii) choosing policy options and tackling the slow transition to a low-carbon economy, and; (iv) raising finance and addressing burden sharing. |
| Keywords: | Burden Sharing; climate change; GHG; Pricing carbon. |
| JEL: | F18 O44 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11781&r=ene |
| By: | Simon Dietz; Nicoleta Anca Matei |
| Abstract: | Many investments involve both a long time-horizon and risky returns. Making investment decisions thus requires assumptions about time and risk preferences. Such assumptions are frequently contested, particularly in the public sector, and there is no immediate prospect of universal agreement. Motivated by these observations, we develop a theory and method of finding ‘spaces for agreement’. These are combinations of classes of discount and utility function, for which one investment dominates another (or ‘almost’ does so), so that all decision-makers whose preferences can be represented by such combinations would agree on the option to be chosen. The theory is built on combining the insights of stochastic dominance on the one hand, and time dominance on the other, thus offering a nonparametric approach to inter-temporal, risky choice. We go on to apply the theory to the controversy over climate policy evaluation and show with the help of a popular simulation model that, in fact, even tough carbon emissions targets would be chosen by almost everyone, barring those with arguably ‘extreme’ preferences. |
| Keywords: | almost stochastic dominance; climate change; discounting; integrated assessment; project appraisal; risk aversion; stochastic dominance; time dominance; time-stochastic dominance |
| JEL: | D61 H43 Q54 |
| Date: | 2016–01–11 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:64182&r=ene |
| By: | Richard S.J. Tol (UK Department of Economics, University of Sussex, UK; Institute for Environmental Studies and Department of Spatial Economics, Vrije Universiteit, Amsterdam, Netherlands; Tinbergen Institute, Amsterdam, Netherlands; CESifo, Munich, Germany) |
| Abstract: | First-best climate policy is a uniform carbon tax which gradually rises over time. Civil servants have complicated climate policy to expand bureaucracies, politicians to create rents. Environmentalists have exaggerated climate change to gain influence, other activists have joined the climate bandwagon. Opponents to climate policy have attacked the weaknesses in climate research. The climate debate is convoluted and polarized as a result, and climate policy complex. Climate policy should become easier and more rational as the Paris Agreement has shifted climate policy back towards national governments. Changing political priorities, austerity, and a maturing bureaucracy should lead to a more constructive climate debate. |
| Keywords: | Climate policy; political economy |
| JEL: | F53 P16 Q54 |
| Date: | 2016–08 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:09616&r=ene |