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on Energy Economics |
| By: | Casey, Gregory |
| Abstract: | In the United States, rising energy efficiency, rather than the use of less carbon-intensive energy sources, has driven the decline in the carbon intensity of output. Thus, understanding how environmental policy will affect energy efficiency should be a primary concern for climate change mitigation. In this paper, I evaluate the effect of environmental taxes on energy use in the United States. To do so, I construct a putty-clay model of directed technical change that matches several key features of the data on U.S. energy use. The model builds upon the standard Cobb-Douglas approach used in climate change economics in two ways. First, it allows the elasticity of substitution between energy and non-energy inputs to differ in the short and long run. Second, it allows for endogenous and directed technical change. In the absence of climate policy, the new putty-clay model of directed technical change and the standard Cobb-Douglas approach have identical predictions for long-run energy use. The reactions to climate policies, however, differ substantially. In particular, the new putty-clay model of directed technical change suggests that a 6.9-fold energy tax in 2055 is necessary to achieve policy goals consistent with the 2016 Paris Agreement and that such a tax would lead to 6.8% lower consumption when compared to a world without taxes. By contrast, the standard Cobb-Douglas approach suggests that a 4.7-fold tax rate in 2055 is sufficient, which leads to a 2% decrease in consumption. Thus, compared to the standard approach, the new model predicts that greater taxation and more forgone consumption are necessary to achieve environmental policy goals. |
| Keywords: | Energy, Climate Change, Directed Technical Change, Growth |
| JEL: | H23 O30 O40 Q40 Q54 |
| Date: | 2017–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76416&r=ene |
| By: | Brown, David P. (University of Alberta, Department of Economics); Eckert, Andrew (University of Alberta, Department of Economics); Eckert, Heather (University of Alberta, Department of Economics) |
| Abstract: | In this paper, we examine the use of carbon pricing and an output-based subsidy in a market with imperfect competition. We consider a carbon pricing policy in Alberta's electricity market as a case study. This policy consists of two phases. In the first phase, the carbon price is doubled with the output subsidy being based on a fraction of facility-level emission intensity. In the second phase, the carbon price will remain constant, while the output subsidy is altered to be uniform across assets and based on the emissions intensity of an efficient natural gas asset. Using a model of oligopoly competition, we simulate the short-run impacts of the two phases on electricity prices, emissions, and unit and firm-level profitability. We find that the mechanisms by which electricity prices and emissions change in response to carbon pricing differ depending on whether the market is perfectly competitive or oligopolistic. We demonstrate that regardless of market structure, changing the basis of the output subsidy has substantially larger effects than a doubling of the carbon price. The estimated effects of carbon pricing vary as the firms' generation portfolios change. |
| Keywords: | Electricity; Market Power; Carbon Price; Pass-Through |
| JEL: | D43 L51 L94 Q40 Q58 |
| Date: | 2017–01–24 |
| URL: | http://d.repec.org/n?u=RePEc:ris:albaec:2017_001&r=ene |
| By: | Chia-Wen Chen; Wei-Min Hu; Christopher R. Knittel |
| Abstract: | The Chinese automobile market is the largest in the world with annual sales exceeding 20 million vehicles. The tremendous growth in sales---over 200 percent from 2008 to 2015---and concerns over local air quality have prompted China's policy makers to incentivize the adoption of more fuel efficient vehicles. We examine the response of vehicle purchase behavior to China's largest national subsidy program for fuel efficient vehicles during 2010 and 2011. Using variation from the program's eligibility cutoffs, we find that the program boosted sales for subsidized vehicle models, but that the program also created a substitution effect within highly fuel efficient vehicles and most subsidies went to inframarginal consumers. This substitution effect greatly reduces the cost effectiveness of the program. We calculate that the average cost per ton of carbon dioxide saved is over 82 USD, well above the social cost of carbon used in U.S. regulatory filings. Using the framework in Boomhower and Davis (2014) and accounting for local pollution benefits, we show that ignoring the substitution effect would lead one to conclude that the program is welfare enhancing, whereas in fact the marginal cost of the program exceeds the marginal benefit by almost as much as 300 percent. We also show that the program was not well-targeted; the effect of the subsidy on sales of fuel efficient vehicles was smaller in areas where consumers were more likely to purchase fuel inefficient models or were lower educated. |
| JEL: | L5 L91 Q4 Q5 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23045&r=ene |
| By: | Baumeister, Christiane; Ellwanger, Reinhard; Kilian, Lutz |
| Abstract: | It is commonly believed that the response of the price of corn ethanol (and hence of the price of corn) to shifts in biofuel policies operates in part through market expectations and shifts in storage demand, yet to date it has proved difficult to measure these expectations and to empirically evaluate this view. We utilize a recently proposed methodology to estimate the market's expectations of the prices of ethanol, unfinished motor gasoline and crude oil at horizons from three months to one year. We quantify the extent to which price changes were anticipated by the market, the extent to which they were unanticipated, and how the risk premium in these markets has evolved. We show that the Renewable Fuel Standard (RFS) is likely to have increased ethanol price expectations by as much $1.45 in the year before and in the year after the implementation of the RFS had started. Our analysis of the term structure of expectations provides support for the view that a shift in ethanol storage demand starting in 2005 caused an increase in the price of ethanol. There is no conclusive evidence that the tightening of the RFS in 2008 shifted market expectations, but our analysis suggests that policy uncertainty about how to deal with the blend wall raised the risk premium in the ethanol futures market in mid-2013 by as much as 50 cents at longer horizons. Finally, we present evidence against a tight link from ethanol price expectations to corn price expectations and hence to storage demand for corn in 2005-06. |
| Keywords: | biofuels,policy uncertainty,term structure of price expectations,price shocks,market integration,anticipation,storage demand,risk premium,crude oil,gasoline,corn |
| JEL: | Q18 Q28 Q42 Q58 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cfswop:563&r=ene |
| By: | Baumeister, Christiane; Kilian, Lutz |
| Abstract: | We explore the effect on U.S. real GDP growth of the sharp and sustained decline in the global price of crude oil and hence in the U.S. price of gasoline after June 2014. Our analysis suggests that this decline produced a cumulative stimulus of about 0.9 percentage points of real GDP growth by raising private real consumption and non-oil related business investment and an additional stimulus of 0.04 percentage points reflecting a shrinking petroleum trade deficit. This stimulating effect, however, has been largely offset by a large reduction in real investment by the oil sector. Hence, the net stimulus since June 2014 has been close to zero. We show that the response of the U.S. economy was not fundamentally different from that observed after the oil price decline of 1986. Then as now the response of the U.S. economy is consistent with standard economic models of the transmission of oil price shocks. We found no evidence of an additional role for frictions in reallocating labor across sectors or for increased uncertainty about the price of gasoline in explaining the sluggish response of U.S. real GDP growth. Nor did we find evidence of financial contagion, of spillovers from oil-related investment to non-oil related investment, of an increase in household savings, or of households deleveraging. |
| Keywords: | oil loans; oil price decline; reallocation; shale oil; Stimulus; uncertainty |
| JEL: | E32 Q43 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:11792&r=ene |
| By: | Hagfors, Lars Ivar; Kamperud , Hilde Horthe; Paraschiv, Florentina; Prokopczuk, Marcel; Sator, Alma; Westgaard, Sjur |
| Abstract: | Understanding the mechanisms that drive extreme negative and positive prices in day-ahead electricity prices is crucial for managing risk and market design. In this paper, we consider the problem of understanding how fundamental drivers impact the probability of extreme price occurrences in the German day-ahead electricity market. We develop models using fundamental variables to predict the probability of extreme prices. The dynamics of negative prices and positive price spikes differ greatly. Positive spikes are related to high demand, low supply, and high prices the previous days, and mainly occur during the morning and afternoon peak hours. Negative prices occur mainly during the night, and are closely related to low demand combined with high wind production levels. Furthermore, we do a closer analysis of how renewable energy sources, hereby photovoltaic and wind power, impact the probability of negative prices and positive spikes. The models confirm that extremely high and negative prices have different drivers, and that wind power is particularly important in relation to negative price occurrences. The models capture the main drivers of both positive and negative extreme price occurrences, and perform well with respect to accurately forecasting the probability with high levels of confidence. Our results suggests that probability models are well suited to aid in risk management for market participants in day-ahead electricity markets. |
| Keywords: | Energy Markets, Fundamental Analysis, Spikes, EPEX |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:usg:sfwpfi:2016:22&r=ene |
| By: | Stefan ?etkovi?; Aron Buzogány; Miranda Schreurs |
| Abstract: | The paper introduces a novel framework for classifying different types of national political economies. It applies the outlined framework to analyse in an historical perspective the development of one mature renewable energy sector (onshore wind) and one infant renewable energy sector (offshore wind) across three major types of European economies.The paper shows that the presence of strategic state.market coordination and the decentralized pluralist polity constitute key enabling factors that drive the development of new renewable energy technologies. The commonalities and differences in the political economy of the onshore and offshore wind sectors are also discussed. |
| Keywords: | Capitalism, Industrial productivity, Renewable energy sources, Sustainable development |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:unu:wpaper:wp2016-018&r=ene |
| By: | Andrea Baranzini; Nicolas Borzykowski; Stefano Carattini |
| Abstract: | Following the entry into force of the Paris Agreement in November 2016, governments around the world are now asked to turn their nationally determined contributions into concrete climate policies. Economic arguments justify implementing carbon pricing to achieve emission abatement targets in a cost-effective way, including the possibility to offset domestic greenhouse gas emissions in foreign countries. However, abating emissions abroad instead of domestically may face important political and popular resistance. We run a lab experiment with more than 300 participants by asking them to choose between a domestic and an international reforestation project. We test the effect of three informational treatments on the allocation of participants’ endowment between the domestic and the international project. The treatments consist in: (1) making more salient the cost-effectiveness gains associated with offsetting carbon abroad (2) providing guarantees on the reliability of reforestation programmes (3) stressing local ancillary benefits associated with domestic offset projects. We find that stressing the cost-effectiveness of the reforestation programme abroad is the best way to increase its support, the economic argument in favour of offsetting abroad being largely overlooked by participants. We relate this finding to the recent literature on the drivers of public support for climate policies, generally pointing to a gap between people’s preferences and economists’ prescriptions. |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp257&r=ene |
| By: | Heesen, Florian (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)) |
| Abstract: | In Germany, policy-induced energy efficiency improvements typically aim at reducing primary energy consumption. Private households, on the contrary, pursue the maximization of wellbeing, or in microeconomics jargon, the maximization of utility of the occupants. There is a marked difference between upfront-calculated energy performance ratings (EPRs) and realized heating energy consumption (HEC). From an energy and environmental policy point of view, a deviation of energy consumption from ex ante calculated EPRs is problematic, as it offers poor guidance for (prospective) homeowners, policy-makers and researchers relying on the EPRs as benchmarks. The EPR-HEC gaps reported are, apart from heterogeneity, i.e. deviations from the mean aggregate values, often attributed to (unanticipated) behavioral effects. From an energy economist’s point of view, energy rebound induced by a decreasing unit price per unit of energy service output is one explanation. The existing literature in this field almost entirely treats building-specific EPRs as universal standards, trying to explain the empirically observed discrepancies. In this paper, we investigate whether and to what extent the current EPR scheme in place in Germany today can address behavioral issues. To this end, we empirically investigate the deviations between EPRs used in regulation and observed HEC levels based on two different data sets for Germany. The results show that it is not necessarily the behavioral dimension, but rather the static and mostly technically guided calculations of the EPRs itself that account for the major part of this deviation. The results obtained and insights gained from our analysis highlight the need for further improvements in the field of EPR regulation and methodology. |
| Keywords: | Energy performance rating; Energy performance gap; Heating energy; Consumer behavior |
| JEL: | Q40 |
| Date: | 2016–11–23 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2016_017&r=ene |
| By: | Ahad, Muhammad; Khan, Wali |
| Abstract: | This research investigates the relationship between globalization, environment degradation, industrial production, energy consumption and economic growth over the period of 1972-2015 for Bangladesh. The long run relationship between variables is examined using ARDL bound test and combined cointegration approach. These cointegration approaches predict the long run relationship between underlying variables. The empirical findings demonstrate that globalization, industrial production and energy consumption drives environmental degradation positively, but economic growth pushes environmental degradation negatively in the long run as well as short run. Further, the direction of causality is examined by VECM Granger causality which shows bidirectional causality between energy consumption and environment degradation, economic growth and environment degradation, industrial production and economic growth, and energy consumption and economic growth for both short-long run. Our results suggest a unidirectional causality runs from environmental degradation and energy consumption to industrial production. The empirics of Innovative Accounting Approach (IAA) confirm the findings of VECM Granger causality. Our findings suggest that Policymakers may focus on imports of advance technology and export led growth strategy to control environmental pollution. |
| Keywords: | Globalization, Environment Degradation, Bangladesh |
| JEL: | F64 Q4 |
| Date: | 2016–04 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76278&r=ene |
| By: | Steve Cicala |
| Abstract: | This paper measures changes in electricity generation costs caused by the introduction of market mechanisms to determine output decisions in service areas that were previously using command-and-control-type operations. I use the staggered transition to markets from 1999- 2012 to evaluate the causal impact of liberalization using a nationwide panel of hourly data on electricity demand and unit-level costs, capacities, and output. To address the potentially confounding effects of unrelated fuel price changes, I use machine learning methods to predict the allocation of output to generating units in the absence of markets for counterfactual production patterns. I find that markets reduce production costs by $3B per year by reallocating output among existing power plants: Gains from trade across service areas increase by 20% based on a 10% increase in traded electricity, and costs from using uneconomical units fall 20% from a 10% reduction in their operation. |
| JEL: | D4 D61 L1 L5 L94 Q4 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:23053&r=ene |
| By: | Peter A. Lang |
| Abstract: | A transition to nuclear power was disrupted in the late-1960s. Counterfactual analyses suggest the foregone benefits of the disruption are substantial. Learning rates are presented for nuclear power in seven countries comprising 58% of all nuclear power reactors ever built. Learning rates and deployment rates changed in the late-1960s from rapidly falling costs and accelerating deployment to rapidly rising costs and stalled deployment. If the early rates had continued nuclear power could now be around 10% of its current cost. The additional nuclear power could have substituted for 69,000-186,000 TWh of coal and gas generation, thereby avoiding up to 9.5 million deaths and 174 Gt CO2 emissions. In 2015 alone nuclear power could have replaced up to 100% of coal and 76% of gas-generated electricity, thereby avoiding up to 540,000 deaths and 11 Gt CO2. Rapid progress was achieved in the past and could be again, with appropriate policies. Research is needed to identify impediments to progress, and policy is needed to remove them. |
| Keywords: | Nuclearpower, Constructioncost, Learningrate, Experience curve, Energy transition, Forgone benefits, Deaths, CO2 emissions |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2017-04&r=ene |
| By: | F. Aleskerov; E. Victorova |
| Abstract: | As a result of the climate change the situation in Arctic area leads to several important consequences. On the one hand, oil and gas resources can be exploited much easier than before. Thus, one can already observe discussions on disputed shelf zones where the deposits are located. On the other hand, oil and gas excavation leads to serious potential threats to fishing by changing natural habitats which in turn can create serious damage to the economies of some countries in the region. Another set of problems arises due to the extension of navigable season for Arctic Shipping Routes. |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1701.07321&r=ene |
| By: | Michael Bucksteeg; Stephan Spiecker; Christoph Weber (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen (Campus Essen)) |
| Abstract: | There is an ongoing debate on the introduction of capacity markets in most European countries while a few of them have already established capacity markets. Since the implementation of independent national capacity markets is not in line with the target of a pan-European internal electricity market we investigate the impacts of uncoordinated capacity markets compared with coordinated capacity markets. A probabilistic approach for the determination of capacity requirements is proposed and a European electricity market model (E2M2s) is applied for evaluation. The model simultaneously optimizes investments and dispatch of power plants. Besides the impact on generation investments, market prices and system costs we analyse effects on production and security of supply. While coordinated capacity markets reveal high potentials for cross border synergies and cost savings, uncoordinated and unilateral implementations can lead to inefficiencies, in particular free riding effects and endanger security of supply due to adverse allocation of generation capacity. |
| Keywords: | capacity markets, system adequacy, market design |
| JEL: | Q40 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:dui:wpaper:1701&r=ene |
| By: | Shahnoushi, Naser; Sayed, Saghaian; Hezareh, Reza; Tirgari Seraji, Mohammad |
| Abstract: | Although food prices are at or near a historical low in major world markets, there is increasing concern about food security. The high food prices experienced over recent years have led to the widespread view that food price volatility has increased. In this study, factors affecting food prices are investigated for subgroups of foods such as cereals, meats, beverages, and vegetable oils, using Seemingly Unrelated Regression panel data approach with monthly world food prices from January 1994 to July 2016. Estimation results show crude oil and gasoline prices have a positive significant impact on food price subgroups such as cereals and meats. With the rise in Di-Ammonium Phosphate and Triple Superphosphate prices, the cereals, beverages, and vegetable oil prices increased. Potassium chloride fertilizer price has a positive significant effect on cereals, but in most cases, the meats and beverages’ subgroups were not affected by fertilizer prices. Also, the exchange rate had a negative significant effect on all food price subgroups. |
| Keywords: | Food Prices, Panel SUR, Food Security, Exchange Rates., Agricultural and Food Policy, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Resource /Energy Economics and Policy, |
| Date: | 2017–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea17:252782&r=ene |
| By: | André, Francisco J. (Departamento de Análisis Económico. Universidad Complutense de Madrid.); Arguedas, Carmen. (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.) |
| Abstract: | In this paper we study the relationship between market power in emission permit markets and endogenous technology adoption. The presence of market power results in a di- vergence of both abatement and technology adoption levels with respect to the benchmark scenario of perfect competition, as long as technology adoption becomes more e¤ective in reducing abatement costs. Also, the initial distribution of permits, in particular, the amount of permits initially given to the dominant rm, is crucial in determining over- or under-investment in relation to the benchmark model. Speci cally, if the dominant rm is initially endowed with more permits than the corresponding cost e¤ective allocation, this results in under- investment by the dominant rm and over- investment by the competitive fringe, regardless of the speci c amount of permits given to the latter rms. The results are reversed if the dominant rm is initially endowed with relatively few permits. Our ndings seem consistent with some empirical evidence about the performance of the power sector in the initial phases of the European Union Emission Trading System. |
| Keywords: | environmental policy, emission permits, market power, environmentally-friendly technologies |
| JEL: | C72 D43 D62 L51 Q55 Q58 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:uam:wpaper:201701&r=ene |
| By: | Halkos, George; Bampatsou, Christina |
| Abstract: | Better management of natural capital, an efficient allocation of resources and technological progress can contribute to productivity change. The present study uses Data Envelopment Analysis to determine the Total Factor Productivity Index, in the case of the EU15 countries, using panel data on energy consumption for a period spanning from 1995 to 2011. The aim is not only to determine the index of total factor productivity change but also to record its driving forces for the decision making units under consideration, showing whether the productivity gains come mainly from an improvement in efficiency or derive merely as a result of technological progress. In terms of eco-efficiency, the paper contributes in showing whether the overall development is more driven by input-saving or environmental-saving processes. The detailed decomposition offers policy makers additional insights into more valuable reference material representing the driving forces of productivity gains or losses. |
| Keywords: | Energy; Energy Consumption; Environmental Economics; Carbon emissions; Eco-Efficiency; Data envelopment analysis; Total factor productivity index. |
| JEL: | O11 O57 Q01 Q40 Q43 Q48 Q50 Q58 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:76287&r=ene |
| By: | Tomas Balint (Université Panthéon-Sorbonne - Paris 1 (UP1)); Francesco Lamperti (Université Panthéon-Sorbonne - Paris 1 (UP1)); Mauro Napoletano (Observatoire français des conjonctures économiques); Antoine Mandel (Ecole d'Économie de Paris - Paris School of Economics); Andrea Roventini (Laboratory of Economics and Management (Pisa) (LEM)); Sandro Sapio (Università degli Studi di Napoli Parthenope) |
| Abstract: | We provide a survey of the micro and macro economics of climate change from a complexity science perspective and we discuss the challenges ahead for this line of research. We identify four areas of the literature where complex system models have already produced valuable insights: (i) coalition formation and climate negotiations, (ii) macroeconomic impacts of climate-related events, (iii) energy markets and (iv) diffusion of climate-friendly technologies. On each of these issues, accounting for heterogeneity, interactions and disequilibrium dynamics provides a complementary and novel perspective to the one of standard equilibrium models. Furthermore, it highlights the potential economic benefits of mitigation and adaptation policies and the risk of under-estimating systemic climate change-related risks. |
| Keywords: | Climate change; Climate policy; Climate economics; Complex systems; Agent-based models; Socio-economics networks |
| JEL: | C63 Q40 Q50 Q54 |
| Date: | 2016–07 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/5qr7f0k4sk8rbq4do5u6v70rm0&r=ene |
| By: | Kuboniwa, Masaaki |
| Abstract: | This paper investigates whether Russia's expansion of military goods can be Impossible Mission Force (IMF) for its V-Shaped growth recovery under declining oil prices. Looking at long-run relationships between domestic outputs and international oil prices for 1995–2016, we focus on the impact of the military output expansion on growth of GDP and manufacturing for 2011–2016. We demonstrate that the military output expansion checked further growth retardation for 2012–2014 as a counter power against deteriorating oil prices or economic sanctions, while the military output expansion would not be likely to bolster up Russia's growth from 2015 onward without next oil windfalls. |
| Keywords: | military goods, international oil price, Impossible Mission Force, growth |
| JEL: | F51 F52 H56 L64 |
| Date: | 2016–11 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rrcwps:64&r=ene |
| By: | Andreas Welling (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg) |
| Abstract: | Carbon taxation is used by several countries to internalize the negative effects of carbon emissions to the emitters of carbon. In this article the effects of a carbon tax on an oligopolistic market of polluters are analyzed. With the help of a multi-criteria optimization model the optimal carbon tax rate is determined; first under certainty and then in presence of demand uncertainty. It is shown that demand uncertainty leads to a lower optimal carbon tax rate, while it simultaneously increases carbon emissions. Finally, the influence of a possible carbon emission reducing investment is analyzed with the help of a real option model. |
| Keywords: | Carbon Tax; Climate Change; Real Option; Technological Progress; Uncertainty; Oligopolistic competition |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:mag:wpaper:170001&r=ene |
| By: | Richard S.J. Tol (Department of Economics, University of Sussex,UK, Institute for Environmental Studies and Department of Spatial Economic,UK, Vrije Universiteit, Amsterdam, The Netherlands Tinbergen Institute, Amsterdam, The Netherlands); Peter Dolton (Department of Economics, University of Sussex,UK,Centre for Economic Performance, London School of Economics,UK,CESifo, Munich, Germany,IZA, Bonn, Germany) |
| Abstract: | An online survey of over 12,000 UK residents was conducted with the aim of understanding: elements of public policy, preferences and knowledge of public expenditure, the provision of public goods, and the intergenerational allocation of resources. Questions were asked about demographics, wealth and income attitudes, time preferences, risk preferences, social value orientation, subjective personal assessments of life expectancy, perceptions of government spending, and public policies on health, education, pensions and climate change. This paper presents a simple description of the summary statistics from the survey. It does not, as yet, provides substantive analysis of the data. |
| Keywords: | Survey, United Kingdom, discount rate, risk aversion, social value orientation, health, education, pensions, climate change, public policy |
| JEL: | D10 D64 D70 D80 I18 I28 J32 H51 H52 H55 Q54 |
| Date: | 2016–02 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:08416&r=ene |
| By: | Sambit Bhattacharyya (Department of Economics, University of Sussex); Louis Conradie (Department of Economics, University of Sussex); Rabah Arezki (Research Department, IMF) |
| Abstract: | If the central government is a revenue maximizing Leviathan then resource discovery and democratization should have a discernible impact on the degree of fiscal decentralization. We systematically explore this effect by exploiting exogenous variation in giant oil and mineral discoveries and permanent democratization. Using a global dataset of 77 countries over the period 1970 to 2012 we find that resource discovery has very little effect on revenue decentralization but induces expenditure centralization. Oil discovery appears to be the main driver of centralization and not minerals. Resource discovery leads to centralization in locations which have not experienced permanent democratization. Tax and intergovernmental transfers respond most to resource discovery shocks and democratization whereas own source revenue, property tax, educational expenditure, and health expenditure do not seem to be affected. Higher resource rent leads to more centralization and the effect is moderated by democratization. |
| Keywords: | Resource discovery; Resource rent; Democratization; Fiscal decentralization |
| JEL: | H41 H70 O11 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:08916&r=ene |
| By: | Wensheng Kang; Ronald A. Ratti; Joaquin L. Vespignani |
| Abstract: | Important interaction has been established for US economic policy uncertainty with a number of economic and financial variables including oil prices. This paper examines the dynamic effects of US and non-US oil production shocks on economic policy uncertainty using a structural VAR model. Such an examination is motivated by the substantial increases in US oil production in recent years with implications for US political and economic security. Positive innovations in US oil production are associated with decreases in US economic policy uncertainty. The economic forecast interquartile ranges about the US CPI and about federal/state/local government expenditures are particularly sensitive to innovations in US oil supply shocks. Shocks to US oil supply disruption causes rises in the CPI forecast uncertainty and accounts for 21% of the overall variation of the CPI forecaster disagreement. Dis-aggregation of oil production shocks into US and non-US oil production yield novel results. Oil supply shocks identified by US and non-US origins explain as much of the variation in economic policy uncertainty as structural shocks on the demand side of the oil market. |
| Keywords: | US oil production, Economic policy uncertainty, CPI forecast uncertainty, Structural VAR |
| JEL: | E44 G12 Q43 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2017-07&r=ene |
| By: | Suleymanov, Elchin |
| Abstract: | The selected paper presented at the IAMO Samarkand Conference |
| Keywords: | Agricultural and Food Policy, Demand and Price Analysis, |
| Date: | 2016–11–02 |
| URL: | http://d.repec.org/n?u=RePEc:ags:iamc16:249959&r=ene |
| By: | Chia-Lin Chang (Department of Applied Economics Department of Finance National Chung Hsing University, Taiwan); Michael McAleer (Department of Quantitative Finance National Tsing Hua University, Taiwan); Yu-Ann Wang (Department of Applied Economics National Chung Hsing University Taichung, Taiwan) |
| Abstract: | The recent and rapidly growing interest in biofuel as a green energy source has raised concerns about its impact on the prices, returns and volatility of related agricultural commodities. Analyzing the spillover effects on agricultural commodities and biofuel helps commodity suppliers hedge their portfolios, and manage the risk and co-risk of their biofuel and agricultural commodities. There have been many papers concerned with analyzing crude oil and agricultural commodities separately. The purpose of this paper is to examine the volatility spillovers for spot and futures returns on bio-ethanol and related agricultural commodities, specifically corn and sugarcane. The diagonal BEKK model is used as it is the only multivariate conditional volatility model with well-established regularity conditions and known asymptotic properties. The daily data used are from 31 October 2005 to 14 January 2015. The empirical results show that, in 2 of 6 cases for the spot market, there were significant negative co-volatility spillover effects: specifically, corn on subsequent sugarcane co-volatility with corn, and sugarcane on subsequent corn co-volatility with sugarcane. In the other 4 cases, there are no significant co-volatility spillover effects. There are significant positive co-volatility spillover effects in all 6 cases, namely between corn and sugarcane, corn and ethanol, and sugarcane and ethanol, and vice-versa, for each of the three pairs of commodities. It is clear that the futures prices of bio-ethanol and the two agricultural commodities, corn and sugarcane, have stronger co-volatility spillovers than their spot price counterparts. These empirical results suggest that the bio-ethanol and agricultural commodities should be considered as viable futures products in financial portfolios for risk management. |
| Keywords: | BBiofuel, Spot prices, Futures prices, Returns, Volatility, Risk, Co-risk, Bio-ethanol, Corn, Sugarcane, Diagonal BEKK model, Co-volatility spillover effects, Hedging, Risk management. |
| JEL: | C32 C58 G13 G15 Q14 Q42 |
| Date: | 2016–12 |
| URL: | http://d.repec.org/n?u=RePEc:ucm:doicae:1704&r=ene |
| By: | Siami-Namini, Sima; Hudson, Darren |
| Abstract: | Crude Oil prices are thought to have direct and indirect effect through the exchange rate on the international agricultural commodities prices. The aim of this paper is to examine the interdependence relationship between crude oil futures prices, US dollar exchange rate, and international agricultural commodities prices, including corn (maize), sorghum, wheat, sugar, coconut oil, fishmeal, olive oil, palm oil, groundnut oil, groundnuts, rapeseed oil, soybean meal, soybean oil, soybeans, and sunflower prices. Using autoregressive (AR) model with an exponential generalized autoregressive conditional heteroskedasticity (EGARCH), namely AR-EGARCH model, we describe mean and variance equation in EGARCH model and then extract GARCH variance time series to investigate the volatility spillover from crude oil returns and US dollar exchange rate to the international agricultural commodities returns. To this end, the vector auto-regression (VAR) and vector error correction model (VECM) Granger causality approach, generalized and accumulated impulse-response analysis for identification of the short run and long run interrelationships are applied to the monthly data spanning from Jan 1986 to Nov 2015. The generalized and accumulated impulse response analysis suggests the volatility of international agricultural commodities prices do not significantly react to the volatility of crude oil price and the volatility of exchange rate shocks in the short run for the pre-crisis time period. But, they are significant for the post-crisis time period. The long run causality analysis reveals that the volatility of crude oil prices and appreciation/depreciation of the US dollar exchange rate are transmitted to the international agricultural commodities prices for the post-crisis time period. Also, crude oil returns volatility does affect the US dollar exchange rate volatility for the post-crisis time period which in turn affects the volatility of the international agricultural commodities returns through changes in prices. |
| Keywords: | Volatility Spillover, Agricultural commodities returns, EGARCH Model., Institutional and Behavioral Economics, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy, |
| Date: | 2017–01–18 |
| URL: | http://d.repec.org/n?u=RePEc:ags:saea17:252845&r=ene |
| By: | García-Martos, Carolina; Bastos, Guadalupe; Alonso Fernández, Andrés Modesto |
| Abstract: | In the context of the liberalization of electricity markets, forecasting prices is essential. With this aim, research has evolved to model the particularities of electricity prices. In particular, Dynamic Factor Models have been quite successful in the task, both in the short and long run. However, specifying a single model for the unobserved factors is difficult, and it can not be guaranteed that such a model exists. In this paper, Model Averaging is employed to overcome this difficulty, with the expectation that electricity prices would be better forecast by acombination of models for the factors than by a single model. Although our procedure is applicable in other markets, it is illustrated with applications to forecasting spot prices of the Iberian Market, MIBEL (The Iberian Electricity Market) and the Italian Market. Three combinations of forecasts are successful in providing improved results for alternative forecasting horizons. |
| Keywords: | Forecast combination; Bayesian model averaging; Electricity prices; Dimensionality reduction |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:cte:wsrepe:24028&r=ene |
| By: | Knauth, Andreas (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)); Paschmann, Martin (Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)) |
| Abstract: | Analyzing commodity market dynamics, we observe that price volatility increases with reduced contract duration. In this paper, we derive a theoretical model depicting the price formation in two markets with altering product granularity. Supplemented by empirical evidence from German electricity markets for hourly and quarter-hourly products, we find that the high price volatility is triggered by restricted participation of suppliers in the market for quarter-hourly products as well as by sub-hourly variations of renewable supply and demand. Welfare implications reveal efficiency losses of EUR 96 million in 2015 that may be reduced if markets are coupled. |
| Keywords: | Commodity Markets; Price Volatility; Sequential Market Organization; Short-Term Market Dynamics; Electricity Market Interaction; Short-Term Price Formation |
| JEL: | C13 C51 D44 D47 L94 Q21 Q41 |
| Date: | 2017–01–19 |
| URL: | http://d.repec.org/n?u=RePEc:ris:ewikln:2017_002&r=ene |
| By: | Sambit Bhattacharyya (Department of Economics, University of Sussex); Maurizio Intartaglia (Department of Economics, University of Sussex); Andy Mckay (Department of Economics, University of Sussex) |
| Keywords: | Climate Aid; Emissions; Energy |
| JEL: | D72 O11 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:sus:susewp:09416&r=ene |
| By: | Bruno Lanz (University of Neuchâtel, Department of Economics and Business; ETH Zurich, Chair for Integrative Risk Management and Economics; Massachusetts Institute of Technology, Joint Program on the Science and Policy of Global Change.); Jules-Daniel Wurlod (Boston Consulting Group, Geneva, Switzerland.); Luca Panzone (Newcastle University, School of Agriculture, Food and Rural Development, UK.); Timothy Swanson (Graduate Institute of International and Development Studies, Centre for International Environmental Studies, Switzerland.) |
| Abstract: | Pigovian regulation provides monetary penalties/rewards to incentivize prosocial behavior, and may thereby trigger behavioral effects beyond a more standard response associated with a change in relative prices. This paper quantifies the magnitude of these behavioral effects using data from an experiment on real product choices together with a structural model of consumer behavior. First, we show that information about external effects (products’ embodied carbon emissions) triggers voluntary substitution towards cleaner alternatives, and we estimate that this effect is equivalent to a change in relative prices of GBP30.69-165.15/tCO2. Second, comparing a Pigovian intervention (GBP19/tCO2) with a neutrally-framed price change of the same magnitude, we find a negative behavioral effect associated with regulation. Compensating this bias would require increasing the Pigovian price signal by up to 48.06/tCO2. Finally, based on a cross-product comparison, we show that the magnitude of behavioral effects declines with substitutability between clean and dirty product alternatives, a measure of effort to reduce emissions. |
| Keywords: | Externalities; Pigovian regulation; Consumer behavior; Information; Field experiments; Environmental policy. |
| JEL: | C93 D03 D12 H23 Q58 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:irn:wpaper:17-01&r=ene |
| By: | Aditi Bhattacharyya (Department of Economics and International Business, Sam Houston State University); Daisy Das (Cotton College State University, Guwahati, Assam, India); Arkadipta Ghosh (Mathematica Policy Research Inc) |
| Abstract: | We examine the impact of electrification on the welfare of poor households in rural India. We use two rounds of survey data (2004-2005 and 2011-2012) from the National Sample Survey Organization, and examine household welfare as captured by monthly and annual expenditures on multiple categories of goods and services among the poorest households. Using inverse propensity score weighting and difference-in-differences estimation in two separate analyses for households across all states and in eight backward states, we find significant evidence for improved welfare from electrification. This includes higher monthly expenditures in total as well as on food, fuel, entertainment, nonfood, education, and durable goods across all states. We also find evidence for higher expenditures in selected categories of goods like fuel, entertainment, nonfood, and education items after electrification in backward states. Additionally, we find that the poorest rural households in backward states experienced reduced medical expenditures after electrification. |
| Keywords: | Rural electrification, household welfare, poor households |
| JEL: | O13 I30 |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:shs:wpaper:1702&r=ene |
| By: | - |
| Abstract: | En este documento se presentan cuadros regionales y nacionales con datos estadísticos del subsector hidrocarburos de los ocho países que conforman el Sistema de la Integración Centroamericana (SICA): Belice, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panamá y la República Dominicana. El informe consta de cinco grupos de cuadros: el primero corresponde al valor de las importaciones y precios; el segundo a los balances de petróleo, derivados y gas natural; el tercero al consumo interno de hidrocarburos; el cuarto a la procedencia de las importaciones y la capacidad de almacenamiento; y el quinto y último, a la estructura de los mercados. La sección de gráficos también se divide en cinco grupos: a) procedencia de las importaciones; b) evolución de los precios de los combustibles; c) consumo de los derivados del petróleo y gas natural; d) balance de los hidrocarburos, y e) impacto de las importaciones en la balanza comercial. |
| Keywords: | HIDROCARBUROS, PETROLEO, INDUSTRIA PETROLERA, DATOS ESTADISTICOS, IMPORTACIONES, CONSUMO, PRECIOS, DESARROLLO DE LOS RECURSOS NATURALES, HYDROCARBONS, PETROLEUM, PETROLEUM INDUSTRY, STATISTICAL DATA, IMPORTS, CONSUMPTION, PRICES, NATURAL RESOURCES DEVELOPMENT |
| Date: | 2017–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col094:40918&r=ene |
| By: | Liao, Kenneth |
| Date: | 2016–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:isu:genstf:3544&r=ene |