nep-ene New Economics Papers
on Energy Economics
Issue of 2017‒03‒19
33 papers chosen by
Roger Fouquet
London School of Economics

  1. Dirty Little Secrets: Inferring Fossil-Fuel Subsidies from Patterns in Emission Intensities By Radoslaw Stefanski
  2. The light at the end of the tunnel: the impact of policy on the global diffusion of fluorescent lamps By Suchita Srinivasan
  3. Social nudging with condorcet juries and its strategic implications for a paternalistic implementation of LED bulbs By Kalmbach, Bettina
  4. Residential Energy Efficiency Retrofits: Potential Unintended Consequences By Collins, Matthew; Dempsey, Seraphim
  5. Investment in Energy Efficiency, Adoption of Renewable Energy and Household Behaviour: Evidence from OECD countries By Prudence Dato
  6. Wind, Storage, Interconnection and the Cost of Electricity Generation By Di Cosmo, Valeria; Malaguzzi Valeri, Laura
  7. Investigating the interdependence between non-hydroelectric renewable energy, agricultural value added, and arable land use in Argentina By Ben Jebli, Mehdi; Ben Youssef, Slim
  8. System Integration of Wind and Solar Power in Integrated Assessment Models: a Cross-model Evaluation of New Approaches By Pietzcker, Robert C.; Ueckerdt, Falko; Carrara, Samuel; de Boer, Harmen Sytze; Després, Jacques; Fujimori, Shinichiro; Johnson, Nils; Kitous, Alban; Scholz, Yvonne; Sullivan, Patrick; Luderer, Gunnar
  9. Providing efficient network access to green power generators: : A long-term property rights perspective. By Petropoulos, G.; Willems, Bert
  10. The French nuclear bet By Quentin Perrier
  11. A Regional Trade Model with Ricardian Productivity Gains and Multi-technology Electricity Supply By Pothen, Frank; Hübler, Michael
  12. Follow the Money: How Does the Income Flow After an Energy Boom By Weinstein, Amanda; Partridge, Mark; Tsvetkova, Alexandra
  13. Phasing out coal and phasing in renewables – good or bad news for arctic gas producers? By Lars Lindholt; Solveig Glomsrød
  14. Forecasting oil prices By Degiannakis, Stavros; Filis, George
  15. Algeria and the Natural Resource Curse: Oil Abundance and Economic Growth By Sidi Mohammed Chekouri; Abderrahim Chibi
  16. Oil Prices and the Global Economy By Rabah Arezki; Zoltan Jakab; Douglas Laxton; Akito Matsumoto; Armen Nurbekyan; Hou Wang; Jiaxiong Yao
  17. Oil and Civil Conflict: On and Off (Shore) By Jørgen Juel Andersen; Frode Martin Nordvik; Andrea Tesei
  18. The Impact of Natural Resource Discoveries in Latin America and the Caribbean; A Closer Look at the Case of Bolivia By Frederik G Toscani
  19. Population Dynamics and Carbon Emissions in the Arab Region: An Extended Stirpat II Model By Hala Abou-Ali; Yasmine M. Abdelfattah; John Adams
  20. Angola; 2016 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Angola By International Monetary Fund.
  21. Gender, Enterprise Ownership, and Labor Allocation in MENA: the Roles of Islam, Oil, and Government Policies By Hadi Salehi Esfahani; Roksana Bahramitash
  22. Budgetary Institutions, Fiscal Policy, and Economic Growth: the Case of Saudi Arabia By Ashraf Galal Eid
  23. Biofuels in Southern Africa: Political economy, trade, and policy environment By Taku Fundira; Giles Henley
  24. La capture et le stockage du CO2 : Adaptation au changement climatique ou Technologie de géo ingénierie ? By Xavier GALIEGUE
  25. Combining Geothermal Energy and CCS: from the Transformation to the Reconfiguration of a Socio-Technical Regime? à paraître dan s Energy procedia By Xavier GALIEGUE; Audrey LAUDE
  26. Freight Futures: The Potential Impact of Road Freight on Climate Policy By Carrara, Samuel; Longden, Thomas
  27. Does Income Growth Relocate Ecological Footprint? By Sevil Acar; Ahmet Atil Asici
  28. Computational analysis of source receptor air pollution problems By Halkos, George; Tsilika, Kyriaki
  29. Natural cycles and pollution By Stefano Bosi; David Desmarchelier
  30. Technology Treaties and Climate Change By Hans Gersbach; Marie-Catherine Riekhof
  31. Environmental regulations and competitiveness: evidence based on Chinese firm data By Ankai Xu
  32. The Effect of Globalisation on Energy Footprints: Disentangling the Links of Global Value Chains By Kaltenegger, Oliver; Löschel, Andreas; Pothen, Frank
  33. How to measure greenhouse gas emissions by fuel type for binary sustainability standards: Average or Marginal emissions? An example of fertilizer use and corn ethanol By Zhu, Xueqin; Yan, Shiyu; Smeets, Edward; van Berkum, Siemen

  1. By: Radoslaw Stefanski (University of St Andrews)
    Abstract: I develop a unique database of international fossil-fuel subsidies by examining country specific patterns in carbon emission-to-GDP ratios, known as emission-intensities. For most - but not all - countries, intensities tend to be hump-shaped with income. I construct a model of structural-transformation that generates this hump-shaped intensity and then show that deviations from this pattern must be driven by distortions to sectoral-productivity and/or fossil-fuel prices. Finally, I use the calibrated-model to measure these distortions for 170 countries for 1980-2010. This methodology reveals that fossil-fuel price-distortions are large, increasing and often hidden. Furthermore, they are major contributors to higher carbon-emissions and lower GDP.
    Keywords: Carbon Subsidies; Subsidies; Fossil Fuels; Pollution; Energy; Energy Intensity; Industrialization; Structural Transformation; Climate Change; Global Warming; Emissions
    JEL: O1 O44 O41 Q53 Q54 H23
    Date: 2017–03–06
  2. By: Suchita Srinivasan
    Abstract: The objective of this paper is to evaluate the effectiveness of different policies in facilitating the diffusion of green innovations through trade. Focusing on developing countries, this paper develop analyses the effectiveness of policies such as information, subsidies, and banning the use of the incumbent technology in encouraging the use of a clean technology. The empirical model uses a novel dataset of a sample of 72 low and middle-income countries, spanning the period 1993- 2013 to evaluate the effectiveness of these policies, and analyse the determinants of policy choice. Results suggest that domestic policies pay a pivotal role in facilitating the transfer of CFL, especially subsidies; however, simultaneous implementation of policies need not necessarily be effective. Moreover, countries learn from the experiences of other countries in deciding whether to implement a particular policy. Results also suggest a role for trade policy instruments, such as trade agreements with top exporters, to facilitate clean technology diffusion.
    Keywords: Technology Diffusion; Policy Effectiveness; International Trade.
    JEL: D78 D83 F13 H30 O33 O38 Q48
    Date: 2016–07–31
  3. By: Kalmbach, Bettina
    Abstract: In the light of irrational behaviour and decision biases leading people to commit systematic blunders, Thaler and Sunstein (2003) presented in their approach of libertarian paternalism the concept of choice architecture, to face the problem of wrong decisionmaking and resulting welfare losses by "Nudging" irrational agents. The debate about this approach focuses on its compatibility with libertarian principles, on its welfare-enhancing character and on the knowledge problem about peoples' true preferences. The goal of this paper is to show in part I that with recourse to contract theory, applied constitutional economics provides a justification of both the libertarian character and the profitability of libertarian paternalism. The use of libertarian paternalistic policies for environmental in particular to promote the acceptance and purchase of climate-friendly and sustainable LED bulbs can be justified as a selfbinding commitment induced by hierarchical preferences for sustainability. Referring to the Condorcet Jury Theorem, stating that 1) an expert jury is always more competent than a single expert and that 2) for large juries, group competence tends to infallibility with an increase in group size, libertarian paternalism for ecological goals can be defended against the knowledge problem. In part II an extension of the Condorcet Jury Theorem relaxing its restrictive assumptions of binary choice, homogeneous and independent voters, investigates its applicability and reliability for paternalistic interventions and allows a new perspective in the debate of choice framing paternalism, namely the concept of "social nudging" to promote social long-term goals. This paper provides an approach of effective choice framing by applying the CJT and implementing expert juries with the subsidiary principle. It investigates with regard to the support of sustainable "lightconsumption" how far institutions should go in shaping choice situations of consumers to promote their welfare.
    JEL: B13 D03 D60 H10 Q20
    Date: 2016
  4. By: Collins, Matthew; Dempsey, Seraphim
    Abstract: Improving the energy efficiency of the residential building stock has increasingly been promoted by policy makers as a means of reducing energy demand in the residential sector. We review the literature on some non-energy impacts of energy efficiency retrofitting measures aimed at increasing the air tightness and thermal insulation of residential properties. Specifically, we review the impact of retrofitting measures on indoor pollutants, mould growth, attenuation of radio signal and overheating. We show that without the provision of adequate ventilation, increased air tightness can result in higher levels of indoor pollutants and mould growth. Similarly, we show that in certain circumstances thermal insulation has the potential to result in increased signal attenuation and overheating. We detail the policy implications of these findings and outline policy actions that have been implemented in case study countries where these consequences are an issue.
    Date: 2017–03
  5. By: Prudence Dato (IREGE-Université Savoie Mont Blanc)
    Abstract: There are possible synergies between the decision to invest in energy efficiency measures and to adopt renewable energy, in the sense that the former reduces energy demand so that the latter can further cut future greenhouse gas (GHG) emissions, and which has great potential in the residential sector. Much work has been done in the residential sector on demand for clean energy and on investment in energy efficiency, but to our knowledge there is no specific study that investigates the interaction between the two. This paper fills a gap in the literature, and first shows theoretically that there are interactions between the two decisions depending on the threshold of the cross effect related to the environmental motivation of the consumer. Second, the paper empirically shows that the two decisions are positively interrelated and cannot be estimated independently. As a result, univariate methods that estimate the decision to adopt renewable energy and investment in energy efficiency separately may produce biased results, because there may be unobserved characteristics that determine both decisions. Third, the paper investigates household characteristics that significantly affect the interaction between the two decisions using a generalised ordered logit model. Specifically, the paper provides evidence of factors that affect the joint probability of adopting renewable energy and investing in energy efficiency, and the probability of doing nothing. This contribution can serve to define incentive policies to advance the energy transition.
    Keywords: Energy efficiency, Renewable energy, Bivariate probit, Generalised ordered logit
    JEL: Q42 Q21 C35 D11
    Date: 2017–02
  6. By: Di Cosmo, Valeria; Malaguzzi Valeri, Laura
    Abstract: We evaluate how increasing wind generation affects wholesale electricity prices, balancing payments and the cost of subsidies using the Irish Single Electricity Market (SEM) as a test system, with hourly data from 1 January 2008 to 28 August 2012. We model the spot market using a system of seemingly unrelated regressions (SUR) where the regressions are the 24 hours of the day. Wind has a negative impact on the system marginal price, with every MWh increase in wind generation (equal to about 0.2% of the average wind generation in our sample) leading to a decrease of the system marginal price of €0.018/MWh, or about 0.3% of its average value. We use time series models to analyse the balancing market and show that wind generation increases balancing payments, as do the forecast errors of demand and wind. Every MWh of additional wind generation is associated with an increase in constraint payments of €3.2, or about 0.01%. Lack of storage increases the impact of wind on balancing payments whereas the lack of interconnection has no effect. Overall, wind decreases costs through its effect on the electricity price more than it increases constraint payments, even when storage is on outage. The effect of wind remains positive after including the cost of subsidies given to wind generation.
    Keywords: Wind Generation, Constraints, Storage, Interconnection, Subsidies, Resource /Energy Economics and Policy, L94, Q42,
    Date: 2017–03–03
  7. By: Ben Jebli, Mehdi; Ben Youssef, Slim
    Abstract: We examine the dynamic relationships between per capita carbon dioxide (CO2) emissions, real gross domestic product (GDP), non-hydroelectric renewable energy (NHRE) consumption, agricultural value added (AVA), and agricultural land (AGRL) use for the case of Argentina over the period 1980-2013 by employing the autoregressive distributed lag (ARDL) bounds approach to cointegration and Granger causality tests. The Wald test confirms the existence of a long-run cointegration between variables. There are long-run bidirectional causalities between all considered variables. The short-run Granger causality suggests bidirectional causality between AVA and agricultural land use; unidirectional causalities running from AGRL to NHRE and from NHRE to AVA. Long-run elasticity estimates suggest that increasing AVA increases GDP and reduces both pollution and NHRE; increasing NHRE reduces AVA and AGRL. Thus it seems that agriculture and renewable energy are substitute activities and compete for land use. We recommend that Argentina should continue to encourage agricultural production. The substitutability between agricultural and non-hydroelectric renewable energy productions, and their competition for agricultural land use, should be at least reduced or even stopped by encouraging R&D in second-generation (or even in third-generation) biofuels production and in new renewable energy technologies more efficient in land use.
    Keywords: Autoregressive distributed lag; Granger causality; non-hydroelectric renewable energy; agricultural value added; agricultural land; Argentina.
    JEL: C32 Q15 Q42 Q54
    Date: 2017–03–13
  8. By: Pietzcker, Robert C.; Ueckerdt, Falko; Carrara, Samuel; de Boer, Harmen Sytze; Després, Jacques; Fujimori, Shinichiro; Johnson, Nils; Kitous, Alban; Scholz, Yvonne; Sullivan, Patrick; Luderer, Gunnar
    Abstract: Mitigation-Process Integrated Assessment Models (MP-IAMs) are used to analyze long-term transformation pathways of the energy system required to achieve stringent climate change mitigation targets. Due to their substantial temporal and spatial aggregation, IAMs cannot explicitly represent all detailed challenges of integrating the variable renewable energies (VRE) wind and solar in power systems, but rather rely on parameterized modeling approaches. In the ADVANCE project, six international modeling teams have developed new approaches to improve the representation of power sector dynamics and VRE integration in IAMs. In this study, we qualitatively and quantitatively evaluate the last years’ modeling progress and study the impact of VRE integration modeling on VRE deployment in IAM scenarios. For a comprehensive and transparent qualitative evaluation, we first develop a framework of 18 features of power sector dynamics and VRE integration. We then apply this framework to the newly-developed modeling approaches to derive a detailed map of strengths and limitations of the different approaches. For the quantitative evaluation, we compare the IAMs to the detailed hourly-resolution power sector model REMIX. We find that the new modeling approaches manage to represent a large number of features of the power sector, and the numerical results are in reasonable agreement with those derived from the detailed power sector model. Updating the power sector representation and the cost and resources of wind and solar substantially increased wind and solar shares across models: Under a carbon price of 30$/tCO2 in 2020 (increasing by 5% per year), the model-average cost-minimizing VRE share over the period 2050-2100 is 62% of electricity generation, 24%-points higher than with the old model version.
    Keywords: Integrated Assessment Models (IAM), Variable Renewable Energy (VRE), Wind and Solar Power, System Integration, Power Sector Model, Flexibility Options (Storage, Transmission Grid, Demand Response), Model Evaluation, Model Validation, Resource /Energy Economics and Policy, C6, C61, Q40, Q42, Q47, Q49,
    Date: 2017–03–03
  9. By: Petropoulos, G.; Willems, Bert
    Abstract: Coordinating the timing of new production facilities is one of the challenges of liberalized power sectors. It is complicated by the presence of transmission bottlenecks, oligopolistic competition and the unknown prospects of low-carbon technologies. We build a model encompassing a late and early investment stage, an existing dirty (brown) and a future clean (green) technology and a single transmission bottleneck, and compare dynamic efficiency of several market designs. Allocating network access on a short-term competitive basis distorts investment decisions, as brown firms will preempt green competitors by investing early. Dynamic efficiency is restored with long-term transmission rights that can be traded on a secondary market. We show that dynamic efficiency does not require the existence of physical rights for accessing the transmission line, but financial rights on receiving the scarcity revenues generated by the transmission line suffice.
    Keywords: network access, congestion management, renewable energy sources, power markets
    JEL: C72 D43 L13 L94
    Date: 2017–02
  10. By: Quentin Perrier (CIRED; Engie)
    Abstract: After the first oil shock, France fully engaged in the world’s largest nuclear program, ordering 36 reactors within two years. These reactors are now reaching the end of their lifetime, so a new policy must be defined: Should they be retrofitted or decommissioned? What are the prospects for nuclear afterwards? The best economic decision crucially depends on the future costs of nuclear, demand levels and CO2 price, which are all subject to significant uncertainty. To deal with these uncertainties, we apply the framework of Robust Decision Making to determine which plants should be retrofitted. We build an optimization model of investment and dispatch, calibrated for France. Then we use it to study 27 retrofit strategies for all combinations of uncertain parameters. Based on nearly 3,000 runs, our analysis reveals one robust strategy, which is to shut down from 7 to 14 of the oldest 14 reactors, and then extend the lifetime of all remaining reactors. Departing from cost-minimization strategies and from the French official scenarios, this provides a hedge against unexpected high retrofit cost, decreasing demand or low CO2 price. But we also show how this strategy remains vulnerable to a combination of these three elements, which helps understand and put numbers on the current debate. In the longer term, we show that the optimal share of nuclear in the power mix decreases. If the cost of new reactors (EPR or else) remains higher than 80 €/MWh, this optimal share drops below 40% in 2050. A combination of variable renewables, hydropower and gas becomes competitive, even if the price of CO2 reaches 200 €/tCO2.
    Keywords: Electricity, Nuclear, Investment, Uncertainty, Robust Decision Making
    JEL: Q41 Q48 C61 D81
    Date: 2017–02
  11. By: Pothen, Frank; Hübler, Michael
    Abstract: This article presents an applied general equilibrium model which combines the theoretical foundations of an Eaton-Kortum type model of international trade with the complexity of a global multi-region, multi-sector Computable General Equilibrium (CGE) model of production and consumption. The Eaton-Kortum model features endogenous trade-induced productivity gains via Ricardian specialization and takes non-tariff trade costs into account. Model regions and sectors can be disaggregated, e.g., representing technology-specific electricity generation. The models is tailored to explicitly study the German Federal State of Lower Saxony, a prime location for renewable electricity generation in Germany with ambitious climate policy goals. The calibration utilizes the structural estimation of a gravity model with constraints, while the disaggregation adapts methods used in regional science and energy economics. With these features the model goes beyond standard CGE models and provides new insights in the nexus between trade policy and climate policy. Simulations suggest that the removal of tariffs creates smaller welfare gains than a comparable reduction of non-tariff barriers to trade but also a slightly smaller increase in global CO2 emissions. Trade policy-induced productivity gains and renewable energy subsidies significantly reduce carbon leakage from the EU to the rest of the world by making the EU more CO2-efficient. With its large wind power potential, Lower Saxony is less susceptible to negative effects of climate policy than the rest of Germany.
    Keywords: international trade; regional model; climate policy; renewable energy; CGE
    JEL: C68 F10 F18 Q40
    Date: 2017–03
  12. By: Weinstein, Amanda; Partridge, Mark; Tsvetkova, Alexandra
    Abstract: Many U.S. towns reportedly boomed after new technologies in oil and gas extraction, particularly improved hydraulic fracturing, led to rapid development of shale resources. Recent research on the expected economic impact focused on the employment multipliers associated with new oil and gas jobs. Instead, our focus is the impact of oil and gas industry growth on local earnings while paying attention to the distributional effects and assessing how much income seeps out due to the peculiarities of the industry. Our estimation results suggest that oil and gas earnings multipliers are relatively modest and mostly similar to oil and gas employment multipliers, with relatively large shares of the earnings leaving the county on average. Likewise, oil and gas multipliers tend to be smaller or comparable to the estimated multipliers for equal-sized shocks in the rest of the economy, suggesting that oil and gas is not a special industry case. Given the high wages in the sector and the large royalty payments that can go to landowners, these results may be surprising.
    Keywords: shale revolution; energy boom; earnings multiplier; economic effects
    JEL: O13 Q40 R12
    Date: 2017–03–07
  13. By: Lars Lindholt; Solveig Glomsrød (Statistics Norway)
    Abstract: This paper examines to what extent downscaling of global coal based electricity generation encourages gas demand and affects regional activity in gas production, with emphasis on the arctic regions. In our reference scenario up to 2050 we take into consideration that renewables is set to increase its contribution to global electricity production over time, while coal will contribute less. We find that a policy scenario with further phasing out of coal and phasing in of renewables in line with the 2 degrees scenario for the power sector up to 2050, will lead to reduced arctic gas production compared to the reference scenario, although total worldwide electricity production doubles over the same period. However, even in a situation with less resources and higher costs in the Arctic, future investments in new reserves in the region are still profitable in our policy scenario, as total arctic gas production then is only marginally lower in 2050 than today.
    Keywords: Arctic; Coal market; Gas market; Electricity market; Equilibrium model
    JEL: Q31 Q41 Q58
    Date: 2017–03
  14. By: Degiannakis, Stavros; Filis, George
    Abstract: Accurate and economically useful oil price forecasts have gained significant importance over the last decade. The majority of the studies use information from the oil market fundamentals to generate oil price forecasts. Nevertheless, the extant literature has convincingly shown that oil prices are nowadays interconnected with the financial and commodities markets. Despite this, there is scarce evidence as to whether information from these markets could improve the forecasting accuracy of oil prices. Even more, there is limited knowledge whether high frequency data, given their rich information, could improve monthly oil prices. In this study we fill this void, employing a Mixed Data-Sampling (MIDAS) method using both oil market fundamentals and high frequency data from 15 financial and commodities assets. Our findings show that either the daily realized volatilities or daily returns of these assets significantly improve oil price forecasts relatively to the no-change forecast, as well as, relatively to the well-established models of the literature. These results hold true even when we consider tranquil and turbulent oil market conditions.
    Keywords: Oil price forecasting, Brent crude oil, intra-day data, MIDAS.
    JEL: C53 G14 G15 Q43 Q47
    Date: 2017–03–14
  15. By: Sidi Mohammed Chekouri (Faculty of Economics and Commerce, University of Tlemcen); Abderrahim Chibi
    Abstract: In this paper we examine the interaction between oil-export revenue and long-run economic growth in Algeria during the period from 1979 until 2013. Our empirical analysis shows that oil revenue has a positive effect on economic growth. This means that resource abundance in itself, as proxied by oil revenue, has been a blessing for the Algerian economy and its growth and development. Our empirical findings also suggest that there is a negative relationship between oil revenue volatility and economic growth in Algeria. This finding confirms that the source of the resource curse is the high volatility existing in oil revenues, rather than abundance of oil in itself, which is consistent with the empirical results in Esfahani et al. (2012) and Mohadees and Pesaran (2013). Therefore, this study identifies that oil abundance in Algeria has been both a blessing and a curse, this is major reason why it is important for Algeria to diversify its economy and improve the quality of its institutions in order to benefit more from their natural wealth and offset the negative volatility effects of oil revenue.
    Date: 2016–04
  16. By: Rabah Arezki; Zoltan Jakab; Douglas Laxton; Akito Matsumoto; Armen Nurbekyan; Hou Wang; Jiaxiong Yao
    Abstract: This paper presents a simple macroeconomic model of the oil market. The model incorporates features of oil supply such as depletion, endogenous oil exploration and extraction, as well as features of oil demand such as the secular increase in demand from emerging-market economies, usage efficiency, and endogenous demand responses. The model provides, inter alia, a useful analytical framework to explore the effects of: a change in world GDP growth; a change in the efficiency of oil usage; and a change in the supply of oil. Notwithstanding that shale oil production today is more responsive to prices than conventional oil, our analysis suggests that an era of prolonged low oil prices is likely to be followed by a period where oil prices overshoot their long-term upward trend.
    Keywords: Oil prices;Oil sector;Supply and demand;Oil production;Econometric models;Oil market; macroeconomic model; depletion; consumption efficiency; technology; cycle.
    Date: 2017–01–27
  17. By: Jørgen Juel Andersen (Norwegian Business School); Frode Martin Nordvik (Norwegian Business School and Centre for Applied Macro- and Petroleum Economics (CAMP)); Andrea Tesei (Queen Mary University of London, CEP (LSE) & CEPR)
    Abstract: We reconsider the relationship between oil and conflict, focusing on the location of oil resources. In a panel of 132 countries over the period 1962-2009, we show that oil windfalls increase the probability of conflict in onshore-rich countries, while they decrease this probability in offshore-rich countries. We use a simple model of conflict to illustrate how these opposite effects can be explained by a fighting capacity mechanism, whereby the government can use offshore oil income to increase its fighting capacity, while onshore oil may be looted by oppositional groups to finance a rebellion. We provide empirical evidence supporting this interpretation: we find that oil windfalls i ncrease both the number and strength of active rebel groups in onshore-rich countries, while they strengthen the government in offshore-rich ones.
    Keywords: Natural resources, Conflict
    JEL: O13 D74 Q34 Q35
    Date: 2017–01
  18. By: Frederik G Toscani
    Abstract: This paper studies the impact of natural resource extraction in Latin America and the Caribbean (LAC) from a number of angles. First, we exploit a novel dataset on the universe of giant oil and gas discoveries in the region to trace out the cyclical response of macroeconomic variables to discoveries over the short- and medium-run. Second, we use non-stationary panel data techniques to look at the long-run (trend) relationship between GDP per capita and the value of oil and gas production—our results imply that the recent fall in prices could depress GDP per capita by several percentage points. Last, we use Bolivia, which discovered huge gas reserves in the late 1990s, as a case study to apply the cross-country results and to study the impact of discoveries at the subnational level.
    Keywords: Natural resources;Bolivia;Latin America;Caribbean;Oil;Natural gas;Natural Resources, Discoveries, Economic Growth, Poverty
    Date: 2017–02–10
  19. By: Hala Abou-Ali (Cairo University); Yasmine M. Abdelfattah (The British University in Egypt); John Adams
    Abstract: Many Arab countries have been developing at a fast pace in the past 20 years and this is now seen as putting considerable pressure on the natural environment through population growth, ecosystem stress and resource extraction. The potential for climate change arising from increasing carbon dioxide emissions threatens the likelihood of a more sustainable development model being achieved in many of these countries. The paper deals with Arab countries’ population-environment nexus with respect to climate change interactions. The paper adopts the STIRPAT II model, which measures the influence of population, affluence and technology on the environment. The environmental impact is measured through carbon dioxide (CO2) emissions. The version of the model is extended in the paper to include specific elements that, a priori, can be expected to be of particular relevance to these countries. These include Governance indicators, energy consumption and energy production indices. The results supports the endogeneity of Governance as well as Arab countries need effective governments to minimize carbon emissions.
    Date: 2016–04
  20. By: International Monetary Fund.
    Abstract: The oil price shock that started in mid-2014 has substantially reduced fiscal revenue and exports, with growth coming to a halt and inflation accelerating sharply. This has brought to the forefront the need to address more forcefully vulnerabilities and dependence on oil, and to diversify the economy. The authorities have taken steps to mitigate the impact of the external shock: an 18 percent of GDP improvement in the non-oil primary fiscal balance over 2015-16, mainly through spending cuts including the removal of fuel subsidies, has been implemented; and the kwanza has been devalued against the U.S. dollar by over 40 percent since September 2014, with international reserves being used to smooth the depreciation. However, the exchange rate has been re-pegged since April 2016 leading to an appreciation of the kwanza in real terms, and further policy actions are needed to continue adjusting the economy to the ‘new normal’ in the oil market and to return growth to a level consistent with poverty reduction.
    Keywords: Article IV consultation reports;Economic conditions;Economic growth;Oil prices;Oil revenues;Fiscal policy;Current account balances;Monetary policy;Banking sector;Bank supervision;Economic indicators;Debt sustainability analysis;Staff Reports;Press releases;Angola;
    Date: 2017–02–06
  21. By: Hadi Salehi Esfahani (University of Illinois at Urbana-Champaign); Roksana Bahramitash
    Abstract: We document a relatively low share of women among small and medium enterprise (SME) owners in the Middle East and North Africa (MENA). This phenomenon appears to be related to the low female labor force participation (LFP) rates commonly observed in the region. However, the connection is not straightforward because the rates of large firm ownership by women in MENA are comparable and sometimes higher than some other world regions. To take a step toward understanding this puzzling pattern, we start with a framework that takes account of economy-wide interactions between firm ownership, employment, and outside options. We then use a unique cross-country micro dataset and a two-level model to separate out the role of individual characteristics from the influence of country conditions. Our first-level micro analysis suggests that the young age structure of MENA population helps explain part of MENA women’s low participation and low SME formation. At the second level, we find that the prevalence of conservative religious culture, particularly the cultural and legal rule that husbands are financially responsible for their families’ expenses, rather than sharing responsibility jointly with their wives, may be a key factor that helps explain the pattern of labor allocation. In addition, lack of government effectiveness, the relative closed-ness of MENA economies, and the gap between educational attainments of women and men in the past have also contributed to women’s low LFP and SME ownership. These are all policy areas in which governments can make a difference. We also explore the role of a number of other factors and show their roles in labor allocation, though they do not help explain the current weaknesses in patterns of participation and employment in the region. One very notable finding among these is that, in contrast to the results of many other studies, resource rents don’t seem to be responsible for low LFP and small firm formation by MENA women. Quite to the contrary, they seem to have helped raise both of these outcomes in the oil-rich countries of the region. We attribute this sharp difference in findings to the closer cross-country comparability of our data and our micro-based approach.
    Date: 2015–09
  22. By: Ashraf Galal Eid (Qatar University)
    Abstract: This paper investigates budgetary and fiscal institutions in Saudi Arabia during the period 1969-2014. In addition, the study examines the impact of government expenditure on non-oil private GDP per capita using Autoregressive Distributive Lag (ARDL) approach. The study finds that although the Saudi government uses a conservative oil price when estimating oil revenues, government expenditure in general, and capital expenditure in specific, is still procyclical. Also, the budget institutions index developed by Dabla-Norris et al (2010) shows that because of the limited power of the Saudi Consultative Assembly in the budgetary cycle, Saudi Arabia scored 0.42 out of 1 in the overall stage Index. On the other hand, the estimation of the long run relationship between government expenditure and GDP per capita illustrates that lagged real government consumption expenditure has a positive and significant impact on real non-oil private GDP per capita while its contemporaneous effect is found to be negative.
    Date: 2015–11
  23. By: Taku Fundira; Giles Henley
    Abstract: Expansion of biofuels production and consumption at the regional and national levels relies on both supportive energy prices and policy interventions. Despite enthusiasm for policy interventions to stimulate biofuel production in Southern African countries in the mid-2000s, the years since have seen a decline in interest due to concerns over environmental and social externalities, and the costs associated with subsidies. This paper reviews the state of the policy, regulation, and narratives around opportunities and challenges for biofuels in each country to assess broader challenges associated with expanding biofuels production and consumption at a regional level.
    Date: 2017
  24. By: Xavier GALIEGUE
    Date: 2017
  25. By: Xavier GALIEGUE; Audrey LAUDE
    Date: 2017
  26. By: Carrara, Samuel; Longden, Thomas
    Abstract: This paper describes changes to the modelling of the transport sector in the WITCH (World Induced Technical Change Hybrid) model to incorporate road freight and account for the intensity of freight with respect to GDP. Modelling freight demand based on the intensity of freight with respect to GDP allows for a focus on the importance of road freight with respect to the cost-effective achievement of climate policy targets. These climate policy targets are explored using different GDP pathways between 2005 and 2100, which are sourced from the Shared Socioeconomic Pathways (SSPs) database. Our modelling shows that the decarbonisation of the freight sector tends to occur in the second part of the century and the sector decarbonises by a lower extent than the rest of the economy. Decarbonising road freight on a global scale remains a challenge even when notable progress in biofuels and electric vehicles has been accounted for.
    Keywords: Road Freight, Transport, Climate Mitigation, Integrated Assessment Models, Environmental Economics and Policy, Q54, Q58, R41,
    Date: 2017–03–03
  27. By: Sevil Acar (Istanbul Kemerburgaz University); Ahmet Atil Asici
    Abstract: The aim of this paper is to investigate whether countries tend to relocate their ecological footprint as they grow richer. The analysis is carried out for a cross-section of 105 countries by employing the production and import components of the Ecological Footprint data of the Global Footprint Network belonging to the year 2006. With few exceptions, the existing Environmental Kuznets Curve (EKC) literature concentrates only on the income-environmental degradation nexus in the home country and neglects the negative consequences of home consumption spilled out. Controlling for effects of openness to trade, biological capacity, population density, industry share and energy per capita as well as stringency of environmental regulation and environmental regulation enforcement, we detect an EKC-type relationship between per capita income and footprint of domestic production as well as that of import, although the income turning points for import footprint are found to be out of the income range of the sample. Moreover, we find that domestic environmental regulations do not influence country decisions to import environmentally harmful products from abroad; but they do affect domestic production characteristics. Hence, our findings indicate the importance of environmental regulations and provide support for the “Pollution Haven” and “Race-to-the-Bottom” hypotheses.
    Date: 2015–09
  28. By: Halkos, George; Tsilika, Kyriaki
    Abstract: This study introduces a method of graph computing for Environmental Economics. Different visualization modules are used to reproduce source-receptor air pollution schemes and identify their structure. Data resources are emissions-depositions tables, available online from the European Monitoring and Evaluation Program (EMEP) of the Long-Range Transmission of Air Pollutants in Europe. In network models of pollutants exchange, we quantify the responsibility of polluters by exploring graph measures and metrics. In a second step, we depict the size of the responsibility of EU countries. We create pollution schemes for ranking the blame for the change in pollutants in the extended EMEP area. Our approach considers both the activity and the amount of pollution for each polluter. To go a step further in qualitative analysis of pollution features, we cluster countries in communities, bonded with strong polluting-based relationships. The network framework and pollution pattern visualization in tabular representations is integrated in Mathematica computer software.
    Keywords: Computational data analysis; graph modeling; visual analytics; source-receptor air pollution; polluters’ responsibility.
    JEL: C63 C88 P28 Q51 Q53 Q58
    Date: 2017
  29. By: Stefano Bosi (EPEE, University of Evry); David Desmarchelier (BETA, University of Lorraine)
    Abstract: In this paper, we study a competitive Ramsey model where a pollution externality, coming from production, impairs a renewable resource which affects the consumption demand. A proportional tax, levied on the production level, is introduced to finance public depollution expenditures. In the long run, two steady states may coexist, the one with a low resource level, the other with a high level. Interestingly, a higher green tax rate lowers the resource level of the low steady state, giving rise to a Green Paradox (Sinn, 2008). Moreover, the green tax may be welfare-improving at the high steady state but never at the low one. Therefore, at the latter, it is optimal to reduce the green tax rate as much as possible. Conversely, the optimal tax rate is positive when the economy experiences the high steady state. This rate is unique. In the short run, the two steady states may collide and disappear through a saddle-node bifurcation. Since consumption and natural resources are substitutable goods, a limit cycle may arise around the high stationary state. To the contrary, this kind of cycles never occur around the low steady state whatever the resource effect on consumption demand. Finally, focusing on the class of bifurcations of codimension two, we find a Bogdanov-Takens bifurcation.
    Keywords: Logistic dynamics, Ramsey model, Saddle-node bifurcation, Hopf bifurcation, Bogdanov-Takens bifurcation
    JEL: E32 O44
    Date: 2017–02
  30. By: Hans Gersbach (ETH Zurich, Switzerland); Marie-Catherine Riekhof (ETH Zurich, Switzerland)
    Abstract: We introduce an international technology treaty that couples the funding of research for a more advanced abatement technology with an international emissions permit market. Under the treaty, each country decides on the amount of permits for its domestic industries, but a fraction of these permits is auctioned on the permit market, and the revenues are used to scale up license revenues for the innovators of abatement technologies. We discuss the conditions under which such a technology treaty can slow down climate change through technological innovations and whether it creates complementary incentives for countries to tighten permit issuance. Finally, we discuss how participation in Tech Treaties can be fostered and how such treaties might be implemented.
    Keywords: Climate change mitigation, Technology promotion, International permit markets, International treaty, Externalities
    JEL: H23 Q54 O31
    Date: 2017–03
  31. By: Ankai Xu
    Abstract: This paper provides empirical evidence in support of the Porter hypothesis that tighter environmental regulations can increase productivity under certain circumstances. It builds on a theoretical model in which environmental regulations induce firms to adopt more efficient technologies. Using Chinese firm-level data covering a ten-year period, the empirical study examines the effects of two specific policy instruments - the pollution levy and regulatory standards - on firm productivity. It finds a bell-shaped relationship between pollution levies and the total factor productivity of firms, indicating that an increase in the pollution levy rate can be associated with higher productivity. In addition, the study investigates the effect of pollution emission standards on firm productivity and identifes an initial negative effect which diminishes after a period of two to three years.
    Keywords: Environmental regulations, Innovation, Productivity, Porter hypothesis, China.
    JEL: D2 F18 Q52 Q55 Q56
    Date: 2016–12–15
  32. By: Kaltenegger, Oliver; Löschel, Andreas; Pothen, Frank
    Abstract: This paper investigates the impact of global value chains on energy footprints. Energy footprints are consumption-based indicators which record the energy used to produce a country's final demand. In order to disentangle key characteristics of global value chains and their effects on the global energy footprint, we employ structural decomposition analyses (SDA). Furthermore, the analysis combines a retrospective with a prospective SDA approach. After an analysis of the global energy footprint for the period between 1995 and 2009, we discuss three scenarios of international integration and their implications for energy footprints for the period from 2009 to 2030. Our results show that the global energy footprint has increased by 29.4 % from 1995 to 2009, and the scenarios indicate that it will increase by another 23.5 % until 2030. Economic activity is the most important driver for the increase in energy footprints. Rising final demand alone would have increased the global energy footprint by 47.0 % between 1995 and 2009. The composition of countries from where consumption and investment goods come adds another 12.6 %. Sectoral energy intensity reductions are the most important decelerator of energy use (-27.8 %). There is a substantial contribution of changing global value chains on the rise in the global energy footprint (7.5 %): Stronger backward linkages in global value chains increased the global energy footprint by 5.5 % between 1995 and 2009. Changes in the regional composition of intermediate inputs raised it by another 1.8 %. The shift of the world economy towards East Asia alone would have increased the global energy footprint by 3.0 %. The sectoral composition of global value chains, on the other hand, had a negligible effect on energy footprints.
    Keywords: Energy footprints; Global value chains; Structural decomposition analysis; Logarithmic mean Divisia index; Multi-regional input-output analysis; Environmental-economic accounting
    JEL: C43 C67 C82 F18 Q43
    Date: 2017–03
  33. By: Zhu, Xueqin (Environmental Economics and Natural Resources Group, Wageningen University); Yan, Shiyu (Dept. of Business and Management Science, Norwegian School of Economics); Smeets, Edward (Wageningen Economic Research Group, Wageningen University); van Berkum, Siemen (Wageningen Economic Research Group, Wageningen University)
    Abstract: This study proposed a modelling framework which addresses various issues such as decreasing marginal yield of corn with respect to fertilizer use in biofuel production and the resulting greenhouse gas emissions. Particularly, the framework considered exogenous changes including oil price development and biofuel policy through market interactions of different inputs and outputs in biofuel production. We applied the modelling framework numerically in an example of corn ethanol production in the United States to illustrate how the economics of fertilizer use could impact the GHG emissions based on both average and marginal emissions. The results show that higher oil prices increase the prices of gasoline, natural gas, ethanol, and corn, which stimulates corn-based ethanol production and increases corn yields by encouraging profit-maximizing farmers to increase their application rate of nitrogen fertilizers slightly. The effect is that, on average, GHG emissions per unit of produced corn ethanol remain almost constant if oil price increases from 60 to 120 $/barrel. However, the marginal emissions per additional unit of ethanol production increase by 2.2% or10%, depending on whether the Volumetric Ethanol Excise Tax Credit is implemented or not. More important is that the marginal emissions of corn ethanol are much higher than those of conventional gasoline. Although on average there are GHG emission savings of corn ethanol compared to conventional gasoline, the savings are negative when based on the marginal emissions of corn ethanol. An interesting implication is that the effectiveness of biofuel policies aimed at reducing GHG emissions might be questionable.
    Keywords: Oil price; ethanol; corn; nitrogen fertilizer; greenhouse gas emissions; ethanol tax credit
    JEL: Q16 Q42 Q43 Q48
    Date: 2017–02–28

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