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on Energy Economics |
| By: | Arlan Brucal; Michael Roberts |
| Abstract: | How do energy efficiency standards affect consumer welfare? To answer this question the authors look at how these standards have affected the price and quality of major appliances – including washing machines, fridges, room air conditioners and clothes dryers – sold in the US between 2001 and 2011. Using a novel index that uses the same-model price changes of appliances to disentangle price changes from perceived quality changes, they derive welfare effects as functions of changes in price and quality as energy-efficiency standards became more stringent. Contrary to common belief, the authors find an indication that prices declined while quality and consumer welfare increased, especially when more stringent energy efficiency standards were enforced. They also find that much of the price decline is attributed to standards-induced innovation and not from competition between manufacturers. The results and technique generate methodological insights in accounting for quality adjustments in price indexing. |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp266&r=ene |
| By: | Quande Qin; Xin Li; Li Li; Wei Zhen; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology) |
| Abstract: | Improving energy efficiency has been recognized as the most effective way to reduce the greenhouse effect and achieve sustainable development. From the perspective of air emissions, this paper adopts data envelopment analysis approach to evaluate the energy efficiency in China's coastal areas over the period of 2000-2012. Carbon dioxide, sulfur dioxide and nitrogen oxide are treated as undesirable outputs of energy consumptions. The proposed global Epsilon-based measure is used to estimate the static energy efficiency with an annual cross-section of data. The weights of the three undesirable outputs are determined according to their treatment costs. A global Malmquist-Luenberger productivity index based on directional distance function is employed to dynamically evaluate the energy efficiency. The results indicate the following in China's coastal areas: 1) the level of economic development is positively related to energy efficiency scores; 2) energy efficiency scores decrease when considering undesirable outputs except Beijing and Hainan; 3) the Circum-Bohai Sea Economic Region greatly improved energy efficiency and has great potential of air emission; 4) the annual growth rate of Malmquist-Luenberger productivity index change is overestimated; 5) energy efficiency improvement is mainly driven by technological improvement, and scale efficiency and management level are the main obstacles. |
| Keywords: | Energy efficiency; Data envelopment analysis; China's Coastal areas; Air emissions |
| JEL: | Q54 Q40 |
| Date: | 2017–01–01 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:98&r=ene |
| By: | Collins, Matthew; Curtis, John |
| Abstract: | Improving the energy efficiency of residential dwellings is seen by policy-makers as an important contributor to the mitigation of climate change, a topic of ever increasing interest. Many countries have put in place policies aimed at stimulating the adoption of energy efficiency retrofit measures in private households. These policies generally focus on reducing costs to home owners, which in turn increases the net benefit of retrofitting, making a retrofit more attractive. We examine the drivers of retrofitting from an information point of view, looking mainly at how expected gross benefits can be increased as a means of inducing retrofitting activities. Using survey data, we examine how perceived effects of retrofitting impact on the likelihood that a home owner possesses an expressed interest in engaging in certain retrofit measures. We find the existence of information asymmetries in many cases between those who have and have not engaged in retrofit measures, while asymmetries are present in almost all instances between those who possess an expressed interest in retrofitting and those who do not. The most effective information that can be used to bridge this asymmetry and could lead to a greater interest in retrofitting among home owners are centred around energy costs and comfort. Perceived impacts of retrofitting on occupant health, property value and mould growth are not found to be significant drivers of interest in retrofitting. |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp558&r=ene |
| By: | Matthias Fripp (University of Hawaii Economic Research Organization (UHERO)) |
| Abstract: | This report outlines the effect that electric vehicles could have on the cost of transport and electricity production in the context of a 100% renewable power system (RPS). Results presented here were produced using the SWITCH power system planning model, configured to choose a least-cost plan to achieve 100% renewable power on Oahu by 2045, subject to a 5% limit on biofuel usage. |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:hae:wpaper:2017-3&r=ene |
| By: | Giacomo Marangoni (FEEM, CMCC and Politecnico di Milano); Gauthier De Maere (FEEM); Valentina Bosetti (FEEM, CMCC and Bocconi University) |
| Abstract: | The availability of technology plays a major role in the feasibility and costs of climate policy. Nonetheless, technological change is highly uncertain and capital intensive, requiring risky efforts in research and development of clean energy technologies. In this paper, we introduce a two-track method that makes it possible to maintain the rich set of information produced by climate-economy models while introducing the dimension of uncertainty in innovation ef- forts, without succumbing to computation complexity. In particular, we solve the problem of an optimal R&D portfolio by employing Approximate Dynamic Programming, through multiple runs of an integrated assessment model (IAM) for the purpose of computing the value function, and expert elicitation data to quantify the relevant uncertainties. We exemplify the methodology with the problem of evaluating optimal near-term innovation investment portfolios in four key clean energy technologies (solar, biofuels, bioelectricity and personal electric vehicle batteries), taking into account the uncertainty surrounding the effectiveness of innovation to improve the performance of these technologies. We employ an IAM (WITCH) which has a fairly rich description of the energy technologies and experts’ beliefs on future costs for the above-mentioned technologies. Focusing on Europe and its short-term climate policy commitments, we find that batteries in personal transportation dominate the optimal public R&D portfolio. The resulting ranking across technologies is robust to changes in risk-aversion, R&D budget limitation and assump- tions on crowding out of other investments. These results suggest an important upscaling of R&D efforts compared to the recent past. |
| Keywords: | Energy, Innovation, Technological Change, Uncertainty, Climate Policy |
| JEL: | O30 O33 Q40 Q41 Q50 Q55 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2017.16&r=ene |
| By: | Moon , Jin-Young (Korea Institute for International Economic Policy); Song , Jihei (Korea Institute for International Economic Policy); Lee , Seojin (Korea Institute for International Economic Policy) |
| Abstract: | Korean Abstract: 2015년 9월 개최된 유엔 지속가능정상회의는 재생에너지 활용 확대를 주요 목표로 설정하였으며, 국제사회는 2020년 신기후체제 출범을 앞두고 온실가스 감축목표 이행을 위한 재생에너지 보급을 확대할 것으로 예상된다. 특히 개도국은 경제발전을 가속화하는 동시에 온실가스를 감축하기 위해 재생에너지의 활용을 크게 확대할 예정이다. 재생에너지에 대한 지속적이고 활발한 투자와 재원확보를 위해서는 민간의 참여가 필수적이며 우리나라는 민간기업과 개발금융기관, 국제기구, 공공기관 등과의 다양한 파트너십을 적극적으로 모색하여 효과적인 개도국 재생에너지 사업 추진전략을 수립할 필요가 있다. 본 연구는 우리나라 중점협력국에서의 재생에너지 사업을 확대하기 위한 재원조달 지원방안에 초점을 둔다. 우리나라의 다수 중점협력국이 재생에너지 개발에 적합한 환경조건을 가지고 있음에 주목하고 개도국의 재생에너지 사업에 민간의 참여를 확대하기 위해 제공된 국제 지원 사례를 유형별로 검토한 후, 우리나라의 추진사례를 비교 분석하였다. 분석 결과를 토대로 향후 중점협력국을 대상으로 우리나라의 재생에너지 투자 확대 및 재원조달 지원방안을 제안하였다. 지난 5년간 세계 재생에너지 투자는 점차 선진국에서 개도국으로 이동하고 있다. 이는 에너지 투자의 주요 동인이 되는 현지 에너지 수요와 제도적 기반환경이 중국과 인도, 남아공, 브라질을 중심으로 하는 개도국에서 보다 우호적으로 조성되고 있기 때문이다. 이들 국가는 한편 지난 5년 동안 재생에너지 원자재 R&D 및 정부의 제도적 지원을 통해 재생에너지 시장을 크게 확대했다는 공통점을 갖는다. IRENA의 태양에너지 및 풍력, 지열에너지 잠재력 평가에 따르면 캄보디아와 방글라데시, 파라과이를 제외한 우리나라의 중점협력국 대부분이 두 개 이상의 재생에너지원에 상당한 잠재력을 가진다. 그러나 우리나라 중점협력국 다수는 높은 개발 잠재력에도 불구하고 제도, 시장 성숙도, 인식도 등의 기반환경 부재로 인해 충분한 개발을 이루지 못하고 있다. 베트남, 인도네시아 등의 중점협력국은 현재 법규제, 시장, 인식도 등의 기반환경을 개선하는 과정에 있으며, 따라서 장기적인 시각에서 볼 때 이들 국가에 대해 재생에너지의 활용과 개발 및 투자가 크게 확대될 것으로 예상된다. (후략). English Abstract: At the United Nations Sustainable Development Summit 2015, the Member States unanimously adopted seventeen Sustainable Development Goals. Among them, SDG 7 calls for substantial increase of renewable energy use. In addition, under the UN Framework Convention for Climate Change, individual countries - developed and developing alike – will work to further encourage and disseminate the use of renewable energy in order to meet their commitment on greenhouse gas reduction. Especially for developing countries, renewable energy development will become a key for sustainable growth for they now face a dual challenge of pursuing economic development while reducing greenhouse gas emission. Since participation from various stakeholder is imperative for sustained yet sizable investment, Korea must seek a proactive strategy in pursuing renewable energy projects in developing countries. In doing so, collaborating with various partners, especially the private sector, is extremely important. This study focuses on mobilizing private sector resource for renewable energy projects in Korea’s priority partner countries. While a number of Korea’s priority partners possess considerable potential in renewable energy development, the lack of institutions, market and awareness have hindered development. The study highlights the fact that renewable energy investment is shifting towards the global South and that the main cause of such transition is the favorable regulatory and institutional environment along with significant demand. In several emerging economies with the highest amount of renewable investment - namely, China, India, South Africa and Brazil - such transition was coupled with governments’ support for technology R&D and subsidies. On the other hand, Vietnam and Indonesia are in the process of actively developing a more conducive environment. That is, laws and regulations, market readiness and awareness regarding renewable energy are being developed. Therefore, we expect rapid progress in relevant investment, development and deployment in these countries in terms of renewable energy in the near future. (The rest omitted). |
| Keywords: | Economic Cooperation; Energy Industry; Renewable Energy; ODA; International Cooperation; Sustainable Development |
| Date: | 2015–12–30 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepre:2015_012&r=ene |
| By: | Renaud Coulomb (University of Melbourne); Yanos Zylberberg (Bristol University) |
| Keywords: | Hedonic prices, housing markets, risk perception, nuclear power. |
| JEL: | D80 Q51 Q53 R21 R23 R31 |
| Date: | 2016–03 |
| URL: | http://d.repec.org/n?u=RePEc:mlb:wpaper:2020&r=ene |
| By: | Quentin Perrier (CIRED and ENGIE) |
| Abstract: | Following the first oil crisis, France launched the world’s largest ever nuclear energy program, commissioning 58 new reactors. These reactors are now reaching 40 years of age, the end of their technological lifetime. This places France at an energy policy crossroads: should the reactors be retrofitted or should they be decommissioned? The cost-optimal decision depends on several factors going forward, in particular the expected costs of nuclear energy production, electricity demand levels and carbon prices, all of which are subject to significant uncertainty. To deal with these uncertainties, we apply the Robust Decision Making framework to determine which reactors should be retrofitted. We build an investment and dispatch optimization model, calibrated for France. Then we use it to study 27 retrofit strategies for all combinations of uncertain parameters, which amounts to nearly 3,000 runs. Our analysis produces two robust strategies, which involve shutting down between 7 and 14 of the 14 oldest reactors, while extending the lifetime of all remaining reactors. These strategies provide a hedge against the risks of unexpected increases in retrofit costs, low demand and low carbon price. Our robust strategies differ from the official French government scenarios on the timing and number of reactors suggested to be decommissioned. They provide a timely contribution to the current debate on the extension of lifetime of nuclear plants in France. |
| Keywords: | Power System, Nuclear Power, Uncertainty, Investment Optimization, Robust Decision Making |
| JEL: | D81 O13 Q40 Q48 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2017.18&r=ene |
| By: | Ke Wang; Jieming Zhang; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology) |
| Abstract: | The trend toward a more fiercely competitive and strictly environmentally regulated electricity market in several countries, including China has led to efforts by both industry and government to develop advanced performance evaluation models that adapt to new evaluation requirements. Traditional operational and environmental efficiency measures do not fully consider the influence of market competition and environmental regulations and, thus, are not sufficient for the thermal power industry to evaluate its operational performance with respect to specific marketing goals (operational effectiveness) and its environmental performance with respect to specific emissions reduction targets (environmental effectiveness). As a complement to an operational efficiency measure, an operational effectiveness measure not only reflects the capacity of an electricity production system to increase its electricity generation through the improvement of operational efficiency, but it also reflects the system¡¯s capability to adjust its electricity generation activities to match electricity demand. In addition, as a complement to an environmental efficiency measure, an environmental effectiveness measure not only reflects the capacity of an electricity production system to decrease its pollutant emissions through the improvement of environmental efficiency, but it also reflects the system¡¯s capability to adjust its emissions abatement activities to fulfill environmental regulations. Furthermore, an environmental effectiveness measure helps the government regulator to verify the rationality of its emissions reduction targets assigned to the thermal power industry. Several newly developed effectiveness measurements based on data envelopment analysis (DEA) were utilized in this study to evaluate the operational and environmental performance of the thermal power industry in China during 2006-2013. Both efficiency and effectiveness were evaluated from the three perspectives of operational, environmental, and joint adjustments to each electricity production system. The operational and environmental performance changes over time were also captured through an effectiveness measure based on the global Malmquist productivity index. Our empirical results indicated that the performance of China¡¯s thermal power industry experienced significant progress during the study period and that policies regarding the development and regulation of the thermal power industry yielded the expected effects. However, the emissions reduction targets assigned to China¡¯s thermal power industry are loose and conservative. |
| Keywords: | Efficiency; Environmental effectiveness; Joint performance; Operational effectiveness |
| JEL: | Q54 Q40 |
| Date: | 2017–01–03 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:100&r=ene |
| By: | Duncan Chaplin; Arif Mamun; Ali Protik; John Schurrer; Divya Vohra; Kristine Bos; Hannah Burak; Laura Meyer; Anca Dumitrescu; Christopher Ksoll; Thomas Cook |
| Abstract: | The Millennium Challenge Corporation’s energy-sector project was designed to promote economic growth and curb poverty in Tanzania. Mathematica conducted an evaluation of two project components: impacts of building new lines to the electricity grid and outcomes from offering low-cost-connections to households in a subset of communities. |
| Keywords: | Tanzania, Africa, electricity, energy, rigorous evaluation, Millennium Challenge Corporation, MCC |
| JEL: | F Z |
| URL: | http://d.repec.org/n?u=RePEc:mpr:mprres:144768f69008442e96369195ed29da85&r=ene |
| By: | Florian Ziel; Rick Steinert |
| Abstract: | The liberalization of electricity markets and the development of renewable energy sources has led to new challenges for decision makers. These challenges are accompanied by an increasing uncertainty about future electricity price movements. The increasing amount of papers, which aim to model and predict electricity prices for a short period of time provided new opportunities for market participants. However, the electricity price literature seem to be very scarce on the issue of medium- to long-term price forecasting, which is mandatory for investment and political decisions. Our paper closes this gap by introducing a new approach to simulate electricity prices with hourly resolution for several months up to three years. Considering the uncertainty of future events we are able to provide probabilistic forecasts which are able to detect probabilities for price spikes even in the long-run. As market we decided to use the EPEX day-ahead electricity market for Germany and Austria. Our model extends the X-Model which mainly utilizes the sale and purchase curve for electricity day-ahead auctions. By applying our procedure we are able to give probabilities for the due to the EEG practical relevant event of six consecutive hours of negative prices. We find that using the supply and demand curve based model in the long-run yields realistic patterns for the time series of electricity prices and leads to promising results considering common error measures. |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1703.10806&r=ene |
| By: | Kyle, Jordan |
| Abstract: | There is an urgent need to phase out global petroleum subsidies, due to the severe strain they impose on government expenditures and on the environment. However, reform efforts are often stymied by popular resistance to subsidy reform. This article examines the role played by local governments in shaping resistance to reforming fiscally and environmentally disastrous fuel subsidies. Shifting from universalaccess social programs, such as fuel subsidies, to targeted programs requires vesting authority with local politicians and bureaucrats, whom the state relies on to identify poor households and to deliver benefits. Where local governments are corrupt, citizens find promises to replace fuel subsidies with targeted spending less credible, and resistance to reform is higher. Using household survey data from Indonesia, this paper finds that corruption in the implementation of targeted transfer programs increases resistance to fuel subsidy reform among the poor citizens who consume the least fuel and who stand to benefit the most from targeted programs. Matching methods are employed to reduce endogeneity concerns. The findings suggest that improving capacity within subnational governments to deliver social programs is important in developing public support for reform. |
| Keywords: | INDONESIA; SOUTH EAST ASIA; SOUTHEAST ASIA; ASIA, petroleum; subsidies; public expenditure; fuels; environment; environmental protection; households; surveys; support measures; reforms; delinquent behavior, fuel subsidies; corruption; service delivery, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1620&r=ene |
| By: | Matteo Gardini; Marco Diana |
| Abstract: | The article describes the algorithm used to define the electricity price in day-ahead and itraday energy markets in Italy. Details of Matlab implementation of one of its simplified versions, capable of producing good results in a extremely short time, are then provided and numerical results are discussed. |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1703.09782&r=ene |
| By: | Cunningham, Chris (Federal Reserve Bank of Atlanta); Gerardi, Kristopher S. (Federal Reserve Bank of Atlanta); Shen, Yannan (Clemson University) |
| Abstract: | This paper finds that increased hydraulic fracturing, or "fracking," along the Marcellus Formation in Pennsylvania had a significant, negative effect on mortgage credit risk. Controlling for potential endogeneity bias by utilizing the underlying geologic properties of the land as instrumental variables for fracking activity, we find that mortgages originated before the 2007 boom in shale gas, were, post-boom, significantly less likely to default in areas with greater drilling activity. The weight of evidence suggests that the greatest benefit from fracking came from strengthening the labor market, consistent with the double trigger hypothesis of mortgage default. The results also suggest that increased fracking activity raised house prices at the county level. |
| Keywords: | mortgage default; hydraulic fracking; house prices; shale gas |
| JEL: | G21 Q51 R11 |
| Date: | 2017–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedawp:2017-04&r=ene |
| By: | Gasmi, Farid; Laourari, Imène |
| Abstract: | Algeria is strongly dependent on oil exports revenues to fuel its economy and following the 1986 oil counter-shock this country has experienced a persistent decline of its manufacturing sector. Although it has benefited from high oil prices over the last decades and implemented a myriad of economic reforms, Algeria has failed to develop its manufacturing sector and diversify its economy. One of the main mechanisms through which fluctuations in oil prices can constitute an impediment to the development of the manufacturing sector, and hence to long-term growth, in an economy that heavily relies on a natural resource exports is referred to in the literature as the Dutch disease. This paper aims to test whether or not Algeria’s economy has suffered from the main symptoms of this syndrome by analyzing data covering more than half-a-century. More specifically, we use annual data from 1960 to 2016 and investigate two important implications of this phenomenon that occur following an oil boom, namely, the spending effect and the resource movement effect. We perform some simple tests of these signs of the Dutch disease using a set of regressions while controlling for some other factors that could have led to similar economic symptoms. The results do not allow us to unambiguously claim that the Algerian economy has suffered from the Dutch disease over the period under study. |
| Keywords: | Algeria, Oil revenues, Manufacturing sector, Dutch disease, Real exchange rate, Economic growth, Time series. |
| JEL: | C32 O13 O14 O55 Q32 Q43 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:31559&r=ene |
| By: | Olivier Rousse (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes); Benoît Sévi (LEMNA - Laboratoire d'économie et de management de Nantes Atlantique - UN - Université de Nantes) |
| Abstract: | The weekly release of the U.S. inventory level by the DOE-EIA is known as the market mover in the U.S. oil futures market and to be a significant piece of information for all world oil markets in which the WTI is a price benchmark. We uncover suspicious trading patterns in the WTI futures markets in days when the inventory level is released that are higher than economists’ forecasts: there are significantly more orders initiated by buyers in the two hours preceding the official release of the inventory level. We also show a clear drop in the average price of -0.25% ahead of the news release. This finding is consistent with informed trading. We also provide evidence of an asymmetric response of the oil price to the news, and highlight an over-reaction that is partly compensated in the hours following the announcement. |
| Keywords: | insider trading,WTI crude oil futures,intraday data,inventory release |
| Date: | 2017–02–07 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01460186&r=ene |
| By: | MAGNUS ABENG |
| Abstract: | This study focus on the impact of oil price fluctuation on the sector level activities of the stock market in Nigeria. Five industry sectors were examined based on availability of data while included macroeconomic factors were selected guided by economic theory and existing literature. Study results suggest that changes in oil prices significantly affect stock returns of all the sectors, except food beverages and tobacco. Consistent with the findings of McSweeney and Worthington (2007) and Agusman and Deriantino (2008) for the Australian and Indonesian stock markets, respectively, the parameter estimates of market returns for the banking, insurance, food beverages and tobacco, oil and gas and industrial sectors significantly exceeded unity, suggesting a high risk exposure of these sectors vis-à-vis market returns. The food beverages and tobacco and oil and gas sectors exhibit significantly negative sensitivity to exchange rate risk, indicating the debilitating effect of the depreciation of the domestic currency on the returns of these sectors. The implications are enormous. First, the negative response of all sectors to exchange rate movement calls for prudent management of reserves plus informed and timely intervention in the market by the monetary authority to keep the rate stable. Secondly, the insensitivity of the food beverages and tobacco to oil price movement is an indication of the inefficiency instituted by the subsidy on petroleum products that insulate domestic consumption from market fundamentals. Subsidies distort the efficient allocation of resources by the market and in the case of Nigeria abet and aid corruption. Industry studies are very limited for developing countries. most studies are aggregate in analysis and concentrates on advanced economies. Nigeria has a peculiar nature of being crude oil export as well as a importer of refined petroleum products. This study focused on exploring the implications of oil price change on decomposed stock returns in the Nigerian stock exchange. Specifically, the study intend to determine whether oil price uncertainty increases investment risks in industry sectors; determine the magnitude and direction of the impact; and ascertain the existence of spillovers among the selected industry sectors in the market. Structural vector autoregression (SVAR)technique 1. OIL PRICE UNCERTAINTY AFFECT INDUSTRY SECTOR PERFORMANCE 2. MONETARY POLICY IS EQUALLY INFLUENCED 3. MARKET RISK IS DETERMINED |
| Keywords: | Nigeria, Agent-based modeling, Agent-based modeling |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:009007:9285&r=ene |
| By: | Nachtigall, Daniel |
| Abstract: | This paper analyzes the impact of declining extraction costs of shale oil producers on the choice of the policy instrument of a climate coalition in the presence of a monopolistic oil supplier such as OPEC. Shale oil producers' extraction costs represent an upper bound for the oil price OPEC can charge. Declining extraction costs ultimately limit OPEC's price setting behavior and thus impacts the optimal climate policy of the climate coalition. A pure cap-and-trade system is weakly welfare-inferior relative to a carbon tax for the climate coalition. While high extraction costs allow OPEC to appropriate the whole climate rent in case of quantity regulation, declining extraction costs imply OPEC to capture only a part of the climate rent. A carbon tax always generates positive revenue and thus is welfare-superior in general. However, low extraction costs prevent OPEC from exerting its market power, leading the climate coalition to implement the Pigouvian tax in the first place. Both market-based instruments are equivalent in this case. Complementing a quota with a base tax cannot outperform a pure carbon tax. |
| Keywords: | fossil fuel taxation,prices versus quantities,international redistribution,global warming |
| JEL: | H23 Q31 Q54 Q58 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fubsbe:20176&r=ene |
| By: | Yadulla Hasanli; Adalat Muradovd; Yadulla Hasanli; Nazim Hajiyev |
| Abstract: | It is for a long time oil since an energy source has got crucial role for the development of the countries. Economy of the all countries create demand to oil and oil products. It has been already extracting oil in more than hundred countries. Oil volume and its prices is always in the limelight of the consumers and producers. Changing of the oil prices affects production indicators in all areas of the economy as well as the level of the prices.Political issues also affect oil prices taking into account the reason of the neccesity of oil and oil prices in the vital fields of the economy.Therefore prediction of the oil prices is always in the limelight of the oil producer and consumer countries as well as the politicians. From this point of view prognosis of the oil prices is in the agenda as a urgent problem. Oil prices also have got impact on the formalization of the prices of the alternativ energy products. Exact prediction of the oil prices is very complex. Prediction of the well-known international institutions about the oil prices has been considerably deviation from the real facts. Nevertheless investigations is continuning in this direction. Complexity of the prognosis of the oil prices is related the impact of political issues to oil prices as well as economic factors. More deviation of the prognosis of the oil prices is observing in the crises and the political ambitions. For main purpose it is necessary to fulfill the following problems: • To decompose and learn the factors which influence oil prices; • Analysis of the prognosis with ARIMA,TREND and HOLT methods; • To collect data and fulfill descriptive analysis; • To establish an econometric model for dependence of oil price on factors, including non-qualitative factors those influence as well and defining the significant factors through proper tests. Dynamics of the oil prices are influenced by some factors those may be decomposed as follows: • Economic(World GDP growth, economic growth of USA, China and India, oil production volume etc); • Natural climate; • Military-political (intergovemental conflicts etc.). Recently economic growth factor of high demographicly developed China and India will increase its importance in forecasting of the oil prices. In the research linear-logarithm trend model of the dependence of the daily oil prices on the influencing factors was econometrically evaluated and defined that in spite of increase propensity of the daily oil prices between 0.022 % and 0.025%, some new factors has changed this positive increase to negative. These factors include liquidatation of the prohibition of oil exports of the USA and Iranian oil exports to world markets. |
| Keywords: | Azerbaijan and world, Macroeconometric modeling, Macroeconometric modeling |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:009007:9602&r=ene |
| By: | Hao Chen; Hua Liao; Bao-Jun Tang; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology) |
| Abstract: | The impacts of OPEC's political risk on the fluctuations of international crude oil prices have caused widespread concern and analyzing the impacts is of great significance to the investment decisions and risk aversion strategies in the crude oil markets. Therefore, using the International Country Risk Guide (ICRG) index as a proxy for the countries' political risk situation, we empirically investigate the impacts of OPEC's political risk on the Brent crude oil prices, based on several Structural Vector Autoregression (SVAR) models. The main empirical results indicate that: (1) The political risk of OPEC countries does have a significant and positive influence on Brent crude oil prices in the sample period from January 1998 to September 2014, and the most significant positive influences appear in about one and a half year and last about a year. (2) The OPEC's integrated political risk contribute to 17.58% of the oil price fluctuations in the sample period, which is only lesser than that of the oil demand shocks (34.64%). (3) Compared with the political risk of OPEC countries in North Africa and South America, the political risk of OPEC countries in Middle East contribute most to the oil price fluctuations. (4) Among the eight components of the political risk in OPEC, the internal conflicts contribute most to the oil price fluctuations in the sample period. |
| Keywords: | OPEC; Political risk; Oil price; SVAR |
| JEL: | Q54 Q40 |
| Date: | 2016–10–01 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:96&r=ene |
| By: | Polbin, Andrey |
| Abstract: | The paper estimates vector error correction model (VECM) for the real ruble exchange rate and the real oil prices. The VECM model takes into account the structural break in short run parameters due to monetary policy regime change in November 2014. Estimates show that the real exchange rate response to oil price shocks has dramatically changed. Before November 2014 it is needed approximately one year to correct 50% of a real exchange rate gap due to oil prices permanent change. From November 2014 the real exchange rate adapts to oil price shocks almost instantly. The estimate of long-run elasticity of the real exchange rate on real oil prices is 0.33. |
| Keywords: | real ruble exchange rate; oil prices; monetary policy; vector error correction model; VAR; VECM |
| JEL: | C22 C51 E52 F31 F41 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78139&r=ene |
| By: | Drago Bergholt; Vegard H Larsen; Martin Seneca |
| Abstract: | The recent oil price fall has created concern among policy makers regarding the consequences of terms of trade shocks for resource-rich countries. This concern is not a minor one - the world's commodity exporters combined are responsible for 15-20% of global value added. We develop and estimate a two-country New Keynesian model in order to quantify the importance of oil price shocks for Norway - a large, prototype petroleum exporter. Domestic supply chains link mainland (nonoil) Norway to the off-shore oil industry, while fiscal authorities accumulate income in a sovereign wealth fund. Oil prices and the international business cycle are jointly determined abroad. These features allow us to disentangle the structural sources of oil price fluctuations, and how they affect mainland Norway. The estimated model provides three key results. First, oil price movements represent an important source of macroeconomic volatility in mainland Norway. Second, while no two shocks cause the same dynamics, conventional trade channels make an economically less significant difference for the transmission of global shocks to the oil exporter than to oil importers. Third, the domestic oil industry's supply chain is an important transmission mechanism for oil price movements, while the prevailing fiscal regime provides substantial protection against external shocks. |
| Keywords: | DSGE, small open economy, oil and macro, Bayesian estimation |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:618&r=ene |
| By: | Lee , Kwon Hyung (Korea Institute for International Economic Policy); Son , Sung Hyun (Korea Institute for International Economic Policy); Jang , Yun Hee (Korea Institute for International Economic Policy); Ryou, Kwang Ho (Korea Institute for International Economic Policy) |
| Abstract: | A global oil price decline since the second half of 2014 has negatively impacted the economies of GCC countries, which heavily depend on the oil and gas sector. This led to a decline in trade surpluses and undermined current account balances, resulting in a slowdown of economic growth in these countries. GCC countries are carrying out several policies, as they face slowing economic growth, deepening budget deficits, diminishing foreign investment and shrinking construction project markets due to lower oil prices. In response, a new cooperation framework is required to strengthen bilateral ties for shared growth. First, industrial cooperation should be reinforced to expand economic diversification and job creation in GCC countries. Second, energy security is one of the most significant rationales for bilateral cooperation between Korea and the Middle East, since Korea imports more than 60% of the oil it uses from GCC countries. Third, investment cooperation should be strengthened to facilitate joint investment in the region, including joint ventures. Fourth, institutional cooperation between governments is needed to share experiences and know-how obtained in the process of Korea's institutional reforms in the fields of tax, subsidies, privatization and FDI. Civil servant exchange programs will also contribute to deepening mutual understanding in the bilateral economic partnership. |
| Keywords: | Economic Cooperation between Korea and the Middle East; Oil Prices; GCC |
| Date: | 2017–04–05 |
| URL: | http://d.repec.org/n?u=RePEc:ris:kiepwe:2017_007&r=ene |
| By: | Deepa Datta; Benjamin K Johannsen; Hannah Kwon; Robert J Vigfusson |
| Abstract: | Since 2008, oil and equity returns have moved together much more than they did previously. In addition, we show that both oil and equity returns have become more responsive to macroeconomic news. Before 2008, there is little evidence that oil returns were responsive to macroeconomic news. We argue that these results are consistent with a new-Keynesian model that includes oil and incorporates the zero lower bound on nominal interest rates. Our empirical findings lend support the model's implication that different rules apply at the zero lower bound. |
| Keywords: | macroeconomic announcements, news, monetary policy, zero lower bound, fiscal policy, fiscal multiplier |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:bis:biswps:617&r=ene |
| By: | Leszek Kasek; Jakub Boratyński; Leszek Kąsek |
| Abstract: | Oil prices on global markets have plunged from US$115 per barrel in mid-June of 2014 to US$48 at end-January 2015, and around US$30 in January 2016. Oil prices that remain low over the long-term would give a positive boost to the global economy, but the effects will vary across countries. While net oil (fossil fuel) importers are expected to win (Europe, Japan, China, India), net oil exporters (OPEC countries, EFTA, Russia, Canada) are set to lose. However, in the EU, with carbon emission constraints in place, the possible benefits for oil users will be restricted because of climate regulations. This paper quantifies the economic effects of lower fossil fuel prices in the 2020 time horizon, modeled as a supply shock, and emphasizes their interaction with EU climate policy. The impact assessment of the oil price shock was conducted using a multi-county, multi-sector computable general equilibrium (CGE) model, PLACE, maintained by the Center for Climate Policy Analysis (CCPA) in Warsaw. The effects of a permanent 60 percent oil price shock are assessed against a baseline scenario through 2020 based on the IEA 2012 World Energy Outlook assuming a high oil price scenario of US$118 in 2015 and US$128 in 2020 (both in 2010 constant prices) and correlated price changes of coal (by 50 percent), and natural gas (by 30 percent). Model simulations show that, first, oil exporters will suffer substantial double-digit welfare losses through 2020 due to significant deterioration in their terms of trade. Second, the EU, as a large oil importer, will benefit significantly from lower oil prices, with the New Member States being relatively better off, as a consequence of their relatively high energy intensity. Third, if the assumed permanent oil price shock occurs at half the level of the headline 60 percent scenario (proxying for US dollar appreciation or reflecting a rebound in oil prices from their early 2015 levels through 2020), welfare effects will be smaller and less than proportional for most countries. Finally, in the EU, the existing emissions cap constrain the use of cheaper fossil fuels and limits the welfare increase by about 0.5 percentage points. |
| Keywords: | EU countries and key global regions, Energy and environmental policy, General equilibrium modeling |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:009007:9319&r=ene |
| By: | Chang, C-L.; McAleer, M.J.; Wang, Y-A. |
| 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: | Biofuel, 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: | 2016–12–01 |
| URL: | http://d.repec.org/n?u=RePEc:ems:eureir:98657&r=ene |
| By: | Hao Chen; Bao-Jun Tang; Hua Liao; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology) |
| Abstract: | The negative externalities apart from carbon emissions are often neglected in most power generation planning models, which will affect the human health, biodiversity, crop yield and land use greatly. To achieve a sustainable development of China's power industry, this paper develops a deterministic linear programming model with consideration of the non-carbon externalities. This model has been applied for the case study of China for the period from 2015 to 2030, through which some interesting results have been drawn. Firstly, most of the new capacity additions are from the non-fossil fuel power plants in this planning horizon, which account for 84% of the total new capacity additions. Secondly, the power generation priority would better be given to the non-fossil fuel power plants in this horizon under the cost-effectiveness criteria. Thirdly, the minimum total cost of China's power planning is 34.48 trillion yuan, which equals to 2% of China's GDP during the planning horizon. Finally, neglecting of non-carbon externalities does have a significant influence on the power planning results, which will lead to a higher power generation share of technology with bigger negative externalities. |
| Keywords: | Power planning; Investing strategy; Operating strategy; Externalities; Linear programming |
| JEL: | Q54 Q40 |
| Date: | 2016–10–02 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:97&r=ene |
| By: | Chen, Xi; Zhang, Xiaobo; Zhang, Xin |
| Abstract: | While there is a large body of literature on the negative health effects of air pollution, there is much less written about its effects on cognitive performance for the whole population. This paper studies the effects of contemporaneous and cumulative exposure to air pollution on cognitive performance based on a nationally representative survey in China. By merging a longitudinal sample at the individual level with local air-quality data according to the exact dates and counties of interviews, we find that contemporaneous and cumulative exposure to air pollution impedes both verbal and math scores of survey subjects. Interestingly, the negative effect is stronger for men than for women. Specifically, the gender difference is more salient among the old and less educated in both verbal and math tests. |
| Keywords: | CHINA; EAST ASIA; ASIA, gender; pollution; air pollution, cognitive performance; gender difference; human capital, I24 Education and Inequality; Q53 Air Pollution, Water Pollution, Noise, Hazardous Waste, Solid Waste, Recycling; Q51 Valuation of Environmental Effects; J16 Economics of Gender, Non-labor Discrimination, |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:1619&r=ene |
| By: | Jin-Wei Wang; Hua Liao; Bao-Jun Tang; Ruo-Yu Ke; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology) |
| Abstract: | The contribution of non-metallic sector to global CO2 emissions is increasing. However, there are very few studies on non-metallic sector CO2 emissions from international comparative perspective. This paper proposes an integrated model employing LMDI (Logarithmic Mean Divisia Index) decomposition technique and TOPSIS (the Technique for Order Preference by Similarity to Ideal Solution) method to contribute to the existing literature by filling the gap that the drivers of aggregate and national level non-metallic sector CO2 emissions and its impacts on CO2 emissions reduction have not been estimated by relevant models. First, we analyze drivers of non-metallic sector CO2 emissions in BRIC countries and G7 countries using LMDI decomposition method. Second, we evaluate the low-carbon development of non-metallic sector in the 11 major economies from a comprehensive viewpoint of main drivers using TOPSIS assessment model. Finally, based on the results of the model, this paper presents some implications for the non-metallic sector CO2 emissions reduction and low-carbon development. |
| Keywords: | CO2 emissions; Non-metallic sector; Cement; Logarithmic mean divisia index decomposition; WIOD database |
| JEL: | Q54 Q40 |
| Date: | 2017–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:101&r=ene |
| By: | Bosupeng, Mpho |
| Abstract: | In the early days of industrialisation, economists believed that the ramifications of economic growth will far outweigh the potential damage to the environment. Today the concern is the rising magnitude of emissions. Many economies are under immense pressure to reduce carbon dioxide emissions. Carbon taxation and absorption technologies seem to be the main mechanisms controlling emissions in different nations. China proposed her target of reducing carbon dioxide emissions by 40-45% by 2025. The purpose of this study is to determine if China’s ambition of reducing its carbon dioxide emissions is feasible. This investigation also examines the potential effects of China's emissions on the economic growth of other countries. The study demonstrates that China’s target may not only reduce her output, but may also adversely affect the economic growth of others. This article further reveals that unemployment in China is likely to soar during the reduction in emissions and energy consumption. Additionally, this paper evaluates the effects of green taxation on carbon dioxide emissions. In conclusion, there is a possibility that China may reach her emissions target by 2025. However, the country faces a dilemma between economic growth and environmental preservation. It is recommended that China should explore techniques which will reduce emissions but not impinge negatively on economic growth. |
| Keywords: | carbon dioxide emissions; economic growth; green taxation; energy consumption. |
| JEL: | Q53 Q55 |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:78044&r=ene |
| By: | Gabriele Standardi; Yiyong Cai; Sonia Yeh |
| Abstract: | This paper carries out a systematic assessment on the sensitivity of Computable General Equilibrium models to technological and geographical scales in evaluating the economic impacts of carbon mitigation policies. We start with a basic version of a global CGE model and database, which considers Italy as one single economic unit and has one technology in the electricity sector. We then disaggregate the electricity sector into a bundle of various generation technologies, and split Italy into 20 sub-national regions to create more spatially disaggregated versions of the model. The comparison across different model specifications enables us to quantify the importance of technological and regional disaggregation in response to a given policy by carefully laying out the causal inferences that drive the differences of results, and quantitatively assessing the impacts on the results within the realm of the climate policies that we examined in this study. Taking Italy as an example, we find that the estimation for carbon price and economic cost of a de-carbonization pathway by a model with technological and regional details can be lower than a model without such details by up to 40%. Additionally, the effect of representing regional details appears to be several times more important than the effect of representing the details of electricity technology in both the estimated carbon prices and the estimated impacts on electricity production. Our results for Italy highlight the importance of modeling uncertainties of these two key assumptions, which should be appropriately acknowledged when applying CGE models for policy impact assessment. Our conclusions can be generalized to different countries and policy scenarios not in terms of magnitudes of results but in terms of economic explanation. In particular, intra-national trade and the sub-national sectoral/technological specialization are important variables to understand the economic dynamics behind these outcomes. |
| Keywords: | Italy, General equilibrium modeling, Energy and environmental policy |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:009007:9557&r=ene |
| By: | Nicolas Piluso (CERTOP - Centre d'Etude et de Recherche Travail Organisation Pouvoir - UT2 - Université Toulouse 2 - UPS - Université Paul Sabatier - Toulouse 3 - CNRS - Centre National de la Recherche Scientifique); Edwin Le Héron (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - Université Montesquieu - Bordeaux 4 - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | L'objet de cet article est d'analyser les effets conjoncturels d'une politique climatique de taxation des émissions polluantes ainsi que son impact sur l'efficacité des politiques de relance dans le cadre d'analyse d'une économie keynésienne. Les contributions empiriques et théoriques actuelles estiment qu'une taxation a le plus souvent un impact récessif. Par ailleurs, ces travaux montrent que l'efficacité des politiques publiques est entravée par l'exercice de la politique climatique et/ou l'existence d'une contrainte environnementale. Nous montrons ici à l'inverse que la politique climatique de taxation peut exercer, sous certaines conditions, un effet favorable sur la conjoncture et renforcer l'efficacité économique des politiques de relance budgétaire. |
| Keywords: | Taxe carbone, politique de relance, économie keynésienne. |
| Date: | 2017–02–03 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-01454866&r=ene |
| By: | touitou mohammed |
| Abstract: | This study analyzes the macroeconomic effects of limiting carbon emissions using computable general equilibrium (CGE) model in the Algerian economy. Doing so, we developed an environmental computable general equilibrium model and investigate carbon tax policy responses in the economy applying exogenously different degrees of carbon tax into the model. Three simulations were carried out using anAlgerian Social Accounting Matrix. A static environmental computable general equilibrium (CGE) model of the Algerian economy is constructed for this study . The model consists of tenindustries, one representative household, three factor production, and rest of the world. The CGE technique is an approach that models the complex interdependent relationships among decentralized actors or agents in an economy by considering the actual outcome to represent a ‘general equilibrium’. Briefly, the technique expresses that the ‘equilibrium’ of an economy is reached when expenditures by consumers exactly exhaust their disposable income, the aggregate value of exports exactly equals import demand, and the cost of pollution is just equal at the marginal social value of damage that it causes. The carbon tax policy illustrates that a 1.52% reduction of carbon emission reduces the nominal GDP by 1.26% and exports by 3.04%; a 2.67% reduction of carbon emission reduces the nominal GDP by 1.92% and exports by 4.86%and a 3.72% reduction of carbon emission reduces the nominal GDP by 3.79% and exports by 6.90%. Imposition of successively higher carbon tax results in increased government revenue from baseline by 23.68%, 50.18% and 76.38% respectively. However, fixed capital investment increased in scenario 1a (1st) by 0.23% but decreased in scenarios 1b (2nd) and 1c (3rd) by 0.35% and 2.03% respectively from the baseline. According to our findings policy-makes should consider initial (1st) carbon tax policy. This policy results in achieving reasonably good environmental impacts without losing the investment, fixed capital investment, investment share of nominal GDP and government revenue. |
| Keywords: | ALGERIA, Energy and environmental policy, General equilibrium modeling |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:009007:9180&r=ene |
| By: | Gabriele Standardi (FEEM and CMCC); Yiyong Cai (CSIRO and CAMA, Australian National University); Sonia Yeh (Chalmers University of Technology) |
| Abstract: | Model differences in technological and geographical scales are common, but their contributions to uncertainties have not been systematically quantified in the climate policy literature. This paper carries out a systematic assessment on the sensitivity of Computable General Equilibrium models to technological and geographical scales in evaluating the economic impacts of carbon mitigation policies. Taking Italy as an example, we find that the estimation for carbon price and the economic cost of a de-carbonization pathway by means of a model with technological and regional details can be lower than a model without such details by up to 40%. Additionally, the effect of representing regional details appears to be far more important than the effect of representing the details of electricity technology in both the estimated carbon prices and the estimated economic impacts. Our results for Italy highlight the importance of modeling uncertainties of these two key assumptions, which should be appropriately acknowledged when applying CGE models for policy impact assessment. Our conclusions can be generalized to different countries and policy scenarios not in terms of absolute numbers but in terms of economic explanations. In particular, intra-national trade and the sub-national sectoral/technological specialization are important variables for understanding the economic dynamics behind these outcomes. |
| Keywords: | Computable General Equilibrium, Carbon Mitigation Policy, Sensitivity, Technology, Sub-national regions |
| JEL: | C68 Q5 Q55 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2017.19&r=ene |
| By: | Daniele Crotti (University of Genoa); Elena Maggi (University of Insubria) |
| Abstract: | In recent years several European municipalities have paired market-based measures with urban distribution centres (UDC) in order to reduce CO2 emissions and make more sustainable urban freight ‡ows. However, UDCs may add reloading costs and extra delivery times which have relevant impact on both urban supply chains and the competition among traditional and UDC-based logistics service providers in terms of service quality and freight rates. By using a duopolistic Hotelling framework, we show that market-based measures and subsidies might be substitutes to enhance the demand for UDC-based providers but public funding can be reduced by improving the quality of UDC services. These results can enlarge the scope for investments in UDC value-adding services in order to decrease private crowding-out effects in the long run. |
| Keywords: | Urban Distribution Centre, City logistics, Sustainable Urban Transport Policy, Hotelling Spatial Competition Model, Market-Based Measures, Public Subsidy |
| JEL: | D43 H23 L13 Q58 R41 R48 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:fem:femwpa:2017.17&r=ene |
| By: | Marcelo Arbex (Department of Economics, University of Windsor); Christian Trudeau (Department of Economics, University of Windsor) |
| Abstract: | Abstract We model a federation of two heterogeneous jurisdictions where agents value consumption vs. nature differently. Consumption obtained through pollution-inducing production also generates a negative externality on neighbors. We show that even with a decentralized policy we can obtain first-best efficiency by choosing a combination of pollution taxes in both regions and lump-sum transfers. Moreover, we show that optimal pollution taxes are determined only by the externality parameters, independent of agents' preferences for consumption and nature. |
| Keywords: | Externalities, environmental preferences, optimal taxation. |
| JEL: | D62 H23 Q53 Q58 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:wis:wpaper:1703&r=ene |
| By: | Georg Zachmann |
| Abstract: | The issue Mitigating greenhouse gas emissions is more difficult in some countries than in others. International emissions trading can help to reduce the overall cost of mitigation and ensure that companies in different countries face the same carbon price. Lower costs and tackling competitiveness concerns can enable higher levels of climate ambition. The Paris Agreement explicitly provides for international emissions trading, but the rules governing trading still need to be determined. In the absence of strict rules, international emissions trading might become a loophole leading to reduced climate ambition. And because of its consensus requirements, the United Nations process is unlikely to lead to comprehensive rules. To fill this gap, the European Union should engage with other nations to determine a set of rules that can serve as a gold standard for emissions trading anywhere in the world. Policy challenge The effort to define rules for international emissions trading faces the strong desire of nation states to develop their own climate policies, which collides with the need for tradable units in one country to be equivalent to tradable units in another country. To overcome this dilemma we propose a club of carbon-buying countries that would regulate only imported mitigation outcomes. We propose that private parties would be able, if permitted by the participating governments, to transfer any type of privately tradable emissions reduction unit across borders. But they would also be liable if the foreign units do not represent sufficient mitigation in the selling county. To bridge the period before final settlement, private parties would be able to borrow domestic compliance units, based on collateralising a certain amount of foreign units. |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:bre:polbrf:19951&r=ene |
| By: | Anton Orlov |
| Abstract: | COP21 meeting in Paris ended up with a global climate (non-binding) agreement, which proposes a very ambiguous, if not unrealistic, target of 2 °C. Among other countries, Russia proposed a reduction in GHG emissions. Russia’s pledge submitted to the UN is a 25-30% reduction in GHG emissions by 2030 compared to 1990 (Carbon Brief , 2015). At present, Russia is one of the largest producers of GHG emissions: Russia’s share in total GHG emissions accounted approximately for 5% in 2012 (WRI , 2012). Recently, a few publications address economy-wide effects from climate and energy policy in Russia (e.g., Heyndrickx et al., 2012). Yet their analyses are based on single-country models, which are unable to depict the response of other economies. Moreover, those studies do not show how the Russian economy could be affected, when other countries implement stricter climate policies. This study aims to fill this knowledge gap. From an economic point of view, what matter is overall welfare costs arising from climate policy. Therefore, many CGE studies typically focus on welfare effects from climate policy. But competitiveness, sectoral effects, and income distribution effects are also vital to policy-makers. It also should be noted that, according to results from CGE models, welfare costs of climate policy are typically moderate. In this study, we focus on competiveness and sectoral effects from climate policy. Therefore, the main objective of this paper is to quantify the sectoral effects resulting from a stricter climate policy in Russia and the rest of the word (RoW). Our analysis is based on a dynamic multi-region multi-sector CGE model, GRACE (Aaheim and Rive , 2009). We modify the core version of the model by disaggregating the electricity generation sector into seven sub-sectors: coal-fired, oil-fired, gas-fired, nuclear, hydro, bioenergy, and renewables. The model is calibrated around Version 9 of the GTAP database. We consider the following countries/regions: Russia, FSU, EU, Asia, and RoW. Two main experiments are carried out: In the first experiment, we implement climate policy in all regions excluding Russia, and in the second experiment, climate policies are implemented in all regions and Russia. The core simulations are supplemented by several sensitivity analyses to investigate the robustness of results with respect to key parameters. The rest of the paper is organized as follows. Section 2 provides an informal description of the model. Section 3 presents the results and discussion. Section 4 concludes. a stricter Russia's climate policy encourages of development of less energy-intensive sector. A removal of subsidies on domestic energy consumption results in energy efficiency improvement and a reduction in GHG emissions. |
| Keywords: | Russia, General equilibrium modeling, Developing countries |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:009007:9436&r=ene |
| By: | Lyazzat Nugumanova |
| Abstract: | Kazakhstan has one of the highest CO2 emissions per GDP in the world. Kazakhstan has taken a leadership role in the Central Asian region in terms of climate change policies and greener economy. Kazakhstan has ratified Kyoto Protocol in 2009. Kazakhstan has committed to reduce emissions by 15% below 1992 GHG levels by year 2020. In 2013 by decree of President of Kazakhstan a concept of Green Growth was adopted. Environmental regulations in Kazakhstan inherited from the planned economy need to be modified to correspond to current economic situation and climate change goals. Carbon tax and emissions trading are two of the main instruments to curb GHG emissions. There is an ongoing debate regarding which policy instrument is the most optimal towards reduction of emissions. The main difference between the two instruments are levels of uncertainty with regards to the carbon price and thus emissions reductions. Carbon tax provides more carbon price certainty, while emissions trading carbon prices are more volatile. Carbon tax mechanism is more easily to implement and operate, than ETS. Kazakhstan has opted and implemented emissions trading scheme in January 2013.. The ETS covers 55% of total CO2 emissions in Kazakhstan, and includes energy, mining and chemical industry. The average price of allowances was KZT 406 (US$2). Carbon tax in Kazakhstan would provide stability of carbon price, moreover carbon tax is easier to implement and monitor. The objective of this paper is using computable general equilibrium (CGE) model evaluate macroeconomic and environmental impacts of different carbon tax levels in Kazakhstan. Standard multiregion, multisector static CGE model, GTAP is used to simulate the impact of different carbon tax levels in Kazakhstan. GTAP is a standard CGE model based on assumptions of perfect competition and constant returns to scale. GTAP data base with latest version 9 is used in this study. The base year of the data base is 2010. The data base for the purpose of this study is aggregated to 11 sectors, out of which six are energy sectors, and six regions. Six regions are Kazakhstan, Russia, Belarus, China, EU and Rest of the World. Three sets of scenarios are simulated where carbon tax is priced at US$5, US$10 and US$20 per tCO2. Carbon tax is implemented in the CGE model as ad valorem equivalents. Carbon tax is implemented for all energy sectors and chemicals and heavy manufacturing sectors. Initial findings show macroeconomic effects of carbon tax in Kazakhstan. Preliminary findings allow to identify sectors which would benefit or loss from the implementation of carbon tax in Kazakhstan. It is expected that in all scenarios CO2 emissions will reduce, though magnitude of CO2 emissions reductions is expected to differ. |
| Keywords: | Kazakhstan, Energy and environmental policy, General equilibrium modeling |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:009007:9175&r=ene |
| By: | Magdalena Zachlod-Jelec; Jakub Boratyński |
| Abstract: | CGE models are popular tools for assessing the impact of economic (climate and energy, specifically) policy on the economy, yet the simulation results are sensitive to parameters assumed by the modeler. However, econometric evidence on those parameters available in the literature is often scarce or ambiguous, as well as there is difficulty in finding results tailored to a specific CGE model (with its specific sectoral and regional disaggregation, nesting structure production functions etc). In practice this makes a choice of parameter values more or less arbitrary, and in fact in many cases the modelers simply follow the perhaps equally arbitrary choices made by other authors. Although such an approach does not imply that simulation results are meaningless, it calls for at least a clear communication of uncertainties to the reader. In the paper we present mean results of simulation of the 2030 emission reduction target for the EU countries together with standard deviations of mean results. We also discuss sources of parameters uncertainty. In order to investigate model parameters uncertainty we conduct systematic sensitivity analysis based on Stroud's (1957) Gaussian quadratures in a static global CGE model. By “systematic” we mean that alternative values of parameters are picked in a systematic way, i.e. they are determined by means of some specific method in order to explore the whole domain of plausible values. Our preliminary findings can be summarized as follows. First, uncertainty of model simulation results driven by the uncertainty in assumed elasticities is quite remarkable with double-digit variation coefficients in many cases. Second, the uncertainty is larger with respect to non-energy parameters than to energy parameters. Finally, there is a clear pattern with mostly the New Member States experiencing relatively high cost of emissions reduction in terms of GDP and consumption loss. In the extreme case of strictly rigid energy mixes (no substitution at an industry level), these costs roughly double. |
| Keywords: | European Union countries, General equilibrium modeling, Energy and environmental policy |
| Date: | 2016–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:ekd:009007:9449&r=ene |
| By: | Francesco Lamperti (Université Panthéon-Sorbonne - Paris 1 (UP1)); Giovanni Dosi (Laboratory of Economics and Management); Mauro Napoletano (Observatoire français des conjonctures économiques); Andrea Roventini (Laboratory of Economics and Management); Sandro Sapio (Universita degli studi di Napoli "Parthenope" [Napoli]) |
| Abstract: | In this paperwe develop the first agent-based integrated assessment model, which offers an alternative to standard, computable general-equilibrium frameworks. The Dystopian Schumpeter meeting Keynes (DSK) model is composed of heterogeneous firms belonging to capital-good, consumption-good and energy sectors. Production and energy generation lead to greenhouse gas emissions, which affect temperature dynamics in a non-linear way. Increasing temperature triggers climate damages hitting, at the micro-level, workers’ labor productivity, energy efficiency, capital stock and inventories of firms. In that, aggregate damages are emerging properties of the out-of-equilibrium interactions among heterogeneous and boundedly rational agents. We find the DSK model is able to account for a wide ensemble of micro and macro empirical regularities concerning both economic and climate dynamics. Moreover, different types of shocks have heterogeneous impact on output growth, unemployment rate, and the likelihood of economic crises. Finally, we show that the magnitude and the uncertainty associated to climate change impacts increase over time, and that climate damages much larger than those estimated through standard IAMs. Our results point to the presence of tipping points and irreversible trajectories, thereby suggesting the need of urgent policy interventions. |
| Keywords: | Climate change; Agent-based model; Integrated assessment; Macroeconomic dynamics; Climate damages |
| JEL: | C63 Q40 Q50 Q54 |
| Date: | 2017–04 |
| URL: | http://d.repec.org/n?u=RePEc:spo:wpmain:info:hdl:2441/4hs7liq1f49gh9chdf7r17gam6&r=ene |
| By: | Wei Jin (School of Economics, UNSW Business School, UNSW); Alan Woodland (School of Economics, UNSW Business School, UNSW) |
| Abstract: | This paper investigates a problem of optimal growth with resource exhaustibility and pollution externality, based on a unified framework that explicitly considers augmentable man-made capital, exhaustible resource reserves, and accumulative environmental pollutants as three stock variables for optimal control analysis. Characterizations of the social optimum show that for any given man-made capital and resource reserves, resource extraction flows generated in optimal growth with both resource exhaustibility and pollution externality are smaller than those with only resource exhaustibility, and taking account of pollution externality resulting from resource extraction reduces the growth rate of consumption if man-made capital and natural resources are complements in final goods production. Existence, uniqueness and comparative statics of the steady state are analyzed. Conditions for transitional dynamics stability of optimal growth with resource exhaustibility and pollution externality are established. Expositions are made on whether allocations in a market equilibrium are consistent with the social optimum outcomes. |
| Keywords: | Sustainability; Economic Growth; Exhaustible Resources; Pollution Externality; Environmental Damage; Optimal Control Problems. |
| JEL: | Q54 H23 Q43 Q32 O13 O44 C61 |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:swe:wpaper:2017-09&r=ene |
| By: | Sam Fankhauser; Frank Jotzo |
| Abstract: | Energy is needed for economic growth, and access to cheap, reliable energy is an essential development objective. However, in the future access to fossil fuel-based energy will need to be constrained because of climate change. This paper reviews the implications of a transition to low-carbon energy for economic growth and development in current low-income countries. Historically, most incremental energy demand has been met through fossil fuels but in the future that energy will have to be low-carbon and ultimately zero-carbon. Decarbonisation thus needs to happen in all countries – albeit at varying speeds, depending on national circumstances. The authors set out findings on trajectories for energy intensity and emissions intensity of economic growth, explore pathways to accelerate decarbonisation, review the theoretical and empirical literature on economic costs and co-benefits of energy decarbonisation, and assess analytical approaches. Evidence from the literature, the authors find, suggests that it makes sense for developing countries to start decarbonising their energy systems early, and they discuss the opportunities that might arise in terms of a cleaner, more dynamic and more sustainable growth model, and the options for developing countries to implement a less carbon-intensive model of economic development. |
| Date: | 2017–03 |
| URL: | http://d.repec.org/n?u=RePEc:lsg:lsgwps:wp267&r=ene |