nep-ene New Economics Papers
on Energy Economics
Issue of 2017‒04‒23
48 papers chosen by
Roger Fouquet
London School of Economics

  1. Economic Viability of Second-Life Electric Vehicle Batteries for Energy Storage in Private Households By Kirmas, Alexander; Madlener, Reinhard
  2. Photovoltaics and Heat Pumps – Limitations of Local Pricing Mechanisms By Björn Felten; Jessica Raasch; Christoph Weber
  3. Macroeconomic Effects of a Low-Carbon Electricity Transition in Kenya and Ghana: An Exploratory Dynamic General Equilibrium Analysis By Willenbockel, Dirk
  4. La transition énergétique : contrainte ou opportunité pour la croissance et l'emploi ? By Francesco Vona
  5. Balancing Reserves within a Decarbonized European Electricity System in 2050: From Market Developments to Model Insights By Casimir Lorenz
  6. Solar PV where the sun doesn’t shine: Estimating the economic impacts of support schemes for residential PV with detailed net demand profiling By Sarah La Monaca; L. (Lisa B.) Ryan
  7. Impacts of Actually Connecting to the Electric Grid in Tanzania (In Focus Brief) By Ali Protik; Duncan Chaplin; Arif Mamun; John Schurrer; Divya Vohra; Kristine Bos
  8. Macroeconomic impact of electric power outage: simulation results from a CGE modelling experiment for Hungary By Klára Major; Drucker, Luca Flóra
  9. Grid Electricity Expansion in Tanzania: Findings from a Rigorous Impact Evaluation (Issue Brief) By Arif Mamun; Duncan Chaplin; Ali Protik; John Schurrer; Divya Vohra; Kristine Bos; Hannah Burak; Laura Meyer; Anca Dumitrescu
  10. The Potential Impact of Industrial Energy Savings on The New Zealand Economy By Milad Maralani; Milad Maralani; Basil Sharp; Golbon Zakeri
  11. Impacts of New Electric Line Extensions in Tanzania (In Focus Brief) By Kristine Bos; Duncan Chaplin; Arif Mamun; Ali Protik; John Schurrer; Divya Vohra
  13. Energy futures modelling for African countries: LEAP model application By Nadia S. Ouedraogo
  14. Constraints to biofuel feedstock production expansion in Zambia By Paul C. Samboko; Mulako Kabisa; Giles Henley
  17. One-off subsidies and long-run adoption: Experimental evidence on improved cooking stoves in Senegal By Bensch, Gunther; Peters, Jörg
  18. Modelling Long-Run Energy Development Plans: The Case of Barbados By Winston Moore; Mika Korkeakoski; Jyrki Luukkanen; Laron Alleyne; Abdullahi Abdulkadri; Noel Brown; Therese Chambers; Orlando Costa; Alecia Evans; Sidonia McKenzie; Dwight Reid; Luis Vazquez Seisdedos
  19. Confidence Sets for the Break Date in Cointegrating Regressions By Skrobotov Anton; Lanshina T.
  20. Distributional Impacts of Energy Taxes By William A. Pizer; Steven Sexton
  21. Intertemporal hybrid modeling of energy policy in Poland: how to avoid biased results By Olga Kiuila
  22. Distributive fairness in paying for clean energy infrastructure By Harry Granqvist; David Grover
  23. Politiques énergétique et climatique des États - Unis durant les deux mandats de Barack Obama By Sophie Méritet; Stéphanie Monjon
  24. The role of oil and gas in the development of the global economy By Paul Stevens
  25. Theoretical and Practical Aspects of Natural Gas Pricing in Domestic and Foreign Markets: The Case of Russia By Idrisov Georgy; Gordeev Dmitry
  26. Testing the Presence of the Dutch Disease in Kazakhstan By Akhmetov, Almaz
  27. Crude oil market and geopolitical events: an analysis based on information-theory-based quantifiers By Aurelio F. Bariviera; Luciano Zunino; Osvaldo A. Rosso
  28. Analysing the Effect of Oil Price Shocks on Asset Prices: evidence from UK firms By Alaali, Fatema
  29. OPEC News and Predictability of Oil Futures Returns and Volatility: Evidence from a Nonparametric Causality-in-Quantiles Approach By Rangan Gupta; Seong-Min Yoon
  30. أثر الحوكمة على عوائد الموارد الطبيعية : دراسة تطبيقية مع إشارة للدول العربية By Shaker, Saber Adly
  31. How do oil producers respond to giant oil field discoveries? By Jochen Güntner
  32. The effects of oil supply and demand shocks on U.S. consumer Sentiment By Jochen Güntner; Katharina Linsbauer
  33. The political economy of Middle East and North Africa oil exporters in times of global decarbonisation By Simone Tagliapietra
  34. Determinants of the Contemporary Inequality among MENA and African Countries: What are in the variation of Land and Natural Resource ownership? By Ece Guleryuz
  35. The impact of oil price shocks on exchange rates: A non-linear smooth-transition approach By Alfred Haug; Syed Basher; Perry Sadorsky
  36. Does Air Pollution Affect Consumption Behavior? Evidence from Korean Retail Sales By Hyunju Kang; Hyunduk Suh; Jongmin Yu
  37. Smog in Our Brains: Gender Differences in the Impact of Exposure to Air Pollution on Cognitive Performance By Chen, Xi; Zhang, Xiaobo; Zhang, Xin
  38. Defensive Investments and the Demand for Air Quality: Evidence from the NOx Budget Program By Olivier Deschenes; Michael Greenstone; Joseph S. Shapiro
  39. Emission taxation, green innovations and inverted-U aggregate R&D efforts in a linear state oligopoly game By D. Dragone; L. Lambertini; A. Palestini
  40. Evolution of the New Zealand Emissions Trading Scheme: Linking By Catherine Leining; Judd Ormsby; Suzi Kerr
  41. Evolution of the New Zealand Emissions Trading Scheme: Sectoral Coverage and Point of Obligation By Catherine Leining; Corey Allan; Suzi Kerr
  42. Pension funds carbon footprint and investment trade-offs By Martijn Boermans; Rients Galema
  43. Turkiye'de Enerji Uretiminde Fosil Yakit Kullanimi ve CO2 Emisyonu Iliskisi: Bir Senaryo Analizi By Hakan Cetintas; I. Murat Bicil; Kumru Turkoz
  44. Development perspectives of Sub-Saharan Africa under climate policies By Marian Leimbach; Niklas Roming; Gregor Schwerhoff; Anselm Schultes
  45. Optimal Climate Policies in a Dynamic Multi-Country Equilibrium Model By Elmar Hillebrand; Marten Hillebrand
  46. 신기후체제하에서의 국제 탄소시장 활용방안 (Utilization of International Carbon Market under the Paris Agreement) By Moon , Jin-Young; Jung , Jione; Song , Jihei; Lee , Sung Hee
  47. Active learning and optimal climate policy By In Chang Hwang
  48. Decreasing the carbon footprint of KU Leuven staff mobility: How a Carbon Compensation Policy can support sustainable management By Tom Bosserez; Pieter Moonen; Marten Ovaere; Jan Rongé; Niels Smeets; Sarah Van Eynde

  1. By: Kirmas, Alexander (RWTH Aachen University); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: We examine the economic viability of second-life batteries from electric vehicles for load shifting and peak shaving in residential applications. We further investigate the expected impact of a growing number of residential storage systems on the electricity market. For the analysis a simulation model of a private household with integrated PV-storage system is used that is parametrized for an electricity demand of three people and a location in southern Germany. The conditions for which investments in second use batteries are profitable are examined for three scenarios. The central scenario S2 tackles an expected net increase in the electricity price by 4% per year. Upward and downward deviations from this price trajectory are covered by scenarios S1 and S3. For scenario S1, we find that investments in storage systems are profitable for all Li-ion battery costs assumed. In scenario S2, the breakeven battery price is found to be 107 € kWh-1, whereas in scenario S3 with the lowest electricity price growth the battery price has to be equal or lower than 73 € kWh-1 to maintain economic viability.
    Keywords: E-vehicle; Residential electricity; Battery storage; Load shifting; Peak shaving
    JEL: D12 Q41
    Date: 2017–04
  2. By: Björn Felten; Jessica Raasch; Christoph Weber (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen (Campus Essen))
    Abstract: With the increasing amount of volatile infeed from renewable energy sources the need for flexibility becomes more and more urgent. This holds especially for the distribution grids where critical load situations caused by high local renewable infeed occur increasingly often. Therefore, demand side management with broad participation of households has been proposed as one cornerstone for a future sustainable energy system. Local prices may contribute substantially to enable a smart behaviour of grid users by providing appropriate incentives. Although the benefits of both demand side management and local prices seem evident in theory practicalities have to be considered when it comes to assessing their effectiveness. Notably individual restrictions for different kinds of grid users have to be regarded in detail. Eventually, the potential contribution of local pricing to a secure and efficient energy system may be called into question. In this paper, a typical rural low voltage grid is analysed having local electricity generation from PV systems and typical household consumption. In addition, a high penetration of heat pumps is supposed as well as the implementation of a framework of local prices. With households heated by electric heat pumps a potentially flexible consumer type is implemented in detail. Thus, a model of a possible future rural low voltage system is implemented and used to assess the limitations of local pricing mechanisms – firstly, by a sequential deduction of the possibly leveraged potential of the local market mechanism under existing technical constraints and, secondly, by a scenario analysis of the allocation of economic benefits. Results show that even with given local incentives the consumption adjustment towards an efficient grid usage cannot be realized frequently as comfort and system needs have priority. I.e. due to limited complementarity of heat pump consumption and photovoltaic infeed patterns expected operational system cost reduction is low – especially in comparison to required investments in smart systems. Hence, the example disproves any generalized claims about the efficiency of local pricing - yet obviously it does not prove that local pricing is of no worth in general. As second main result, stylized policy choices are analysed. Thus, it is demonstrated how the benefits of local pricing mechanisms can be distributed to the market participants and which are the difficulties that policy makers will have to face. Ultimately, for the present case study, it is not possible to set sufficient investment incentives for the installation of flexibility measures for heat pumps without either causing disadvantages to renewables-based electricity generators or without receiving additional regulatory payments from the overarching system. Thereby, the paper contributes to the existing literature by analysing a novel pricing mechanism and, more importantly, demonstrating the effects of these pricing mechanisms on the system costs and the economic figures of the market participants. As main result, it can be seen that practicalities play an important role and must be taken into account when considering the implementation of local pricing mechanisms. Furthermore, policy makers have to pay attention to the redistributive effects as they might be substantial even though the costs savings of the overall system will not necessarily be meaningful.
    Keywords: Integration of Renewables, Distribution Grid, Local Pricing, Agent-Based Simulation, Demand Side Management, Heat Pump
    JEL: Q40
    Date: 2017–02
  3. By: Willenbockel, Dirk
    Abstract: The present study applies purpose-built dynamic computable general equilibrium models for Ghana and Kenya with a disaggregated country-specific representation of the power sector to simulate the prospective medium-run growth and distributional implications associated with a shift towards a higher share of renewables in the power mix up to 2025. In both countries the share of fossil-fuel-based thermal electricity generation in the power mix will increase sharply over the next decade and beyond according to current national energy sector development plans. The overarching general message suggested by the simulation results presented here is that in both countries it appears feasible to reduce the carbon content of electricity generation significantly without adverse consequences for economic growth and without noteworthy distributional effects.
    Keywords: Green growth; Low carbon growth; Sub-Saharan Africa; CGE analysis; computable general equilibrium
    JEL: D58 Q42 Q43
    Date: 2017–03
  4. By: Francesco Vona (Observatoire français des conjonctures économiques)
    Abstract: Les politiques environnementales représentent-elles une contrainte ou, au contraire, une opportunité pour la croissance économique ? Deux thèses compatibles sont en présence. L’une met l’accent sur l’augmentation du prix de l’énergie et, par suite, des coûts pour l’industrie qui en menaceraient la compétitivité. L’autre insiste sur les effets à plus long terme qui, outre les gains en bien-être, pourraient permettre d'augmenter la compétitivité horsprix d'une industrie fortement transformée. Voici nos conclusions. 1. En France, le prix de l’électricité augmente légèrement moins que dans les autres pays et le niveau des prix reste au-dessous du prix moyen dans les autres pays. Il faut aussi noter que l'incidence du prix du gaz naturel (et du pétrole qui lui est très corrélé) est beaucoup plus forte en Italie, Allemagne et Espagne qu'en France, où l’électricité est produite principalement au moyen de l'énergie nucléaire ; 2. Dans tous ces pays, les secteurs polluants migrent vers des pays où les prix de l’énergie sont plus bas. Il s'ensuit une baisse de l'emploi qui s’avère plus élevée en France qu'en Italie et en Allemagne. La transition énergétique peut donc être très coûteuse pour l'industrie française ; 3. En France, l’augmentation du prix de l'énergie de 1 % réduit effectivement l’emploi de 0,26 % et la productivité des entreprises de 0,1 %. Toutefois, cette augmentation diminue la demande d'énergie de plus de 0,6 %, et réduit les émissions de gaz à effet de serre de plus de 1,1 % ; 4. La destruction d’emplois dans les industries intensives en énergie est potentiellement plus que compensée par la création d'emplois dans les industries vertes. Des études sur données américaines montrent que la création d'un emploi vert est associée à 2,4 emplois supplémentaires dans l'économie locale ; 5. Nous avançons trois prescriptions de politique économique : (i) le crédit d’impôtrecherche pourrait être utilisé pour stimuler les innovations stratégiques afin d'inciter à l'adoption des technologies vertes ; (ii) les objectifs de développement des technologies et des secteurs verts devraient être au cœur des mesures de soutien des pôles de compétitivité ; (iii) le système de formation professionnelle devrait favoriser la mobilité professionnelle des travailleurs vers les emplois verts dont la demande future devrait augmenter.
    Keywords: Energie; Environnement; Compétitivité
    JEL: Q4 Q42 Q43
    Date: 2017–04
  5. By: Casimir Lorenz
    Abstract: Abstract This paper expands the discussion about future balancing reserve provision to the long-term perspective of 2050. Most pathways for a transformation towards a decarbonized electricity sector rely on very high shares of fluctuating renewables. This can be a challenge for the provision of balancing reserves, although their influence on the balancing cost is unclear. Apart from the transformation of the generation portfolio, various technical and regulatory developments within the balancing framework might further influence balancing costs: i) dynamic dimensioning of balancing reserves, ii) provision by fluctuating renewables or new (battery) storage technologies, and iii) exchange of balancing reserves between balancing zones. The first part of this paper discusses and transforms these developments into quantitative scenario definitions. The second part applies these scenarios to dynELMOD (dynamic Electricity Model), an investment model of the European electricity system that is extended to include balancing reserve provision. In contrast to other models applied in most papers on balancing reserves, this model is capable of evaluating the interdependencies between developments in balancing reserve provision and high shares of fluctuating renewables jointly. The results show that balancing reserve cost can be kept at current levels for a renewable electricity system until 2050, when using a dynamic reserve sizing horizon. Apart from the sizing horizon, storage capacity withholding duration and additional balancing demand from RES are the main driver of balancing costs. Renewables participation in balancing provision is mainly important for negative reserves, while storages play an important role for the provision of positive reserves. However, only on very few occasions, additional storage investments are required for balancing reserve provision, as most of the time sufficient storage capacities are available in the electricity system.
    Keywords: balancing reserves, electricity sector modeling, investment model, renewable participation, cross-border cooperation, dynamic sizing
    JEL: Q42 Q47 Q48 C61 L94
    Date: 2017
  6. By: Sarah La Monaca; L. (Lisa B.) Ryan
    Abstract: Countries with low irradiation and solar PV adoption rates are increasingly considering policy support for solar PV, though consumer electricity demand and solar generation profiles are often mismatched. This paper presents a methodology for policy makers in countries with such conditions to examine more precisely the financial performance of residential solar PV from the consumer perspective as part of an ex-ante policy assessment. We model a range of prospective policy scenarios and compare policy mechanisms that compensate homeowners for generation, those that reduce their upfront costs, and those that assist with financing, using Ireland as a case study. The results confirm the intuitive notion that more generous financial remuneration schemes provide quicker payback, however, we observe that upfront grants do little to accelerate payback timeframes. We also show the importance of retail tariff structure in consumer payback for a solar PV system, with one-part tariffs generating shorter paybacks than two-part tariff structures, although the latter is more likely to secure revenue for electricity infrastructure investment. Drawing from this analysis, the paper proposes some options for the design of policy supports and tariff structures to deliver a sustainable residential renewable electricity system.
    Keywords: Residential solar PV; Energy policy; Energy economics; Electricity rate structure; Financial performance; Distributed generation
    JEL: H23 Q41 Q42 Q48
    Date: 2016–12
  7. By: Ali Protik; Duncan Chaplin; Arif Mamun; John Schurrer; Divya Vohra; Kristine Bos
    Abstract: This brief summarizes the impacts of actually connecting to the electric grid in Tanzania.
    Keywords: Tanzania, Africa, electricity, energy, rigorous evaluation, Millennium Challenge Corporation, MCC
    JEL: F Z
  8. By: Klára Major; Drucker, Luca Flóra
    Abstract: This paper presents the results of a CGE application that is used to measure and understand how sectoral shocks might influence the Hungarian economy, its economic agents and its different industries. The electricity outages are modelled by the decrease in the supply of energy. A 62 sectoral CGE model has been calibrated for the Hungarian economy. The capital stock of the energy industry is shocked, which has led to a decrease in the supply of energy. It is assumed that energy is a close complement to other goods both in production and consumption. In the base scenario a 2.08% decline in the supply of energy leads to a 0.53% decline in the GDP. Without price rigidities and other frictions, the adjustment is mainly driven by agents who can react at the lowest price. Therefore, this estimation should be considered as a lower bound on the real costs of adjustment. It is also shown that if prices are distorted, the costs of an outage are higher.
    Keywords: Hungary, Impact and scenario analysis, General equilibrium modeling
    Date: 2016–07–04
  9. By: Arif Mamun; Duncan Chaplin; Ali Protik; John Schurrer; Divya Vohra; Kristine Bos; Hannah Burak; Laura Meyer; Anca Dumitrescu
    Abstract: This issue brief summarizes findings from the final evaluation report of a large energy-sector project in Tanzania.
    Keywords: Tanzania, Africa, electricity, energy, rigorous evaluation, Millennium Challenge Corporation, MCC
    JEL: F Z
  10. By: Milad Maralani; Milad Maralani; Basil Sharp; Golbon Zakeri
    Abstract: In New Zealand approximately 39% of electricity is consumed by large industries. In 2012, The University of Auckland engineering team proposed to develop novel heat exchanger technology to allow electricity demand shaving and load shifting in light metal industries. This technology provides significant cost savings for such companies and preserves generation capacity at peak times for other users. The aim of this study is to represent the impact of adopting this technology in a particular, electricity intensive sector (e.g. steel or light metals manufacturing), on the electricity market and economic system as a whole. New Zealand’s economy is represented as a static CGE model, and the electricity sector is represented by a bottom-up model. An iterative algorithm settles the quantities and price between these two models; the general equilibrium sub-model uses the MCP format, and the electricity sector is based on optimization. Initial results show that a decrease in electricity demand by our targetted sector has an impact on some other sectors of the economy(e.g. manufacturing). Exports increase as a result of lower equilibrium prices for domestic intermediate goods. However, the domestic price of final products increased slightly as a result of more goods being exported.
    Keywords: New Zealand, Energy and environmental policy, General equilibrium modeling
    Date: 2016–07–04
  11. By: Kristine Bos; Duncan Chaplin; Arif Mamun; Ali Protik; John Schurrer; Divya Vohra
    Abstract: This brief summarizes the impacts of new electric line extensions in Tanzania.
    Keywords: Tanzania, Africa, electricity, energy, rigorous evaluation, Millennium Challenge Corporation, MCC
    JEL: F Z
  12. By: Reyno Seymore; Martin Combrinck
    Abstract: The objective of the study is to determine the necessary growth magnitudes in exogenous final demand for the alternative growth industries identified by the Gabonese government, which would directly offset the GDP decline resulting from the decrease in the production of oil. Input-output analysis has been identified as the appropriate methodology, especially due to data restrictions, since it can be used to evaluate the direct and indirect effects on the economy of various simulations. In the process of answering the study objective, a symmetric input-output table is developed which, at the time of writing, did not exist for Gabon. All the alternative growth industries were simulated separately to directly offset the decline in the oil production, and the required growth magnitudes in these industries were calculated. In addition, a fifth scenario identified that an 8.16% increase in the exogenous final demand of all the alternative growth industries, is sufficient to directly offset the effect that the 2.80% decline in production of the “Production of “raw” petrol and natural gas and petroleum services” industry (B03), has on GDP. In addition, the indirect impact on total production will be positive.
    Keywords: Gabon, Developing countries, Energy and environmental policy
    Date: 2016–07–04
  13. By: Nadia S. Ouedraogo
    Abstract: This study develops a scenario-based model to assess the current and future trends in energy demand in Africa and associated greenhouse gas emissions. Future energy demand is forecast on the basis of socio-economic variables such as gross domestic product, income per capita, population, and urbanization. The Long-range Energy Alternative Planning model is applied to analyse and project energy demand and the related emissions under alternative strategies for the period 2010–2040. Two main policy implications can be derived from the results of this study. First, it is essential for Africa to promote energy conservation policies that will improve energy efficiency and address issues related to energy shortages, energy poverty, and energy security. Second, policies that favour cleaner energies over other sources are required as early as possible to displace fossil fuel usage and to support sustainable economic development.
    Date: 2017
  14. By: Paul C. Samboko; Mulako Kabisa; Giles Henley
    Abstract: World biofuel production has been increasing to improve energy security and mitigate global warming. Southern Africa’s bioenergy demand could increase with South Africa’s planned fuel blending mandates, triggering increased demand for feedstocks and agricultural land. Ensuring sustained production will require a full understanding of the constraints to production expansion, considering the tradeoffs that may be generated in rural areas, as has been observed for large-scale land acquisitions. We analyse the social and biophysical constraints to biofuel production expansion in Zambia. Previously social constraints have received limited attention even though they may prove more problematic. Results indicate that Zambia is at least moderately suitable for bioenergy investments with biophysically suitable areas largely coinciding with the socially suitable areas. However, existing gaps in compensatory procedures may inhibit large-scale projects’ access to development finance if not aligned with internationally acceptable practices, and generate negative outcomes if safeguards are not in place.
    Date: 2017
  15. By: Palakiyèm Kpemoua (Université de Lomé - Université de Lomé)
    Abstract: The purposes of this paper are to analyze empirically the nexus between energy consumption per capita and Togo’s economic growth with a model that relies on an augmented neoclassical production function and to test the causality between that energy consumption and the economic growth. The data cover the period 1972-2013. The methodological approach is based on the cointegration and the causality tests.The results obtained indicate that the impact of energy consumption per capita on economic growth is positive and significant at 1% level. The results indicate also the existence of causality and show that Togo’s economic growth causes a rise in energy consumption per capita according to Granger.
    Abstract: Ce papier à pour objectifs d'analyser empiriquement la relation entre la consommation d'énergie par habitant et la croissance économique du Togo ainsi que l'existence d'une relation de causalité entre cette consommation d'énergie par habitant et la croissance économique en utilisant un modèle qui repose sur une fonction de production de type néoclassique. Les données couvrent la période 1972-2013. L'approche méthodologique utilisée s'appuie sur des techniques de cointégration et de causalité. Les résultats empiriques révèlent une corrélation positive et significative au seuil de 1% entre la consommation d'énergie par habitant et la croissance économique et une causalité au sens de Granger, de la croissance économique vers la consommation d'énergie
    Keywords: Togo,energy consumption,economic growth,causalité,cointégration,croissance économique,Consommation d'énergie,causality
    Date: 2016–09–12
  16. By: Palakiyèm Kpemoua (Université de Lomé - Université de Lomé)
    Abstract: The purposes of this paper are to investigate empirically the impact of electric power on Togo’s aggregate and economic branch levels (primary, secondary, tertiary) production growth, with a model that relies on a neoclassical production function and to test the causality between that electric power and the growth of aggregate production and economic branch levels. The empirical methodology is based on the (ARMA) maximum likelihood and Granger causality tests. The obtained results indicate that the impact of electricity consumption on Togo’s aggregate and economic branch levels (secondary, tertiary) production in the long-run is positive and significant. The results show also a significant existence of circular causality between electricity consumption and aggregate production growth, while that the causality goes from electricity consumption to the agricultural, services sectors , and from industrial sector to electricity consumption according to Granger.
    Abstract: Cet article à pour objectifs d'examiner empiriquement l'impact de l'énergie électrique sur la croissance économique globale et sectorielle (agriculture, industrie, service) au Togo ainsi que l'existence d'une relation de causalité entre l'énergie électrique et la croissance économique globale et sectorielle à partir d'une fonction de production de type néoclassique augmentée, par l'estimateur du maximum de vraisemblance (ARMA) et du test de causalité de Granger. Les résultats indiquent l'existence de corrélations positives significatives entre la consommation d'électricité et la croissance économique globale et sectorielle (secondaire et tertiaire) à long terme. Les résultats du test de causalité de Granger montrent qu'à long terme, il existe une causalité bidirectionnelle entre la consommation d'électricité et la croissance économique globale, une causalité unidirectionnelle de la consommation d'électricité vers l'agriculture et les services, et de l'industrie vers la consommation d'électricité. Mots-clés : Consommation d'énergie électrique, Croissance économique, test de causalité au sens de Granger. Classification JEL : C33, O13, O40. Abstract: The purposes of this paper are to investigate empirically the impact of electric power on Togo's aggregate and economic branch levels (primary, secondary, tertiary) production growth, with a model that relies on a neoclassical production function and to test the causality between that electric power and the growth of aggregate production and economic branch levels. The empirical methodology is based on the (ARMA) maximum likelihood and Granger causality tests. The obtained results indicate that the impact of electricity consumption on Togo's aggregate and economic branch levels (secondary, tertiary) production in the long-run is positive and significant. The results show also a significant existence of circular causality between electricity consumption and aggregate production growth, while that the causality goes from electricity consumption to the agricultural, services sectors , and from industrial sector to electricity consumption according to Granger.
    Keywords: Granger causality test ,electricity consumption,Economic growth
    Date: 2016–12–19
  17. By: Bensch, Gunther; Peters, Jörg
    Abstract: Free distribution of a technology can be an effective development policy instrument if its adoption is socially inefficient and hampered by affordability constraints. Improved cookstoves may be such a case: they generate high environmental and public health returns, but adoption is generally low. Based on a randomized controlled trial in rural Senegal, this paper studies whether one-time free cookstove distribution affects households' willingness to pay (WTP) in the long run. Effects might be negative because people anchor their WTP on the earlier zero price (reference dependence) or positive because information deficits about potential benefits are overcome. We find that households who received a free stove six years back exhibit a higher WTP today compared to control households. Potential reference dependence effects are thus at least compensated by learning effects. Our findings suggest that one-time free distribution does not spoil future prices and might even be a stepping stone for future market establishment.
    Keywords: Technology adoption,cookstoves,willingness to pay,real-purchase offer,energy access
    JEL: D03 D12 O12 O13 Q41
    Date: 2017
  18. By: Winston Moore; Mika Korkeakoski; Jyrki Luukkanen; Laron Alleyne; Abdullahi Abdulkadri; Noel Brown; Therese Chambers; Orlando Costa; Alecia Evans; Sidonia McKenzie; Dwight Reid; Luis Vazquez Seisdedos
    Abstract: Barbados spends approximately seven percent of annual gross domestic product (GDP) on imported fuel, a significant amount in a foreign exchange constrained economy. In addition, to the foreign exchange burden of imported fuel, the relatively high cost of electricity is a major constraint impacting on the external competitiveness of local businesses. This paper therefore contributes to the literature building a disaggregated model of the island’s long run energy development that accounts for both supply-side energy features as well as demand-side changes, particularly in relation to energy efficiency. It is expected that the study would be able to identify any potential shortfalls in future energy supply under various scenarios of economic development.
    Keywords: Barbados, Energy and environmental policy, Impact and scenario analysis
    Date: 2016–07–04
  19. By: Skrobotov Anton (RANEPA); Lanshina T. (Department of Economics, Hitotsubashi University, Japan)
    Abstract: In this paper, we propose constructing confidence sets for a break date in cointegrating regressions by inverting a test for the break location, which is obtained by maximizing the weighted average of power. It is found that the limiting distribution of the test depends on the number of I(1) regressors whose coefficients sustain structural change and the number of I(1) regressors whose coefficients are fixed throughout the sample. By Monte Carlo simulations, we then show that compared with a confidence interval developed by using the existing method based on the limiting distribution of the break point estimator under the assumption of the shrinking shift, the confidence set proposed in the present paper has a more accurate coverage rate, while the length of the confidence set is comparable. By using the method developed in this paper, we then investigate the cointegrating regressions of Russian macroeconomic variables with oil prices with a break.
    Keywords: Confidence interval, structural change, cointegration, Russian economy, oil price
    JEL: C12 C21
    Date: 2016
  20. By: William A. Pizer; Steven Sexton
    Abstract: Despite popularity among economists for their efficiency, energy pollution taxes enjoy less political support than standards-based regulation because of common perceptions that they burden the poor relative to the rich. However, the literature on pollution tax incidence and consumption surveys in Mexico, the United Kingdom, and the United States, suggest energy taxes need not be as regressive as often assumed. This paper demonstrates that the incidence of such taxes varies according to the energy commodities that are taxed, the physical, social and climatic characteristics of jurisdictions in which they are implemented, and how the revenue is used. It is also shown that the variation in household energy expenditure within income groups is greater than variation across income groups in many cases. These horizontal equity impacts are reviewed, as are their implications for policy making.
    JEL: H22 Q41 Q48
    Date: 2017–04
  21. By: Olga Kiuila (University of Warsaw)
    Abstract: In the coming decades the energy sector in Poland will undergo a substantial transition towards low carbon usage which will have a preponderant impact on the economy. Several modernization scenarios for energy policy are currently being discussed and not yet concluded. The main objective of the paper is to provide a tool that allow to simulate such scenarios and to show the impact into the whole economy by accounting for complex set of linkages between energy sector and other parts of economy. Those scenarios should assume, in different proportions, increasing use of nuclear energy, renewable sources and natural gas in exchange for reduction of carbon.Energy is a crucial economic input circulating in the economy, widely utilized as production factor and consumed in different forms by households. For this reason, any changes in energy will have a preponderant impact on the entire economy, thus partial equilibrium modeling is not sufficient. Currently there is no appropriate research tool in Poland which could accommodate complex structure of different energy sources and wide linkages of the energy sector to assess economy-wide impacts of the energy policy in longer horizon for Poland. We propose a hybrid general equilibrium modeling that incorporates energy technologies (bottom-up approach) directly into macroeconomic structure (top-down approach).By accounting for wide adjustments in the economy, while controlling for all major constraints - such as energy balance and available capital stock - the model can give a unique and detailed insight into the future shape of energy sector and low carbon economy in Poland.Based on the model outcomes we can state that simulation results can be very much biased even if the model is properly calibrated. We present several issues that should prevent modelers to supply results to policy-makers without careful tests. The immediate source of ?strange? results is wrong model design to study specific topics. The lack of formal tests to validate computable general equilibrium models should not be a pass for unreasonable results. Our study helps to understand the source of selected ?strange? results.
    Keywords: computable general equilibrium modeling, dynamics, capital market, energy technologies
    JEL: C61 D58 Q43
  22. By: Harry Granqvist; David Grover
    Abstract: Despite the rapid rise in public expenditure on clean energy infrastructure, there has been little discussion about what constitutes a fair distribution of this new spending burden. We examine four ethical principles that speak to different notions of fairness in the way this burden can and should be shared, and use them to produce three normative criteria for pursuing fairness in the clean energy fiscal policy context. We use these criteria to examine the extent to which fairness is being achieved in large clean energy roll-out programs in Australia, California and the United Kingdom. Maintaining a close focus on providing practical guidance for decision makers in similar policy contexts, we find that fairness is more achievable when program design explicitly considers which households should pay for the program and which should be exempt; when the idea of proportionality guides the distribution of the cost across paying households, and when the interests of low-income households are protected, by ensuring that they share in the benefits of the program, for example.
    Keywords: environmental taxes and subsidies; distributional impacts; equity; energy policy; renewable energy.
    JEL: N0
    Date: 2016–06
  23. By: Sophie Méritet (LEDa-CGEMP, Université Paris-Dauphine - Université Paris-Dauphine, PSL Research University); Stéphanie Monjon (LEDa-CGEMP, Université Paris-Dauphine - Université Paris-Dauphine, PSL Research University)
    Abstract: Durant les deux mandats de Barack Obama, la situation énergétique des Etats-Unis a connu de profonds bouleversements, non seulement du fait de l’exploitation des hydrocarbures non conventionnels, mais aussi de l’essor des énergies renouvelables. Ces évolutions résultent d’actions politiques fortes, au niveau fédéral et des Etats, pour diminuer la dépendance énergétique du pays, ainsi que ses émissions de gaz à effet de serre.Ainsi, dans le mix électrique américain d'origine renouvelable, la part combinée du solaire et de l'éolien a fortement augmenté : elle est maintenant supérieure à 20%, soit une part équivalente à celle des biocarburants. En dépit d'une progression spectaculaire au cours des cinq dernières années, les énergies renouvelables (hors hydroélectricité) occupent toujours une place modeste dans le mix électrique américain (7%). L’indépendance énergétique du pays a été un objectif clairement affiché pour ces politiques ; la réduction des émissions de gaz à effet de serre (GES) en a été un autre, conduisant à la mise en œuvre d’un large spectre de mesures visant l’ensemble des secteurs du pays.Ces changements de l’offre énergétique du pays, ainsi que les actions prises dans les autres secteurs, ont abouti à un recul important des émissions de GES. Alors qu’entre 1990 et 2007 elles avaient progressé de façon quasi continue, elles enregistrent un recul important depuis. Les réductions les plus importantes ont été observées dans le secteur électrique et dans le secteur des transports. Cette évolution résulte d’une volonté politique au niveau à la fois fédéral et des États. Malgré l’échec de l’American Clean Energy and Security Act qui devait notamment introduire un système de permis d’émissions couvrant les émissions des centrales électriques en 2009, de nombreux États se sont engagés dans une action forte en faveur du climat à la fin des années 2000. Néanmoins, le contraste reste important entre États, que cela soit en matière de niveau d’émissions de GES, ou de politiques climatiques. Certains se sont engagés très tôt dans la lutte contre le changement climatique, en adoptant un objectif de réduction de leurs émissions de GES et en déployant des mesures dans l’ensemble des secteurs économiques. D’autres sont encore assez peu actifs sur la question climatique et se contentent généralement de programmes en faveur des énergies renouvelables.Après sa réélection en 2012, le président Obama a adopté une stratégie différente de la précédente, en renonçant à proposer une nouvelle loi fédérale et en préférant utiliser son pouvoir exécutif sur ce dossier. En juin 2013, il annonce un Plan d’Action sur le Climat qui repose sur la législation existante et les prérogatives de l’Environmental Protection Agency (EPA). Les réductions les plus importantes sont attendues dans le secteur de l’énergie avec, d’une part, la baisse des émissions de CO2 des centrales électriques et, d’autre part, la réduction des émissions de méthane des infrastructures d’extraction et de transport du gaz naturel. Barack Obama a également repris place sur la scène internationale. Après avoir été en première ligne de la négociation de l’accord de Copenhague en 2009, l’administration Obama a été présente et moteur tout au long du processus de négociation qui a préparé la 21e Conférence des Parties de la Convention cadre des Nations unies sur les changements climatiques. Dans son héritage, le président Obama a néanmoins parfaitement conscience que son rêve « d’Amérique verte » doit cohabiter avec les ressources fossiles non conventionnelles. Sa nouvelle politique se divise donc entre cette recherche d’indépendance énergétique au travers de la production nationale d’hydrocarbures non conventionnels et d’énergies renouvelables, et la réduction de l’empreinte carbone de son pays.
    Keywords: Etats-Unis,énergie,environnement
    Date: 2016
  24. By: Paul Stevens
    Abstract: This paper is concerned with the role of oil and gas in the development of the global economy. Its focus is on the context in which oil and gas producers in both established and developing countries must frame their policies in order to optimize the benefits of producing such resources. It begins by outlining a brief history of the issue over the last 25 years. It considers oil and gas as factor inputs, their role in global trade, the role of oil prices in the macro-economy and the impact of the geopolitics of oil and gas over the same period. The paper then considers various conventional views of the future of oil and gas in the primary energy mix, trying to explain why there is a tendency towards consensus in the different forecasts. Finally, it seeks to challenge these conventional views of the future by examining the various drivers behind them, and to show why the future may prove to be very different from what is expected and how this may change the context in which producers must frame their policy responses.
    Date: 2016
  25. By: Idrisov Georgy (Gaidar Institute for Economic Policy); Gordeev Dmitry (Gaidar Institute for Economic Policy)
    Abstract: The paper analyzes the need to change the approaches to Russia’s natural gas pricing in domestic and foreign markets. The authors conclude that changes are inevitable in the medium term because existing pricing practices are becoming obsolete in the rapidly transforming gas market. The development of the gas industry is severely hampered by inefficient domestic consumption due to distorted price incentives, lack of competition in the domestic market and the pegging of export gas prices to the oil product basket. The paper discusses possible development options for Russia’s gas industry and their potential macroeconomic effects.
    Keywords: natural gas, pricing, cross subsidization
    JEL: D24 D40 D60 E20
    Date: 2017
  26. By: Akhmetov, Almaz
    Abstract: This paper uses Vector Autoregression (VAR) models to test the presence of the Dutch disease in Kazakhstan. It was found that tradable industries and world oil price have immediate effect on domestic currency appreciation. This in return has delayed negative impact on agricultural production and positive delayed effect on non-tradable industries. Prolonged period of low oil prices could hurt Kazakh economy if no effective policies to combat the negative effects of the Dutch disease are implemented.
    Keywords: Kazakhstan, Dutch disease, VAR
    JEL: E6 O13 O53
    Date: 2017–03–27
  27. By: Aurelio F. Bariviera; Luciano Zunino; Osvaldo A. Rosso
    Abstract: This paper analyzes the informational efficiency of oil market during the last three decades, and examines changes in informational efficiency with major geopolitical events, such as terrorist attacks, financial crisis and other important events. The series under study is the daily prices of West Texas Intermediate (WTI) in USD/BBL, commonly used as a benchmark in oil pricing. The analysis is performed using information-theory-derived quantifiers, namely permutation entropy and permutation statistical complexity. These metrics allow capturing the hidden structure in the market dynamics, and allow discriminating different degrees of informational efficiency. We find that some geopolitical events impact on the underlying dynamical structure of the market.
    Date: 2017–04
  28. By: Alaali, Fatema
    Abstract: This study examines the responses of some of the UK transportation, travel and leisure, and oil and gas firms to oil price changes. Fama-French-Carhart's (1997) four-factor asset pricing model is augmented with the oil price risk factor to study the association of oil and stock prices of 25 firms over the period from January 1998 to December 2012. The extent of the exposure of UK transportation and travel and leisure firms is generally negative but it is particularly significant for a number of firms including delivery services, travel and tourism, and airlines. Oil price risk exposures of UK oil and gas companies are generally positive and significant. With the aid of asymmetric and scaled specifications, some firms show strong evidence of asymmetry in the reaction of stock returns to changes in the price of oil comprising travel and tourism, airlines, and integrated oil and gas. Moreover, the results document that oil price risk exposures vary over time. In particular, the global recession of 2008 has significantly contributed to the oil price risk exposure of travel and tourism and integrated oil and gas firms. These results should be of interest to financial analysts, corporate executives, regulators and policy makers.
    Keywords: Oil Price, Stock returns, Asset pricing
    JEL: G21 Q31
    Date: 2017–03–26
  29. By: Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Seong-Min Yoon (Department of Economics, Pusan National University, Busan, Republic of Korea)
    Abstract: This paper provides a novel perspective to the predictive ability of OPEC meeting dates and production announcements for (Brent Crude and West Texas Intermediate) oil futures market returns and GARCH-based volatility using a nonparametric quantile-based methodology. We show a nonlinear relationship between oil futures returns and OPEC-based predictors; hence, linear Granger causality tests are misspecified and the linear model results of non-predictability are unreliable. When the quantile-causality test is implemented, we observe that the impact of OPEC variables is restricted to Brent Crude futures only (with no effect observed for the WTI market). Specifically, OPEC production announcements, and meeting dates predict only lower quantiles of the conditional distribution of Brent futures market returns. While, predictability of volatility covers the majority of the quantile distribution, barring extreme ends.
    Keywords: Oil futures markets Returns and volatility, OPEC announcements, Nonparametric quantile causality
    JEL: C22 C58 G14 G15
    Date: 2017–04
  30. By: Shaker, Saber Adly
    Abstract: The main purpose of this research is to investigate the impact of governance (especially of natural resources) on returns of natural resources sector (specifically oil and natural gas). In addition, It also examines whether governance turn point exists or not. The natural resources governance index used in this research was drawn from the Revenue Watch Institute for the year 2013 while the natural resources rent, GDP, and natural resources depletion data were obtained from the World Bank Database. The study covered fifty-six countries; ten of them are Arabian countries. And it adopted the cross-sectional data framework, the Ordinary Least Square estimation technique is used for the analysis. The research found that governance, GDP, and depletion of natural resources impact positively on the returns of natural resources. The research also found that there is a turning point for governance which means that after a given level of governance the significant positive impact diverted to be a significant negative impact. The research advocates that the last result may be due to the maximized governance after optimal level may lead to bureaucracy or/and combat the corruption in natural resources sector which lead to a drop in natural resources returns. The results suggest that firstly, it's necessary to provide a legislative guarantee to ensure ease of access to data related to the natural resources sector. Secondly, apply the disclosure standards of the contracts entered by the government with companies worked in the natural resources sector. Thirdly, publish periodic reports on the financial receipts and licensing revenues and assess both of the economic and environmental returns in the exploitation of natural resources projects. Fourthly, application of accountability standards begins with setting clear selection criterions for top management in both of public companies and governmental agencies related to the natural resources sector. Fifthly, publish financial data of natural resources funds in terms of assets and how to manage those funds. Sixthly, encourage the cooperation with international organizations which interested in governance, for example, joining the World Bank's initiative to promote transparency in the extractive industries, which indicate to good intentions from the government to apply the principles of governance. Finally, by analyzing the returns of natural resources - oil and natural gas only - in terms of value in Arab countries, it notes that there are ten Arab countries that have about 648.8 billion US Dollar in the year 2014. Therefore, the share of the ten Arab countries is about 21% of the total revenue of the natural resources in the world in 2014. This fact indicates that Arab countries are a major player in the natural resources market. So, any attempts to reform the natural resources sector will lead to positive effects on the whole economy performance
    Keywords: Governance – Natural resources – Arab countries
    JEL: E02 G30 Q38
    Date: 2017–03–23
  31. By: Jochen Güntner
    Abstract: This paper studies how petroleum producers respond to a giant oil field discovery. Using a large panel of country-level production data and a difference-in-differences identification approach, I show that domestic production levels respond before a newly found oil field has come on line, indicating that producers raise extraction rates from existing reservoirs. Given that domestic petroleum consumption rises by less in response to a discovery, at least part of the increase in production seems to go into (net) oil exports. I find substantial heterogeneity in the impulse responses of oil production and consumption with respect to the location and size of a giant oil field and the country’s OPEC membership status.
    Keywords: Giant oil field discoveries; Half life of reserves; Oil production; OPEC; Proved reserves
    JEL: C32 N50 Q33 Q41
    Date: 2017–03
  32. By: Jochen Güntner; Katharina Linsbauer
    Abstract: This paper investigates how the University of Michigan’s Index of Consumer Sentiment (ICS) – a survey measure of U.S. households’ expectations about current and future economic conditions – responds to structural oil supply and demand shocks. We find that the response to an observed increase in the real price of crude oil depends on the underlying reason. While oil supply shocks have little effect on the ICS, other oil demand shocks such as a precautionary demand shock, for example, have a statistically significant negative impact over a two-year horizon. The effect of aggregate demand shocks associated with the global business cycle is positive in the first few months and negative thereafter. Considering the responses of ICS sub-indices and more specific survey questions, we find that expectations about higher future inflation and the associated reduction of real household income as well as a deterioration of perceived vehicle and house buying conditions are the main transmission channels of aggregate demand and other oil demand shocks. Oil shocks also affect consumers’ satisfaction with U.S. economic policy.
    Keywords: Consumer sentiment; Oil price shocks; Structural VAR estimation; Transmission channels
    JEL: C32 E30 N50 Q41
    Date: 2016–12
  33. By: Simone Tagliapietra
    Abstract: Endowed with half of the world’s known oil and gas reserves, the Middle East and North Africa (MENA) region is a cornerstone of the global energy architecture. This architecture is currently undergoing a structural transformation, prompted by two different forces - decarbonisation policies and low-carbon technology advancements. The energy literature offers no comprehensive analysis of the potential impact of the global energy transformation on the MENA region. This paper seeks to fill this gap by investigating the following research question - are MENA oil exporting countries equipped to prosper in times of global decarbonisation? Making use of the Rentier State Theory and of a business-as-usual projection of the exploitation of oil resources in MENA countries, we highlight on the lack of incentives for MENA oil exporters to pursue paths of economic diversification. On the basis of a scenario-based analysis, we illustrate that, should the Paris Agreement on climate change be implemented, MENA oil exporters would see their oil rents decline over the next few decades. MENA oil exporting countries are still not adequately equipped to prosper in a decarbonising world. Therefore, decarbonisation should represent an incentive for MENA oil exporters to pursue structural processes of transition from rentier to production states.
    Date: 2017–04
  34. By: Ece Guleryuz
    Abstract: This paper examines the fundamental determinants of the contemporary income inequailty and economic growth in MENA and African countries in a panel data estimation during the period 1970-2013 for 24 countries. It is hypothesized that the variation in oil rents, human capital accumulation, and initial inequality in land ownership have significant impacts on contemporary income inequality in different countries. Furthermore, various political economy factors are included in the regression in order to measure the effect of institutional quality. The estimation results show that the oil rents levels, initial inequality in land ownership, rule of law and property rights affect income inequality and growth performance with a statistical significance. Keywords: Landownership inequality, Oil rents, Income inequality, Growth performance, MENA and African countries JEL code: O13, O15, O41, O43, P16, Q00 Random Effects Model. Panel Data Estimation. The estimation results show that the oil rents levels, initial inequality in land ownership, rule of law and property rights affect income inequality and growth performance with a statistical significance.
    Keywords: Middle East and North Africa (MENA) and African Countries , Growth, Macroeconometric modeling
    Date: 2016–07–04
  35. By: Alfred Haug; Syed Basher; Perry Sadorsky
    Abstract: This paper contributes to the literature on the effects of oil price changes for developed and emerging oil-exporting countries by looking at the effects on real exchange rates, which affect a country’s terms of trade and hence its competitiveness. In contrast to previously used Markov-switching models where the adjustment process is abrupt and in a way a “black box,” we employ smooth transition models that specify the functional form of the adjustment process and are explicit about what variables drive the process. These types of smooth transition models have been successfully used to model the time series behaviour of exchange rate movements but have not yet been used to explain how exchange rates react to changes in oil prices, as far as we know. The paper considers logistic (asymmetric) and exponential (symmetric) smooth transition adjustments of real exchange rates for six major oil exporting countries in response to three different shocks affecting oil prices: an oil supply shock, an oil-market specific demand shock, and a global economic demand shock. Preliminary results for Canada only: We detect no statistically significant non-linearities, be they asymmetric or symmetric, for the effects of oil supply shocks and oil-market specific demand shocks on the exchange rate. Instead, the effects are linear in these cases. However, global aggregate demand shocks have non-linear effects on exchange rates.
    Keywords: Canada, Brazil, Mexico, Norway, Russia, and the United Kingdom , Energy and environmental policy, Finance
    Date: 2016–07–04
  36. By: Hyunju Kang (Korea Capital Market Institute); Hyunduk Suh (Department of Economics, Inha University); Jongmin Yu (Department of Economics, Hongik University)
    Abstract: We conduct an empirical analysis on the effect of air pollution on retail sales, using monthly regional panel data on air quality and large retail store sales in Korea. We account for regional heterogeneity in air pollution and control for various macroeconomic and climatic factors that can affect retail sales. We also use the air quality indicator in the west coastal islands - affected by trans-border pollution, but uncorrelated with economic activity in the mainland - as an instrumental variable. The estimation result shows that one additional day of PM10 level higher than 80 reduces monthly retail sales by about 0.1 percent in general. However, an adaptive pattern appears over time, in particular when the level of air pollution in the previous month was severe.
    Keywords: Air pollution, PM10, Consumption, Large store Retail Sales, Adaptation
    JEL: E21 E60 Q53
    Date: 2017–04
  37. By: Chen, Xi (Yale University); Zhang, Xiaobo (Peking University); Zhang, Xin (Peking University)
    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: cognitive performance, air pollution, gender difference
    JEL: I24 Q53 Q51 J16
    Date: 2017–03
  38. By: Olivier Deschenes (University of California, Santa Barbara); Michael Greenstone (University of Chicago); Joseph S. Shapiro (Cowles Foundation, Yale University)
    Abstract: The demand for air quality depends on health impacts and defensive investments, but little research assesses the empirical importance of defenses. A rich quasi-experiment suggests that the Nitrogen Oxides (NOx) Budget Program (NBP), a cap-and-trade market, decreased NOx emissions, ambient ozone concentrations, pharmaceutical expenditures, and mortality rates. The annual reductions in pharmaceutical purchases, a key defensive investment, and mortality are valued at about $800 million and $1.1 billion, respectively, suggesting that defenses are over one-third of willingness-to-pay for reductions in NOx emissions. Further, estimates indicate that the NBP’s benefits easily exceed its costs and that NOx reductions have substantial benefits.
    Keywords: Health, NOx, Emissions
    JEL: H40 I10 Q40
    Date: 2017–03
  39. By: D. Dragone; L. Lambertini; A. Palestini
    Abstract: We revisit the well known differential Cournot game with polluting emissions dating back to Benchekroun and Long (1998), proposing a version of the model in which environmental taxation is levied on emissions rather than the environmental damage. This allows to attain strong time consistency under open-loop information, and yields two main results which can be summarized as follows: (i) to attain a fully green technology in steady state, the regulator may equivalently adopt an appropriate tax rate (for any given number of firms) or regulate market access (for any given tax rate); (ii) if the environmental damage depends on emissions only (i.e., not on industry output) then the aggregate green R&D effort takes an inverted-U shape, in accordance with Aghion et al. (2005), and the industry structure maximising aggregate green innovation also minimises individual and aggregate emissions.
    JEL: C73 H23 L13 O31 Q52
    Date: 2017–04
  40. By: Catherine Leining (Motu Economic and Public Policy Research); Judd Ormsby (Motu Economic and Public Policy Research); Suzi Kerr (Motu Economic and Public Policy Research)
    Abstract: The New Zealand Emissions Trading Scheme (NZ ETS) was conceived as New Zealand’s gateway to the international carbon market with two objectives: assisting New Zealand to meet its international climate change obligations and reducing domestic net emissions below business-as-usual levels. Underlying these objectives was the principle of least-cost compliance for both the New Zealand government and NZ ETS participants. Uniquely among ETS to date, from 2008 through mid-2015 the NZ ETS operated with buy-and-sell linkages to the Kyoto market that did not constrain domestic emissions and were used to set the domestic price. As international Kyoto unit prices plunged from 2011 onward, so did New Zealanders’ incentives to invest in higher-cost domestic mitigation. Instead, NZ ETS participants complied by purchasing large numbers of Kyoto units. In November 2012, the government announced it would take its post-2012 commitment under the UNFCCC, not the Kyoto Protocol. NZ ETS participants responded by surrendering low-cost Kyoto units and banking NZUs which were expected to remain usable in the longer term. In mid-2015, the NZ ETS delinked from the Kyoto market. Although the New Zealand government has explored bilateral ETS linkages, none has come to fruition to date. As of 2017, the NZ ETS operates as a stand-alone system with a substantial participant-held NZU bank as the legacy of past linking. The government now faces important decisions about the future of unit supply in the NZ ETS and linkages to international markets. This paper examines New Zealand’s experience with linking and de-linking its ETS to capture lessons that could be of value to policy makers in New Zealand and other countries. It finds that the considerable opportunities to a small ETS market from linking can be negated if the environmental, economic and political risks are not managed strategically. It also highlights some of the technical and political challenges of negotiating bilateral linking agreements. New Zealand’s future policy on ETS linking, and more generally support for international mitigation as part of our global contribution, should ensure the integrity of New Zealand’s contribution to global mitigation and support strategic domestic decarbonisation in the longer term.
    Keywords: Emissions trading, environmental economics, climate change, greenhouse gases, linking emissions trading schemes, environmental public policy, history
    JEL: Q50 Q54 Q58 N5 N57
    Date: 2017–04
  41. By: Catherine Leining (Motu Economic and Public Policy Research); Corey Allan (Motu Economic and Public Policy Research); Suzi Kerr (Motu Economic and Public Policy Research)
    Abstract: When it was launched in 2008, the New Zealand Emissions Trading Scheme (NZ ETS) pioneered the design concept of implementing an emissions trading scheme (ETS) across all sectors of the economy (e.g. stationary energy, transport, industrial processes, forestry, waste and biological emissions from agriculture) and all six major greenhouse gases (GHGs). This reflected New Zealand’s relatively unique emission profile among industrialised countries (with heavy renewable generation, nearly half of emissions from agriculture, and a large land area suitable for forestry) and its interest in finding effective, efficient, and equitable solutions to the challenge of meeting its international emission reduction targets. Further innovations at the time – influenced in part by the government’s previous efforts to implement a carbon tax in the energy and industry sectors – were the selection of predominantly upstream points of obligation in the energy sector, with the potential for some major downstream energy users to opt in voluntarily, and the selection of a default processor-level obligation in the agriculture sector, with the option to shift to a farmer-level obligation. As of 2017, the entry of biological emissions from agriculture has been deferred indefinitely. Otherwise, the proof of concept on both broad sectoral coverage and upstream points of obligation has been demonstrated through practical experience. To help inform future ETS policy making in New Zealand and internationally, this paper provides a conceptual foundation for design decisions on ETS coverage and points of obligation, and explores the history of and rationale for the specific design choices that have been made in this regard in New Zealand.
    Keywords: Emissions trading, sectoral coverage, point of obligation, NZ ETS
    JEL: Q58 Q48 Q50
    Date: 2017–04
  42. By: Martijn Boermans; Rients Galema
    Abstract: With the adoption of the Paris Agreement in December 2015, better understanding of portfolio carbon dioxide (CO2) exposures has become increasingly important for investors, regulators and society at large. In this paper we measure the portfolio carbon footprints (CFPs) of pension funds' stock investments. We utilize security-by-security holdings of Dutch pension funds over the period 2009-2015 and combine this with firm-level CO2 information to analyze the drivers of CFP at the portfolio level. The results show that pension funds face intricate trade-offs when aiming to reduce portfolio related CO2 emissions: expected dividend yields are positively related to the carbon footprint while portfolios' systematic risk (market beta) is negatively related to the carbon footprint. The dividend trade-off with carbon exposures only applies to well-funded pension funds and is driven to some extent by investments in energy and utility companies. For the period 2013-2015 pension funds which publicly disclose their carbon footprint tend to have relatively lower exposure to firm with high carbon emissions.
    Keywords: carbon emissions; pension funds; institutional investors; socially responsible investment; climate change
    JEL: G11 G23 H55 Q54 Q56
    Date: 2017–04
  43. By: Hakan Cetintas (Kyrgyzstan-Turkey Manas University, Department of Economics); I. Murat Bicil (Balikesir University, Department of Economics); Kumru Turkoz (Balikesir University, Department of Economics)
    Abstract: Elektrik uretiminde fosil yakitlarin kullanimi CO2 emisyonlarinin artmasinda onemli etkenlerin basinda gelmektedir. Bu calismada Turkiye'de 1986-2013 yillari icin yillik veriler ele alinarak fosil yakitlarla CO2 emisyonlari arasindaki uzun donemli iliskiden yola cikilarak uretimde fosil yakit secimi ile ilgili farkli bilesimlere gore olusturulan senaryolara dayali CO2 emisyonu ongoruleri yapilmistir. Farkli uretim senaryolarina gore emisyondaki degismeleri hesaplamak icin Turkiye'de elektrik uretimi Box-Jenkins metodolojisi ile tahmin edilmis ve uretim projeksiyonu kullanilarak farkli yakit bilesimi senaryolari altinda CO2 emisyonlari hesaplanmistir. Buna gore elektrik uretiminde mevcut durumun devami, komure alternatif olarak dogal gaz kullanimi, komurden yenilenebilir enerjiye gecis gibi alternatif senaryolarin CO2 emisyonunu nasil degistirdigi uretim projeksiyonuna bagli olarak degerlendirilmistir.
    Keywords: CO2 Emisyonlari, Enerji Uretimi, Fosil Yakitlar
    JEL: Q2 Q47
    Date: 2017–03
  44. By: Marian Leimbach; Niklas Roming; Gregor Schwerhoff; Anselm Schultes
    Abstract: Progress in international climate negotiations depends crucially on the contribution of developing countries. Development perspectives determine their incentive structure. This study investigates into two related research questions: Does climate policy slow economic growth of Sub-Saharan Africa? What are interregional and intraregional distributional impacts of climate policies? Based on a scenario analysis with the energy-economy-climate model REMIND, we estimate the economic costs and transformation needs under different assumptions on (i) climate stabilization target, (II) policy and technology cooperation, and (iii) burden sharing. This scenario analysis is supplemented by an ex-post assessment of distributional effects within the Sub-Saharan Africa region based on stylized facts of energy consumption. - Climate change mitigation is affordable and compatible with economic growth - While mitigation costs can be reduced for Sub-Saharan Africa by delayed action, early action can even generate benefits (beyond avoided damages) when global action takes international equity into account - Direct (domestic) mitigation costs can potentially be reduced (up to 8 percentage points) due to revenues on the carbon and biomass market. - Climate policy causes the price for liquid energy to rise much faster in a mitigation scenario than in the business-as usual scenario; until 2030 this increase even exceeds that of the increase in per capita income, resulting in a decline of non-energy consumption
    Keywords: Sub-Saharan Africa, Energy and environmental policy, Developing countries
    Date: 2016–07–04
  45. By: Elmar Hillebrand (EEFA Research Institute); Marten Hillebrand (Johannes Gutenberg University Mainz)
    Abstract: This paper develops a dynamic general equilibrium model with an arbitrary number of different regions to study the economic consequences of climate change under alternative climate policies. Regions di?er with respect to their state of economic development, factor endowments, and climate damages and trade on global markets for capital, output, and exhaustible resources. Our main result derives an optimal climate policy consisting of an emissions tax and a transfer policy. The optimal tax can be determined explicitly in our framework and is independent of any weights attached to the interests of different countries. Such weights only determine optimal transfers which distribute tax revenues across countries. We infer that the real political issue is not the tax policy required to reduce global warming but rather how the burden of climate change should be shared via transfer payments between di?erent countries. We propose a simple transfer policy which induces a Pareto improvement relative to the Laissez faire solution.
    Keywords: Multi-region model; Dynamic equilibrium; Climate change; Optimal climate tax; Optimal transfer policy; Emissions trading system
    JEL: E10 E61 H21 H23 Q43 Q54
    Date: 2017
  46. By: Moon , Jin-Young (Korea Institute for International Economic Policy); Jung , Jione (Korea Institute for International Economic Policy); Song , Jihei (Korea Institute for International Economic Policy); Lee , Sung Hee (Korea Institute for International Economic Policy)
    Abstract: Korean Abstract: 본 연구는 신기후체제 출범에 대비하여 온실가스 감축목표 이행을 위한 국제 탄소시장 메커니즘 활용방안을 제시하였다. 시장 매커니즘에 관한 그간의 논의 경과를 정리하고, 특히 현재 운영 중인 국제사회의 탄소 상쇄 프로그램의 주요 내용과 특징을 검토하였다. 우리나라는 국가 감축목표 달성을 위해 국제 탄소시장 메커니즘 활용계획을 수립한바, 본 연구에서는 해외 감축사업을 위한 유망 분야 및 지역 선정 시 적용가능한 '탄소감축협력지수'를 개발하였다. 아울러 민간기업의 해외 감축사업 추진을 위한 제약요인을 분석하고, 향후 활성화 과제를 제시하였다. English Abstract: Adopted at the UNFCCC COP21, the Paris Agreement is recognized as the most significant international environmental agreement since the United Nations Framework Convention on Climate Change in 1992. Laying the foundation for the post-2020 climate regime, the Paris Agreement emphasizes GHG mitigation efforts by all parties, including developed and developing countries. Korea decided to cut the national greenhouse gas emission by 37% in 2030 compared to the business-as-usual emission estimate and included the statement in its Intended Nationally Determined Contribution. In achieving the target, Korea stated that 11.3%p of greenhouse gas reduction will be achieved through international carbon market mechanism while the remaining 25.7% will come from domestic source. Nevertheless, the international community is in the process of developing consensus around the details of trans-boundary carbon market mechanism that is environmentally sound and sustainable enough to be recognized under the Paris Agreement. In this regard, the study aims to present ways for Korea to properly respond to the issue by observing the progress in the climate discussions and analyzing major carbon programs. Particularly since the Korean government is considering the use of cross-border carbon offset programs, the study comprehensively reviews a number of international carbon offset programs and thus seeks to provide implication for Korea. The study considers key principles highlighted in the international community and develops a Mitigation Cooperation Index (MCI), applicable to identifying prospective regions and fields for carbon offset programs. The study also looked at constraints to private participation in implementing international carbon projects and suggests ideas to increase private participation. In order to identify potential carbon partner countries for Korea, the study devised a set of index, namely 'Mitigation Cooperation Index.' The study deemed the following elements as essential: GHG emission level and intent for international carbon transfer, economic ties with Korea, and national development potential. By sub-categorizing and indexing the above-mentioned elements (emission level index, economic exchange index, and national capacity index) and varying the weight among the elements, the study induced values between 0 and 1, with 0 being less prospective and 1 being more prospective. When placing most weight on emission environment, India, Iran, Kazakhstan, Mongolia, and Vietnam were analyzed as the most potential partners. Nine out of thirty most potential partners were Asian countries. In terms of economic exchange, Vietnam, Indonesia, the Philippines, Bangladesh, Cambodia, Myanmar and several other Asian countries were included in the more prospective group. In regards to national development capacity, countries with higher income levels while classified as developing countries in the UNFCCC (i.e. Singapore, Israel, Chile, Qatar, etc.), were in the top tier. However, through a MCI analysis, we were able to conclude that it is most effective when national capacity support is provided along with cooperation in carbon reduction in a number of Asian countries. On the Korean side, while private companies are willing to participate in overseas reduction projects, many of them lack local network and capacity. Therefore, it is necessary to enhance private sector competitiveness through adequate institutional and policy design. In terms of finance, Korea must seek a linkage between ODA resources and international carbon reduction programs. Given the financial constraints of low-carbon projects, ODA resources can be linked to lowering entry barriers and inducing private capital inflows. Also, active participation in international carbon finance initiatives by multilateral banks and organizations should be considered. In conclusion, the study suggests the followings to facilitate Korea's participation in international GHG reduction. First, the government should set up and implement a mid- to long-term plan to assist the private sector participation in climate change mitigation. There is a need for a powerful inter-agency control tower beyond the current level to perform and coordinate relevant action plans established by each ministries. Secondly, active support from the government is needed to promote private participation in climate change projects overseas. For example, establishing a one-stop support organization for Korean companies to successfully launch business in overseas green industry sector, building a system for companies to transfer overseas carbon credits to domestic reduction, and supporting private sector competency and experience through domestic institution building. In addition, resource mobilization must be considered. In this respect, Korea may consider supporting GHG mitigation projects in connection with ODA, multilateral funds, and various other financial instruments. Particularly, enhanced efforts to access the Green Climate Fund is necessary. Access to the Fund can be highly potential through a well-devised project plan. Finally, efforts are needed for Korea to engage and collaborate in various international carbon partnership programs. Through participation in the discussions with major international organizations, donors and recipients, Korea will be able to access first-hand information and also cultivate climate capabilities while engaging in actual business. Engagement in such activities will also increase business opportunities and partnership with interested parties.
    Date: 2016–12–30
  47. By: In Chang Hwang
    Abstract: This paper develops a climate-economy model with uncertainty, irreversibility and active learning. Whereas previous papers assume passive learning from one observation per period, or experiment with control variables to gain additional information, this paper considers active learning from research investment in improved observations. We restrict ourselves to improving observations of the global mean temperature. We find that the decision maker invests a significant amount of money in climate research, far more than the current level, in order to increase the rate of learning about climate change. This helps the decision maker take improved decisions. The level of uncertainty decreases more rapidly in the active learning model with research investment than in the passive learning model only with temperature observations. As a result, active learning reduces the optimal carbon tax. The greater the risk, the larger is the effect of learning. The method proposed here is applicable to any dynamic control problem where the quality of monitoring is a choice variable.
    Keywords: The Netherlands/ South Korea, Energy and environmental policy, Optimization models
    Date: 2016–07–04
  48. By: Tom Bosserez; Pieter Moonen; Marten Ovaere; Jan Rongé; Niels Smeets; Sarah Van Eynde
    Abstract: tion%20papers/ForeignTravel-TechnicalNot e.pdf
    Keywords: Carbon Compensation Policy, KU Leuven staff mobility
    Date: 2017–02–01

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