nep-ene New Economics Papers
on Energy Economics
Issue of 2017‒05‒28
thirty-six papers chosen by
Roger Fouquet
London School of Economics

  1. Measuring the Welfare Effects of Residential Energy Efficiency Programs By Hunt Allcott; Michael Greenstone
  2. Analysis of energy use efficiency in Japanese factories:Industry agglomeration effect for energy efficiency By Kenta Tanaka; Shunsuke Managi
  3. Financial incentives for residential energy efficiency investments in Ireland: Should the status quo be maintained? By Collins, Matthew; Dempsey, Seraphim; Curtis, John
  4. Innovation-Led Transitions in Energy Supply By Derek Lemoine
  5. Too late, too sudden: Transition to a low-carbon economy and systemic risk By Daniel Gros; Philip Lane; Sam Langfield; Sini Matikainen; Marco Pagano; Dirk Schoenmaker; Javier Suarez
  6. Is Nepal's Renewable Energy Subsidy Reaching Poor People of Rural Areas? A Study of Biogas amd Solar Home Systems By Dipendra Bhattarai
  7. Dynamic scheduling of a flow shop with on-site wind generation for energy cost reduction under real time electricity pricing. By Zhai, Y.; Biel, K.; Zhao, F.; Sutherland, J.W.
  8. Private Investment in Renewable Energy Sector in Africa: An Economic Analysis By Mahrous, Walaa
  9. The role of community compensation mechanisms in reducing resistance to energy infrastructure development By Hyland, Marie; Bertsch, Valentin
  10. Estimation de l’élasticité prix de la demande électrique en France By Régis Bourbonnais; Jan Horst Keppler
  11. How Production Risk and Flexibility Affect Liquidity Management: Evidence from Electricity Generating Firms By Chen Lin; Thomas Schmid; Michael S. Weisbach
  12. The Electricity Distribution Network Economic Modelling and Middle-Term Scenario Planning in Russian Federation By Suyunchev, Marat; Mozgovaya, Oxana; Temnaya, Olga
  13. Energy Intensity of GDP: A Nonlinear Estimation of Determinants in Iran By Heidari, Hassan; Babaei Balderlou, Saharnaz; Ebrahimi Torki, Mahyar
  14. Quadratic hedging with multiple assets under illiquidity with applications in energy markets By Panagiotis Christodoulou; Nils Detering; Thilo Meyer-Brandis
  15. Immer mehr Verbraucher erzeugen selber Strom By Chrischilles, Esther
  16. Uncertainty, Learning, and Local Opposition to Hydraulic Fracturing By Hess, Joshua; Manning, Dale; Iverson, Terry; Cutler, Harvey
  17. A retrospective evaluation of the GDF/Suez merger: Effects on gas hub prices By Elena Argentesi; Albert Banal-Estañol; Jo Seldeslachts; Meagan Andrews
  18. Saving Alberta's Resource Revenues: Role of Intergenerational and Liquidity Funds By Rick van der Ploeg; Ton S. van den Bremer
  19. On the Current Account - Biofuels Link in Emerging and Developing Countries: Do Oil Price Fluctuations Matter? By Gabriel Gomes; Emmanuel Hache; Valérie Mignon; Anthony Paris
  20. Relative tax in a vertically differentiated market: the key role of consumers in environment By G. Ceccantoni; O. Tarola; C. Vergari
  21. Permanent and Temporary Oil Price Shocks, Macroeconomic Policy, and Tradable Non-oil Sector: Case of Azerbaijan, Kazakhstan, and Russia By Ramiz Rahmanov
  22. External Adjustment in Oil Exporters: The Role of Fiscal Policy and the Exchange Rate By Alberto Behar; Armand Fouejieu
  23. The Impact of Process Innovation on Prices: Evidence from Automated Fuel Retailing in The Netherlands By Adriaan R. Soetevent; Tadas Bruzikas
  24. Lags, Costs and Shocks: An Equilibrium Model of the Oil Industry By Bornstein, Gideon; Krusell, Per; Rebelo, Sérgio
  25. Handle with Care: The Local Air Pollution Costs of Coal Storage. By Akshaya Jha; Nicholas Z. Muller
  26. Innovation and The Precautionary Principle By Caroline Orset
  27. Environmental Policy in an Endogenous Growth Model with Expanding Variety By Bianco, Dominique
  28. Adoption of Environmental Management Practices in the Hotel Industry in Sri Lanka By Kanchana Wickramasinghe
  29. Valeurs carbone implicites des contributions nationales et trajectoires 2°C By Laureline Coindoz; Patrick Criqui; Sandrine Mathy; Silvana Mima
  30. Green taxes in oligopoly revisited: exogenous versus endogenous number of firms By Requate, Till
  31. Excessive and under-investment: on the incentives to adopt new technologies under Pigouvian taxes and tradeable permits By Requate, Till
  32. La réforme de l’EU ETS dans le Paquet Energie Climat 2030 : Premières leçons à partir du modèle ZEPHYR By Frédéric Gonand; Christian De Perthuis; Raphaël Trotignon
  33. Marché européen des quotas de CO2 : Les enjeux du passage à la phase 3 By Christian De Perthuis; Raphaël Trotignon
  34. Pourquoi et comment redresser le système européen des quotas de CO² By Christian De Perthuis; Raphaël Trotignon
  35. Consumers' willingness to offset their CO2 emissions from traveling: A discrete choice analysis of framing and provider contributions By Schwirplies, Claudia; Dütschke, Elisabeth; Schleich, Joachim; Ziegler, Andreas
  36. Climate Change : Behavioral Responses from Extreme Events and Delayed Damages By Ghidoni, Riccardo; Calzolari, G.; Casari, Marco

  1. By: Hunt Allcott; Michael Greenstone
    Abstract: This paper sets out a framework to evaluate the welfare impacts of residential energy efficiency programs in the presence of imperfect information, behavioral biases, and externalities, then estimates key parameters using a 100,000-household field experiment. Several results run counter to conventional wisdom: we find no evidence of informational or behavioral failures thought to reduce program participation, there are large unobserved benefits and costs that traditional evaluations miss, and realized energy savings are only 58 percent of predictions. In the context of the model, the two programs we study reduce social welfare by $0.18 per subsidy dollar spent, both because subsidies are not well-calibrated to estimated externality damages and because of self-selection induced by subsidies that attract households whose participation generates low social value. However, the model predicts that perfectly calibrated subsidies would increase welfare by $2.53 per subsidy dollar, revealing the potential of energy efficiency programs.
    JEL: D12 L94 Q41 Q48
    Date: 2017–05
  2. By: Kenta Tanaka (Faculty of Economics, Musashi University); Shunsuke Managi (Urban Institute, Kyushu University)
    Abstract: Improving energy efficiency is the one of the best environmental/resource policy. Previous studies have measured energy efficiency in the industrial sector. We further contribute understanding what factors affect energy efficiency changes. This study measures energy efficiency based on plant level data in the Japan'paper/pulp industry and cement industry as energy intensive sectors. We then reveal the relationship between industry agglomeration effect and energy efficiency of each factory. Our results show several important findings. First, energy efficiency has improved in recent years in the paper and pulp industry as well as the cement industry. However, the factors for improvement of energy efficiency differ between each industry. Second, industry agglomeration affects energy efficiency. In the paper and pulp industry, the same industry agglomerations contribute to improvements in the energy efficiency. However the agglomeration effect is negative for energy efficiency in the cement industry.
    Keywords: Energy efficiency, Productivity analysis, Industry agglomeration, Data envelopment analysis
    Date: 2017–05
  3. By: Collins, Matthew; Dempsey, Seraphim; Curtis, John
    Abstract: Improving the energy efficiency of residential dwellings is seen by policy-makers as an important tool to help mitigate the impacts of climate change. Many countries, including Ireland, have put in place policies aimed at stimulating energy efficiency renovations in private households. Options to induce further retrofitting activity include the possibility of altering the structure of financial incentives on offer. At the moment, the Better Energy Homes scheme comprises a cash rebate to home owners following the completion of retrofit works. However, alterations to the incentive structure may be more or less preferred by different segments of the population. We analyse these preferences toward different financing structures. We find that the most preferred option of the choice set presented to respondents is the status quo of a post-retrofit cash rebate, followed closely by the alternative of an upfront discount.
    Date: 2017–05
  4. By: Derek Lemoine
    Abstract: I reconcile a benchmark model of directed technical change with the historical experience of energy transitions by allowing for a non-unitary elasticity of substitution between machines and the other factor of production, interpreted here as energy resources. I show that the economy becomes increasingly locked-in to the dominant sector when machines and resources are gross substitutes, but a transition from the dominant sector to the other is possible when machines and resources are gross complements. Consistent with history, a transition in research activity leads the transition in resource supply. A calibrated numerical implementation shows that innovation is critical for climate change policy. A policymaker would use a U-shaped emission tax trajectory so as to immediately transition innovation away from the fossil sector, wait for clean technology to improve, and then hasten a transition in resource supply later in the century.
    JEL: N70 O33 O38 O44 Q43 Q54 Q55 Q58
    Date: 2017–05
  5. By: Daniel Gros; Philip Lane; Sam Langfield; Sini Matikainen; Marco Pagano; Dirk Schoenmaker; Javier Suarez
    Abstract: Keeping global warming below 2°C will require substantial reductions in global greenhouse gas emissions over the next few decades. To reduce emissions, economies must reduce their carbon intensity; given current technology, this implies a decisive shift away from fossil-fuel energy and related physical capital. In an adverse scenario, the transition to a low-carbon economy occurs late and abruptly. Belated awareness about the importance of controlling emissions could result in an abrupt implementation of quantity constraints on the use of carbon-intensive energy sources. The costs of the transition will be correspondingly higher. This adverse scenario could affect systemic risk via three main channels. First, a sudden transition away from fossil-fuel energy could harm GDP, as alternative sources of energy would be restricted in supply and more expensive at the margin. Second, there could be a sudden repricing of carbon-intensive assets, which are financed in large part by debt. Third, there could be a concomitant rise in the incidence of natural catastrophes related to climate change, raising general insurers' and reinsurers' liabilities. To quantify the importance of these channels, policymakers could aim for enhanced disclosure of the carbon intensity of non-financial firms. The related exposures of financial firms could then be stress-tested under the adverse scenario of a late and sudden transition. In the short-term, joint research efforts of energy experts and macroeconomists could help to better quantify macroeconomic risks and inform the design of scenarios for stress testing. In the medium-term, the availability of granular data and dedicated low-frequency stress tests will provide information about the impact of the adverse scenario on the financial system. JEL Classification: G28
    Keywords: climate change, global warming, sustainability
    Date: 2016–02
  6. By: Dipendra Bhattarai
    Abstract: The Government of Nepal has been providing financial support to promote biogas technology since the 1970s and Solar Home Systems (SHS) since the 1990s. This paper analyse data from the Nepal Living Standard Survey for the year 2010/11 to determine the extent to which these programs have reached the poor. Only 5 percent of households eligible for a biogas subsidy have adopted biogas. Only 2 percent of biogas adopters are below the poverty line, as compared to a poverty rate of 19 percent in all of Nepal. The probability of biogas adoption is increasing in annual per capita consumption. The adoption rate is much higher for SHS with 27 percent of the households eligible for a subsidy having adopted Solar Home Systems. About 25 percent of adopters are below the poverty line, as compared to a poverty rate of 19 percent in all of Nepal showing that the SHS subsidy program reaches many more of the poor than the biogas subsidy program. The proportion of SHS adopters increases some what with an increase in annual per capita consumption upto the median and then falls steeply. The findings suggest that thegovernment's subsidy for biogas has not reached the low-income population and to do so, the existing subsidy delivery mechanism would have to be rethought. The SHS subsidy has done much better in this regard. The paper discusses the reasons behind the differences.
  7. By: Zhai, Y.; Biel, K.; Zhao, F.; Sutherland, J.W.
    Date: 2017–04–27
  8. By: Mahrous, Walaa
    Abstract: African countries still lack a huge amount of energy that is necessary to increase economic growth, alleviate poverty, and sustain economic development (energy insecurity). Public investment in energy sector is still limited to supply household and private sector with their energy needs. Only private investment in renewable energy can play a major role in filling this gap. By applying SWOT analysis, this study illustrates the major threats and weaknesses (challenges) faced by the private investment in renewable energy sector in Africa vis-à-vis the main opportunities and strengths (benefits) these investments can get. Finally, it ends with some suggested solutions that can help at improving conditions of this vital sector and attracting more private investments to it.
    Keywords: Private Investment, Renewable Energy, SWOT Analysis.
    JEL: Q20 Q42
    Date: 2016–04
  9. By: Hyland, Marie; Bertsch, Valentin
    Abstract: Across the EU, significant investments are being made in renewable generation and grid technologies, however, policy makers and planners are frequently met with resistance from local communities to proposed infrastructure development. Offering some form of compensation to the affected communities may reduce objections and minimise project delays. While there are numerous methods of compensating and involving local communities, evidence on which methods are most effective at increasing acceptance of infrastructure developments is scant. We therefore carry out a nationally-representative survey of Irish citizens to analyse how different compensation methods affect acceptance. Ireland is a useful case study because of its high RES-E targets. Respondents are presented with four compensation models for the local construction of a wind farm, and two for the local development of the transmission grid. While it is often reported that communities would prefer deeper levels of involvement, we find no evidence of this. Instead, we find a preference for schemes in which people receive financial compensation without sharing in the ownership and associated risks of project development. Our econometric analyses show that certain socio-demographic characteristics, for example, age and income are significant predictors of people’s acceptance under different schemes, while a person’s education level significantly predicts whether a particular compensation scheme will increase acceptance. Moreover, we find that the satisfaction with local planning procedures and the tradeoff people make between environmental sustainability and economic competitiveness consistently affect people’s attitudes. Such evidence can help policy makers better understand and design policies to minimise resistance to energy infrastructure development.
    Date: 2017–05
  10. By: Régis Bourbonnais (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine); Jan Horst Keppler (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine)
    Abstract: Sur la demande de l’Union française d’électricité (UFE), Jan Horst Keppler, Professeur d’économie à l’Université Paris - Dauphine, et Régis Bourbonnais, Maître de conférences à l’Université Paris - Dauphine et spécialiste en économétrie, ont entrepris une série de tests statistiques pour déterminer l’élasticité prix de la demande électrique en France.
    Keywords: France,Consommation d'énergie,Consommation,Services de l'électricité,Tarifs,Électricité
    Date: 2017–03–24
  11. By: Chen Lin; Thomas Schmid; Michael S. Weisbach
    Abstract: Production inflexibility together with product price uncertainty creates production risk, which is a potentially important factor for firms’ liquidity management. One industry for which production risk can be measured is the electricity producing industry. We use data on hourly electricity prices in 41 markets to measure fluctuations in output prices and information on over 60,000 power plants to approximate firms’ cost to vary output quantities. Our results suggest that higher electricity price volatility leads to increased cash holdings, but only in firms using inflexible production technologies. This effect is robust to a number of specification choices including instrumenting for volatility in electricity prices using weather forecast data. After deregulation, firms hold 20-25% more cash, suggesting that the process of deregulation increases the risk firms’ face. Production risk affects cash holdings most in financially constrained firms, and in firms that cannot easily hedge the electricity price through derivative markets. Capital market liquidity and balance sheet liquidity appear to be substitutes for one another.
    JEL: G3 G32 G35 L5
    Date: 2017–05
  12. By: Suyunchev, Marat (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Mozgovaya, Oxana (Russian Presidential Academy of National Economy and Public Administration (RANEPA)); Temnaya, Olga (Russian Presidential Academy of National Economy and Public Administration (RANEPA))
    Abstract: The research «The Electricity Distribution Network Economic Modelling and Middle-term Scenario Planning in Russian Federation» emphasizes the main problems and the factors affecting to a quality of the electricity distribution network development planning. The electricity distribution network economic model was created. The Central federal district middle-term development scenarios were done on the basis of this economical model.
    Date: 2017–04
  13. By: Heidari, Hassan; Babaei Balderlou, Saharnaz; Ebrahimi Torki, Mahyar
    Abstract: Energy intensity is a measure of the energy efficiency of a nation’s economy. Many factors influence a country’s energy intensity. In this paper, however, we note the effective factors of energy intensity and decompose it by applying Logistic Smooth Transition Regression (LSTR) in Iran during the period 1980- 2013. The main factors are the ratio of the added value of services to GDP (explaining both linear and nonlinear part of the energy intensity), the percentage of internet users, income per capita and Human Development Index (explaining nonlinear part of the energy intensity). The results indicated that the lifestyle and structural changes had a significant and considerable effect on decreasing energy intensity and that the ratio of services value-added to GDP as a transition variable caused an asymmetric behavior of energy intensity affected from explanatory variables. The most effective factor on energy intensity was Human Development Index
    Keywords: Energy Intensity, Energy Efficiency, LSTR Model, Iran
    JEL: C22 Q43
    Date: 2016–09–03
  14. By: Panagiotis Christodoulou; Nils Detering; Thilo Meyer-Brandis
    Abstract: We propose a hedging approach for general contingent claims when liquidity is a concern and trading is subject to transaction cost. Multiple assets with different liquidity levels are available for hedging. Our risk criterion targets a tradeoff between minimizing the risk against fluctuations in the stock price and incurring low liquidity costs. Following \c{C}etin U., Jarrow R.A., and Protter P. (2004) we work in an arbitrage-free setting assuming a supply curve for each asset. In discrete time, following the ideas in Schweizer M. (1998) and Lamberton D., Pham H., Schweizer M. (1998) we prove the existence of a locally risk-minimizing strategy under mild conditions on the price process. Under stochastic and time-dependent liquidity risk we give a closed-form solution for an optimal strategy in the case of a linear supply curve model. Finally we show how our hedging method can be applied in energy markets where futures with different maturities are available for trading. The futures closest to their delivery period are usually the most liquid but depending on the contingent claim not necessary optimal in terms of hedging. In a simulation study we investigate this tradeoff and compare the resulting hedge strategies with the classical ones.
    Date: 2017–05
  15. By: Chrischilles, Esther
    Abstract: Seit langem erzeugt die Industrie, da wo viel Energie gebraucht wird, selber Strom. Doch es drängen auch neue Akteure in die Eigenversorgung, da hier allerlei Abgaben entfallen, die in den letzten Jahren immer stärker gestiegen sind. Konsequenz: Die Eigenversorgung boomt. Damit können sich immer mehr Verbraucher beispielsweise der Finanzierung des erneuerbaren Energien Gesetzes (EEG) oder des Netzausbaus entziehen. Das zeigt einmal mehr, dass das EEG anders als über den Strompreis finanziert werden sollte.
    Date: 2016
  16. By: Hess, Joshua; Manning, Dale; Iverson, Terry; Cutler, Harvey
    Abstract: The development of oil and gas extraction technologies, including hydraulic fracturing (fracking), has increased fossil fuel reserves in the US. Despite benefits, uncertainty over environmental damages has led to fracking bans, both permanent and temporary, in many jurisdictions. We develop a stochastic dynamic learning model parameterized with a computable general equilibrium model to explore if uncertainty about damages, combined with the ability to learn about risks, can explain fracking bans in practice. Applying the model to a representative Colorado municipality, we quantify the quasi-option value (QOV), which creates an additional incentive to ban fracking temporarily in order to learn, though it only influences policy in a narrow range of oil and gas prices. To our knowledge, this is the first attempt to quantify an economy-wide QOV associated with a local environmental policy decision.
    Keywords: hydraulic fracturing; quasi-option value; stochastic dynamic program; computable general equilibrium model
    JEL: C61 C68 Q34 Q38 Q58
    Date: 2016–12–30
  17. By: Elena Argentesi; Albert Banal-Estañol; Jo Seldeslachts; Meagan Andrews
    Abstract: We present an ex-post analysis of the effects of GDF’s acquisition of Suez in 2006 created one of the world’s largest energy companies. We perform an econometric analysis, based on Difference-in-Difference techniques on the market for trading on the Zeebrugge gas hub in Belgium. Removing barriers to entry and facilitating access to the hub through ownership unbundling were an important part of the objectives of the remedies imposed by the European Commission. Our analysis shows a price decline after the merger. This decline suggests the remedies were effective in limiting the potential anti-competitive effects of the merger. Moreover, it suggests that ownership unbundling has generated improved access to the hub. Therefore, the remedies may have done more than simply mitigate the potential anti-competitive effects of the merger; they may have effectively created competition.
    Keywords: Mergers, Ex-post Evaluation, Gas sector, Hub prices
    Date: 2017–05
  18. By: Rick van der Ploeg; Ton S. van den Bremer
    Abstract: We use a welfare-based intertemporal stochastic optimization model and historical data to estimate the size of the optimal intergenerational and liquidity funds and the corresponding resource dividend available to the government of the Canadian province Alberta. To first-order of approximation, this dividend should be a constant fraction of total above- and below-ground wealth, complemented by additional precautionary savings at initial times to build up a small liquidity fund to cope with oil price volatility. The ongoing dividend equals approximately 30 per cent of government revenue and requires building assets of approximately 40 per cent of GDP in 2030, 100 per cent of GDP in 2050 and 165 per cent in 2100. Finally, the effect of the recent plunge in oil prices on our estimates is examined. Our recommendations are in stark contrast with historical and current government policy.
    Keywords: oil price valatility, precautionary saving, resource wealth, fiscal policy
    JEL: E21 E22 D91 Q32
    Date: 2016
  19. By: Gabriel Gomes; Emmanuel Hache; Valérie Mignon; Anthony Paris
    Abstract: Many developed countries promote the use of biofuels for environmental concerns, leading to a rise in the price of agricultural commodities utilized in their production. Such environmental policies have major effects on the economy of emerging and developing countries whose activity is highly dependent on agricultural commodities involved in biofuel production. This paper tackles this issue by examining the price impact of biofuels on the current account for a panel of 16 developing and emerging countries, and the potential nonlinear effect exerted by the price of oil on this relationship. Relying on the estimation of panel smooth-transition regression models, we show that positive shocks in the price of biofuels lead to a current-account appreciation for agricultural commodity exporters and producers only when the price of oil is below a certain threshold. When the price of oil exceeds this threshold, fluctuations in the price of biofuels no longer affect the current account. These findings illustrate that a rise in the price of oil exerts a negative effect on the trade balance of commodity exporters which are also oil importers, dampening the biofuel price impact on the current-account position.
    Keywords: Biofuels;Oil;Current Account;Panel Smooth Transition Regression
    JEL: Q16 Q43 F32 C23
    Date: 2017–05
  20. By: G. Ceccantoni; O. Tarola; C. Vergari
    Abstract: In this paper, under the assumption that green consumption has (at least partially) a social/psychological dimension, we analyse the effect of a carbon tax when it is imposed on consumers buying dirty products rather than on polluting firms. The amount of the tax paid is determined by the share of brown consumers in the market and the quality gap between variants. We show that this tax can abate emissions without inducing the undesirable relocation effect which can be observed in the case when a unilateral climate policy is imposed on polluting producers.
    JEL: H30 D43 Q5 L13
    Date: 2017–05
  21. By: Ramiz Rahmanov (Central Bank of Azerbaijan Republic)
    Abstract: This paper examines the economic effects of permanent and temporary oil price shocks in three oil exporting countries (Azerbaijan, Kazakhstan, and Russia) using the five variable (real short-term interest rate, real effective exchange rate, real budget expenditure, real imports, and real tradable non-oil production) VARX model with two exogenous variables which represent the corresponding shocks. The impulse response analysis conducted over the quarterly data from 2003:I to 2015:IV shows that in Azerbaijan, a permanent oil price shock produces a significantly positive effect on all variables but interest rate, while a temporary oil price shock has a significant and positive effect only on imports and exchange rate. For Kazakhstan, the impulse response functions show that a permanent oil price shock significantly and positively affects interest rate, imports, and budget expenditure; a temporary oil price shock has a significantly positive influence on all variables except budget expenditure. In Russia, a permanent oil price shock produces a significantly positive effect on all variables; a temporary oil price shock exerts a significantly positive effect on all variables but interest rate. Contrary to the permanent income hypothesis, the budget expenditure in Russia responds both to the permanent and temporary oil price shocks. Such divergence from the hypothesis can be explained by the specifics of the policy on the oil revenue spending. As regards the presence of the symptoms of the Dutch disease, the results indicate only on one symptom. Thus oil price shocks ultimately lead to appreciation of national currencies but not to a decline in tradable non-oil production.
    Keywords: permanent oil price shock, temporary oil price shock, macroeconomic policy, non-oil economy, Permanent income hypothesis, Dutch disease, VARX, Azerbaijan, Kazakhstan, Russia
    JEL: C54 E32 E37 E63 Q32
    Date: 2016–12–10
  22. By: Alberto Behar; Armand Fouejieu
    Abstract: After the decline in oil prices, many oil exporters face the need to improve their external balances. Special characteristics of oil exporters make the exchange rate an ineffective instrument for this purpose and give fiscal policy a sizeable role. These conclusions are supported by regression analysis of the determinants of the current account balance and of the trade balance. The results show little or no relationship with the exchange rate and, especially for the less diversified oil exporters, a strong relationship with the fiscal balance or government spending.
    Keywords: Oil exporters; current account; trade balance; fiscal policy; exchange rates; trade volume elasticities; Marshall Lerner conditions
    JEL: F32 F13 F41 E62
    Date: 2017
  23. By: Adriaan R. Soetevent (University of Groningen); Tadas Bruzikas (University of Groningen)
    Abstract: In the last decade, many European countries have seen a sharp increase in the number of automated fueling stations. We study the effect of this process innovation on prices at stations that are automated and their competitors using a difference-in-differences matching strategy. Our estimates show that prices at automated stations drop by 1.0 to 2.1% immediately after conversion and stabilize at this lower level. We find no indication of competitive spillover effects to neighboring sites at the conventional significance levels. Other than previous studies, our estimates do not reveal a difference in impact between early and later adopters of automation.
    Keywords: technology adoption; retail gasoline; pricing; competition
    JEL: C22 D4 L13 L81
    Date: 2017–05–10
  24. By: Bornstein, Gideon; Krusell, Per; Rebelo, Sérgio
    Abstract: We use a new micro data set to compile some key facts about the oil market and estimate a structural industry equilibrium model that is consistent with these facts. We find that demand and supply shocks contribute equally to the volatility of oil prices but that the volatility of investment by oil firms is driven mostly by demand shocks. Our model predicts that the advent of fracking will eventually result in a large reduction in oil price volatility.
    Keywords: commodities; Oil; volatility
    JEL: Q4
    Date: 2017–05
  25. By: Akshaya Jha; Nicholas Z. Muller
    Abstract: Burning coal is known to have environmental costs; this paper quantities the local environmental costs of transporting and storing coal at U.S. power plants for the sample period 2002-2012. We first demonstrate that a 10% increase in coal stockpiles (number of deliveries) results in a 0.07% (0.16%) increase in the average concentration of fine particulates (PM2.5) for locations up to 25 miles away from, and downwind from, plants. We next assess the impacts of PM2.5 on average adult and infant mortality rates using coal stockpiles and deliveries as instruments for PM2.5. Our findings within this instrumental variables framework indicate that a 10% increase in PM2.5 leads to a 1.1% (6.6%) increase in average adult (infant) mortality rates; these causal estimates are similar in magnitude to the epidemiological estimates used by the USEPA in their regulatory impact analyses. Our estimated increase in mortality rates implies local environmental costs of $183 ($203) per ton of coal stockpiled (delivered); to put this in perspective, the average power plant paid roughly $48 per ton for coal during our sample period. These sizable but highly localized environmental costs of coal transportation and storage disproportionately impact the economically disadvantaged communities living near coal-fired power plants.
    JEL: H23 Q40 Q52 Q53
    Date: 2017–05
  26. By: Caroline Orset (ECO-PUB - Economie Publique - INRA - Institut National de la Recherche Agronomique - AgroParisTech)
    Abstract: Recent environmental policies favour the polluter pays principle. This principle points out the pollutant financial liability for the eventual incidents induced by his activities. In this context, we analyse the decision of an agent to invest in new industrial activities, the consequences of which on human health and the environment are initially unknown. It is not possible for him to delay investing, but the agent has the opportunity to acquire information and to reduce the cost of an accident. This allows the agent to reduce uncertainty regarding dangers associated with the project and to limit potential damages that it might cause. However, the agent's chosen level of these actions may be considered as insufficient and not acceptable by Society as response in the face of a possible danger. Precautionary state regulation may then be introduced. We get that this regulation may slow down innovation and may favour innovation in countries with less safety requirements. We find that agent may get around the goal of the regulation by ignoring the information on the dangerousness of its project. We then propose some policy tools which stimulate innovation and impose a certain level of risk considered as acceptable for Society to the agent. Finally, we use a numerical analysis based on the Monsanto Company for studying the agent's behaviour with different regulatory frameworks.
    Keywords: uncertainty,the precautionary principle,environment, information acquisition,irreversible investment
    Date: 2017–04–03
  27. By: Bianco, Dominique
    Abstract: In this paper, we analyze the long-term impact of an environmental policy on economic growth, pollution and welfare. A standard growth model with horizontal innovation is modified by including pollution which comes from the use of intermediate goods production. Taxation on pollution reduces profits of final good producer as well as intermediate good producers. In this setting, profit gains is explained by a realloaction of labor from intermediate goods sector to R&D sector which enhances innovation, growth and welfare while it reduces pollution.
    Keywords: Porter hypothesis, endogenous growth, environmental policy
    JEL: D43 O31 O41 Q58
    Date: 2017–03
  28. By: Kanchana Wickramasinghe
    Abstract: Environmental management has not received the attention that it deserves in the case of the hotel industry in Sri Lanka although sustainable growth in the industry requires consideration of such practices. Our study assesses the adoption of good environmental management practices in the Sri Lankan hotel industry, focusing on energy, water, solid waste and waste water management. The study is based on data from 78 registered hotels in the Western Province of Sri Lanka. We obtained primary data on the environmental management practices using a pretested structured questionnaire. In addition to the cross-sectional data, we collected panel data on electricity consumption from these hotels for 2009-2013. The results show that the highest number of practices, 3.7 on average, adopted by hotels is in energy management. The average number of water management practices is 2.6. Low adoption rates are observed for waste water and solid waste management practices. The results from Poisson and Probit regression models show that the hotel characteristics and customer characteristics are significant determinants of the adoption of good practices with large hotels, chain-affiliated hotels and classified hotels more likely to adopt them. Analysis of electricity consumption shows that the occupancy rate and involvement of the hotels in environment management projects lead to a reduction in electricity consumption. From a policy perspective, small hotels,independent hotels, and unclassified hotels need to be motivated to adopt good environmental management practices through training, capacity building and financial support.
  29. By: Laureline Coindoz (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); Patrick Criqui (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); Sandrine Mathy (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); Silvana Mima (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)
    Abstract: Ce document de travail analyse le degré d'effort nécessaire à l'atteinte des objectifs INDC des 13 pays du Deep Decarbonization Pathway Project. L'objectif est d'évaluer et de comparer les degrés d'effort requis pour atteindre les objectifs INDC, entre les pays, d'une part et, d'autre part, au regard de trajectoires de plus long terme (2050) s'inscrivant dans l'objectif global de limiter la hausse des températures en deçà de 2°C. Une méthodologie est mise en place pour transcrire les INDC en niveaux d'émissions de CO2 nettes du LULUCF. Le modèle POLES est ensuite utilisé pour révéler la valeur carbone implicite des INDC et permettre une comparabilité des objectifs nationaux entre eux. Enfin, la création d'un scénario INDCext permet d'appréhender les INDC au regard d'objectifs nationaux de plus long terme (2050) compatibles avec l'objectif global de limiter la hausse des températures en deçà de 2°C.
    Keywords: Intended Nationally Determined Contributions , objectifs INDC , scénario ,émissions de CO2
    Date: 2017–03–27
  30. By: Requate, Till (Center for Mathematical Economics, Bielefeld University)
    Date: 2017–05–10
  31. By: Requate, Till (Center for Mathematical Economics, Bielefeld University)
    Date: 2017–05–10
  32. By: Frédéric Gonand (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine); Christian De Perthuis (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine); Raphaël Trotignon (Chaire économie du climat - Chaire économie du climat)
    Abstract: La Commission a publié le 22 janvier ses propositions en vue du futur « Paquet énergie - climat 2030 » qui seront soumises au Conseil européen des 20 et 21 mars prochain. Elles évoquent la création d’une « réserve de stabilité » pour le marché européen du CO².
    Keywords: Politique énergétique
    Date: 2017–04–07
  33. By: Christian De Perthuis (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine, Chaire économie du climat - Chaire économie du climat); Raphaël Trotignon (Chaire économie du climat - Chaire économie du climat)
    Abstract: Le système européen d’échanges de quotas de CO2 constitue le pivot de la politique climatique européenne visant à mettre la société sur une trajectoire sobre en carbone aux meilleures conditions économiques. Ce système a été affaibli par la faiblesse de sa régulation, par un chevauchement indésirable avec d’autres politiques publiques et par l’ampleur de la crise économique et financière qui a fait plonger le prix du quota sur le marché. Ce Cahier de la Chaire Economie du Climat tente d’identifier les conditions permettant de réussir le passage à la phase 3 du marché (2013-2020). Il tire les leçons historiques de huit années de fonctionnement qui révèlent l’extraordinaire sensibilité du marché à tout changement même modéré des conditions de l’offre et de la demande. Il évalue ensuite, à l’aide du modèle ZEPHYR-Flex, les différentes interventions des pouvoirs publics actuellement discutées pour faire remonter le prix du quota sur le marché ; ces simulations révèlent le risque de report des difficultés sur le futur en brouillant un peu plus la visibilité dont ont besoin les acteurs sur le long terme. Il propose enfin de tirer les leçons de la politique monétaire en esquissant ce que pourrait être le mandat d’une Autorité Indépendante de Régulation, en charge d’une gestion dynamique de l’offre de permis et dont la mission principale serait, à l’instar d’une banque centrale, d’assurer une articulation optimale entre les différents horizons temporels de la stratégie climatique.
    Keywords: Politique de l'environnement
    Date: 2017–04–10
  34. By: Christian De Perthuis (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine); Raphaël Trotignon (Chaire économie du climat - Chaire économie du climat)
    Abstract: Après une analyse rapide des facteurs qui concourent aux dysfonctionnements actuels, cette note passe en revue les voies proposées par la Commission dans son document de consultation.
    Keywords: Permis de pollution négociables,Compensation carbone,Politique énergétique,EU ETS,Transition énergétique,AIMC
    Date: 2017–04–10
  35. By: Schwirplies, Claudia; Dütschke, Elisabeth; Schleich, Joachim; Ziegler, Andreas
    Abstract: This paper identifies potential drivers and individuals' willingness to pay (WTP) for offsetting their emissions from traveling. We focus on the effects of framing the polluting activity with different modes of transportation (i.e. bus and plane) and travel occasions (i.e. holiday and professional training) as well as the effects of contributions from the travel provider. The analyses are based on discrete choice experiments with a representative sample of about 1000 consumers from Germany. Applying mixed logit and latent class logit models, the findings suggest substantial framing effects resulting from the variation in the mode of transportation as well as a significantly higher WTP when offsets are matched by the travel provider 1:1. The findings further indicate that re-/afforestation projects in the participants' region are the preferred mode for compensation. Respondents who are more willing to offset emissions from traveling seem to be younger and female, have a higher income, exhibit stronger environmental and social preferences, and believe that offsetting is effective in protecting the climate.
    Keywords: climate change,carbon offsetting,framing effects,provider contribution,willingness to pay,discrete choice experiments
    JEL: H41 Q54 Q58
    Date: 2017
  36. By: Ghidoni, Riccardo (Tilburg University, Center For Economic Research); Calzolari, G.; Casari, Marco
    Abstract: Understanding how to sustain cooperation in the climate change global dilemma is crucial to mitigate its harmful consequences. Damages from climate change typically occurs after long delays and can take the form of more frequent realizations of extreme and random events. These features generate a decoupling between emissions and their damages, which we study through a laboratory experiment. We find that some decision-makers respond to global emissions, as expected, while others respond to realized damages also when emissions are observable. On balance, the presence of delayed/stochastic consequences did not impair cooperation. However, we observed a worrisome increasing trend of emissions when damages hit with delay.
    Keywords: Social dilemma; Experiments; Greenhouse gas; pollution
    JEL: C70 C90 D03 Q54
    Date: 2017

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