|
on Energy Economics |
| By: | Olsthoorn, Mark; Schleich, Joachim; Gassmann, Xavier; Faure, Corinne |
| Abstract: | The cost-effectiveness of energy technology upgrade programs critically depends on free riding. This paper assesses ex ante the effects of free riding on the cost-effectiveness of a rebate program that promotes the adoption of energy-efficient heating systems, relying on contingent valuation choice experiments carried out through identical representative surveys in eight EU Members States. The anal-ysis distinguishes between strong and weak free riders: strong free riders already plan to adopt a new heating system in the next five years; weak free riders decide to purchase once propositioned with an attractive technology package (and there-fore do not require a rebate to adopt). The reservation rebates for incentivized adopters (those who decide to adopt because of a rebate) differ substantially across countries. On average, they amount to approximately 40% of the heating system's purchasing price, suggesting generally high opportunity costs for prem-ature upgrades. The reservation rebate and weak free-ridership vary with income, risk and time preferences, and environmental identity. At a rebate level that cor-responds to half the purchase price of the offered heating system, the estimated share of free riders exceeded 50% for most countries, with a typically higher share of weak free riders than strong free riders. Specific rebate cost estimates (in €/tCO2) differ considerably across countries, suggesting that cooperation can yield budgetary benefits. |
| Keywords: | free rider,subsidies,energy efficiency,contingent valuation |
| JEL: | Q41 Q48 Q51 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s102017&r=ene |
| By: | Crossley, Thomas F.; Zilio, Federico |
| Abstract: | Each year the UK records 25,000 or more excess winter deaths, primarily among the elderly. A key policy response is the “Winter Fuel Payment†(WFP), a labelled but unconditional cash transfer to older households. The WFP has been shown to raise fuel spending among eligible households. We examine the causal effect of the WFP on health outcomes, including self-reports of chest infection, measured hypertension and biomarkers of infection and inflammation. We find a robust and statistically significant six percentage point reduction in the incidence of high levels of serum fibrinogen. Reductions in other disease markers point to health benefits, but the estimated effects are not robustly statistically significant. |
| Date: | 2017–08–15 |
| URL: | http://d.repec.org/n?u=RePEc:ese:iserwp:2017-10&r=ene |
| By: | Adriaan (A.R.) Soetevent (University of Groningen, The Netherlands; Tinbergen Institute, The Netherlands); Gert-Jan Romensen (University of Groningen, The Netherlands;) |
| Abstract: | How to engage workers in conservation efforts when the company pays the bill? In a field experiment with 409 bus drivers, we investigate the potential of targeted peer-comparison feedback and on-the-road coaching. Drivers receive individualized reports with peer-comparison messages on multiple driving dimensions. In addition, coaches quasi randomly provide drivers with in person coaching moments on the bus. Based on 800,000 trip-level observations, we find that the targeted peer-comparison treatments do not improve driving. On-the-road coaching significantly improves driving on multiple dimensions but only temporarily. Further analysis reveals negative interaction effects between the two programs. |
| Keywords: | peer comparisons; coaching; worker motivation; fuel conservation |
| JEL: | D2 M5 Q5 |
| Date: | 2017–08–03 |
| URL: | http://d.repec.org/n?u=RePEc:tin:wpaper:20170073&r=ene |
| By: | Itkonen, Juha |
| Abstract: | We model a network of linked permit markets to examine efficiency and dependencies between the markets in a competitive equilibrium. Links enable the participants of one emissions trading system to use the permits of another system. To improve the cost-efficiency of the international policy architecture, the Paris climate agreement set out a framework for linking local policies. International trade in permits reduces costs by merging markets, but in a large network it is generally not obvious which markets end up linked in the equilibrium. Also, indirect links might allow foreign regulators to undermine domestic policy outcomes. We apply graph theory to study dependencies between markets and to determine how the network is partitioned into separate market areas. Our main theorem characterizes the dependency structure of the equilibrium in an exogenous trading network. We show that markets merge when they are connected by a particular pattern of links. The results help to identify potential sources of both cost reductions and foreign interference, and to secure the efficiency of climate change policies. |
| JEL: | L14 F13 Q54 Q58 D41 |
| Date: | 2017–08–09 |
| URL: | http://d.repec.org/n?u=RePEc:bof:bofrdp:2017_020&r=ene |
| By: | Moita, Rodrigo Menon Simões; Monte, Daniel |
| Abstract: | Hydroelectric generation is the main source of energy production in many countries. When firms operate in the same river, or in cascades, the output of an upstream firm is the input of its downstream rival. We build a dynamic stochastic duopoly model of competition in cascades and show that the decentralized market is efficient at the critical times when rain is infrequent, but inefficient when rain is more frequent. Market power is an issue when peak prices are sufficiently higher than off-peak prices: Upstream firms delay production in off-peak times, limiting their rival downstream generators' production in peak times. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:fgv:eesptd:456&r=ene |
| By: | Paul J. Burke; Ashani Abayasekara |
| Abstract: | In this paper we employ a dataset of three dimensions - state, sector, and year - to estimate the short- and long-run price elasticities of state-level electricity demand in the United States. Our sample covers the period 2003-2015. We contribute to the literature by employing instrumental variable estimation approaches, using the between estimator, and pursuing panel specifications that are able to control for multiple dimensions of fixed effects. We conclude that state-level electricity demand is very price inelastic in the short run, with a same-year elasticity of -0.1. The long-run elasticity is near -1, larger than often believed. Among the sectors, it is industry that has the largest long-run price elasticity of demand. This appears to in part be due to electricity-intensive industrial activities clustering in low-price states. |
| Keywords: | electricity demand, price elasticity, United States, panel |
| JEL: | Q41 Q43 L94 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2017-50&r=ene |
| By: | Kube, Roland; Löschel, Andreas; Mertens, Henrik; Requate, Till |
| Abstract: | This paper analyzes the way the content of the Journal of Environmental Economics and Management (JEEM) has developed over the last 40 years. We have classified the articles in the journal into five dimensions: content, methods, environmental media (pollutants and resources), cross-cutting issues and the regional dimension of studies. Up to about 10 years ago, non-market valuation and cost-benefit analysis, natural resource economics and environmental policy instruments were the subjects regularly representing the lion's share of the articles published in the journal. Thereafter we register a significant shift towards a more diversified array of research areas, with climate change and energy issues finding their way into the journal. In addition, increasing methodological plurality becomes apparent, reflected in a significant shift away from economic theory and towards empirical approaches. We also analyze key distinctions between the major environmental economics journals. To this end, we compare the 100 most frequently cited articles in JEEM, Ecological Economics, Land Economics, Environmental & Resource Economics, and the American Journal of Agricultural Economics. Here we find that non-market valuation studies play an important role in all the journals considered. Econometric studies are also widely represented in all of them, with theoretical models particularly strong in JEEM. Finally, we use citations as a criterion for analyzing JEEM's external influence on leading general economics (A+) journals. A regression analysis shows that a focus on market-based environmental policies and policy comparisons plus the use of econometric and statistical methods or experimental approaches correlates positively with an A+ citation. If we leave self-citations out of account, A+ citations are also positively correlated with a focus on air pollution and negatively correlated with a focus on water pollution and other pollutants. |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cawmdp:95&r=ene |
| By: | Luciano Celi; Claudio Della Volpe; Luca Pardi; Stefano Siboni |
| Abstract: | A phase plot of the oil economy is built using the literature data of world oil production, price, and EROEI (Energy Returned on Energy Invested). An analogy between the oil economy and the Benard convection is proposed; some methods of interpretation and forecast of the system behavior are also shown based on "phase portrait" using as main variables the price, production and EROEI values. A scenery is proposed on this basis. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1708.03533&r=ene |
| By: | Bataa, Erdenebat; Park, Cheolbeom |
| Abstract: | The U.S. Energy Information Administration estimates that approximately 52\% of total U.S. crude oil was produced from shale oil resources in 2015. We examine whether the recent low crude oil price is attributable to this shale revolution in the U.S., using a SVAR model with structural breaks. Our results reveal that U.S. supply shocks are important drivers of real oil price and, for example, explain approximately a quarter of the 73\% decline between June 2014-February 2016. Failure to consider statistically significant structural changes results in underestimating the role played by global supply shocks, while overestimating the role of the demand shocks. |
| Keywords: | Oil market, structural breaks, U.S. shale revolution. |
| JEL: | C5 C51 Q4 Q41 |
| Date: | 2017–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80775&r=ene |
| By: | Jose Eduardo Gomez-Gonzalez (Banco de la República de Colombia); Jorge Hirs-Garzon (Banco de la República de Colombia) |
| Abstract: | We study the relation between oil prices and stock market returns for a set of six countries, including important oil consumers and demanders. We study interconnectedness between oil and stock markets and characterize the dynamics of transmission and reception between them. We test for Granger causality between markets dynamically, endogenously identifying periods for which oil prices have responded to innovations in financial markets. Our results on connectedness show that the direction of transmission is mainly from stock markets to crude petroleum prices. Additionally, connectedness increased importantly around the global financial crisis, and reports high levels until 2014. Regarding causality, we find evidence of bidirectional relations between stock market returns and crude petroleum prices. Causality is stronger during times of financial volatility as well. Our results have important implications both for investors and policy makers. Classification JEL: G01; G12; C22. |
| Keywords: | Time-varying causality; Oil price; Stock market returs; Emerging market economies. |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:bdr:borrec:1009&r=ene |
| By: | Raymond Swaray (Economics Subject Group, University of Hull Business, University of Hull, Cottingham Road, UK); Afees A. Salisu (Centre for Econometric and Allied Research, University of Ibadan) |
| Abstract: | In this paper, we query whether stock prices of non-integrated firms in upstream and downstream sectors of global oil supply chain respond similarly to changes in oil prices. This enquiry relates to “homogenous expectation†assumption among investors and fund managers pertaining to returns and variances of assets of specialized firms operating in upstream and downstream sectors of the supply chain. Using theoretical framework underpinned by the arbitrage pricing theory in conjunction with heterogeneous panel ARDL regression models, we find that stock prices of upstream and downstream firms move in contrasting directions in response to changes in benchmark crude oil prices in the long-run. Specifically, we show that stock prices of upstream sector firms increased in response to increase in oil prices, while the reverse holds for stock prices of downstream firms. In the short run, returns on stock of firms in both sectors increase following increase in oil prices; but downstream firms stock returns decreased in response to negative oil price shocks. Findings further show that both sectors respond differently to episodic changes in market conditions which emanated from the global financial crisis. However, upstream firms show stronger response to changing market conditions than their downstream counterparts. |
| Keywords: | Oil price, stock price, crude oil price, price transmission, portfolio management |
| JEL: | C23 F41 G11 G12 Q43 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cui:wpaper:0021&r=ene |
| By: | Afees A. Salisu (Centre for Econometric and Allied Research, University of Ibadan); Idris Ademuyiwa (Centre for International Governance Innovation (CIGI), Waterloo, Canada); Kazeem Isah (Centre for Econometric and Allied Research, University of Ibadan) |
| Abstract: | In this paper, we query whether stock prices of non-integrated firms in upstream and downstream sectors of global oil supply chain respond similarly to changes in oil prices. This enquiry relates to “homogenous expectation†assumption among investors and fund managers pertaining to returns and variances of assets of specialized firms operating in upstream and downstream sectors of the supply chain. Using theoretical framework underpinned by the arbitrage pricing theory in conjunction with heterogeneous panel ARDL regression models, we find that stock prices of upstream and downstream firms move in contrasting directions in response to changes in benchmark crude oil prices in the long-run. Specifically, we show that stock prices of upstream sector firms increased in response to increase in oil prices, while the reverse holds for stock prices of downstream firms. In the short run, returns on stock of firms in both sectors increase following increase in oil prices; but downstream firms stock returns decreased in response to negative oil price shocks. Findings further show that both sectors respond differently to episodic changes in market conditions which emanated from the global financial crisis. However, upstream firms show stronger response to changing market conditions than their downstream counterparts. |
| Keywords: | OECD countries, Phillips Curve, Oil price, Inflation forecasts, Forecast evaluation |
| JEL: | C53 E31 E37 Q41 Q47 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cui:wpaper:0022&r=ene |
| By: | Byrne, Joseph P; Lorusso, Marco; Xu, Bing |
| Abstract: | This paper accounts for informational frictions when modelling the time-varying relationship between crude oil prices, traditional fundamentals and expectations. Informational frictions force a wedge between oil prices and supply and/or demand shocks, especially during periods of elevated risk aversion and uncertainty. In such a context expectations can be a key driver of oil price movements. We utilize a variety of proxies for forward-looking expectations, including business confidence, consumer confidence and leading indicators. In addition, our paper implements a time-varying parameter approach to account empirically for time-varying informational frictions. Our results illustrate firstly that oil supply shocks played an important role in both the 1970’s and coinciding with the recent shale oil boom. Secondly, demand had a positive impact upon oil prices, especially from the mid-2000’s. Finally, we provide evidence that oil prices respond strongly to expectations but the source of the shock matter: business leaders’ expectations are positively related, while markets’ expectations are not strongly linked to oil prices. |
| Keywords: | Crude Oil Prices; Informational Frictions; Fundamentals; Expectations; Time-Varying Parameters |
| JEL: | C30 E30 F00 Q43 |
| Date: | 2017–06–10 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80668&r=ene |
| By: | Sam Olofin (Centre for Econometric and Allied Research, University of Ibadan); Afees A. Salisu (Centre for Econometric and Allied Research, University of Ibadan) |
| Abstract: | In this paper, we model the relationship between oil price and inflation for selected OPEC and EU countries using monthly data from 2000 to 2014. We employ both the Linear (Symmetric) ARDL by Pesaran et al. (2001) and Nonlinear (Asymmetric) ARDL by Shin et al. (2014) and we also account for structural breaks using the Bai and Perron (2003) test that allows for multiple structural changes in regression models. Six findings are discernible from our analyses. First, the relationship between oil price and inflation tends to change over short periods. Secondly, the oil price-inflation nexus is stronger in oil exporting countries than oil importing countries. Thirdly, oil price asymmetries seem to matter more when dealing with oil exporting nations. Fourthly, it may be necessary to pre-test for structural breaks when modelling the relationship between oil price and inflation regardless of the category being analyzed. Fifth, while asymmetric effect for the oil exporting (OPEC) is not sensitive to structural breaks, the effect seems to diminish for oil-importing (EU) countries in the presence of breaks. Sixth, while the results are largely insensitive to the nature of data frequency, the behaviour of asymmetry suggests otherwise. |
| Keywords: | Oil price, Inflation, Asymmetry, Structural breaks, Linear ARDL, Non-linear ARDL |
| JEL: | C12 C22 E31 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:cui:wpaper:0020&r=ene |
| By: | Aruga, Kentaka |
| Abstract: | As mitigating the effects of energy consumption on the environment is a crucial issue for the Asia-Pacific region, this study investigates the energy-environmental Kuznets curve (EEKC) hypothesis among the 19 Asia-Pacific regions. The study also test the hypothesis for the low-, middle-, and high-income groups of the region. The panel regression and cointegration models are used for this purpose. Both models suggest that the EEKC hypothesis does sustain for the whole Asia-Pacific region. However, the test performed on the income groups revealed that the hypothesis only holds for the high-income group and the low- and middle-income groups do not satisfy the hypothesis. This is likely indicating that the transition in the energy consumption along the EEKC is only occurring in the developed countries of the Asia-Pacific region. |
| Keywords: | Energy-environmental Kuznets curve, energy consumption, GDP per capita, Asian-Pacific region, panel regression model, panel cointegration model |
| JEL: | O53 Q56 |
| Date: | 2017–08–08 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:80692&r=ene |