nep-ene New Economics Papers
on Energy Economics
Issue of 2017‒08‒27
twenty-two papers chosen by
Roger Fouquet
London School of Economics

  1. The Health Benefits of a Targeted Cash Transfer:The UK Winter Fuel Payment By Crossley, T.F.; Zilio, F.;
  2. Prospect Theory and Energy Efficiency By Garth Heutel
  3. Energy efficiency in the food retail sector: Barriers, drivers, and acceptable policies By Christopher Dixon-O’Mara; L. (Lisa B.) Ryan
  4. Transformative policy mixes in socio-technical scenarios: The case of the low-carbon transition of the German electricity system (2010-2050) By Rogge, Karoline S.; Pfluger, Benjamin; Geels, Frank
  5. The environmental Kuznets curve in Indonesia: Exploring the potential of renewable energy By Sugiawan, Yogi; Managi, Shunsuke
  6. Co-operation, institutional quality and management outcome in community based micro hydro schemes in Kenya By Mary Karumba; Edwin Muchapondwa
  7. Returns to Scale in Electricity Generation: Revisited and Replicated By David H. Bernstein; Christopher F. Parmeter
  8. Estimation of price and income elasticities for the Brazilian household electricity demand By Daniel de Abreu Pereira Uhr; Júlia Gallego Ziero Uhr, André Luis Squarize Chagas
  9. Importance of the long-term seasonal component in day-ahead electricity price forecasting revisited: Neural network models By Grzegorz Marcjasz; Bartosz Uniejewski; Rafal Weron
  10. Dynamic Conditional Correlation between Electricity and Stock markets during the Financial Crisis in Greece By Panagiotis G. Papaioannou; George P. Papaioannou; Kostas Siettos; Akylas Stratigakos; Christos Dikaiakos
  11. Forecasting day-ahead electricity prices in Europe: the importance of considering market integration By Jesus Lago; Fjo De Ridder; Peter Vrancx; Bart De Schutter
  12. Arms and Oil in the Middle East: A Biography of Research By Bichler, Shimshon; Nitzan, Jonathan
  13. Oil Price Pass-Through into Core Inflation By Cristina Conflitti; Matteo Luciani
  14. Models with Short-Term Variations and Long-Term Dynamics in Risk Management of Commodity Derivatives By Guo, Zi-Yi
  15. The response of income inequality to positive oil rents shocks in Iran: Implications for the post-sanction period By Mohammad Reza Farzanegan; Tim Krieger
  16. Addressing transboundary cooperation in the Eastern Nile through the Water-Energy-Food Nexus: Insights from an E-survey and key informant interviews By Berga, Helen; Ringler, Claudia; Bryan, Elizabeth; El Didi, Hagar; Elnasikh, Sara
  17. Refunding Emissions Taxes By Bontems, Philippe
  18. User-Side Intermediaries and the Local Embedding of Low Carbon Technologies By Jake Barnes
  19. Optimal Privatization Policy in a Mixed Eco-Industry in the Presence of Commitments on Abatement Technologies By Lee, Sang-Ho; Nakamura, Tamotsu; Park, Chul-Hi
  20. Default Risk, Productivity, and the Environment: Theory and Evidence from U.S. Manufacturing By Andersen, Dana C.
  21. Who Bears the Economic Costs of Environmental Regulations? By Don Fullerton; Erich Muehlegger
  22. Annex I and non-Annex I countries’productive performance revisited using a generalized directional distance function under a metafrontier framework: Is there any convergence-divergence pattern for technology gaps? By Kounetas, Kostas; Zervopoulos, Panagiotis

  1. By: Crossley, T.F.; Zilio, F.;
    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.
    Keywords: benefits; health; biomarkers; heating; regression discontinuity;
    JEL: H51 I12
    Date: 2017–08
  2. By: Garth Heutel
    Abstract: Investments in energy efficiency entail uncertainty, and when faced with uncertainty consumers have been shown to behave according to prospect theory: preferences are reference-dependent and exhibit loss aversion, and probabilities are subjectively weighted. Using data from a choice experiment eliciting prospect theory parameters, I provide evidence that loss-averse people are less likely to invest in energy efficiency. Then, I consider policy design under prospect theory when there are also externalities from energy use. A higher degree of loss aversion implies a higher subsidy to energy efficiency. Numerical simulations suggest that the impact of prospect theory on policy may be substantial.
    JEL: D81 H23 Q41 Q58
    Date: 2017–08
  3. By: Christopher Dixon-O’Mara; L. (Lisa B.) Ryan
    Abstract: The objective of this research is to empirically examine the drivers and barriers to energy efficiency measures in an important energy-using sector, namely the food retail sector, and support more effective energy efficiency policies for this sector. Although food retailers consume a significant amount of energy due to the refrigeration, air conditioning and specialised lighting needs of stores, there has been little research in this sector on the barriers and drivers for implementing energy efficiency measures. A survey of small food retailers was carried out to understand the barriers and drivers to greater uptake of energy efficiency measures and to examine the acceptability of different energy efficiency policy options for food retailers. In addition, external stakeholders were consulted in order to validate and contextualise the results of the survey. We find there is a complementary relationship between energy efficiency barriers and drivers for food retailers that is remarkably coherent. We identify policies, such as subsidies and support for ESCOs, that both exploit the complementarities between barriers and drivers and are acceptable to food retailers also. This methodology should help identify and design more effective policies to deliver energy efficiency improvements in the food retail sector.
    Keywords: Energy efficiency policy; Food retail sector; Policy acceptance; Energy economics; Energy efficiency barriers and drivers
    JEL: Q40 Q41 Q48
    Date: 2017–07
  4. By: Rogge, Karoline S.; Pfluger, Benjamin; Geels, Frank
    Abstract: Global climate change represents one of the grand societal challenges which policy makers around the world have agreed to jointly tackle it under the Paris Agreement. Henceforth, much research and policy advice has focused on de-veloping model-based scenarios to identify pathways towards achieving corre-sponding decarbonisation targets. In this paper, we complement such model-based analysis (based on IMAGE and Enertile) with insights from socio-technical transition analysis (MLP) to develop socio-technical storylines that plausibly show how low-carbon transitions can be implemented. We take the example of the transition of the German electricity system towards renewable energies, and elaborate two transition pathways which are assumed to achieve an 80% reduction in GHG emissions by 2050, but differ in terms of lead actors, depth of change and scope of change: the first pathway captures the substitu-tion of technological components (pathway A) and assumes incumbents as lead actors and focuses on radical technological change while leaving other system elements intact; in contrast, pathway B (broader system transformation) postu-lates new entrants as lead actors, which rests on the assumption that trans-formative change occurs in the whole system, i.e. affecting the architecture of the system, technologies but also practises. For both pathways, we focus on how policy makers could govern such transition processes through transforma-tive policy mixes, and compare the requirements of such policy mixes depend-ing on the pathway pursued. We find that multi-dimensional socio-technical change going beyond technological substitution (pathway B) requires much greater emphasis on societal experimentation and a more proactive role for an-ticipatory deliberation processes from the outset. In contrast, shifting gear from a new entrant friendly past trajectory to an incumbent dominated pathway (pathway A) requires active agency from incumbents and is associated with what we have called regime stabilizing instruments which defend core principles of the old regime while simultaneously fulfilling decarbonisation as additional success criteria.
    Keywords: socio-technical scenarios,transformative policy mix,German Ener-giewende,MLP,energy system modelling,transition pathways
    Date: 2017
  5. By: Sugiawan, Yogi; Managi, Shunsuke
    Abstract: There is an increasing interest in investigating the environmental Kuznets curve (EKC) hypothesis because it suggests the existence of a turning point in the economy that will lead to a sustainable development path. Although many studies have focused on the EKC, only a few empirical studies have focused on analyzing the EKC with specific reference to Indonesia, and none of them have examined the potential of renewable energy sources within the EKC framework. This study attempts to estimate the EKC in the case of Indonesia for the period of 1971-2010 by considering the role of renewable energy in electricity production, using the autoregressive distributed lag (ARDL) approach to cointegration as the estimation method. We found an inverted U-shaped EKC relationship between economic growth and CO2 emissions in the long run. The estimated turning point was found to be 7,729 USD per capita, which lies outside of our sample period. The beneficial impacts of renewable energy on CO2 emission reduction are observable both in the short run and in the long run. Our work has important implications both for policymakers and for the future development of renewable energy in Indonesia.
    Keywords: Renewable energy; environmental Kuznets curve; Cointegration
    JEL: O13 Q43 Q48
    Date: 2016–02–20
  6. By: Mary Karumba; Edwin Muchapondwa
    Abstract: Community based micro hydro grids in developing countries have characteristics like those of man-made common pool resources like irrigation commons. While empirical testing of the conditions that enable collective participation and subsequent successful self-governance within irrigation commons and other CPRs is widely studied, there is very limited analysis of enabling conditions for energy commons. This study contributes towards the study of CPR management by identifying individual characteristics that influence their participation levels in such energy commons, and secondly interrogates the role of institutional arrangements and other relevant conditions in predicting management outcome in self-governed micro hydro schemes in Kenya. The findings indicate that more education; trust for peers and higher allowance for electricity increase cooperation among users. Additional relevant conditions such as higher installed capacity, bigger groups and having clearly defined boundary of users also seem to increase the chances of success in self-governed micro hydro schemes in this study.
    Keywords: Collective action, Participation; Institutions, Micro hydro schemes
    Date: 2017–08
  7. By: David H. Bernstein (University of Miami); Christopher F. Parmeter (University of Miami)
    Abstract: We replicate the findings of two in uential studies on returns to scale in the electricity generation market in the United States. The main results are also contrasted using local linear nonparametric regression, a technique robust to functional form assumptions. While the quantitative findings differ somewhat regarding the magnitude of returns to scale, we find that there is a substantial shift in returns to scale across the electricity generation market of 1955 to that of 1970.
    Keywords: System Estimation, Shepard's Lemma, Seemingly Unrelated Regression, Nonparametric. Publication Status: Submitted
    JEL: C1
    Date: 2017–06–20
  8. By: Daniel de Abreu Pereira Uhr; Júlia Gallego Ziero Uhr, André Luis Squarize Chagas
    Abstract: This paper fills a gap in the literature on residential energy consumption in Brazil. We estimate price and income elasticities for residential electricity consumption using disaggregated data at household level for the São Paulo metropolitan area. Data were obtained from Fundação Instituto de Pesquisas Econômicas (Fipe), which has complete access to Pesquisa de Orçamento Familiar (POF). Information about residential electricity consumption and household characteristics was available at two different periods, 1998 and 2008, which enabled us to adopt panel data estimation procedures. This study is the first to use Brazilian household level data on electricity consumption and a panel approach to estimate price and income elasticities. The results show that the price elasticity ranges from -0.26 to -0.64 and the income elasticity between 0.11 and 0.32. Controlling for a variety of fixed effects, household and family characteristics, price and income elasticities for the short-run are, approximately, -0.50, and 0.21.
    Keywords: Electricity; Price elasticity; Income elasticity; Brazil; household data.
    JEL: C23 D12 Q41
    Date: 2017–08–11
  9. By: Grzegorz Marcjasz; Bartosz Uniejewski; Rafal Weron
    Abstract: In day-ahead electricity price forecasting the daily and weekly seasonalities are always taken into account, but the long-term seasonal component was believed to add unnecessary complexity and in most studies ignored. The recent introduction of the Seasonal Component AutoRegressive (SCAR) modeling framework has changed this viewpoint. However, the latter is based on linear models estimated using Ordinary Least Squares. Here we show that considering non-linear neural network-type models with the same inputs as the corresponding SCAR model can lead to a yet better performance. While individual Seasonal Component Artificial Neural Network (SCANN) models are generally worse than the corresponding SCAR-type structures, we provide empirical evidence that committee machines of SCANN networks can significantly outperform the latter.
    Keywords: Electricity spot price; Forecasting; Day-ahead market; Long-term seasonal component; Neural network; Committee machine
    JEL: C14 C22 C45 C51 C53 Q47
    Date: 2017–07–29
  10. By: Panagiotis G. Papaioannou; George P. Papaioannou; Kostas Siettos; Akylas Stratigakos; Christos Dikaiakos
    Abstract: Liberalization of electricity markets has increasingly created the need for understanding the volatility and correlation structure between electricity and financial markets. This work reveals the existence of structural changes in correlation patterns among these two markets and links the changes to both fundamentals and regulatory conditions prevailing in the markets, as well as the current European financial crisis. We apply a Dynamic Conditional Correlation (DCC) GARCH model to a set of market s fundamental variables and Greece s financial market and microeconomic indexes to study their interaction. Emphasis is given on the period of severe financial crisis of the Country to understand contagion and volatility spillover between these two markets.
    Date: 2017–08
  11. By: Jesus Lago; Fjo De Ridder; Peter Vrancx; Bart De Schutter
    Abstract: Motivated by the increasing integration among electricity markets, in this paper we propose three different methods to incorporate market integration in electricity price forecasting and to improve the predictive performance. First, we propose a deep neural network that considers features from connected markets to improve the predictive accuracy in a local market. To measure the importance of these features, we propose a novel feature selection algorithm that, by using Bayesian optimization and functional analysis of variance, analyzes the effect of the features on the algorithm performance. In addition, using market integration, we propose a second model that, by simultaneously predicting prices from two markets, improves even further the forecasting accuracy. Finally, we present a third model to predict the probability of price spikes; then, we use it as an input in the other two forecasters to detect spikes. As a case study, we consider the electricity market in Belgium and the improvements in forecasting accuracy when using various French electricity features. In detail, we show that the three proposed models lead to improvements that are statistically significant. Particularly, due to market integration, predictive accuracy is improved from 15.7% to 12.5% sMAPE (symmetric mean absolute percentage error). In addition, we also show that the proposed feature selection algorithm is able to perform a correct assessment, i.e. to discard the irrelevant features.
    Date: 2017–08
  12. By: Bichler, Shimshon; Nitzan, Jonathan
    Abstract: FROM THE ARTICLE: 'During the late 1980s, we printed a series of working papers, offering a new approach to the political economy of Israel and wars in the Middle East. Our approach in these papers rested on three new concepts. It started by identifying the Weapondollar-Petrodollar Coalition – an alliance of armament firms, oil companies and financial institutions based mostly in the United States – whose interests, we posited, converged in the Middle East. It continued by arguing that the interests of this coalition were best measured by its differential accumulation – i.e., by its performance relative to other large firms. And it concluded by showing that variations in differential accumulation predicted subsequent Middle East energy conflicts (our term). At the time, the papers seemed unpublishable. They were politically unaligned (neither neoclassical nor Marxist). They were non-disciplinary (belonging to neither economics nor politics – or any other social science, for that matter). And they were written in non-academic language (i.e., simply, clearly and to the point). But they made a scientific prediction: the Middle East, they argued, was ripe for another round of military hostilities and oil crisis. And when the 1990-91 Gulf War broke out, their theoretical frame-work suddenly sounded very relevant’.
    Keywords: arms,capital as power,differential accumulation,dominant capital,Israel,Middle East,energy conflicts,stagflation
    Date: 2017
  13. By: Cristina Conflitti; Matteo Luciani
    Abstract: We estimate the oil price pass-through into consumer prices both in the US and in the euro area. In particular, we disentangle the specific effect that an oil price change might have on each disaggregate price, from the effect on all prices that an oil price change might have since it affects the whole economy. To do so, we first estimate a Dynamic Factor Model on a panel of disaggregate price indicators, and then we use VAR techniques to estimate the pass-through. Our results show that the oil price passes through core inflation only via its effect on the whole economy. This pass-through is estimated to be small, but statistically different from zero and long lasting.
    Keywords: Core inflation ; Disaggregate consumer prices ; Dynamic factor model ; Oil price ; Pass-through
    JEL: C32 E31 E32 Q43
    Date: 2017–08–17
  14. By: Guo, Zi-Yi
    Abstract: We adopt Schwartz and Smith’s model (2000) to calculate risk measures of Brent oil futures contracts and light sweet crude oil (WTI) futures contracts and Mirantes, Poblacion and Serna’s model (2012) to calculate risk measures of natural gas futures contracts, gasoil futures contracts, heating oil futures contracts, RBOB gasoline futures contracts, PJM western hub peak and off-peak electricity futures contracts. We show that the models present well goodness of fit and explain two stylized facts of the data: the Samuelson effect and the seasonality effect. Our backtesting results demonstrate that the models provide satisfactory risk measures for listed energy commodity futures contracts. A simple estimation method possessing quick convergence is developed.
    Keywords: Samuelson effect,seasonal effect,value-at-risk,least-square-estimation
    Date: 2017
  15. By: Mohammad Reza Farzanegan (Philipps-Universität Marburg); Tim Krieger (Albert-Ludwigs-Universität Freiburg)
    Abstract: We study the short and long run responses of income inequality to the positive oil and gas rents per capita shocks in Iran from 1973 to 2012. Using vector autoregression (VAR)-based impulse response functions, we find a positive and statistically significant response of income inequality to oil rents booms within 4 years after the shock. The Autoregressive-Distributed Lag (ARDL) results show that a 10 percent increase in oil and gas rents per capita leads to 1.1 percent increase in income inequality in the long run. The results are robust after controlling for income-distribution channels in Iran. Our analysis can help policy makers to evaluate and accommodate the possible positive or negative effects of lifting sanctions on inequalities in Iran.
    Keywords: oil rents; inequality; VAR; ARDL; sanctions; Iran
    JEL: Q33 Q38 D63
    Date: 2017
  16. By: Berga, Helen; Ringler, Claudia; Bryan, Elizabeth; El Didi, Hagar; Elnasikh, Sara
    Abstract: The Nile is the lifeblood of northeastern Africa, and its roles for and interdependency with the national economies it traverses and binds together grow as it moves from source to sea. With rapid economic development—population growth, irrigation development, rural electrification, and overall economic growth—pressures on the Nile’s water resources are growing to unprecedented levels. These drivers of change have already contributed to stark changes in the hydropolitical regime, and new forms of cooperation and cross-sectoral collaboration are needed, particularly in the Eastern Nile Basin countries of Egypt, Ethiopia, Sudan, and South Sudan. As direct sharing of water resources is hampered by unilateral developments, the need has increased for broader, cross-sectoral collaboration around the water, energy, and food sectors. This study is conducted to assess and understand the challenges of and opportunities for cooperation across the water-energy-food nexus nationally in Egypt, Ethiopia, and Sudan, as well as regionally across the Eastern Nile. To gather data, the paper uses an e-survey supplemented with key informant interviews geared toward national-level water, energy, and agriculture stakeholders, chiefly government staff and researchers. Findings from the survey tools suggest that most respondents strongly agree that collaboration across the water, energy, and agriculture sectors is essential to improve resource management in the region. At the same time, there is ample scope for improvement in collaboration across the water, energy, and food sectors nationally. Ministries of water, energy, and food were identified as the key nexus actors at national levels; these would also need to be engaged in regional cross-sectoral collaboration. Respondents also identified a wide range of desirable cross-sectoral actions and investments—both national and regional—chiefly, joint planning and operation of multipurpose infrastructure; investment in enhanced irrigation efficiency; joint rehabilitation of upstream catchments to reduce sedimentation and degradation; and investment in alternative renewable energy projects, such as wind and solar energy.
    Keywords: stakeholders, energy, water, food, Nile river, resilience, surveys, cooperation,
    Date: 2017
  17. By: Bontems, Philippe
    Abstract: This paper examines theoretically whether by combining both output based refunding and abatement expenditures based refunding it is possible to limit the negative consequences that a pollution tax imply for a polluting industry. We actually show that this is indeed the case by using such a three-part policy where emissions are subject to a fee and where output and abatement expenditures are subsidized. In particular, when the industry is homogenous, it is possible to replicate the standard emission tax outcome by inducing a polluting firm to choose the production and emission levels obtained under any emission tax, without departing from budget balance. By construction, any polluter earns strictly more than under the standard tax alone without rebate, making this proposal highly acceptable to the industry. When firms are heterogenous, the refunding policy needed to replicate the standard emission tax outcome is personalized in the sense that at least the output subsidy should be type dependent. Another result is that this three-part policy is strictly prefered only from the industry's point of view to a standard environmental tax. We also explore the implications of uniform three-part refunding policies for a heterogenous industry.
    Keywords: refunded emission taxes; regulation design; pollution.
    JEL: H23 Q52 Q58
    Date: 2017–07
  18. By: Jake Barnes (SPRU – Science Policy Research Unit, University of Sussex, Falmer, Brighton, BN1 9SL, UK, Department of Geography, University of Exeter, Rennes Drive, Exeter, EX4 4RJ)
    Abstract: This article draws on three theoretical fields, innovation intermediaries, socio-technical transitions and domestication studies to develop a process perspective of how user-side intermediary organisations seek to locally embed low carbon technologies. The term local embedding is increasingly used by transition researchers in a variety of ways. The first contribution of this paper is to explore and substantiate the concept of local embedding as the process of integrating technologies into local contexts of use. Intermediary organisations are conceived as contributing to local embedding where they facilitate, configure and broker change towards configurations that work. Nonetheless, understanding how these key intermediary processes relate as well as the influence of system dynamics on the work intermediaries undertake is still largely uncharted territory. The paper’s second contribution is a process perspective on the agency of intermediary organisations in local embedding. The resulting perspective offers insights into the agency of user-side intermediaries and later phases of transition processes.
    Keywords: Intermediary organisations, local embedding, socio-technical transitions, domestication
    Date: 2017–08
  19. By: Lee, Sang-Ho; Nakamura, Tamotsu; Park, Chul-Hi
    Abstract: We formulate the vertical market structure with a downstream polluting industry and an upstream eco-industry, where both private and public eco-firms produce abatement goods. We then investigate the voluntary commitments on target emissions from polluting firms and their impacts on the optimal decisions of privatization policies. We provide the conditions for the non-optimality of partial privatization and show that, depending on the environmental damage, full nationalization, full privatization or partial privatization can be optimal. In particular, it is shown that there is a U-shaped relationship between environmental damage and the optimal degree of privatization. It supports that government should have large ownership of privatized eco-firms for environmental protection when environmental damage is serious.
    Keywords: Abatement Goods; Commitments; Eco-Industry; Mixed Oligopoly; Partial Privatization
    JEL: D43 L13 Q58
    Date: 2017–08–21
  20. By: Andersen, Dana C. (University of Alberta, Department of Economics)
    Abstract: This paper develops a general equilibrium model with heterogeneous firms to analyze the effect of default risk on production-generated pollution emissions. The model analytically divides the effect of default risk into three distinct effects: the market-size, technology-upgrading, and selection effect. Conceptually, an increase in default risk raises equilibrium borrowing costs, thereby precluding investment in a technology upgrade among a subset of firms (technology-upgrading effect). As a consequence, the economy consists of more numerous (market-size effect) but less productive and more pollution-intensive firms (selection effect). Because the effects are confounding in nature, the effect of default risk on aggregate pollution emissions and emissions intensity is an empirical question. To answer this question, this paper estimates the model’s key parameters using a unique dataset with establishment-level credit scores and a composite measure of pollution emissions for a panel of manufacturing firms in the United States. Using a two-step procedure where default risk is estimated in the first stage, the results indicate that the estimated elasticity of emissions intensity and productivity with respect to default risk is 0.89 and -0.16, respectively. Next, I use the theoretical model to leverage the coefficient estimates to estimate the effect of economy wide default risk on aggregate pollution emissions, demonstrating that default risk increases aggregate emissions and emissions intensity, primarily as a consequence of the technology-upgrading effect. Finally, this paper demonstrates that historical changes in economy-wide default risk can generate economically significant changes in pollution emissions.
    Keywords: Default risk; pollution emissions; firm heterogeneity; general equilibrium
    JEL: D50 L60 Q50
    Date: 2017–08–21
  21. By: Don Fullerton; Erich Muehlegger
    Abstract: Public economics has a well-developed literature on tax incidence – the ultimate burdens from tax policy. This literature is used here to describe not only the distributional effects of environmental taxes or subsidies but also the likely incidence of non-tax regulations, energy efficiency standards, or other environmental mandates. Recent papers find that mandates can be more regressive than carbon taxes. We also describe how the distributional effects of such policies can be altered by various market conditions such as limited factor mobility, trade exposure, evasion, corruption, or imperfect competition. Finally, we review data on carbon-intensity of production and exports around the world in order to describe implications for effects of possible carbon taxation on countries with different levels of income per capita.
    JEL: H22 H23 Q48 Q52
    Date: 2017–08
  22. By: Kounetas, Kostas; Zervopoulos, Panagiotis
    Abstract: Countries rapid economic growth, energy consumption and anthropogenic emissions (GHGs) in the atmosphere are creating serious environmental problem on both global and local scales -. This is while compiled evidence about the relationship between climate change/global warming and the amount of GHG released is present (IEA, 2010). In advance, it is generally accepted that countries production processes, should seriously, take into account environmental sustainability principles and targets. In recent years, there have been a series of studies using a directional distance function dealing with environmental efficiency with the aim of measuring the ability of decision making units (i.e regions, firms, industries, countries) to produce more with less impact on the environment. A scarcity of empirical studies appears concerning the estimation of directional distance function under a metafrontier framework. In this paper we employ a balanced panel of 103 countries from 1995-2011 to shed light on the idiosyncratic performance of countries participating in two distinct different groups (Annex I and non-Annex I) using a generalized directional distance function independent of the direction vector length -. The non-parametric metafrontier framework - used in this study, as a first stage of analysis, is exploited to account for the heterogeneity between countries participating in our sample. In the second stage, a convergence-divergence hypothesis has been examined for the technology gaps estimated for each period. Our findings reveal significant patterns between countries’ individual performance.
    Keywords: Metafrontier; Generalized Distance Function; Technology gaps; Annex-I countries
    JEL: D24 Q0 Q4
    Date: 2017–07–15

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