nep-ene New Economics Papers
on Energy Economics
Issue of 2017‒09‒03
28 papers chosen by
Roger Fouquet
London School of Economics

  1. A Consumer Decision-making Process? Unfolding Energy Efficiency Decisions of German Owner-occupiers By Paul Baginski; Christoph Weber
  2. Role of governance in clean energy innovation policies in East and North-East Asia By Dorothea Lazaro from the ESCAP Subregional Office for East and North-East Asia.
  3. Identifying technological sub-trajectories in photovoltaic patents By Martin Kalthaus
  4. Fostering Renewables and Recycling a Carbon Tax: Joint Aggregate and Intergenerational Redistributive Effects By Frédéric Gonand
  5. Dynamic Impacts on Growth and Intergenerational Effects of Energy Transition in a Time of Fiscal Consolidation By Frédéric Gonand
  6. Developing renewable energy in Pacific small island developing States By Heather Taylor from the Macroeconomic Policy and Financing for Development Division.
  7. Fertility and Rural Electrification in Bangladesh By Fujii, Tomoki; Shonchoy, Abu S.
  8. The importance of government effectiveness for transitions toward greater electrification in developing countries By Rohan Best; Paul J Burke
  9. Financing energy connectivity By Kohji Iwakami and Sean Ratka from the Energy Division.
  10. Easing the traffic: The effects of Indonesia's fuel subsidy reforms on toll-road travel By Paul J Burke; Tsendsuren Batsuuri; Muhammad Halley Yudhistira
  11. Time-Varying Rare Disaster Risks, Oil Returns and Volatility By Rıza Demirer; Rangan Gupta; Tahir Suleman; Mark E. Wohar
  12. Improving the Predictive ability of oil for inflation: An ADL-MIDAS Approach. By Afees A. Salisu; Ahaemefula Ephraim Ogbonna
  13. Is the Recent Low Oil Price Attributable to the Shale Revolution? By Cheolbeom Park; Erdenebat Bataa
  14. A multi-factor predictive model for oil-US stock nexus with persistence, endogeneity and conditional heteroscedasticity effects By Afees A. Salisu; Raymond Swaray; Tirimisyu F. Oloko
  15. Is Chad affected by Dutch or Nigerian disease? By Sandrine Kablan; Josef Loening
  16. Managing food and fuel price inflation needs fiscal space By Anis Chowdhury, Clovis Freire, Kiatkanid Pongpanich, and Vatcharin Sirimaneetham from the Macroeconomic Policy and Development Division.
  17. Sustainability development: Biofuels in agriculture By Cheteni, Priviledge
  18. Compliance, Efficiency and Instrument Choice: Evidence from air pollution control in China By Thomas Stoerk
  19. Balancing Development and the Environment in a Changing World: Expressways, GDP, and Pollution in China By Guojun He; Yang Xie; Bing Zhang
  20. Pricing Green Financial Products By Awdesch Melzer; Wolfgang K. Härdle; Brenda López Cabrera;
  21. Carbon taxes and climate commitment with non-constant time preference By Iverson , Terrence; Karp, Larry
  22. Making Carbon Pricing Work By Klenert, David; Mattauch, Linus; Combet, Emmanuel; Edenhofer, Ottmar; Hepburn, Cameron; Rafaty, Ryan; Stern, Nicholas
  23. Asset prices and climate policy By Karp, Larry; Rezai, Armon
  24. Decoupling economic growth from CO2 emissions in the world By Rim Berahab
  25. Supporting National Commitment in Reducing GHG Emissions: A Painful Journey for Indonesian Local Government? By Sulistiadi Dono Iskandar; Andhika Putra Pratama
  26. Internalizing the environmental costs of production – policy instruments and priorities By Laura Altinger and Daniel Jeongdae Lee from the Macroeconomic Policy and Financing for Development Division.
  27. International Environmental Agreement and the Timing of Domestic Lobbying By Etienne Farvaque; Norimichi Matsueda
  28. Découplage entre croissance économique et émissions de dioxyde de carbone dans le monde By Rim Berahab

  1. By: Paul Baginski; Christoph Weber (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen (Campus Essen))
    Abstract: The German housing stock needs substantial energetic retrofit to meet carbon reduction targets. Various instruments are available to motivate building owners to improve the energy efficiency of their dwellings. These instruments mainly focus on the economic issue of funding and financing energy efficient refurbishments as the decision is interpreted as a rational choice of an investment. Their success is rather low as the refurbishment rate stagnates around 1% per year for more than a decade. The objective of this study is to gain deeper insights into the decision-making of owner-occupiers regarding energy efficient refurbishments and to offer an adjusted framework to analyse the decision. A qualitative-explorative research approach is chosen, whereby in-depth interviews with independent energy advisers have been conducted. Results point out that the decision of owner-occupiers towards energy efficient refurbishment measures qualifies as an extensive consumer decision rather than a pure investment decision. The refurbishment measure implies high cognitive as well as emotional involvement. Owner-occupiers use several criteria to evaluate refurbishments, which alleviate monetary determinants. The standard process model of consumer decision-making, reaching from need recognition to post-purchase evaluation, qualifies for structuring the decision. It allows analysing drivers and barriers stepwise and deriving implications for activating homeowners and for promoting energy efficiency in each step. Current policies partly choose unrewarding argumentations to stimulate energy efficient refurbishments since they do not take all relevant factors of this consumer decision into account.
    Keywords: Energy efficient refurbishments; decision-making process; consumer purchase decision; energy efficiency policy
    Date: 2017–08
  2. By: Dorothea Lazaro from the ESCAP Subregional Office for East and North-East Asia. (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: The experiences of major economies in the East and North-East Asia subregion point to at least three desirable aspects of public policies and strategies in promoting clean energy innovation. These aspects include a well-designed governance structure, balanced policy mix of incentives and regulations and an enabling financial system. The list is clearly not comprehensive as other policy aspects, such as the need to develop a large pool of educated workers and to have an open trade policy to facilitate technology transfer, are equally crucial.
  3. By: Martin Kalthaus (FSU Jena)
    Abstract: This paper proposes a search strategy for photovoltaic patents which allows to distinguish the photovoltaic system into sub-trajectories. Identifying and analyzing sub-trajectories is of particular importance for understanding micro patterns of technological change. The proposed search strategy is modular and replicable. It performs similar to leading benchmark search strategies but allows to distinguish three cell sub-trajectories and two system components. Descriptive analysis reveals that inventive activity differs between sub-trajectories. The market dominating silicon wafer cell sub-trajectory shows hardly any patented inventive activity. Country comparison reveals that Asian countries focus on the emerging cell sub-trajectory. The USA focus on the established thin-film sub-trajectory and inventive activity in Germany focuses on module components. While the proposed search strategy allows for a fine-grained analysis of inventive activity in photovoltaics, the empirical assessment of sub- trajectories in general can increase understanding of technological change and can be used to implement policy interventions at a microtechnological level.
    Keywords: Innovation, Sub-trajectory, Patent search, Photovoltaics
    JEL: O31 O34 Q42
    Date: 2017–08–30
  4. By: Frédéric Gonand (Chaire économie du climat - Chaire économie du climat, LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine)
    Abstract: A rising share of renewables in the energy mix push es up the average price of energy - and so does a carbon tax. However the former bolsters the accumulation of capital whereas the latter, if fully recycled, does not. Thus, in general equilibrium, the effects on growth and intertemporal welfare of these two environmental po licies differ. The present article assesses and compares these effects. It relies on a computable general equilibrium model with overlapping generations, an energy module and a pub lic finance module. The main result is that an increasing share of renewables in the energy mix and a fully recycled carbon tax have opposite (though limited) impacts on activity and i ndividuals’ intertemporal welfare in the long run. The recycling of a carbon tax fosters consumption and labour supply, and thus growth and welfare, whereas an increasing share of renewables does not. Results also suggest that a higher share of renewables and a recycled carbon tax trigger intergenerational redistributive effects, with the former being relat ively detrimental for young generations and the latter being pro-youth. The policy implication is that a social planner seeking to modify the structure of the energy mix while achieving some ne utrality as concerns the GDP and triggering some proyouth intergenerational equity, could usefully contemplate the joint implementation of higher quantitative targets for the future development of renewables and a carbon tax fully recycled through lower proportional taxes.
    Keywords: Energy transition,intergenerational redistribution,overlapping generations,carbon tax,general equilibrium
    Date: 2017–05–12
  5. By: Frédéric Gonand (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine, Chaire économie du climat - Chaire économie du climat)
    Abstract: Social planners in most western countries will be facing two long-lasting challenges in the next years: energy transition and fiscal consolidation. One problem is that governments might consider that implementing an energy transition could get in the way of achieving a fiscal consolidation. If so, interrupting the energy transition in a time of fiscal consolidation would involve significant aggregate impacts on activity and intergenerational redistributive effects. This article tries to assess them empirically. It relies on an overlapping-generations framework in a general equilibrium setting, with a detailed energy module. The model is parameterized on data provided by OECD/IEA for France. Different results emerge. Renouncing to the energy transition would slightly foster the level of GDP during the next 10 to 15 years - depending on the dynamics of the prices of fossil fuels on world markets - but weigh on it more significantly afterwards (up to -1% in 2050). If the prices of fossil fuels keep increasing in the future, implementing an energy transition could have broadly the same favourable effects on the GDP level in the long run as those of a fiscal consolidation diminishing significantly public spending instead of raising taxes. In the long-run, the GDP would be maximized by implementing an energy transition and simultaneously lessening the public deficit by lowering some public expenditure, a policy that would entail an overall gain of around 1,6% of GDP in 2050. Stopping the energy transition would also bring about intergenerational issues. It would be detrimental to the intertemporal wellbeing of almost all cohorts alive in 2010. A fiscal policy with lower public expenditures and frozen tax rates may be still more favourable to young and future generations than implementing an energy transition. However, renouncing to an energy transition would annihilate most of these proyouth effects.
    Keywords: fiscal consolidation,general equilibrium,Energy transition,intergenerational redistribution,overlapping generations
    Date: 2017–05–12
  6. By: Heather Taylor from the Macroeconomic Policy and Financing for Development Division. (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: The small island developing States (SIDS) of the Pacific face unique development challenges because of their small size, remoteness from major markets, limited export base and exposure to global environmental challenges. Energy security and diversification of the energy mix have been major drivers for renewable policies and targets in the Pacific islands. This policy brief focuses on the targets for electricity generation from renewables set by Pacific SIDS and discusses the key policy considerations and challenges related to those targets. In particular, it highlights the importance of creating a conducive environment for the development of renewables and emphasizes the need to shift policy discourses from focusing on output to prioritizing access.
  7. By: Fujii, Tomoki (School of Economics, Singapore Management University); Shonchoy, Abu S. (Institute for Developing Economies, IDE-JETRO)
    Abstract: We use a household-level panel dataset from Bangladesh to examine the household-level relationship between fertility and the access to electricity. We find that the household's access to electricity reduces the change in the number of children by about 0.1 to 0.25 children in a period of five years in most estimates. This finding also applies to retrospective panel data and is robust to the choice of covariates and estimation methods. Our finding passes falsication test and corroborates with the predictions of our theoretical model on the households' time use and consumption pattern.
    Keywords: Bangladesh; infrastructure; television; difference in differences; propensity score matching; retrospective panel data.
    JEL: J13 O20
    Date: 2017–07–11
  8. By: Rohan Best; Paul J Burke
    Abstract: Electricity is a vital factor underlying modern living standards, but there are many developing countries with low levels of electricity access and use. We seek to systematically identify the crucial elements underlying transitions toward greater electrification in developing countries. We use a cross-sectional regression approach with national-level data up to 2012 for 135 low- and middle-income countries. The paper finds that the effectiveness of governments is the most important governance attribute for encouraging the transition to increased electrification in developing countries, on average. The results add to the growing evidence on the importance of governance for development outcomes. Donors seeking to make more successful contributions to electrification may wish to target countries with more effective governments.
    Keywords: electricity transitions, developing countries, government effectiveness
    JEL: O13 O20 Q40
    Date: 2017
  9. By: Kohji Iwakami and Sean Ratka from the Energy Division. (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: This policy brief aims to explore regional energy connectivity and its role in meeting broader energy goals within the framework of the Sustainable Development Agenda. Challenges, particularly relating to financing gaps will be highlighted through existing sub-regional initiatives.
  10. By: Paul J Burke; Tsendsuren Batsuuri; Muhammad Halley Yudhistira
    Abstract: Indonesia has serious traffic jams. This study uses data from 19 Indonesian toll roads over 2008-2015 to calculate the effects of Indonesia's historic recent fuel subsidy reforms on motor vehicle travel. The timing of the reforms was determined by budgetary and political factors, providing a suitable setting for estimating a causal effect. We control for a broad set of other factors potentially influencing traffic flows. Estimates using monthly data suggest an immediate fuel price elasticity of motor vehicle flows on the roads in our study of -0.1, increasing to -0.2 when responses over a year are considered. We estimate that Indonesia's fuel subsidy reforms of 2013 and 2014 had reduced traffic pressure on these roads in the second half of 2015 by around 10% relative to the counterfactual without reform. A move to an adequate fuel excise system could contribute to more free-flowing traffic, while generating revenue for infrastructure and other investment.
    Keywords: fuel subsidy, gasoline, price, elasticity, transport, Indonesia
    JEL: R41 R48 H20
    Date: 2017
  11. By: Rıza Demirer (Department of Economics & Finance, Southern Illinois University Edwardsville, Edwardsville, USA); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Tahir Suleman (School of Economics and Finance, Victoria University of Wellington, New Zealand and School of Business, Wellington Institute of Technology, New Zealand); Mark E. Wohar (College of Business Administration, University of Nebraska at Omaha, Omaha, USA; School of Business and Economics, Loughborough University, Leicestershire, UK)
    Abstract: This paper provides a novel perspective to the predictive ability of rare disaster risks for West Texas Intermediate (WTI) oil market returns and volatility using a nonparametric quantile-based methodology over the monthly period of 1918:01-2013:12. We show that a nonlinear relationship and structural breaks exists between oil returns and various rare disaster risks; hence, linear Granger causality tests are misspecified and the linear model results of non-predictability are unreliable. However, the quantile-causality test shows that rare disaster-risks strongly affect both WTI returns and volatility, with stronger evidence of predictability observed at lower quantiles of the respective conditional distributions. Our results are robust to alternative specification of volatility (based on a GARCH model), and measure of rare disaster risks (based on the number of crises).
    Keywords: Oil Returns and Volatility, Rare Disasters, Nonparametric Quantile Causality
    JEL: C22 C58 G14 G15
    Date: 2017–08
  12. By: Afees A. Salisu (Centre for Econometric and Allied Research, University of Ibadan); Ahaemefula Ephraim Ogbonna (Centre for Econometric and Allied Research, University of Ibadan)
    Abstract: This paper attempts to improve the predictive ability of oil for inflation by incorporating mixed data sampling regression model into the autoregressive distributed lag model. The efficiency of the conventionally used models, which are based on same frequency of variables, is challenged on the basis of the concealed information in low frequency series. Using data covering OECD countries, we find that the ADL-MIDAS seems to outperform all the other competing models, a feat attributable to the integration of more information from a higher frequency oil price series in the forecast of a low frequency inflation series. In addition, including oil price in inflation model produces more accurate results than the model that excludes it.
    Keywords: OECD countries, ADL-MIDAS, Inflation forecasts, Forecast evaluation
    JEL: C53 E31 E37
    Date: 2017–08
  13. By: Cheolbeom Park (Department of Economics, Korea University, Seoul, Republic of Korea); Erdenebat Bataa (Department of Economics, National University of Mongolia , Ulaanbaatar, Mongolia)
    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: C32 E32 F43
    Date: 2017
  14. By: Afees A. Salisu (Centre for Econometric and Allied Research, University of Ibadan); Raymond Swaray (Economics Subject Group, University of Hull Business, University of Hull, Cottingham Road, UK); Tirimisyu F. Oloko (Centre for Econometric and Allied Research, University of Ibadan)
    Abstract: In this study, we extend the single-predictor model for US stock market developed by Narayan and Gupta (2014) to capture more important predictors of the market. Our analyses are conducted in three distinct ways. First, we test whether oil price will produce better forecast accuracy in the multiple-factor model than in the single-factor model. Secondly, we also test the plausibility of making generalization about the predictive model for oil-US stocks on the basis of large cap stocks. Thirdly, we employ the recently developed Feasible Quasi Generalized Least Squares (FQGLS) estimator by Westerlund and Narayan (2014) in order to capture the inherent persistence, endogeneity and heteroscedasticity effects in the predictors. Our results reveal that oil price renders better forecast performance in the multiple-factor predictive model than in the single-factor variants for both in-sample and out-of-sample forecasts. Also, we find that generalizing the predictability of oil-US stock market with large cap may lead to misleading inferences. In addition, it may be necessary to pre-test the predictors for persistence, endogeneity and conditional heteroscedasticity particularly when modeling with high frequency series. Our results are robust to different forecast measures and forecast horizons.
    Keywords: WTI Oil price; US large cap; US Small cap; Inflation; Output, Forecast evaluation
    JEL: G11 Q43
    Date: 2017–08
  15. By: Sandrine Kablan (ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12); Josef Loening (The World Bank - The World Bank - The World Bank)
    Abstract: We examine the effects of the ‘natural resource curse’ on Chad and find little evidence for Dutch disease. Structural vector auto-regression suggests that changes in domestic output and prices are overwhelmingly determined by aggregate demand and supply shocks, and while oil production and high international prices negatively affect agricultural output, the effects are small. Consistent with empirical evidence for neighbouring Cameroon, we observe minimal impact on Chad’s manufacturing sector. We associate our findings with structural underemployment and the inefficient use of existing production factors. In this context, increased public expenditures in tradable sectors present the opportunity to make oil revenues an engine of national development.
    Date: 2017–05–24
  16. By: Anis Chowdhury, Clovis Freire, Kiatkanid Pongpanich, and Vatcharin Sirimaneetham from the Macroeconomic Policy and Development Division. (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: Concerns with high and volatile prices of food and fuel remain at the centre of the policy agenda. Volatility of commodity prices continues to be influenced by fundamentals of demand and supply, but is exacerbated by the financialization of commodity markets. High global liquidity has played an important role in supporting the persistently high prices of oil and globally traded food commodities. The challenge was highlighted by the head of Food and Agriculture Organization of the United Nations (FAO), Mr. Jose Graziano da Silva, during the opening of the Ministerial Meeting on International Food Prices in October 2013: “International prices have declined but they are still above their historical levels. And prices are expected to remain volatile over the next years.†Asia-Pacific countries are well aware of this fact. The region was severely affected by food and fuel price hikes during 2007-2008 and 2010-2011, slowing the progress in poverty reduction. ESCAP estimates show that, based on $1.25 a day per capita poverty line, additional 19.4 million people in the ESCAP region remained in poverty due to increased food and fuel prices in 2010.
  17. By: Cheteni, Priviledge
    Abstract: Biofuels are socially and politically accepted as a form of sustainable energy in numerous countries. However, cases of environmental degradation and land grabs have highlighted the negative effects to their adoption. Smallholder farmers are vital in the development of a biofuel industry. The study sort to assess the implications in the adoption of biofuel crops by smallholder farmers. A semi-structured questionnaire was administered to 129 smallholder farmers who were sampled from the Eastern Cape Province in South Africa. A binary probit model was used to investigate the determinants of smallholder farmers adopting biofuel crops. The empirical results showed that the variables membership in association, occupation and incentives were statistically significant in influencing farmers’ decision to adopt biofuel crops. Furthermore, it was discovered that the studied areas have a potential to grow biofuel crops.
    Keywords: Agriculture, Biofuels, Binary Model, Sustainable Development, South Africa
    JEL: Q5 Q58
    Date: 2017–01–05
  18. By: Thomas Stoerk
    Abstract: This research evaluates China's main air pollution control policy. In 2005, China decided on a 10% SO2 emissions reduction goal as part of the 11th Five-Year Plan (2006-2010). I study the effect of this policy on pollution outcomes, using both the offcial, misreporting-prone indicator and independent NASA SO2 satellite data in a differences-in-differences strategy that exploits variation in target stringency at the province level. I find that results from the offcial and the satellite data differ initially when the Chinese government lacked the ability to effectively monitor SO2 pollution. Ultimately, however, the policy worked and reduced air pollution by 11%. The regulated provincial governments react through rhetorical compliance, measured by a unique dataset of quantified political statements, and by shutting down small, ineffcient thermal units. Rhetorical compliance increases, especially before the government gained the ability to monitor SO2 in 2008. Real compliance sets in through the shutdown of small, ineffcient thermal units. Next, I compute detailed marginal abatement cost curves for SO2 for each province in China, thus illustrating the large heterogeneity in abatement cost across provinces. I use those curves to construct the counterfactual cost-effcient allocation of SO2 reduction targets across provinces. Using this benchmark, I find that the cost-effcient allocation would increase effciency by 49% at the margin, by lowering marginal abatement cost from 658e/tSO2 to 338e/tSO2. This finding is robust to inclusion of a back-of-the-envelope measure for the marginal benefits of abatement. I conclude that a market-based allocation of SO2 reduction targets would have doubled the effciency of China's main air pollution control policy. Contrary to the US experience, I find that a mandate on scrubbers would reap most of those effciency gains.
    Date: 2017–08
  19. By: Guojun He (Division of Social Sciencee, Division of Environment, and Department of Economics, The Hong Kong University of Science and Technology); Yang Xie (Department of Economic, University of California, Riverside); Bing Zhang (Center for Environmental Management and Policy Analysis, School of Environment, Nanjing University)
    Abstract: When productivity changes, how would an economy rebalance economic production and environmental preservation? We develop a conceptual framework to analyze the question, and predict that a productivity shock can have heterogeneous impacts on environmental quality and income. Exploiting a quasi-experiment provided by the dramatic expansion of China’s national expressway system, we find empirical evidence that is consistent with the model’s predictions: expressway access increases both pollution and GDP in initially poor counties, decreases pollution and GDP in initially rich counties, and decreases pollution while increasing GDP in counties with moderate levels of initial income. These findings cannot be fully explained by alternative theories such as the pollution haven hypothesis and home market effect.
    Date: 2017–08
  20. By: Awdesch Melzer; Wolfgang K. Härdle; Brenda López Cabrera;
    Abstract: With increasing wind power penetration more and more volatile and weather dependent energy is fed into the German electricity system. To manage the risk of windless days and transfer revenue risk from wind turbine owners to investors wind power derivatives were introduced. These insurance-like securities (ILS) allow to hedge the risk of unstable wind power production on exchanges like Nasdaq and European Energy Exchange. These products have been priced before using risk neutral pricing techniques. We present a modern and powerful methodology to model weather derivatives with very skewed underlyings incorporating techniques from extreme event modelling to tune seasonal volatility and compare transformed Gaussian and non-Gaussian CARMA(p; q) models. Our results indicate that the transformed Gaussian CARMA(p; q) model is preferred over the non-Gaussian alternative with Lévy increments. Out-of-sample backtesting results show good performance wrt burn analysis employing smooth Market Price of Risk (MPR) estimates based on NASDAQ weekly and monthly German wind power futures prices and German wind power utilisation as underlying. A seasonal MPR of a smile-shape is observed, with positive values in times of high volatility, e.g. winter months, and negative values, in times of low volatility and production, e.g. in summer months. We conclude that producers pay premiums to insure stable revenue steams, while investors pay premiums when weather risk is high.
    Keywords: market price of risk, risk premium, renewable energy, wind power futures, stochastic process, expectile, CARMA, jump, Lévy, transform, logit-normal, extreme
    JEL: C00
    Date: 2017–08
  21. By: Iverson , Terrence; Karp, Larry
    Keywords: Social and Behavioral Sciences
    Date: 2017–08–30
  22. By: Klenert, David; Mattauch, Linus; Combet, Emmanuel; Edenhofer, Ottmar; Hepburn, Cameron; Rafaty, Ryan; Stern, Nicholas
    Abstract: Carbon-pricing initiatives are spreading at an unprecedented rate, but a considerable gap remains between actual prices and those required to achieve ambitious climate change mitigation. This perspective shows that much of this gap could be closed by enhancing the public’s acceptance of carbon pricing through the effective use of the substantial revenues raised. We synthesize findings regarding the use of carbon revenues both from recent behavioral and political studies as well as from economic analyses of equity and efficiency. We then compare real-world carbon pricing regimes with insights derived from theory. We find that uniform lump-sum recycling of carbon revenues to citizens is favored among behavioral and political studies that emphasize the importance of distributional fairness, revenue salience, political trust, and policy stability amid partisan changes in government. It is also successfully employed in several real-world recycling schemes, although alternative uses of revenues such as green spending may be appropriate in different national contexts.
    Keywords: carbon pricing; carbon tax; revenue recycling; uniform lump-sum transfers; green spending; behavioral economics; political science; inequality; equity
    JEL: D3 D6 D72 H2 H3
    Date: 2017–08–23
  23. By: Karp, Larry; Rezai, Armon
    Abstract: Currently living people might reduce carbon emissions to protect themselves, their wealth, or future generations from climate damage. An overlapping generations climate model with endogenous asset priceand investment levels disentangles these incentives. Asset markets capitalize the future e¤ects of policy, regardless of people’s concern for future generations. These markets can lead self-interested agents to undertake signi…cant abatement. A small climate policy that raises the price of capital increases welfare of old agents and also increases welfare of young agents with a high intertemporal elasticity of sub-stitution. Climate policy can also have subtle distributional e¤ects across the currently living generations.
    Keywords: Social and Behavioral Sciences, Climate externality, overlapping generations, climate pol- icy, generational con‡ict, dynamic bargaining, Markov perfection, ad- justment costs.
    Date: 2017–08–31
  24. By: Rim Berahab
    Abstract: The progressive warming of Earth suggests an important danger for future populations. As stabilizing the level of greenhouse gases (GHGs) in the atmosphere becomes inadequate, there is now talk of reducing this level while preserving sustainable economic growth rates. This Policy Brief deals with the issue of the economy’s carbon intensity through a decoupling indicator, defined as the ratio between the change in carbon dioxide (CO2) emissions and Gross Domestic Product (GDP). It also highlights some remarkable trends emerging from the experience of different countries. Globally, CO2 emissions were stable for the third consecutive year despite strong economic growth, which suggests a decline in the carbon intensity of the economy. However, the study of the decoupling indicator has shown that disparities exist between regions. Africa, and Morocco in particular, shows mixed results insofar as there is a low degree of decoupling -or dissociation- between CO2 emissions and GDP.
    Keywords: Emissions de CO2, gaz à effet de serre , croissance économique, développement, Produit Intérieur Brut, découplage, changement climatique, climat, Courbe Environnementale de Kuznets, charbon, gaz naturel, énergies renouvelables
    Date: 2017–07
  25. By: Sulistiadi Dono Iskandar (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta); Andhika Putra Pratama (Researcher, Institute for Economic and Social Research, Faculty of Economics, University of Indonesia, Jakarta)
    Abstract: In 2009, Indonesian ex-President, Susilo Bambang Yudhoyono declared Indonesia’s commitment to reduce its Green House Gas (GHG) emission. The commitment later being legalized in Government Regulation No. 61 2011 (PP 61 Tahun 2011) along with the legal establishment of RAN-GRK (National Action Plan for GHG Emission Reduction) and RAD-GRK (Local Action Plan for GHG Emission Reduction) Program. However, following ï¬ ve years after the implementation of both program, the effectiveness itself is still in question especially in the case of local government level. This paper aims to evaluate the effectiveness of GHG emission mitigation activities in provincial level from the budget perspective. On top of that, this paper also attempts to investigate the determinant factors of local government’s effort to reduce GHG emission proxied by the total mitigation expenditure in the particular province. Using Panel data analysis for each province with timespan of 2010–2015, our results suggest that mitigation activities conducted by the local government are signiï¬ cant in reducing the GHG emission. Our result also shows that local government’s ï¬ scal capacity does determine the level of budget dedicated for reducing GHG emission although with a very low coefï¬ cient, suggesting that emission mitigation has not became a priority for the local government in Indonesia
    Keywords: GHG Emission - RAN-GRK - Panel Data - Local Government - Mitigation Expenditure
    JEL: Q54 Q58
    Date: 2017–07
  26. By: Laura Altinger and Daniel Jeongdae Lee from the Macroeconomic Policy and Financing for Development Division. (United Nations Economic and Social Commission for Asia and the Pacific)
    Abstract: Although not captured in the GDP measure, environmental degradation, carbon emissions and air pollution reduce social welfare and undermine the sustainability of economies.
  27. By: Etienne Farvaque (Faculty of Economic and Social Sciences, University of Lille 1); Norimichi Matsueda (School of Economics, Kwansei Gakuin University)
    Abstract: We incorporate domestic lobbying activities into a policymaker's decision mak-ing on whether or not to sign a cooperative bilateral environmental agreement and, if not, how much pollution a country emits. There are environmental and industrial lobbyists who attempt to sway the policymaker's decision toward their respectively favored policies. As is usually the case with a common agency model, they present contribution schedules that are tied to resulting policy choices. We focus on the impacts of the timing of lobbying activities. The first type of lobbying occurs on the signing of a cooperative agreement, and the second when each nation chooses its own emission level after the agreement is not signed or one of the signatories reneges on its promise. We compare the outcomes of the four different cases: (i) no lobbying activity; (ii) lobbying conducted at the agreement signing stage; (iii) lob-bying conducted when non-cooperative choice is made; and (iv) lobbying at every occasion. Our results suggest that the timing of lobbying has a critical impact on the signing of a cooperative agreement, and that the lobbying activities can pose a hindrance to the signing of an agreement even when environmental interests are represented by lobby groups in a similarly high proportion as industrial ones.
    Keywords: common agency, compensating equilibrium, environmental agreement, global pollution, lobbying.
    JEL: K23 Q58
    Date: 2017–08
  28. By: Rim Berahab
    Abstract: Le réchauffement progressif de la terre laisse présager un danger important pour les populations futures. Stabiliser le niveau de gaz à effet de serre (GES) dans l’atmosphère devient alors insuffisant, il est désormais question de réduire ce niveau, tout en préservant des taux de croissance économique soutenables. Ce Policy Brief traite de la question de l’intensité carbone de l’économie , à travers un indicateur de découplage, défini comme le rapport entre la variation des émissions de dioxyde de carbone (CO2) et du Produit Intérieur Brut (PIB). Il met également en exergue quelques tendances remarquables issues de l’expérience de certains pays. Au niveau mondial, les émissions de CO2 ont été stables pour la troisième année consécutive malgré une croissance économique marquée, ce qui laisse présager une baisse de l’intensité carbone de l’économie. L’étude de l’indicateur de découplage a cependant démontré que des disparités existent entre les régions. L’Afrique, et le Maroc en particulier, présentent des résultats mitigés dans la mesure où on observe un faible degré de découplage –ou dissociation- entre les émissions de CO2 et le PIB.
    Keywords: Emissions de CO2, gaz à effet de serre , croissance économique, développement, Produit Intérieur Brut, découplage, changement climatique, climat, Courbe Environnementale de Kuznets, charbon, gaz naturel, énergies renouvelables
    Date: 2017–07

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