nep-ene New Economics Papers
on Energy Economics
Issue of 2017‒11‒26
34 papers chosen by
Roger Fouquet
London School of Economics

  1. What Role Can Renewable Energy and Water and Food Securities Play for North Africa and the Middle East ? By Rabi H. Mohtar
  2. Does renewable energy consumption drive economic growth: Evidence from Granger-causality technique By Khobai, Hlalefang; Le Roux, Pierre
  3. Impact of German Energiewende on transmission lines in the Central European region By Jan Málek; Lukáš Recka; Karel Janda
  4. Oil Prices and the Renewable Energy Sector By Kyritsis, Evangelos; Serletis, Apostolos
  5. Service Quality in Electricity Distribution in Brazil: A Malmquist Approach By Alexandre Marinho; Marcelo Resende
  6. Ana?lisis econo?mico del mecanismo de respuesta de la demanda en el sector ele?ctrico colombiano (Julio de 2017) By John J. Garci?a; Alejandro Gutierrez; Luisa Vargas Tobo?n; Hermilson Velasquez
  7. Electricity consumption and Economic growth: A panel data approach to Brics countries By Khobai, Hlalefang
  8. Accounting for Elimination-by-Aspects Strategies and Demand Management in Electricity Contract Choice By Daniel, Aemiro Melkamu; Persson, Lars; Sandorf, Erlend Dancke
  9. Some Considerations in Respect to Customer-Centric Demand Response Market Design By Ekaterine Maglakelidze; Maia Veshaguri
  10. The Cobb-Douglas function as a flexible function. Analysing the substitution between capital, labor and energy. By Frédéric Reynès
  11. Power to the people: WA's energy future By Rebecca Cassells; Alan S Duncan; Yashar Tarverdi
  12. A Review of the Nexus Between Energy consumption and Economic growth in the Brics countries By Khobai, Hlalefang; Abel, Sanderson; Le Roux, Pierre
  13. Literature survey on the relationships between energy variables, environment and economic growth By Sofien, Tiba; Omri, Anis
  14. Common factors of commodity prices By Delle Chiaie, Simona; Ferrara, Laurent; Giannone, Domenico
  15. A comparison of German and Indian innovation pathways in the auto component industry By Kalogerakis, Katharina; Fischer, Luise; Tiwari, Rajnish
  16. Transitioning beyond coal: Lessons from the structural renewal of Europe’s old industrial regions By Stephanie Campbell; Lars Coenen
  17. The effect of oil spills on infant mortality: Evidence from Nigeria By Anna Bruederle; Roland Hodler
  18. Forecasting the real price of oil under alternative specifications of constant and time-varying volatility By Beili Zhu
  19. Show us the money: Oil revenues, undisclosed allocations and accountability in budgets of the GCC States By AlShehabi, Omar
  20. Creaming - and the depletion of resources: A Bayesian data analysis By Lillestøl, Jostein; Sinding-Larsen, Richard
  21. Ontology and methodology in the study of the resource curse By Herb, Michael
  22. Does the Expansion of Biofuels Encroach on the Forest? By Johanna Choumert; Pascale Combes Motel; Derya Keles; Eric Kere
  23. Food versus fuel: An updated and expanded evidence By Ondrej Filip; Karel Janda; Ladislav Kristoufek; David Zilberman
  24. Carbon pricing in climate policy: seven reasons, complementary instruments, and political economy considerations By Baranzini, Andrea; van den Bergh, Jeroen C. J. M.; Carattini, Stefano; Howarth, Richard B.; Padilla, Emilio; Roca, Jordi
  25. Polarisation of Eco-Labelling Strategies By Vera Danilina
  26. Testing for Convergence in Carbon Dioxide Emissions using a Bayesian Robust Structural Model By Fernández-Amador, Octavio; Oberdabernig, Doris; Tomberger, Patrick
  27. The CO2 emissions in Finland, Norway and Sweden: a dynamic relationship By Alonso-Rodriguez, Agustin
  28. Economía del Cambio Climático en Honduras: documento técnico 2017 By -
  29. The accountability imperative for quantifying the uncertainty of emission forecasts : evidence from Mexico By Daniel PUIG; Oswaldo Morales-Napoles; Fatemeh Bakhtiari; Gissela Landa Rivera
  30. Simultaneity Modeling Analysis of the Environmental Kuznets Curve Hypothesis By BEN YOUSSEF, Adel; Hammoudeh, Shawkat; Omri, Anis
  31. Faraway, so close : coupled climate and economic dynamics in an agent based integrated assessment model By Francesco Lamperti; Giovanni Dosi; Mauro Napoletano; Andrea Roventini; Alessandro Sapio
  32. Preferences for distributional impacts of climate policy By Lea Skræp Svenningsen; Bo Jellesmark Thorsen
  33. Intergenerational equity under catastrophic climate change By Aurélie Méjean; Antonin Pottier; Stéphane Zuber; Marc Fleurbaey
  34. The climate beta By Dietz, Simon; Gollier, Christian; Kessler, Louise

  1. By: Rabi H. Mohtar
    Abstract: Renewable energy technologies are projected to have substantial growth in the coming decades, especially given the environmental, social and economic drivers observed globally. The Middle East and North Africa (MENA) region encloses abundant alternative energy sources such as solar, wind and hydropower. The concern is more whether the Arab region will be able to respond to and manage the growth opportunities in this emerging sector. This Policy Brief explores opportunities and challenges for the MENA region to adopt and increase the production of alternative energy in an existing national portfolio and the role this renewable sources of energy can help in water and food securities in remote areas that are not serviced by the electric grid. As such renewable energy can help the MENA region towards its quest to achieve the Sustainable Development Goals and in particular Water, Energy, climate goals.
    Keywords: renewable, energy, water, food security, MENA, Morocco
    Date: 2017–07
  2. By: Khobai, Hlalefang; Le Roux, Pierre
    Abstract: This study investigates the causal relationship between renewable energy consumption and economic growth in South Africa. It incorporates carbon dioxide emissions, capital formation and trade openness as additional variables to form a multivariate framework. Quarterly data is used for the period 1990 – 2014 and is tested for stationarity using the Augmented Dickey Fuller (ADF), Dickey Fuller Generalised Least Squares (DF-GLS) and Phillips and Perron (PP) unit root tests. The study employs the Autoregressive distributed lag (ARDL) model to examine the long run relationship among the variables. Lastly, the study determines the direction of causality between the variables using the Vector Error Correction Model (VECM). The results validated an existence of a long run relationship between the variables. Moreover, a unidirectional causality flowing from renewable energy consumption to economic growth was established in the long run. The short run results suggested a unidirectional causality flowing from economic growth to renewable energy consumption. The findings of the study suggest that an appropriate and effective public policy is required in the long run, while considering sustainable economic growth and development
    Keywords: Renewable energy consumption; Economic growth; Causality; South Africa
    JEL: Q2 Q21 Q27 Q4 Q42 Q43 Q48
    Date: 2017–11–06
  3. By: Jan Málek; Lukáš Recka; Karel Janda
    Abstract: The impacts of renewable energy production and German nuclear phase-out on the electricity transmission systems in Central Europe is investigated with focus on the disparity between the growth of renewable production and the pace at which new electricity transmission lines have been built, especially in Germany. This imbalance endangers the system stability and reliability in the whole region. The assessment of these impacts on the transmission grid is analysed by the direct current load flow model ELMOD. Two scenarios for the year 2025 are evaluated from different perspectives. The distribution of loads in the grids is shown. Hourly patterns are analysed. Geographical decomposition is made, and problematic regions are identified. The high solar or wind power generation decrease the periods of very low transmission load and increase the mid- and high load on the transmission lines. High solar feed-in has less detrimental impacts on the transmission grid than high wind feed-in. High wind feed-in burdens the transmission lines in the north-south direction in Germany and water-pump-storage areas in Austria.
    Keywords: Energiewende, RES, transmission networks, congestion, loop flows, ELMOD, Central Europe.
    JEL: L94 Q21 Q48 C61
    Date: 2017–11
  4. By: Kyritsis, Evangelos (Dept. of Business and Management Science, Norwegian School of Economics); Serletis, Apostolos (Dept. of Economics, University of Calgary)
    Abstract: Energy security, climate change, and growing energy demand issues are moving up on the global political agenda, and contribute to the rapid growth of the renewable energy sector. In this paper we investigate the effects of oil price shocks, and also of uncertainty about oil prices, on the stock returns of clean energy and technology companies. In doing so, we use monthly data that span the period from May 1983 to December 2016, and a bivariate structural VAR model that is modified to accommodate GARCH-in-mean errors, and it is used to generate impulse response functions. Moreover, we examine the asymmetry of stock responses to oil price shocks and compare them accounting for oil price uncertainty, while effects of oil price shocks of different magnitude are also investigated. Our evidence indicates that oil price uncertainty has no statistically significant effect on stock returns, and that the relationship between oil prices and stock returns is symmetric. Our results are robust to alternative model specifications and stock prices of clean energy companies.
    Keywords: Renewable energy; Transition; Oil prices; Uncertainty; GARCH-in-Mean model; Asymmetric responses
    JEL: C32 G15 Q42
    Date: 2017–11–14
  5. By: Alexandre Marinho; Marcelo Resende
    Abstract: The paper undertakes a dynamic analysis for service quality in the electricity distribution in Brazil between 2010 and 2014 based on Malmquist indexes constructed upon Data Envelopment Analysis (DEA) distance functions. The motivation for the less usual consideration of efficiency frontiers for service-quality builds on previous static applications in the context of telecommunications as given by Façanha and Resende (2004), Resende and Façanha (2005) and Resende and Tupper (2009). The analysis treats undesirable technical indicators as inputs and desirable consumer satisfaction indicators as outputs. The bootstrap- corrected Malmquist indexes indicated that service quality is an important concern as the evidence respectively indicates quality deterioration in 38.1 %, quality stagnation in 40.5 % and quality improvement only in 21.4 % of the cases. When one decomposes the Malmquist index, the evidence does not suggest relevant frontier shifts and indicates a dominant role for the catch-up effect.
    Keywords: service quality, consumer satisfaction, electricity distribution, Brazil
    Date: 2016
  6. By: John J. Garci?a; Alejandro Gutierrez; Luisa Vargas Tobo?n; Hermilson Velasquez
    Abstract: Resumen Este arti?culo toma como referencia el programa de Respuesta de la Demanda (RD) implementado en el mercado ele?ctrico de Estados Unidos coordinado por PJM, considerado como uno de los casos de mercado ma?s exitosos a nivel mundial, para determinar el impacto econo?mico que podri?a representar un programa de RD para el mercado ele?ctrico colombiano. Se propone la implementacio?n de un programa de RD con un objetivo de 600 MW en su fase madura y al considerar su participacio?n en el precio del mercado se pudo evidenciar que para el an?o 2015, este habri?a podido representar una disminucio?n promedio del precio de bolsa durante las horas de despacho de la RD, de un 30%, con los cuales se estima un ahorro aproximado de 130.000 millones de pesos colombianos, adema?s de que en te?rminos de confiabilidad del sistema se habri?a podido evitar situaciones de incertidumbre del abastecimiento como las ocurridas en los momentos ma?s cri?ticos del evento El Nin?o ocurrido entre 2015 y 2016. Abstract This paper is based upon the PJM market Demand Response Program, which it is considered as one of the most successful DR mechanisms over the world. Based on its design, the economic impact that could be achieve if a similar DR program were implemented in the Colombian market was determined. A DR program has been proposed that could achieve 600 MW of capacity in a mature stage. When its impact was took into account in the market price, it was found that for 2015 its impact in the DR dispatch hours could achieve lowering spot price in around 30%. With these results it can be estimated that the system could save about COP130.000 million, regardless of its contribution to the system reliability that, in the past El Nin?o event (2015-2016), could have reduced blackout risks.
    Keywords: ARIMAX – ARCH, Beneficios Econo?micos, Colombia, Incentivos, Mecanismo de Respuesta de la Demanda, Redes Inteligentes.ARIMAX – ARCH, Colombian, Demand Response Program, Economics Benefits, Incentives, Smart Grid.
    JEL: L11 L94
    Date: 2017–10–09
  7. By: Khobai, Hlalefang
    Abstract: This paper serves to investigate the causal relationship between electricity consumption and economic growth in the Brics countries during the period 1990 – 2014. Carbon dioxide emissions and urbanisation were included as additional variables to form a multivariate framework. The Kao panel co-integration and Johansen Fisher panel co-integration techniques are applied to analyse the co-integration relationship between the variables while the Vector Error Correction Model (VECM) Granger-causality test is used to estimate the causality relationship among the variables. The study’s results reveal that there is a long run relationship between the variables. The research outcome further detected a unidirectional causality flowing from economic growth to electricity consumption in the long run in Brics countries. So in the light of determination of the study, the policy implication is that a significant transformation of low carbon technologies such as renewable energy should be implemented to curb the emissions and sustain economic growth and development.
    Keywords: Energy consumption; Economic growth; Causality; Brics countries
    JEL: D04 Q2 Q43 Z00
    Date: 2017–11–06
  8. By: Daniel, Aemiro Melkamu (CERE and the Department of Economics, Umeå University); Persson, Lars (CERE and the Department of Economics, Umeå University); Sandorf, Erlend Dancke (CERE and the Department of Forest Economics, SLU)
    Abstract: We report on a discrete choice experiment aimed at eliciting Swedish households' willingness-to-accept a compensation for restrictions on household electricity and heating use during peak hours. When analyzing data from discrete choice experiments, we typically assume that people make rational utility maximizing decisions, i.e., that they consider all of the attribute information and compare all alternatives. However, mounting evidence shows that people use a wide range of simplifying strategies that are inconsistent with utility maximization. We use a flexible model capturing a two-stage decision process. In the fi rst stage, respondents are allowed to eliminate from their choice set alternatives that contain an unacceptable level, i.e., restrictions on the use of heating and electricity. In the second stage, respondents choose in a compensatory manner between the remaining alternatives. Our results show that about half of our respondents choose according to an elimination-by-aspects strategy, and that, on average, they are unwilling to accept any restrictions on heating in the evening or electricity use, irrespective of time-of-day. Furthermore, we nd that considering elimination-by-aspects behavior leads to a downward shift in elicited willingness-to-accept. We discuss implications for policy.
    Keywords: Choice experiment; Electricity contract; Willingness-to-accept; Household electricity; Elimination-by-aspects; Two-stage decision
    JEL: C25 Q41 Q51 R21
    Date: 2017–11–07
  9. By: Ekaterine Maglakelidze (University of Georgia); Maia Veshaguri (Ivane Javakhishvili Tbilisi State University (TSU))
    Abstract: For already of the past decade, the Georgia?s electricity sector has been engaged in a complex process to bring increased competition to the business of electric generation, sales, and service delivery. But initial legislative and regulatory efforts to promote competition have focused on the supply side of the market: creating trading floors for energy and capacity sales, removing barriers to independent generators and marketers, and promoting open and non-discriminatory access to the transmission grid. It is assumed by many that robust competition among a variety of suppliers would be sufficient to ensure reasonable electricity rates and service options to customers. But the principal lesson learned from New England?s, French, Germany, Austria and other power systems and markets is that competition among electricity suppliers alone (without an active demand response) is not enough to create efficiently competitive electricity markets. Demand response provides a fair reward to consumers for demand flexibility without compensation of suppliers and relies on available technical solutions. But customers benefit alone is not enough to make demand response to participate in balancing market. Suppliers could also gain by making use of demand response, if they chose to do so. Thus, the purpose of Our study is twofold: to show that robust competition among a variety of suppliers without an active demand response is not enough to create efficiently competitive electricity markets, and to test the hypothesis that ?Only under the fully liberalized customer-centric demand response electricity market with ?Aggregators? on place Georgia?s domestic customers can reap the benefits from their ?demand response? behavior in the form of reduced energy bills without the need of compensating suppliers?.In order to test our hypothesis, empirical analyses have been applied. Based exclusively on secondary data obtained from various sources, We have made the modification to the Georgian Electricity Market Model (GEMM2015) developed by Deloitte Consulting in collaboration with Pierce Atwood Attorneys LLC in 2012. Our considerations are based mainly on the cost-benefit analysis commissioned by Regulatory Assistance Project (RAP) aiming to prove that all customers benefit from explicit demand response, not just those customers who reduce their demand.Thus, instead of paying to generators that sell energy in the balancing market a ?market-clearing price? (in the event of ?over-scheduling?) or compensating generators to reduce generation (in the event of ?under-scheduling?), it would be more reasonable to deploy responsive demand for balancing purposes.
    Keywords: Keywords: Demand response market design, explicit demand, implicit demand, peak demand, demand flexibility, energy policy, aggregator.
    JEL: M31 Q41
    Date: 2017–10
  10. By: Frédéric Reynès (OFCE Sciences Po)
    Abstract: By defining the Variable Output Elasticities Cobb-Douglas function, this article shows that a large class of production functions can be written as Cobb-Douglas function with non-constant output elasticity. Compared to standard flexiblefunctions such as the Translog function, this framework has several advantages. [1] It does not requires the use of a second order approximation. [2] This greatly facilitates the deduction of linear input demands function without the need of involving the duality theorem. [3] It allows for a generalization of the CES function to the case where the elasticity of substitution between each pair of inputs is not necessarily the same. [4] This provides a more general and more flexible framework compared to the traditional nested CES approach while facilitating the analyze of the substitution properties of nested CES functions. The case of substitutions between energy, capital and labor is provided.
    Keywords: flexible production functions, Cobb-Douglas function, substitution capital-labor-energy
    JEL: D24 E23
    Date: 2017–04–20
  11. By: Rebecca Cassells (Bankwest Curtin Economics Centre (BCEC), Curtin University); Alan S Duncan (Bankwest Curtin Economics Centre (BCEC), Curtin University); Yashar Tarverdi (Bankwest Curtin Economic Centre, Curtin University)
    Abstract: Power to the People: WA’s Energy Future asks if WA is positioned to take advantage of technological advances that are yet to be incorporated into energy markets. This second report in our Focus on Industry series examines the state of play in the sector and where WA sits in comparison with the eastern states, analyses technological developments both locally and overseas, considers how our natural endowments affect our energy choices, and whether our productivity and innovation capabilities are ready to participate in the energy revolution. The report highlights the key challenges, risks and policy issues requiring attention to ensure that WA’s system gets power to the people at the right time and right place, at a price that is no more than necessary and using technologies that will power us well into the future.
    Keywords: Western Australia, energy, renewable energy, non-renewables, productivity and innovation, energy price, electricity generation
    Date: 2017–08
  12. By: Khobai, Hlalefang; Abel, Sanderson; Le Roux, Pierre
    Abstract: The study investigates the long run relationship and causal relationship between energy consumption and economic growth in the Brics countries during the period 1990 – 2013. The Pedroni panel co-integration method is applied to analyse the co-integration relationship among the variables. The causality relationship among the variables is analysed using Pair-wise Granger-causality technique. The study’s results reveal that there is a long run relationship between economic growth, energy consumption, employment and trade openness in Brics countries. The research outcome further detected a unidirectional causality flowing from economic growth to energy consumption. This implies that the conservation policies that curb unnecessary loss in energy could be implemented in the Brics countries without adversely affecting economic growth.
    Keywords: Energy consumption; Economic growth; Causality; Brics countries
    JEL: Q40 Q41 Q42 Q43 Q47 Q48
    Date: 2017–11–06
  13. By: Sofien, Tiba; Omri, Anis
    Abstract: This paper provides an extensive survey of the great progress in the literature of energy- environment-growth nexus for both specific- and multi-county studies covering the period from 1978 to 2014. The survey focuses on country (ies) coverage, periods, modeling methodologies, and empirical conclusions. Our survey is based on the direction of causality between (i)energy consumption (electricity, nuclear, renewable and non-renewable) and economic growth; (ii) between economic growth and environment; and between the three variables at the same time. As a general remark from these studies is that the literature produced paradoxical and not conclusive results which energy consumption can boost economic growth through the productivity enhancement and it can boost also the environmental damages through the enhancement of pollutant emissions. This survey gives researchers a ‘snap shot’ of the literature on the causality between the four types of energy, environment and economic growth for both individual and collective cases. Understanding the causal links between environment, economic growth and different types of energy consumption provides a basis for discussion in order to design and implementating effective energy and environmental policies.
    Keywords: Literature survey, economic growth, energy consumption, environment.
    JEL: O4 O44 Q4
    Date: 2016–09–25
  14. By: Delle Chiaie, Simona; Ferrara, Laurent; Giannone, Domenico
    Abstract: In this paper we extract latent factors from a large cross-section of commodity prices, including fuel and non-fuel commodities. We decompose each commodity price series into a global (or common) component, block-specific components and a purely idiosyncratic shock. We find that the bulk of the fluctuations in commodity prices is well summarised by a single global factor. This global factor is closely related to fluctuations in global economic activity and its importance in explaining commodity price variations has increased since the 2000s, especially for oil prices. JEL Classification: C51, C53, Q02
    Keywords: commodity prices, dynamic factor models, forecasting
    Date: 2017–11
  15. By: Kalogerakis, Katharina; Fischer, Luise; Tiwari, Rajnish
    Abstract: This paper is a part of a series of analyses conducted within a BMBF-funded research project to investigate potentials of frugal innovations for Germany. One of the objectives of this project has been to identify innovation pathways that foster frugal innovations. Since auto component suppliers based in India are known to contribute significantly to the development of 'affordable and good quality' vehicles, it was considered useful to conduct comparative studies of the prevalent innovation pathways in Germany with those in India. This paper is based on our investigations of innovation pathways in Indian and German auto component industries and aims to provide a coherent comparative analysis. After discussing similarities and differences in Indian and German innovation pathways, a reference model for frugal innovation pathways is outlined. The results provide insights on how certain elements of frugal innovation pathways could be implemented in Germany in order to create solutions that are affordable, fulfil the requisite quality standards and avoid unnecessary usage (wastage) of resources. Altogether, exploratory connections are identified which provide impetus for further research and can be thought-provoking for relevant business, social and political stakeholders.
    Keywords: Frugal Innovation,Innovation Pathways,Path Dependency,Automotive,Auto-Component Industry
    Date: 2017
  16. By: Stephanie Campbell (Melbourne Sustainable Society Institute, University of Melbourne); Lars Coenen (Melbourne Sustainable Society Institute, University of Melbourne)
    Abstract: It is often assumed that a transition to a low-carbon future will have highly disruptive and potentially devastating effects on coal regions and their communities. However, evidence from the experience of industrial decline and attempted renewal in Europe’s old industrial regions demonstrates that successful regional transition is—while not inevitable—indeed possible. Fundamental transformation of existing industrial, institutional, social and technological structures is not an easy nor straightforward process but fraught with the challenges of creative destruction: while new industrial activities and structures emerge, existing ones are broken down. Drawing on the literature of regional resilience and innovation, the paper offers lessons, insights and cautionary warnings from the experience of renewal initiatives in Europe’s old industrial regions and illustrates the ways in which some of the seeds for a ‘just’ regional transitions to zero-carbon economies may, in fact, lie in a careful understanding of the potential to build on the specific historical context of the regions industrial development and capabilities.
    Keywords: coal transition, old industrial regions, regional development, regional innovation
    JEL: O38 R11
    Date: 2017–11
  17. By: Anna Bruederle; Roland Hodler
    Abstract: Oil spills can lead to irreversible environmental degradation and pose hazards to human health. We are the first to study the causal effects of onshore oil spills on neonatal and infant mortality rates. We use spatial data from the Nigerian Oil Spill Monitor and the Demographic and Health Surveys, and rely on the comparison of siblings conceived before and after nearby oil spills. We find that nearby oil spills double the neonatal mortality rate. These effects are fairly uniform across locations and socio-economic backgrounds. We also provide some evidence for negative health effects of nearby oil spills on surviving children.
    Keywords: Oil spills; Nigeria; infant mortality; child health.
    JEL: I10 I18 J13 Q53
    Date: 2017–09
  18. By: Beili Zhu
    Abstract: This paper constructs a monthly real-time oil price dataset using backcasting and compares the forecast performance of alternative models of constant and timevarying volatility based on the accuracy of point and density forecasts of real oil prices of both real-time and ex-post revised data. The paper considers Bayesian autoregressive and autoregressive moving average models with respectively, constant volatility and two forms of time-varying volatility: GARCH and stochastic volatility. In addition to the standard time-varying models, more flexible models with volatility in mean and moving average innovations are used to forecast the real price of oil. The results show that timevarying volatility models dominate their counterparts with constant volatility in terms of point forecasting at longer horizons and density forecasting at all horizons. The inclusion of a moving average component provides a substantial improvement in the point and density forecasting performance for both types of time-varying models while stochastic volatility in mean is superfluous for forecasting oil prices.
    Keywords: Forecasting, oil price, real-time data, time-varying volatility, moving average, stochastic volatility in mean.
    JEL: C11 C53 C82 Q43
    Date: 2017–11
  19. By: AlShehabi, Omar
    Abstract: This paper traces the historical evolution of the transparency, independence and accountability of public revenues and expenditures in each of the GCC countries. Beginning with the discovery of oil in 1932, specific focus is placed on that part of oil revenues that are treated as undisclosed allocations, including military expenditures, overseas transfers and royal allowances. It argues that with the exception of Kuwait, there is strong evidence to suggest that significant amount of oil revenues are undeclared, which go either into private hands or into undisclosed government transactions.
    JEL: N0 R14 J01
    Date: 2017–09–01
  20. By: Lillestøl, Jostein (Dept. of Business and Management Science, Norwegian School of Economics); Sinding-Larsen, Richard (Dept. of Geoscience and Petroleum, Norwegian University of Science and Technology)
    Abstract: This paper considers sampling in proportion to size from a partly unknown distribution. The applied context is the exploration for undiscovered resources, like oil accumulations in different deposits, where the most promising deposits are likely to be drilled first, based on some geologic size indicators (“creaming”). A Log-normal size model with exponentially decaying creaming factor turns out to have nice analytical features in this context, and fits well available data, as demonstrated in Lillestøl and Sinding-Larsen (2017). This paper is a Bayesian follow-up, which provides posterior parameter densities and predictive densities of future discoveries, in the case of uninformative prior distributions. The theory is applied to the prediction of remaining petroleum accumulations to be found on the mature part of the Norwegian Continental Shelf.
    Keywords: Log-normal distribution; sampling proportional to size; resource prediction
    JEL: C00 C10 C11 C13
    Date: 2017–11–16
  21. By: Herb, Michael
    Abstract: The most influential work on the resource curse employs quantitative methodologies, typically some variant of regression analysis that includes (to the extent that data allows) all of the world’s countries over a number of years. This paper argues that natural resource rents affect political outcomes through different channels, with varying impact and even direction of effect. This complexity is very difficult to capture in a large quantitative model. This paper argues that careful case studies are a more suitable way to advance our knowledge of the resource curse.
    JEL: N0 R14 J01
    Date: 2017–06
  22. By: Johanna Choumert (EDI); Pascale Combes Motel (CERDI); Derya Keles (INRA – LEF); Eric Kere (African Development Bank)
    Abstract: In this article, we explore the role of biofuel production on deforestation in developing and emerging countries. Since the 2000s biofuel production has been rapidly developing to address issues of economic development, energy poverty and reduction of greenhouse gas (GHG) emissions. However, the sustainability of biofuels is being challenged in recent research, particularly at the environmental level, due to their impact on deforestation and the GHG emissions they can generate as a result of land use changes. In order to isolate the impact of bioethanol and biodiesel production among classic determinants of deforestation, we use a fixed effects panel model on biofuel production in 112 developing and emerging countries between 2001 and 2012. We find a positive relationship between bioethanol production and deforestation in these countries, among which we highlight the specificity of Upper-Middle-Income Countries (UMICs). An acceleration of incentives for the production of biofuels, linked to a desire to strengthen energy security from 2006 onwards, enables us to highlight higher marginal impacts for the production of bioethanol in the case of developing countries and UMICs. However, these results are not significant before 2006 for developing countries, and biodiesel production appears to have an impact on deforestation before 2006 on both subsamples. These last two results seem surprising and could be related to the role of biofuel production technologies and the crop yields used in their production.
    Keywords: Biofuel production, land use change, forest cover loss, ,
    JEL: Q16 Q23 Q55
    Date: 2017–11
  23. By: Ondrej Filip; Karel Janda; Ladislav Kristoufek; David Zilberman
    Abstract: This paper replicates and extends the study of Zhang et al. (2010): “Food versus fuel: What do prices tell us?” Energy Policy 38, pp. 445-451. We confirm the findings of the original paper that there was only a weak relationship between ethanol and food commodities in the period between March 1989 and July 2008. In addition, we extend that study and examine the cointegration relationship between biofuels and related commodities for a considerably enlarged dataset (3 vs. 1 market, 26 vs. 8 commodities, analysis up till 2017 vs. 2008, weekly vs. monthly data frequency). Focusing on the biofuel markets of Brazil, the EU and the USA in the three separate periods before, during, and after the food crisis of 2007 and 2008, we show that studying the time variation of the relationships plays an essential role in their proper understanding. Our results help to clarify the wide extensive discussion about the role of biofuels prices in food shortages manifested particularly during the food crises. In agreement with the original study, we confirm that price series data do not support strong statements about biofuels uniformly serving as main leading source of high food prices and consequently the food shortages.
    Keywords: Biofuels, fuels, food, cointegration.
    JEL: Q16 Q42 Q56
    Date: 2017–11
  24. By: Baranzini, Andrea; van den Bergh, Jeroen C. J. M.; Carattini, Stefano; Howarth, Richard B.; Padilla, Emilio; Roca, Jordi
    Abstract: Carbon pricing is a recurrent theme in debates on climate policy. Discarded at the 2009 COP in Copenhagen, it remained part of deliberations for a climate agreement in subsequent years. As there is still much misunderstanding about the many reasons to implement a global carbon price, ideological resistance against it prospers. Here, we present the main arguments for carbon pricing, to stimulate a fair and well-informed discussion about it. These include considerations that have received little attention so far. We stress that a main reason to use carbon pricing is environmental effectiveness at a relatively low cost, which in turn contributes to enhance social and political acceptability of climate policy. This includes the property that corrected prices stimulate rapid environmental innovations. These arguments are underappreciated in the public debate, where pricing is frequently downplayed and the erroneous view that innovation policies are sufficient is widespread. Carbon pricing and technology policies are, though, largely complementary and thus are both needed for effective climate policy. We also comment on the complementarity of other instruments to carbon pricing. We further discuss distributional consequences of carbon pricing and present suggestions on how to address these. Other political economy issues that receive attention are lobbying, co-benefits, international policy coordination, motivational crowding in/out, and long-term commitment. The overview ends with reflections on implementing a global carbon price, whether through a carbon tax or emissions trading. The discussion goes beyond traditional arguments from environmental economics by including relevant insights from energy research and innovation studies as well.
    JEL: N0
    Date: 2017–07
  25. By: Vera Danilina (Aix-Marseille Univ., CNRS, EHESS, Centrale Marseille, AMSE)
    Abstract: Growing ecological concerns give rise to salient discussions of green policy impact within different social sciences domains. This research studies the outcomes of voluntary environmental labelling in autarky and upon trade integration in the presence of two types of heterogeneity, across countries and across producers. It investigates the impact of the two main types of eco-labels – multiple-criteria-based programmes (ISO Type I) and self-declared environmental claims (ISO Type II), both of which are simultaneously introduced due to the environmental concerns of consumers. The model illustrates the polarisation of eco-labels when the least productive firms tend to avoid green strategies, lower-middle productive and the most efficient firms are incentivized to greenwash, and the upper-middle productive firms choose trustful programmes. It also shows that voluntary green restrictions lead to substantial productivity effects in the market upon opening to international trade, conditionally, depending on the type of the labelling and the relative degree of environmental awareness across trading countries. The model predicts average market productivity losses and within segments productivity gains for the relatively more eco-concerned country, while the effects for the relatively less eco-concerned country are the opposite.
    Keywords: eco-labelling, trade integration, voluntary environmental regulation, firms productivity, firm heterogeneity
    JEL: F18
    Date: 2017–11
  26. By: Fernández-Amador, Octavio; Oberdabernig, Doris; Tomberger, Patrick
    Abstract: We find evidence for country- specific conditional convergence in all emission inventories, implying a half-life of 2.8 - 3.1 years for emissions per capita and 3.2 - 5 years for emission intensities. When testing for global convergence without allowing for individual-specific convergence paths, the half-life of CO2 intensities increases to 20 - 24 years, whereas emissions per capita do not show convergence towards global steady states. Our results highlight the current incompatibility between emission targets and economic growth and the need for greener technologies. Moreover, there is no evidence for specific convergence dynamics in the European Union, the OECD, or the countries that rati ed the Kyoto Protocol. The institutional frameworks implemented in industrialized countries did not induce faster convergence among developed economies.
    Date: 2017–05–01
  27. By: Alonso-Rodriguez, Agustin
    Abstract: In this paper a dynamic relationship between the CO2 emissions in Finland, Norway and Sweden is presented. With the help of a VAR(2) model, and using the Granger terminology, it is shown that the emissions in Finland are affecting those in Norway and Sweden. Other aspects of this dynamic relationship are presented as well.
    Keywords: Paris 2015 Agreement,CO2 emissions,VAR models,Granger causality,impulse response functions,forecast error variance decomposition,software R MTS, RATS
    Date: 2017
  28. By: -
    Abstract: A partir de 2008, la CEPAL ha colaborado con el Gobierno de Honduras en la iniciativa «La Economía del Cambio Climático en Centroamérica» (ECC CA) con el propósito de evidenciar los impactos de la variabilidad y el cambio climático y propiciar la discusión sobre políticas públicas en sectores clave. Los análisis multisectoriales realizados con la colaboración de equipos técnicos de funcionarios y expertos de la región han resaltado la alta vulnerabilidad al cambio climático de la región centroamericana y de Honduras en particular. Las discusiones realizadas entre socios sobre las respuestas de políticas públicas generaron propuestas para priorizar la adaptación al cambio climático, explícitamente favoreciendo cobeneficios para la sostenibilidad y la inclusión social, y coordinar con programas de reducción de la vulnerabilidad y la pobreza. Y en este marco de prioridades, transitar a economías ambientalmente sostenibles y bajas en emisiones de los gases de efecto invernadero (GEI). El cambio climático requiere prestar mayor atención a bienes y servicios públicos e intergeneracionales, como el clima, recursos hídricos, ecosistemas, la seguridad alimentaria y nutricional, seguridad energética, y el transporte público. Por el efecto multisectorial de este fenómenoy la necesidad de una mayor articulación entre instituciones en la respuesta, los Objetivos de Desarrollo Sostenible y la Agenda 2030 nos proporcionan un marco valioso de trabajo.
    Date: 2017–10
  29. By: Daniel PUIG (UNEP DTU Partnership, Copenhagen, Denmark); Oswaldo Morales-Napoles (Delft University of Technology, Netherlands); Fatemeh Bakhtiari (UNEP DTU Partnership, Copenhagen, Denmark); Gissela Landa Rivera (OFCE, Sciences Po Paris, France)
    Abstract: Governmental climate change mitigation targets are typically developed with the aid of forecasts of greenhouse-gasemissions. The robustness and credibility of such forecasts depends, among other issues, on the extent to which forecasting approaches can reflect prevailing uncertainties. We apply a transparent and replicable method to quantify the uncertainty associated with projections of gross domestic product growth rates for Mexico, a key driver of greenhouse-gasemissions in the country. We use those projections to produce probabilistic forecasts of greenhouse-gas emissions forMexico. We contrast our probabilistic forecasts with Mexico’s governmental deterministic forecasts. We show that, because they fail to reflect such key uncertainty, deterministic forecasts are ill-suited for use in target-setting processes. We argue that (i) guidelines should be agreed upon, to ensure that governmental forecasts meet certain minimum transparency and quality standards, and (ii) governments should be held accountable for the appropriateness of the forecasting approach applied to prepare governmental forecasts, especially when those forecasts are used to derive climate change mitigation targets.
    Keywords: Uncertainty, projections, structured expert judgment, accountability, emission-reduction targets, gross domestic product growth rates
    JEL: Q25 Q38 Q48
    Date: 2017–09
  30. By: BEN YOUSSEF, Adel; Hammoudeh, Shawkat; Omri, Anis
    Abstract: The environmental Kuznets curve (EKC) hypothesis has been recognized in the environmental economics literature since the 1990's. Various statistical tests have been used on time series, cross section and panel data related to single and groups of countries to validate this hypothesis. In the literature, the validation has always been conducted by using a single equation. However, since both the environment and income variables are endogenous, the estimation of a single equation model when simultaneity exists produces inconsistent and biased estimates. Therefore, we formulate simultaneous two-equation models to investigate the EKC hypothesis for fifty-six countries, using annual panel data from 1990 to 2012, with the end year is determined by data availability for the panel. To make the panel data analysis more homogeneous, we investigate this issue for a three income-based panels (namely, high-, middle-, and low-income panels) given several explanatory variables. Our results indicate that there exists a bidirectional causality between economic growth and pollution emissions in the overall panels. We also find that the relationship is nonlinear and has an inverted U-shape for all the considered panels. Policy implications are provided.
    Keywords: Environment, economic growth, EKC hypothesis, Simultaneous-equation models.
    JEL: O4 Q5
    Date: 2016–10–17
  31. By: Francesco Lamperti (Scuola Superiore Sant'Anna, Pisa, Italy); Giovanni Dosi (Scuola Superiore Sant'Anna, Pisa, Italy); Mauro Napoletano (OFCE Sciences Po Paris France); Andrea Roventini (Scuola Superiore Sant'Anna, Pisa, Italy); Alessandro Sapio (Parthenope University of Naples, Naples, Italy)
    Abstract: In this paper we develop the first agent-based integrated assessment model, which offers an alternative to standard, computable general-equilibrium frameworks. The Dystopian Schumpeter meeting Keynes (DSK) model is composed of heterogeneous firms belonging to capital-good, consumption-good and energy sectors. Production and energy generation lead to greenhouse gas emissions, which affect temperature dynamics in a non-linear way. Increasing temperature triggers climate damages hitting, at the micro-level, workers’ labor productivity, energy efficiency, capital stock and inventories of firms. In that, aggregate damages are emerging properties of the out-of-equilibrium interactions among heterogeneous and boundedly rational agents. We find the DSK model is able to account for a wide ensemble of micro and macro empirical regularities concerning both economic and climate dynamics. Moreover, different types of shocks have heterogeneous impact on output growth, unemployment rate, and the likelihood of economic crises. Finally, we show that the magnitude and the uncertainty associated to climate change impacts increase over time, and that climate damages much larger than those estimated through standard IAMs. Our results point to the presence of tipping points and irreversible trajectories, thereby suggesting the need of urgent policy interventions
    Keywords: Climate change , agent-based models, integrated assessment, macroeconomics dynamics, climate damages.
    JEL: C63 Q40 Q50 Q54
    Date: 2017–04
  32. By: Lea Skræp Svenningsen (Department of Food and Resource Economics, University of Copenhagen); Bo Jellesmark Thorsen (Department of Food and Resource Economics, University of Copenhagen)
    Abstract: What role do people think distributional aspects should play in design of climate policy? The literature assessing climate policies has shown that assumptions regarding peoples’ distributional preferences for climate change policy impacts are central for policy assessment, but empirical evidence for such preferences is lacking. We design a discrete choice experiment that varies how climate policies affect the income of people living in the future in three geographical regions. The experiment is implemented on a representative sample of the Danish population and preferences are modelled in a latent class model. Our results show that i) a small majority of Danes expresses preferences for climate policies consistent with inequity aversion, ii) a group expresses preferences resembling simple warm glow, while iii) a small group prefers not to support additional climate policies. Finally a somewhat larger group expresses some form of distributional preferences, but shows positive preferences for costs, suggesting that responses could be influenced by strategic behaviour and over-signalling of commitment. Our results provide support for the inclusion of social preferences regarding distributional effects of climate change policies in policy assessments, and hence for the significant impact on policy this inclusion have.
    Keywords: choice experiment, social preferences, inequity aversion, warm glow, altruism, climate change impacts, latent class, social cost of carbon
    JEL: D30 H41 Q51 Q54
    Date: 2017–11
  33. By: Aurélie Méjean (CNRS-CIRED); Antonin Pottier (Centre d’Economie de la Sorbonne – CNRS); Stéphane Zuber (PSE-CNRS); Marc Fleurbaey (Woodrow Wilson School of Public and International Affairs, Princeton University)
    Abstract: Climate change raises the issue of intergenerational equity. As climate change threatens irreversible and dangerous impacts, possibly leading to extinction, the most relevant trade-off may not be between present and future consumption, but between present consumption and the mere existence of future generations. To investigate this trade-off, we build an integrated assessment model that explicitly accounts for the risk of extinction of future generations. We compare different climate policies, which change the probability of catastrophic outcomes yielding an early extinction, within the class of variable population utilitarian social welfare functions. We show that the risk of extinction is the main driver of the preferred policy over climate damages. We analyze the role of inequality aversion and population ethics. Usually a preference for large populations and a low inequality aversion favour the most ambitious climate policy, although there are cases where the effect of inequality aversion is reversed.
    Keywords: Climate Change, Catastrophic risk, Equity, Population, Climate-economy model
    JEL: D63 Q01 Q54 Q56 Q5
    Date: 2017–11
  34. By: Dietz, Simon; Gollier, Christian; Kessler, Louise
    Abstract: How does climate-change mitigation affect the aggregate consumption risk borne by future generations? In other words, what is the ‘climate beta’? In this paper we argue using a combination of theory and integrated assessment modelling that the climate beta is positive and close to unity for maturities of up to about one hundred years. This is because the positive effect on the climate beta of uncertainty about exogenous, emissions-neutral technological progress overwhelms the negative effect on the climate beta of uncertainty about the carbon-climate-response, particularly the climate sensitivity, and the damage intensity of warming. Mitigating climate change therefore has no insurance value to hedge the aggregate consumption risk borne by future generations. On the contrary, it increases that risk, which justifies a relatively high discount rate on the expected benefits of emissions reductions. However, the stream of undiscounted expected benefits is also increasing in the climate beta, and this dominates the discounting effect so that overall the net present value of carbon emissions abatement is increasing in the climate beta.
    Keywords: beta; climate change; discounting; integrated assessment; mitigation; risk; social cost of carbon
    JEL: G32
    Date: 2017–07–18

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