nep-ene New Economics Papers
on Energy Economics
Issue of 2018‒02‒19
forty-one papers chosen by
Roger Fouquet
London School of Economics

  1. Assessment of the impact of climate change on residential energy demand for heating and cooling By Alban Kitous; Jacques Despres
  2. The Distributional Effects of Building Energy Codes By Christopher D. Bruegge; Tatyana Deryugina; Erica Myers
  3. EU energy efficiency policy: How a more cost-efficient decarbonization could succeed By Tischler, Benjamin
  4. Drivers of energy efficiency in German manufacturing: A firm-level stochastic frontier analysis By Lutz, Benjamin Johannes; Massier, Philipp; Sommerfeld, Katrin; Löschel, Andreas
  5. Reorienting Finance Towards Energy Efficiency: The Case of UK Housing By Noam Bergman; Tim Foxon
  6. Equally supportive but for different reasons: Investigating public support for national energy transition goals vs. their implementation By Yann Blumer; Lukas Braunreiter; Aya Kachi; Rebecca Lordan-Perret; Fintan Oeri
  7. Determinants of Residential Solar Photovoltaic Adoption By Makena Coffman; Scott Allen; Sherilyn Wee
  8. Probabilistic forecasting of the wind energy resource at the monthly to seasonal scale By Bastien Alonzo; Philippe Drobinski; Riwal Plougonven; Peter Tankov
  9. Optimal management of a wind power plant with storage capacity By Jérôme Collet; Olivier Féron; Peter Tankov
  10. The Effects of German Wind and Solar Electricity on French Spot Price Volatility: An Empirical Investigation By Adhurim Haxhimusa
  11. Hydropower Operation in a Changing Market Environment - A Swiss Case Study By Barry Michael; Moritz Schillinger; René Schumann; Hannes Weigt
  12. Transmission System Operator Regulation for Electric Vehicle Fleets: A Survey of the Issues By Yannick Perez; Marc Petit
  13. Short- to Mid-term Day-Ahead Electricity Price Forecasting Using Futures By Rick Steinert; Florian Ziel
  14. Broad Based Subsidies or Targeted Transfers? An Analysis of the Electricity Subsidy in Pakistan By Andrew Feltenstein; Biplab Datta
  15. Le marché résidentiel locatif en Région wallonne et dans ses 4 principaux centres urbains By Sandrine Meyer; Kevin Maréchal
  16. Residential fuel choice in the rural: A field research on two counties of North China By Jingwen Wu; Bingdong Hou; Ruoyu Ke; Yun-Fei Du; Ce Wang; Xiangzheng Li; Jiawei Cai; Tianqi Chen; Meixuan Teng; Jin Liu; Jin-Wei Wang; Hua Liao
  17. Solid fuel use for cooking and its health effects on the elderly in rural China By Jin Liu; Bingdong Hou; Xiao-Wei Ma; Hua Liao
  18. Credit constraints, energy management practices, and investments in energy saving technologies: German manufacturing in close-up By Löschel, Andreas; Lutz, Benjamin Johannes; Massier, Philipp
  19. Cooking fuel choice in rural China: results from microdata By Bingdong Hou; Xin Tang; Chunbo Ma; Li Liu; Yi-Ming Wei; Hua Liao
  20. The role of natural resources in production: Georgescu-Roegen/Daly versus Solow/Stiglitz By Quentin Couix
  21. The role of Greece and Turkey as energy hubs in the region By Ketenci, Natalya
  22. On the difficulty of interpreting market behaviour in an uncertain world: the case of oil futures pricing between 2003 and 2016 By Cifarelli, Giulio; Paesani, Paolo
  23. Oil Price Shocks and Economic Growth in Oil-Exporting Countries; Does the Size of Government Matter? By Amir Sadeghi
  24. Shale oil revolution: Implications for oil dependent countries By Afees A. Salisu; Lateef O. Akanni
  25. Oil Price Shocks and Economic Growth: The Volatility Link By Maheu, John M; Song, Yong; Yang, Qiao
  26. Dutch disease dynamics reconsidered By Hilde C. Bjørnland; Leif Anders Thorsrud; Ragnar Torvik
  27. Market Efficiency and Optimal Hedging Strategy for the US Ethanol Market By Emmanuel Hache; Anthony Paris
  28. Woody Biomass Processing: Potential Economic Impacts on Rural Regions By Randall Jackson; Amir B. Ferreira Neto; Elham Erfanian
  29. The Comparative Sustainable Development in Sub-Saharan Africa By Simplice Asongu
  30. CO2 Emissions in Beijing: Sectoral Linkages and Demand Drivers By Hua Liao; Celio Andrade; Julio Lumbreras; Jing Tian
  31. Regulating Mismeasured Pollution: Implications of Firm Heterogeneity for Environmental Policy By Eva Lyubich; Joseph S. Shapiro; Reed Walker
  32. Prices or Quantities Dominate Banking and Borrowing By Martin L. Weitzman
  33. Tell the truth or not? The Montero mechanism for emissions control at work By Requate, Tilman; Camacho-Cuena, Eva; Ch'ng, Kean Siang; Waichman, Israel
  34. Pricing Carbon Under Economic and Climactic Risks: Leading-Order Results from Asymptotic Analysis By van den Bremer, Ton; van der Ploeg, Frederick
  35. Pricing carbon emissions in China By Chia-Lin Chang; Te-Ke Mai; Michael McAleer
  36. Patent-based Estimation Procedure of Private R&D: The Case of Climate Change and Mitigation Technologies in Europe By Francesco Pasimeni; Alessandro Fiorini; Aliki Georgakaki
  37. Relative prices and climate policy: How the scarcity of non-market goods drives policy evaluation By Drupp, Moritz A.; Hänsel, Martin C.
  38. Demand response as a common pool resource game: Nudges versus prices By Buckley, P.; Llerena, D.
  39. Financing innovative green projects with asymmetric information and costly public funds By Meunier Guy; Ponssard Jean-Pierre
  40. Key Sectors in Carbon Footprint Responsibility at the City Level: A Case Study of Beijing By Jing Tian; Julio Lumbreras; Celio Andrade; Hua Liao
  41. The Relationship between Environmental Factors and Purchasing Decisions in the Residential Market By Zalejska Jonsson, Agnieszka

  1. By: Alban Kitous (European Commission - JRC); Jacques Despres (European Commission - JRC)
    Abstract: Climate change in Europe leads to a decrease of residential heating needs and an increase of residential cooling needs. The impact on cooling needs is higher than on heating, in each of the climatic European regions. The overall residential heating and cooling needs are expected to decrease by a quarter by the end of the century, due to climate change. This order of magnitude remains when accounting for a higher insulation level of buildings.
    Keywords: climate change, energy, heating, cooling
    Date: 2017–12
  2. By: Christopher D. Bruegge; Tatyana Deryugina; Erica Myers
    Abstract: State-level building energy codes have been around for over 40 years, but recent empirical research has cast doubt on their effectiveness. A potential virtue of standards-based policies is that they may be less regressive than explicit taxes on energy consumption. However, this conjecture has not been tested empirically in the case of building energy codes. Using spatial variation in California’s code strictness created by building climate zones, combined with information on over 350,000 homes located within 3 kilometers of climate zone borders, we evaluate the effect of building energy codes on home characteristics, energy use, and home value. We also study building energy codes’ distributional burdens. Our key findings are that stricter codes create a non-trivial reduction in homes’ square footage and the number of bedrooms at the lower end of the income distribution. On a per-dwelling basis, we observe energy use reductions only in the second lowest income quintile, and energy use per square foot actually increases in the bottom quintile. Home values of lower-income households fall, while those of high-income households rise. We interpret these results as evidence that building energy codes result in more distortions for lower-income households and that decreases in square footage are responsible for much of the code-induced energy savings.
    JEL: H23 Q4 Q48
    Date: 2018–01
  3. By: Tischler, Benjamin
    Abstract: At EU level, new proposed legislation for a clean-energy policy is being adopted. New policies are currently being discussed regarding the increased reduction of CO2 emissions, as well as EU-wide energy consumption targets for the year 2030 and national energy efficiency targets and measures to be derived from them. But what happens when the proposed objectives contradict and undermine each other? A restrictive energy consumption target can become a major obstacle to achieving the overall energy and climate-policy objective of cost-effective decarbonization of the energy system. Economic policy instruments for increasing energy efficiency in the EU ETS sectors can make it more difficult to achieve decarbonization at minimal cost. Energy efficiency targets and the corresponding economic policy measures can however make a worth-while contribution in sectors not included in the EU ETS. Instruments for increasing energy efficiency should aim at improving technical energy efficiency. With that in mind, the conception of quantitative targets and tools must be improved. The macroeconomic indicators for "energy efficiency" and "energy intensity" used thus far are unsatisfactory as simple political objectives and lead to wrong conclusions regarding the success of the economic policy instruments being used. The indicators must be decisively improved, for example, by considering factors such as business cycle and economic growth, as well as the proportion of renewable energy or of energy-intensive and less energy-intensive sectors. Furthermore, a better database is necessary.
    JEL: Q52 Q58
    Date: 2018
  4. By: Lutz, Benjamin Johannes; Massier, Philipp; Sommerfeld, Katrin; Löschel, Andreas
    Abstract: Increasing energy efficiency is one of the main goals in current German energy and climate policies. We study the determinants of energy efficiency in the German manufacturing sector based on official firm-level production census data. By means of a stochastic frontier analysis, we estimate the cost-minimizing energy demand function at the two-digit industry level using firm-level heterogeneity. Apart from the identification of the determinants of the energy demand function, we also analyze potential drivers of energy efficiency. Our results suggest that there is still potential to increase energy efficiency in most industries of the German manufacturing sector. Furthermore, we find that in most industries exporting and innovating firms as well as those investing in environmental protection measures are more energy efficient than their counterparts. In contrast, firms which are regulated by the European Union Emissions Trading System are mostly less energy efficient than non-regulated firms.
    Keywords: Stochastic Frontier Analysis,Stochastic Demand Frontier,Energy Efficiency,Climate Policy,Manufacturing
    JEL: D22 D24 L60 Q41
    Date: 2017
  5. By: Noam Bergman (SPRU - Science Policy Research Unit, University of Sussex, Brighton, BN1 9SL, UK); Tim Foxon (SPRU - Science Policy Research Unit, University of Sussex, Brighton, BN1 9SL, UK)
    Abstract: This paper examines the challenges associated with stimulating large-scale investment in energy efficiency and demand management measures, using residential energy efficiency-improving retrofits in the UK as a case study. We consider how issues of energy policy, consumer choice and financial systems intersect, drawing on recent literature including energy policy documents and research reports, and on interviews with stakeholders from the finance sector, energy efficiency practitioners and more. We suggest that following the withdrawal of the Green Deal, there is a need to reconsider the framing of policy for household energy efficiency improvements, and examine three potential aspects of a new framing: energy efficiency as infrastructure; new business and financing models for energy efficiency provision; and decentralised financing institutions for energy efficiency investment This would require a long-term commitment from government on energy efficiency, and a need to ensure that projects are attractive and investable from both householders and investors’ perspectives. We conclude that there are important roles for government in any large scale initiative for energy efficient retrofitting of UK homes, even if the mechanisms are market based. These includes signalling long-term policy consistency and reducing risks for financial investment, and intermediating between finance and energy efficiency projects.
    Keywords: energy efficiency, energy policy, green finance, demand side management (DSM), infrastructure
    Date: 2018–01
  6. By: Yann Blumer; Lukas Braunreiter; Aya Kachi; Rebecca Lordan-Perret; Fintan Oeri (University of Basel)
    Abstract: Energy system transitions in democracies requires to reconcile national interests and central planning with the public's preferences. To find ways of making public support for national energy strategies and technological implementation more aligned, this article investigates public support for the Swiss national energy strategy and two specific technological measures that are part of it: expansion of hydropower and deep geothermal energy. We address two research questions. First, how does public support for a national energy transition strategy differ from public support for the specific technology endorsed in the energy transition strategy? Second, are there differences in the factors influencing public support for these technologies? We investigate these questions empirically with a survey (n=640) focused on understanding the roles that energy expectations, future orientation, knowledge, and trust play in generating support for these two policy levels and between technologies. We find that while general support for an energy transition is well explained by above factors, this is true only to a much lesser extent for technology support. One conclusions is that while political ideologies play a role for the support of general energy transition goals, the support of energy technologies does not seem to be an issue that is politicized (yet?).
    Date: 2018
  7. By: Makena Coffman (Department of Urban and Regional Planning, University of Hawaii at Manoa; UHERO); Scott Allen (Department of Urban and Regional Planning, University of Hawaii at Manoa); Sherilyn Wee (UHERO)
    Abstract: Hawaii is a leader in distributed solar photovoltaic (PV) adoption. It has the highest rate of PV-based electricity penetration in the U.S. and rivals global front runners (Trabish, 2016). The policy impetus towards large-scale adoption of renewable energy in Hawaii comes from its Renewable Portfolio Standard (RPS), with a target of 40% net electricity sales from renewable sources by the year 2030 and 100% by 2045. Rooftop PV provides the largest share of renewable energy in Hawaii’s electricity generation portfolio. Much of the growth in PV has been through residential systems, as nearly 17% of homes, and 32% of single-family homes on Oahu have PV (Trabish, 2016). The adoption of distributed PV by Hawaii’s households has been motivated by a combination of Hawaii’s high electricity prices, federal and state solar PV income tax credits, net-energy metering (NEM) and other grid-supply arrangements, as well as strong solar resources (Coffman et al., 2016). This study analyzes demographic factors related to residential PV system adoption in Hawaii. It provides an econometric analysis, augmented by maps, to better understand the demographic characteristics of households adopting PV systems. Understanding drivers of past uptake is important to gaining insight into future trends, particularly as Hawaii continues towards its 2045 RPS goal of 100%.
    Date: 2018–02
  8. By: Bastien Alonzo (IPSL; LMD; CNRS; Ecole Polytechnique; Université de Paris-Saclay; Laboratoire de Probabilités et Modéles Aléatoires, Université Paris Diderot-Paris 7); Philippe Drobinski (IPSL; LMD; CNRS; Ecole Polytechnique; Université de Paris-Saclay); Riwal Plougonven (IPSL; LMD; CNRS; Ecole Polytechnique; Université de Paris-Saclay); Peter Tankov (CREST; ENSAE ParisTech)
    Abstract: We build and evaluate a probabilistic model designed for forecasting the distribution of the daily mean wind speed at the seasonal timescale in France. On such long-term timescales, the variability of the surface wind speed is strongly in uenced by the atmosphere large-scale situation. Our aim is to predict the daily mean wind speed distribution at a speci c location using the information on the atmosphere large-scale situation, summarized by an index. To this end, we estimate, over 20 years of daily data, the conditional probability density function of the wind speed given the index. We next use the ECMWF seasonal forecast ensemble to predict the atmosphere large-scale situation and the index at the seasonal timescale. We show that the model is sharper than the climatology at the monthly horizon, even if it displays a strong loss of precision after 15 days. Using a statistical postprocessing method to recalibrate the ensemble forecast leads to further improvement of our probabilistic forecast, which then remains sharper than the climatology at the seasonal horizon.
    Keywords: Wind energy, Wind speed forecasting, Seasonal forecasting, Probabilistic forecasting, Ensemble forecasts, Ensemble model output statistics
    Date: 2017–10–11
  9. By: Jérôme Collet (EDF Lab); Olivier Féron (EDF Lab); Peter Tankov (CREST; ENSAE ParisTech)
    Abstract: We consider the problem of a wind producer who has access to the spot and intraday electricity markets and has the possibility of partially storing the produced energy using a battery storage facility. The aim of the producer is to maximize the expected gain of selling in the market the energy produced during a 24-hour period. We propose and calibrate statistical models for the power production and the intraday electricity price, and compute the optimal strategy of the producer via dynamic programming.
    Keywords: wind power generation, battery storage, intraday electricity market, stochastic control
    Date: 2017–11–02
  10. By: Adhurim Haxhimusa (Research Institute for Regulatory Economics, Vienna University of Economics and Business)
    Abstract: We examine the relationship between German wind and solar electricity and French spot price volatility. Using hourly data, we find that French imports from Germany driven by German wind and solar electricity sometimes decrease, sometimes increase the volatility of French spot prices. These two opposing effects depend on the shape of the French supply function and on the French demand. We, therefore, estimate different coefficients for imports depending on different demand levels. We acknowledge the endogeneity problem in identifying these effects and employ instrumental variable techniques to circumvent this problem. Our results show the urgent need for further coordination of national energy policies in order to reduce the potential for negative spill over effects of nationally driven energy policies in neighbouring countries as European electricity markets are becoming more integrated.
    Keywords: Wind and Solar Electricity, Price Volatility, Market Integration, Electricity Markets
    JEL: F15 L81 L98 Q42 Q48
    Date: 2018–01
  11. By: Barry Michael; Moritz Schillinger; René Schumann; Hannes Weigt (University of Basel)
    Abstract: Hydropower (HP) is expected to play an important role in the European energy transition by providing back-up and storage capacity as well as flexibility for intermittent renewable energies. However, due to low electricity market prices the profitability of HP decreased in recent years. In this paper, we analyze historic revenue potentials and future market prospects for HP taking into account different development paths. Using a short-term HP operation model to capture market opportunities as well as technical and natural constraints of HP plants, we model three representative Swiss HP plants. The results indicate that in the last years, balancing markets could have provided significant additional revenues for HP plants. However, accounting for uncertainties and market characteristics, the potential of balancing markets is reduced but cross-market optimization is still beneficial. Looking into the future, market price prospects for the coming decade are low to modest. Global fuel markets and the European Union Emissions Trading System (ETS) will be the main drivers for decisions for Swiss HP. The revenue potential from balancing markets will be reduced significantly in the future if all Swiss HP operators aim for balancing. While optimized operation across markets helps Swiss HP to increase its revenues, it is limited in scale.
    Keywords: hydropower; cross-market optimization; balancing; Switzerland
    Date: 2017
  12. By: Yannick Perez (UP11 - Université Paris-Sud - Paris 11); Marc Petit (GeePs - Laboratoire Génie électrique et électronique de Paris - UP11 - Université Paris-Sud - Paris 11 - UPMC - Université Pierre et Marie Curie - Paris 6 - CentraleSupélec - CNRS - Centre National de la Recherche Scientifique)
    Abstract: A modular framework is used to analyze how Grid Integrated Vehicles (GIVs), i.e. bi-directional plug-in electric vehicles that are able to modulate their charging rate and have bi-directional capabilities, could be managed efficiently to deliver grid services for transmission operators and conversely, how these new services could be set aside by the design of the current rules in some regions. Based on a detailed analysis of the rules implemented by some representative TSOs, we discern two modules that gather the essential rules for GIV development: the rules towards aggregation of EVs, and the rules defining the payment scheme of the services provided by GIVs. We deduce an optimal combination among these rules that could define the ideal organization for GIVs. Finally, we confront this ideal TSO organization with the European guidelines under construction.
    Keywords: Electromobilité
    Date: 2016
  13. By: Rick Steinert; Florian Ziel
    Abstract: Due to the liberalization of markets, the change in the energy mix and the surrounding energy laws, electricity research is a dynamically altering field with steadily changing challenges. One challenge especially for investment decisions is to provide reliable short to mid-term forecasts despite high variation in the time series of electricity prices. This paper tackles this issue in a promising and novel approach. By combining the precision of econometric autoregressive models in the short-run with the expectations of market participants reflected in future prices for the short- and mid-run we show that the forecasting performance can be vastly increased while maintaining hourly precision. We investigate the day-ahead electricity price of the EPEX Spot for Germany and Austria and setup a model which incorporates the Phelix future of the EEX for Germany and Austria. The model can be considered as an AR24-X model with one distinct model for each hour of the day. We are able to show that future data contains relevant price information for future time periods of the day-ahead electricity price. We show that relying only on deterministic external regressors can provide stability for forecast horizons of multiple weeks. By implementing a fast and efficient lasso estimation approach we demonstrate that our model can outperform several other models in the literature.
    Date: 2018–01
  14. By: Andrew Feltenstein (Department of Economics, Andrew Young School of Policy Studies, Georgia State University); Biplab Datta (Department of Economics, Andrew Young School of Policy Studies, Georgia State University)
    Abstract: This paper studies the incidence of broad-based energy subsidies, and whether poor households could gain from targeted transfer programs financed by savings from energy subsidy reform. We analyze the tariff differential subsidy program in Pakistan, and find that the subsidy is regressive. We conduct a computable general equilibrium exercise and find that reducing energy subsidy would hurt both poor and non-poor households. However, redistributing savings from subsidy reform to poor households, would improve poor household’s welfare.
    Date: 2018–01
  15. By: Sandrine Meyer; Kevin Maréchal
    Abstract: 1. Objectif et contenu de la synthèse Dans le cadre du projet de recherche Energ-Ethic, s’intéressant à la rénovation énergétique des logements loués, il nous a paru essentiel de rassembler les statistiques disponibles non seulement sur le secteur résidentiel et son poids en termes de consommation d’énergie finale, d’émissions de CO2, etc. mais également de quantifier et caractériser le secteur résidentiel locatif. Ce dernier aspect permet de mieux comprendre l’enjeu du ‘split incentive’ de manière globale (niveau régional et provincial) mais surtout de prendre conscience de son rôle majeur au niveau de la rénovation énergétique des logements urbains (communes de Liège, Charleroi, Namur et Mons) où s’y mêlent également des préoccupations plus socio-économiques relatives à la précarité énergétique. Après une analyse de type plus macro, il est également essentiel de plonger au niveau micro pour mettre en lumière les spécificités locales. Dans le contexte d’une nécessaire massification des rénovations énergétiques du parc de logements existant, les mesures politiques de type « one fits to all » perdent en effet de leur intérêt puisqu’elles ne ciblent généralement que le segment le plus ‘facile’ à mobiliser, à savoir les propriétaires-occupants et les ‘maisons’ (bâtiment résidentiel à un seul logement). Mieux connaître les caractéristiques du secteur résidentiel locatif et ses spécificités locales est une première démarche pour permettre d’adapter les mesures politiques au(x) contexte(s) rencontré(s) et accroître leur adéquation avec les besoins identifiés. Cette synthèse fera donc le point sur le contexte de la rénovation énergétique du secteur résidentiel, avant de passer à sa caractérisation plus macro (niveaux régional et provincial) en termes de parc (bâtiments, logements), de type de bâtiments, d’âge, de régime d’occupation, etc. Ensuite, nous nous focaliserons sur le secteur locatif résidentiel selon différents critères et notamment sur le secteur locatif hors logements loués par une Société de Logement de Service Public (sociétés wallonnes de logement social), qui est le segment ciblé par le projet Energ-Ethic. Finalement, le dernier point se penchera spécifiquement sur les quatre grands centres urbains wallons et leurs spécificités, reprenant en annexe une fiche synthétique pour chacun d’eux avec les principales données disponibles sur l’efficience énergétique et leur secteur résidentiel, locatif.
    Date: 2018–02–09
  16. By: Jingwen Wu; Bingdong Hou; Ruoyu Ke; Yun-Fei Du; Ce Wang; Xiangzheng Li; Jiawei Cai; Tianqi Chen; Meixuan Teng; Jin Liu; Jin-Wei Wang; Hua Liao
    Abstract: Solid fuels are still widely used in rural China though the living standard has improved greatly. Energy poverty is an obvious indicator of poverty, which has serious effect on economic development, environment and health. In this paper, we conducted a detailed analysis on fuel choice and usage behavior of different end-use activities in rural residential energy consumption. Using 717 household observations from a micro survey data in two counties of Shandong and Hebei province in 2016, we find that biomass is the dominant fuel used for cooking among all energy sources despite of obvious trend of decrease in recent years, accounting for 44%. Clean energy used to cook increased markedly with a proportion of nearly 50%. Biomass is also the ordinary fuel used for water heating excerpt for solar energy. Almost 90% households rely on coal for space heating in winter, and one-third households have space heating less than 2 months. Ownerships of home appliances for basic needs is higher than that for hedonistic needs, and usage behaviors of some appliances are economical. Fuel accessibility of commercial energy has improved noticeably in rural, and the high proportion usage of biomass is affected by family income, using habits, local resources, environmental recognition, education and age. Since solid fuels are widely used in rural, it is important to cleanse biomass, develop new energy, and improve residents¡¯ cognition about the consequences of using solid fuels.
    Keywords: rural households; fuel choice; end-use; usage behaviors
    JEL: Q54 Q40
    Date: 2018–01–01
  17. By: Jin Liu; Bingdong Hou; Xiao-Wei Ma; Hua Liao
    Abstract: Indoor air pollution is mainly caused by solid fuel use for cooking in developing countries. Many previous studies focused on its health risks on the children and in specific local area. This paper investigates household energy usage and transition for cooking in rural China and the health effects on the elderly. A national large-scale dataset CHARLS (China Health and Retirement Longitudinal Study) covering 450 villages and communities is employed. Logit regressions were used to quantitatively estimate the effects, after controlling for some factors such as income, demographic and geographical variables. The results robustly show that compared to non-solid fuels, solid fuel use significantly increases the possibility of chronic lung diseases (30%), exacerbation of chronic lung diseases (95%), seizure of heart disease (1.80 times), and decreases self-evaluated health status of the elderly (1.38 times). Thus, it is urgent to improve clean energy access for cooking in rural China.
    Keywords: indoor air pollution; household solid fuel; health risks; elderly; rural; China
    JEL: Q54 Q40
    Date: 2018–01–03
  18. By: Löschel, Andreas; Lutz, Benjamin Johannes; Massier, Philipp
    Abstract: We analyze the drivers and barriers that influence investments increasing the energy efficiency of firms' production processes or buildings in the German manufacturing sector based on microdata. In particular, we shed light on the relationship between financial barriers (e. g. credit constraints), information and knowledge (e. g. energy management practices), salience of energy-related topics, and the investments in energy saving technologies. A better understanding of firms' investment behavior regarding energy saving technologies is crucial to design efficient policy measures, which are necessary to achieve the imposed ambitious climate and energy policy targets. We use data from 701 structured telephone interviews in combination with commercial and confidential firm-level data. Our results suggest that energy management practices have a statistically significant positive relationship with investment decisions on energy saving technologies for production processes and buildings. Credit constraints are a barrier to investments in the energy efficiency of firms' production processes. Furthermore, high energy cost shares of heating or cooling, high energy intensity, energy self-generation and structured internal decision making processes influence the investments in energy efficiency positively.
    Keywords: Energy efficiency,Credit constraints,Energy management,Manufacturing industry,Investment behavior
    JEL: D22 H23 Q41 Q48 Q58
    Date: 2017
  19. By: Bingdong Hou; Xin Tang; Chunbo Ma; Li Liu; Yi-Ming Wei (Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology); Hua Liao
    Abstract: Unclean cooking fuel is widely used in the developing world, and it is the main indication of energy poverty in rural China. In this paper, we investigate the situation, transition, and determination of fuel choice in China's rural household cooking. Using the large scale micro-survey data of China Health and Retirement Longitudinal Study (CHARLS), we find that there is a big gap in using commercial cooking fuels between rural and urban households: 60% of the rural households adopt traditional biomass resource as their main fuel for cooking in 2011, while this figure is less than 5% in the urban. We also identify a significant spatial divide in fuel choice: in southeastern coastal areas, about 40% of the rural households prefer solid fuels, while this figure jumps to over 80% in northeastern areas. The longitudinal data also reveal a significant transition from traditional to modern fuels from 2008 to 2012. Moreover, the distance to the most commonly used farmer's market, education background, coal price and female labor participation are all influential in determining the households' choices.
    Keywords: cooking fuel; solid fuel; household; energy poverty; rural China
    JEL: Q54 Q40
    Date: 2018–01–02
  20. By: Quentin Couix (Centre d'Economie de la Sorbonne)
    Abstract: This paper proposes a historical and epistemological account of one of the key controversy between natural resources economics and ecological economics, lasting from early 1970s to the end of 1990s. It shows that the theoretical disagreement on the scope of the economy's dependence to natural resources, such as energy and minerals, has deep methodological roots. On one hand, Solow's and Stiglitz's works are built on a “model-based methodology”, where the model precedes and supports the conceptual foundations of the theory and in particular the assumption of “unbounded resources productivity”. On the other hand, Georgescu-Roegen's counter-assumption of “thermodynamic limits to production”, later revived by Daly, rest on a methodology of “interdisciplinary consistency” which considers thermodynamics as a relevant scientific referent for economic theory. While antagonistic, these two methodologies face similar issues regarding the conceptual foundations that arise from them, which is a source of confusion and of the difficult dialogue between paradigms
    Keywords: natural resources; thermodynamics; growth; sustainability; model; theory; methodology
    JEL: B22 B41 Q01 Q32 Q43 Q57
    Date: 2018–01
  21. By: Ketenci, Natalya
    Abstract: The Greek-Turkish relations have been complex in different aspects for a long time. However, neighborhood makes these countries close to each other in political, military and economic terms. Geopolitical location of Turkey makes it strategically important for Greece. Despite of the economic crisis in Greece bilateral trade between these two countries almost doubled for the last five years. Energy and minerals are significant part of this trade and it is expected that natural gas will be one of the most important determinants of the bilateral trade. The energy products trade is two sided and creates strategic meaning for both countries. This chapter analyzes energy markets in Greece and Turkey separately and the Greek-Turkish relations in terms of energy. Completed natural gas pipeline of 296 km connects Turkey and Greece and delivers natural gas of Azerbaijan to Europe. There are several planned or under construction projects that connect Turkey and Greece. Impact of Turkey and Greece as energy hubs on the Greek-Turkish relations and various possibilities for the future cooperation at the energy market are discussed in this chapter.
    Keywords: Energy hub, Turkey, Greece
    JEL: F0
    Date: 2017
  22. By: Cifarelli, Giulio; Paesani, Paolo
    Abstract: Our results show that over the two cycles that characterize the 2003-2016 period a significant change in the working of oil markets occurs. Our pricing investigation, based on a three-agent model (hedgers, fundamentalist speculators and chartists), find that from 2009 onwards traditional analysis of supply and demand forecasts, loses its explanatory power and hence its credibility. The sharp and unexpected fluctuations in oil prices, compounded by unpredictable political factors and technological break-troughs (e.g. tight sands/shale oil) strongly raises uncertainty and reduces the effectiveness of customary forecasting techniques.
    Keywords: Oil pricing, Speculation, Dynamic hedging, Logistic smooth transition, Multivariate GARCH
    JEL: F2 F30 F37 G1 G13 G14
    Date: 2017–10
  23. By: Amir Sadeghi
    Abstract: This paper examines the impact of government size on how output and government expenditure respond to oil price shocks in 28 oil-exporting countries between 1990 and 2016. Results suggest that if the size of government (measured by government expenditure-to-(non-oil) GDP ratio) is larger, non-oil output growth, in response to a positive oil price shock, tends to be greater and output volatility higher. Furthermore, I find that an unexpected increase in oil price leads to expansion in government expenditure and the expansion is larger, the larger is the government. This paper provides empirical evidence for direct correlation between government size and macroecnomic stability in oil-exporting countries. The findings imply that fiscal consolidation and economic diversification help to narrow down economic exposure to exogenous oil price shocks and reduce volatility in non-oil output.
    Date: 2017–12–22
  24. By: Afees A. Salisu; Lateef O. Akanni (Department of Economics, University of Lagos,Akoka, Lagos, Nigeria)
    Abstract: The International Energy Agency (IEA) recently announces that the explosive increases in the United States oil output, particularly from shale oil, would make the country become world’s top oil producer and eventually exporter ahead of Saudi Arabia and Asia in the coming years. Motivated by this projection, we therefore examine the implications of the US shale oil on oil exports of OPEC and selected non-OPEC countries using the Structural Vector Autoregressive (SVAR) approach. Our results reveal that the US oil supply shocks particularly those due to shale oil are critical in the output and supply decisions of OPEC and major non-OPEC oil exporters. Underestimating the potential consequences of US overtaken the current world oil giants and failure to put in place critical structural shifts by these countries, especially alternative revenue sources, pose a potential threat to their growth prospects.
    Keywords: Shale Oil, Crude Oil, Oil Supply Shocks, OPEC, Shale Revolution
    JEL: E31 E32 Q31 Q43
    Date: 2018–02
  25. By: Maheu, John M; Song, Yong; Yang, Qiao
    Abstract: This paper shows that oil shocks primarily impact economic growth through the conditional variance of growth. We move beyond the literature that focuses on conditional mean point forecasts and compare models based on density forecasts. Over a range of dynamic models, oil shock measures and data we find a robust link between oil shocks and the volatility of economic growth. A new measure of oil shocks is developed and shown to be superior to existing measures and indicates that the conditional variance of growth increases in response to an indicator of local maximum oil price exceedance. The empirical results uncover a large pronounced asymmetric response of growth volatility to oil price changes. Uncertainty about future growth is considerably lower compared to a benchmark AR(1) model when no oil shocks are present.
    Keywords: Bayes factors, predictive likelihoods, nonlinear dynamics, density forecast
    JEL: C11 C32 C53 Q43
    Date: 2018–01
  26. By: Hilde C. Bjørnland (BI Norwegian Business School and Norges Bank (Central Bank of Norway)); Leif Anders Thorsrud (Norges Bank (Central Bank of Norway) and BI Norwegian Business School); Ragnar Torvik (Norwegian University of Science and Technology and BI Norwegian Business School)
    Abstract: In this paper we develop the first model to incorporate the dynamic productivity consequences of both the spending effect and the resource movement effect of oil abundance. We show that doing so dramatically alters the conclusions drawn from earlier models of learning by doing (LBD) and the Dutch disease. In particular, the resource movement effect suggests that the growth effects of natural resources are likely to be positive, turning previous growth results in the literature relying on the spending effect on their head. We motivate the relevance of our approach by the example of a major oil producer, Norway, where it seems clear that the predictions based on existing theory do not apply. Although the effects of an increase in the price of oil may resemble results found in the earlier Dutch disease literature, the effects of increased oil activity do not. Therefore, models that only focus on windfall gains due to increased spending potential from higher oil prices, would conclude - incorrectly based on our analysis - that the resource sector cannot be an engine of growth.
    Keywords: Dutch disease, resource movements, learning by doing, oil prices, time-varying, VAR modelClassification-JEL: C32, E32, F41, Q33
    Date: 2018–02–07
  27. By: Emmanuel Hache; Anthony Paris
    Abstract: The aim of this paper is to study the ethanol price dynamics in the US market and find the optimal hedging strategy. To this end, we first attempt to identify the long-term relationship between ethanol spot prices and the prices of futures contracts on the Chicago Board of Trade (CBOT). Then, we model the short-term dynamics between these two prices using a Markov-switching vector error correction model (Ms-VECM). Finally, accounting for the variance dynamics using a Gjr-MGarch error structure, we compute a time-varying hedge ratio and determine the optimal hedging strategy in the US ethanol market.
    Keywords: Ethanol prices, Futures markets, Markov-switching regime models, Hedge ratio
    JEL: Q41 Q42 G15 C41
    Date: 2018
  28. By: Randall Jackson (Regional Research Institute, West Virginia University); Amir B. Ferreira Neto (Regional Research Institute, West Virginia University); Elham Erfanian (Regional Research Institute, West Virginia University)
    Abstract: This paper estimates the economic and environmental impacts of introducing woody biomass processing (WBP) into a rural area in central Appalachia. WBP is among the most promising additions to energy generation portfolios for reducing import dependency while at the same time providing economic opportunity to stimulate regional economies, especially in rural regions where economic development options are often limited. We use an input-output framework to assess WBP under three different pathways, fast pyrolysis, ethanol and coal-biomass to liquids. We find that the proposed WBP will increase regional output by 0.5–1.3% of gross regional product; it will increase income by $17.32 to $51.31 million dollars each year, and regional employment by 218.1–1127.8 jobs, depending on the chosen pathway. Of these impacts, the direct portions are 63–77% of the total impact, depending on the chosen pathway. The economic analysis and the results from the accompanying environmental assessment show that only the ethanol pathway has both economic and environmental benefits. We conclude that because long-run economic development strategies in rural regions are limited and negative impacts do not alter dramatically the regional environmental profile, regional policymakers should include WBP among their development portfolio options.
    Keywords: woody biomass processing, input output analysis, life cycle assessment, central Appalachia, rural economic development
    JEL: R58 R15 Q51
    Date: 2016–09
  29. By: Simplice Asongu (Yaoundé/Cameroun)
    Abstract: Motivated by sustainable development challenges in Sub-Saharan Africa, this study assesses the comparative persistence of environmental unsustainability in a sample of 44 countries in the sub-region for the period 2000 to 2012. The empirical evidence is based on Generalised Method of Moments. Of the six hypotheses tested, it is not feasible to assess the hypothesis on resource-wealth because of issues in degrees of freedom. As for the remaining hypotheses, the following findings are established. (i) Hypothesis 1 postulating that middle income countries have a lower level of persistence in carbon dioxide (CO2) emissions is valid for CO2 per capita emissions, CO2 emissions from electricity and heat production and CO2 emissions from liquid fuel consumption. (ii) Hypothesis 2 on the edge of French civil law countries is valid for CO2 emissions from liquid fuel consumption and CO2 intensity, but not for CO2 per capita emissions. (iii) Hypothesis 3 on the postulation that politically-unstable countries reflect more persistence is valid for CO2 per capita emissions. (iv) Hypothesis 5 on the propensity for landlocked countries to be associated with more persistence in CO2 emissions is valid for CO2 per capita emissions but not for CO2 emissions from liquid fuel consumption. (v) Hypothesis 6 maintaining that Christianity-dominated countries are more environmentally friendly with regard to CO2 emissions is valid for CO2 per capita emissions but not for CO2 emissions from liquid fuel consumption and CO2 intensity. Implications for policy and theory are discussed.
    Keywords: CO2 emissions; Sustainable development; Environment; Africa
    JEL: C52 O38 O40 O55 P37
    Date: 2017–06
  30. By: Hua Liao; Celio Andrade; Julio Lumbreras; Jing Tian
    Abstract: Cities contribute to most of the CO2 emissions. And the economic system at city level is much complex due to various linkaged sectors. This paper aims to analyze the economy-wide contribution of sectors and households to CO2 emissions in Beijing (China) by utilizing a semi-closed input-output model integrated with a modified hypothetical extraction method. Results show that, compared with 2005, in 2012 (1) within the entire economic system, interprovincial export caused the largest amount of CO2 emissions [135.50 million tons (Mt)] with the main contributions arising from manufacturing (42.12 Mt); transportation, storage, and post (TSP in short, 29.13 Mt); and urban households (23.57 Mt); (2) across the intermediate input-output system, real estate activities accounted for the largest amount of embodied CO2 intensity (0.07 kg per yuan) and more sectors outsourced CO2; (3) tracing the integrated sector network, CO2 linkages pointed to manufacturing and TSP dominating the internal linkages, manufacturing prominent in mixed linkages, secondary industry leading the net forward linkages, and tertiary industry dominant in terms of net backward linkages, helping control CO2 according to its origin; (4) CO2 emissions induced by household strikingly affected total CO2 emissions in Beijing, mainly coming from income-oriented affects, with a large rural-urban disparity and a similar sectoral distribution pattern. Finally, we propose suggestions on carbon reduction in terms of technological interlinkages, final demand and household participation.
    Keywords: CO2 emissions; Semi-closed input-output model; Modified hypothetical extraction method; City; Beijing
    JEL: Q54 Q40
    Date: 2018–01–05
  31. By: Eva Lyubich; Joseph S. Shapiro; Reed Walker
    Abstract: This paper provides the first estimates of within-industry heterogeneity in energy and CO2 productivity for the entire U.S. manufacturing sector. We measure energy and CO2 productivity as output per dollar energy input or per ton CO2 emitted. Three findings emerge. First, within narrowly defined industries, heterogeneity in energy and CO2 productivity across plants is enormous. Second, heterogeneity in energy and CO2 productivity exceeds heterogeneity in most other productivity measures, like labor or total factor productivity. Third, heterogeneity in energy and CO2 productivity has important implications for environmental policies targeting industries rather than plants, including technology standards and carbon border adjustments.
    JEL: F18 H23 Q56
    Date: 2018–01
  32. By: Martin L. Weitzman
    Abstract: The possibility of intertemporal banking and borrowing of tradeable permits is often viewed as tilting the various policy debates about optimal pollution control instruments toward favoring such time-flexible quantities. The present paper shows that this view is misleading, at least for the simplest dynamic extension of the original `prices vs. quantities' information structure. The model of this paper allows the firms to know and act upon the realization of uncertain future costs two full periods ahead of the regulators. For any given circumstance, the paper shows that either a fixed price or a fixed quantity is superior in expected welfare to time-flexible banking and borrowing. Furthermore, the standard original formula for the comparative advantage of prices over quantities contains sufficient information to completely characterize the regulatory role of intertemporal banking and borrowing. The logic and implications of these results are analyzed and discussed.
    JEL: Q50 Q51 Q52 Q54 Q58
    Date: 2018–01
  33. By: Requate, Tilman; Camacho-Cuena, Eva; Ch'ng, Kean Siang; Waichman, Israel
    Abstract: We experimentally test the truth-telling mechanism proposed by Montero (2008) for eliciting firms' abatement costs. We compare this mechanism with two well-known alternative allocation mechanisms, grandfathering and pure auctioning. We conducted 27 treatments with a total of 623 participants, controlling for the allocation mechanism, the number of firms, and the true maximal emission levels. We find that, in line with the theoretical predictions, firms over-report their maximal emissions under grandfathering and under-report them under pure auctioning, while under Montero's mechanism firms almost always report their maximal emissions truthfully. However, in terms of efficiency, the difference between Montero's mechanism and pure auctioning disappears when there is more than one firm in the market.
    Keywords: mechanism design,environmental policy,permit trading,auctions,experiment
    JEL: C92 D44 L51 Q28
    Date: 2018
  34. By: van den Bremer, Ton; van der Ploeg, Frederick
    Abstract: Leading-order results from asymptotic analysis for the optimal price of carbon under uncertainty are derived from a macroeconomic continuous-time DSGE model with AK growth, energy use, adjustment costs, recursive utility and costs of global warming. We consider non-climatic productivity growth uncertainty, atmospheric carbon uncertainty, climate sensitivity uncertainty and climate damage uncertainty. Explicit expressions are derived that show the leading-order dependence of the optimal carbon price on these uncertainties, the various climate betas, risk aversion, intergenerational inequality aversion and convexity of the climate damage specification. Our solution allows for skewness and mean reversion in stochastic shocks to the climate sensitivity and damage coefficients. The resulting rule for the optimal risk-adjusted carbon price incorporates precautionary, risk-insurance and risk-exposure effects to deal with future economic and climatic risks. The stochastic processes are calibrated and used to estimate and interpret the impact of each source of uncertainty on the optimal risk-adjusted carbon price.
    Keywords: climate betas; Insurance; mean reversion; precaution; Skewness
    JEL: H21 Q51 Q54
    Date: 2018–01
  35. By: Chia-Lin Chang (Department of Applied economics, Department of Finance National Chung Hsing University, Taiwan.); Te-Ke Mai (Department of Economics National Tsing Hua University, Taiwan.); Michael McAleer (Department of Quantitative Finance National Tsing Hua University, Taiwan and Econometric Institute Erasmus School of Economics Erasmus University Rotterdam, The Netherlands and Department of Quantitative Economics Complutense University of Madrid, Spain And Institute of Advanced Sciences Yokohama National University, Japan.)
    Abstract: The purpose of the paper is to provide a clear mechanism for determining carbon emissions pricing in China as a guide to how carbon emissions might be mitigated to reduce fossil fuel pollution. The Chinese Government has promoted the development of clean energy, including hydroelectric power, wind power, and solar energy generation. In order to involve companies in carbon emissions control, a series of regional and provincial carbon markets have been established since 2013. Since China’s carbon market was established in 2013 and mainly run domestically, and not necessarily using market principles, there has been almost no research on China’s carbon price and volatility. This paper provides an introduction to China’s regional and provincial carbon markets, proposes how to establish a national market for pricing carbon emissions, discusses how and when these markets might be established, how they might perform, and the subsequent prices for China’s regional and national carbon markets. Power generation in manufacturing consumes more than other industries, with more than 40% of total coal consumption. Apart from manufacturing, the northern China heating system also relies on fossil fuels, mainly coal, which causes serious pollution. In order to understand the regional markets well, it is necessary to analyze the energy structure in these regions. Coal is the primary energy source in China, so that provinces that rely heavily on coal receive a greater number of carbon emissions permits from the Chinese Government. In order to establish a national carbon market for China, a detailed analysis of eight important regional markets will be presented. The four largest energy markets, namely Guangdong, Shanghai, Shenzhen and Hubei, traded around 82% of the total volume and 85% of the total value of the seven markets in 2017, as the industry structure of the western area is different from that of the eastern area. The China National Development and Reform Commission has proposed a national carbon market, which can attract investors and companies to participate in carbon emissions trading. This importantissue will be investigated in the paper.
    Keywords: Pricing chinese carbon emissions, National pricing policy, Energy, Volatility, Energy finance, Provincial decisions.
    JEL: C22 C58 G12 Q48
    Date: 2018–01
  36. By: Francesco Pasimeni (European Commission, JRC , Directorate C7, Knowledge for Energy Union, PO Box 2, NL-1755 ZG Petten, Netherlands; SPRU, University of Sussex, UK); Alessandro Fiorini (European Commission, JRC , Directorate C7, Knowledge for Energy Union, PO Box 2, NL-1755 ZG Petten, Netherlands); Aliki Georgakaki (European Commission, JRC , Directorate C7, Knowledge for Energy Union, PO Box 2, NL-1755 ZG Petten, Netherlands)
    Abstract: Information on R&D expenditure of the private sector is very limited, both in term of availability and data quality, especially when interest focuses on Climate Change Mitigation Technologies (CCMTs). This has an impact on the robustness of quantitative analyses, and, consequently, on the insights deriving from them. This paper proposes a methodology to estimate R&D expenditure in firms simultaneously active in multiple technology sectors, with the focus on those contributing to the development of CCMTs. The methodological approach is applied to measure how the private sector invests in R&D dedicated to CCMTs, and how this differentiates among European countries. Further the paper proposes metrics to analyse the geographical distribution of the R&D expenditures in Multinational Corporations (MNCs) across subsidiaries located in Europe. Early findings are formulated into useful insights for stakeholders and policy makers.
    Keywords: R&D; Patent; Invention; Climate change mitigation technologies; Energy sector
    JEL: C81 O32 O34 O38 Q48
    Date: 2018–01
  37. By: Drupp, Moritz A.; Hänsel, Martin C.
    Abstract: We study how the scarcity of non-market goods, such as environmental amenities, affects the economic appraisal of climate policy. To this end, we perform a comprehensive analysis of the change in relative prices of non-market goods in the widespread climate-economy model DICE. We show that DICE already contains relative prices implicitly and that the impact of the scarcity of non-market goods on climate policy evaluation is therefore more pervasive than previously suggested. We calibrate DICE based on empirical evidence and propose a plausible range for relative price changes. The uncertainty is substantial, with relative price changes ranging from 1.3 to 9.6 percent in 2020. For our central calibration, the relative price change amounts to 4.4 percent in 2020. Neglecting relative prices leads to an underestimation of the social cost of carbon in 2020 of more than 40 percent. Accounting for these changes is equivalent to a decrease in pure time preference by more than a half percentage point. Our findings support initiatives to consider relative prices in governmental project appraisal and offer guidance for the evaluation of climate policy.
    Keywords: climate policy,discounting,non-market goods,social cost of carbon,substitutability
    JEL: Q01 Q54 H43 D61 D90
    Date: 2018
  38. By: Buckley, P.; Llerena, D.
    Abstract: The aim of demand response is to make energy consumption more flexible during peak periods. Using a contextualised CPR framework, we study energy consumption choices. Subjects decide the consumption level of five activities during 10 periods. The total consumption of these activities is the CPR contribution, and payoffs depend on own consumption and the amount consumed by the group. In the nudge treatment, subjects are nudged towards the socially optimal level of consumption using injunctive norms. The average consumption observed in the nudge treatment is used to calculate the price implemented in the price treatment. The objective is to quantify the nudge via an equivalent price. The main hypotheses are: consumption choices will be lower in the treatment groups compared to the control groups; when the price level is fixed according to the nudge result, consumption choices in the price treatment will be equivalent to those in the nudge treatment. Across all 10 periods, consumption is significantly lower in the nudge treatment, and higher for control groups. In the price treatment, consumption remains between the two at or slightly above the target. We conclude that the nudge treatment performs as well as an equivalent price without the implied loss of welfare. When comparing decisions under the nudge and price treatments to the control groups, the consumption decisions are significantly different from period 2 for the nudge and, consistently different from period 7 for the price. We conclude that the nudge is understood and integrated into subjects' decision making quicker than an equivalent price.
    JEL: C91 C92 D62 D91 H21
    Date: 2018
  39. By: Meunier Guy (INRA; ALISS; Ecole Polytechnique); Ponssard Jean-Pierre (Ecole Polytechnique)
    Abstract: The energy transition requires the deployment of significant programs in research and development. In absence of a long term commitment by governments on an international price of carbon various forms of national subsidies have been used. This paper analyzes the potential benefit of using subsidies conditional on success or failure of an R&D program, rather than a flat subsidy. The relationship between the state and the firm is formalized in the principal agent framework. Three potential sources of inefficiency are identified: conditions of observability of the outcome of the project, adverse selection regarding the probability of success and moral hazard. We shall show how subsidies that reward failure and subsidies that reward success mitigate these respective sources of inefficiency in a superior way as compared to flat subsidies. The gap between our second best policies and the first best is also identified. We bring together our analytical results and offer some guidance for the design of contractual investment programs such as the contractual instruments used in the Investment Program for the Future (Programme d’Investissements d’Avenir) launched in France in 2010 to promote R&D for the energy transition over the period 2010-2020.
    Keywords: green innovation, financing, public support, asymmetric information
    Date: 2017–10–01
  40. By: Jing Tian; Julio Lumbreras; Celio Andrade; Hua Liao
    Abstract: Purpose ¨C This paper aims to identify key sectors in carbon footprint responsibility, an introduced concept depicting CO2 responsibilities allocated through the supply chain containing sectoral activities and interactions. In detail, various key sectors could be identified according to comparative advantages in trade, sectoral linkage, and sectoral synergy within the supply chain. Design/methodology/approach ¨C A semi-closed IO model is employed to make household income-expenditure relationship endogenous through the supply chain where sectoral CO2 emissions are calculated and the production-based responsibility (PR) principle is evaluated. Thus, according to "carbon footprint responsibility", modified HEM is applied to decompose sectoral CO2 in terms of comparative advantages in trade, sectoral linkage and synergy. Finally, key sectors are identified via sectoral shares and associated decompositions in carbon footprint responsibility. Findings - Compared to 2005, in 2012: (1) the PR principle failed to track sectoral CO2 flow, and embodied CO2 in import and interprovincial export increased, with manufacturing contributing the most; (2) manufacturing should take more carbon responsibilities in the internal linkage, and tertiary sectors in the net forward and backward linkage, with sectors enjoying low carbonization in the mixed linkage; (3) inward net CO2 flows of manufacturing and service sectors were more complicated than their outward ones in terms of involved sectors and economic drivers; and (4) residential effects on CO2 emissions of traditional sectors increased, urban effects remained larger than rural ones, and manufacturing and tertiary sectors received the largest residential effects. Originality/value ¨C The value of paper involves: (1) household income-expenditure relationship got endogenous in intermediate supply and demand, corresponding to the rapid urbanization in megacities; (2) key sectors were observed to change flexibly according to real sectoral activities and interaction; and (3) the evaluation of the PR principle was completed ahead of employing a certain CO2 accounting principle at the city level.
    Keywords: Carbon responsibility, Carbon footprint, Key sector, Household, Semi-closed input-output model, Modified hypothetical extraction method
    JEL: Q54 Q40
    Date: 2018–01–04
  41. By: Zalejska Jonsson, Agnieszka (Department of Real Estate and Construction Management, Royal Institute of Technology)
    Abstract: The overarching aim of this study is to investigate the factors behind the relatively slow evolution of the green residential housing market in Sweden. The intention is to examine stated willingness to pay (WTP) for green and low energy apartments, and to explore which factors have a significant effect on stated WTP among apartment owners. A green building was defined as a building certified according to the environmental scheme and a low energy building as a building designed and constructed with high energy efficiency goals. Data for this study were collected through a survey conducted among occupants of comparable apartment buildings: two green and one conventional. The study applied a quasi-experimental method; survey responses regarding factors affecting purchase of apartment, stated WTP and environmental literacy have been analysed using descriptive statistics, the Mann–Whitney (rank sum) test and logistic models. Comments received from respondents have been used for further interpretation of results. Results indicate that environmental education has a significant effect on stated WTP. Occupants who declared higher WTP showed a higher level of environmental literacy and indicated that energy efficiency was one of the important factors that affected their decision to buy an apartment. It is concluded that growth in the green housing market in Sweden might be achieved if policymakers and developers engage in active education in the environmental labelling system. The demand for green buildings is more likely to increase when the difference between green and conventional buildings is easily understood and information is not only delivered by the estate agent, but is part of an environmental education programme.
    Keywords: Consumer; environmental education; housing market; stated WTP
    JEL: Q56 R21
    Date: 2018–01–22

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