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on Energy Economics |
| By: | Newbery, David M G |
| Abstract: | Given the agreed urgency of decarbonizing electricity and the need to guide decentralized private decisions, an adequate and credible carbon price appears essential. The paper defines and quantifies the useful concept of the break-even carbon price for mature zero-carbon electricity investments. It appears an attractive alternative given the difficulty of measuring the social cost of carbon, but modelling shows it extremely sensitive to projected fuel prices, the rate of interest, and the capital cost of generation options, all of which are very uncertain. This has important implications, and justifies combining a carbon price floor with suitable long-term contracts for electricity investments. |
| Keywords: | carbon price; electricity; investment; renewables |
| JEL: | C65 Q42 Q48 Q51 Q54 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:12647&r=ene |
| By: | Chelminski, K. |
| Abstract: | Located along the Ring of Fire in the Asia Pacific, both Indonesia and the Philippines have tremendous natural resource endowments in geothermal energy. Yet, the two countries have dramatic differences in the share of installed capacity they have developed with international development assistance for geothermal development over the last decades. This paper investigates the major interests, institutions and barriers to geothermal development in Indonesia and the Philippines and then examines how closely clean energy development finance has addressed these barriers. Using qualitative analysis and data from field research in both countries, this paper investigates the effectiveness of the clean energy development finance for renewable energy development. The main findings of this research show that clean energy development finance targeted major barriers to geothermal energy development, but the finance was limited in its impacts on removing the barriers or addressing major domestic political interests, particularly in the case of Indonesia. This research also illuminated limitations of the project-based development approach to solving macro-level problems in clean energy development. |
| Keywords: | clean energy development, development finance, energy policy, geothermal energy |
| JEL: | O13 Q42 N55 |
| Date: | 2018–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1804&r=ene |
| By: | Mutanga, Shingirirai Savious; Quitzow, Rainer; Steckel, Jan Christoph |
| Abstract: | Focusing on critical aspects of infrastructure, such as energy, this paper argues that African countries, and African cities in particular, need infrastructure that advances both basic needs and industrialization, and avoids a lock-in of unsustainable, high-carbon technologies. G20 countries can promote and support quality of life in African countries by: (1) aligning and cementing the G20 Agenda for Africa with African initiatives, SDGs and the Paris Agreement, (2) mitigating economic risks of climate change through supporting low carbon development pathways in Africa, (3) creating and enabling a level playing field for low carbon technologies, which includes integrated strategies for derisking renewable energy investments, and (4) supporting smart and sustainable urban planning. |
| Keywords: | sustainable development,climate policy,Africa |
| JEL: | Q01 Q54 H23 R11 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:201815&r=ene |
| By: | Spindler, Christian; Woll, Oliver; Schober, Dominik |
| Abstract: | A new type of player occurs in the sharing economy: a vertically integrated consumer who owns production facilities and has direct market access, often termed "active prosumer". The prosumer faces a trade-off between market transaction cost and substantial strategic potential to influence both market demand and supply by her decisions. We discuss optimal marketing and production decisions in light of this trade-off. An empirical application to the German-Austrian electricity market demonstrates substantial incentives for active market participation by recently added decentralized renewables production. Prosumers can achieve considerable profit increases by switching roles of net market supplier or customer. |
| Keywords: | Active Prosumer,Capacity Withholding,Self-Supply,Vertical Integration,Consumer Production,Market Participation Cost |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:18006&r=ene |
| By: | Debabrata Chattopadhyay; Jacek Filipowski; Michael Stanley; Samuel Oguah |
| Keywords: | Energy - Coal and Lignite Energy - Electric Power Energy - Energy Policies & Economics Energy - Energy Production and Transportation Energy - Power & Energy Conversion Energy - Renewable Energy |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:28624&r=ene |
| By: | Janina Franco; V. Susan Bogach; Inés Pérez Arroyo; Maite Lasa |
| Keywords: | Energy - Electric Power Energy - Energy Policies & Economics Rural Development - Rural Poverty Reduction Strategies Rural Development - Rural and Renewable Energy |
| Date: | 2017–10 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wboper:28623&r=ene |
| By: | Lewis, Joshua (University of Montreal); Severnini, Edson R. (Carnegie Mellon University) |
| Abstract: | Electrification among American farm households increased from less than 10 percent to nearly 100 percent over a three decade span, 1930{1960. We exploit the historical rollout of the U.S. power grid to study the short- and long-run impacts of rural electrification on local economies. In the short run, rural electrification led to increases in agricultural employment, rural farm population, and rural property values, but there was little impact on the local non-agriculture economy. Benefits exceeded historical costs, even in rural areas with low population density. As for the long run, rural counties that gained early access to electricity experienced increased economic growth that persisted for decades after the country was fully electrified. In remote rural areas, local development was driven by a long-run expansion in the agricultural sector, while in rural counties near metropolitan areas, long-run population growth coincided with increases in housing costs and decreases in agricultural employment. This last result suggests that rural electrification stimulated suburban expansion. |
| Keywords: | rural electrification, short run, long run, agriculture, suburbanization |
| JEL: | N72 N92 N32 O13 O18 Q48 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11243&r=ene |
| By: | Simora, Michael |
| Abstract: | Despite general support for the transition towards renewable energies, local opposition may hamper the required power line construction. This paper evaluates a large randomized one shot binary choice experiment with about 10,000 observations to examine the effect of annual community compensations based on current legislation as well as the effect of household compensations on the willingness to accept new power line construction. Results reveal that community compensations have no bearing on the acceptance level, whereas personal compensations have a negative effect via crowding out intrinsic motivation to support the construction project or via signaling negative impacts for residents. Thus, policy makers should refrain from financial payments as an instrument to decrease local opposition. |
| Keywords: | not-in-my-backyard,compensation payment,willingness to accept,motivation crowding out |
| JEL: | M52 C93 Q40 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:729&r=ene |
| By: | Simora, Michael; Frondel, Manuel; Vance, Colin |
| Abstract: | Although public support for renewable energy promotion in Germany is strong, the required power line construction has incited a groundswell of opposition from residents concerned about the impacts on their neighborhoods. This paper evaluates a large randomized one-shot binary-choice experiment to examine the effect of different compensation schemes on the acceptance of new power line construction. Results reveal that community compensations have no bearing on the acceptance level, whereas personal compensations have a negative effect. Two possible channels through which financial compensation reduces the willingness-to-accept are (1) crowding out of intrinsic motivation to support the construction project and (2) a signaling effect that alerts residents to potential negative impacts of the power lines. Both explanations call into question the efficacy of financial payments to decrease local opposition. |
| Keywords: | not-in-my-backyard,willingness to accept,motivation crowding out,randomized discrete choice experiment |
| JEL: | M52 C93 Q40 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:742&r=ene |
| By: | HATTA Tatsuo; IKEDA Shin Suke |
| Abstract: | In Europe, transmission system operators (TSOs) operate markets for balancing power and transmission rights. In order to investigate the situation of these markets, a RIETI research group conducted a survey visit of European TSOs and their associations. This paper reports the results of the investigation, focusing on the following three points: 1. Domestic operation of balancing power markets 2. International coordination of operations of balancing power markets 3. Operation of the power transmission right markets: Furthermore, we derive implications for the design of the TSO markets in the course of Japan's electric power reform. |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:eti:rpdpjp:18001&r=ene |
| By: | Barrientos, Jorge; Velilla, Esteban; Tobón Orozco, David; Villada, Fernando; López Lezama, Jesús M. |
| Abstract: | Abstract: This paper presents an estimation of the reaction of electricity demand to changes in price levels of forward contracts in the manufacturing industry of Colombia. To that end, a structural vector autoregressive (SVAR) model was developed, considering several economic activities at different voltage levels. The industrial sectors under study showed an electricity demand not significantly sensitive to price variations. However, the food and drink sectors, plastic and rubber manufacturing, as well as retail trade turned out to be more sensitive to price shocks than the chemical industry or textile manufacturing. Such inelasticity could be softened if information concerning prices and quantity demanded were of common knowledge, or if the forward curve were observable. Resumen En este artículo se presenta una estimación de la reacción de la demanda a niveles de precios de contratos forward de electricidad en la industria manufacturera de Colombia. Se desarrolló un modelo de vectores autorregresivos estructurales (SVAR) considerando varias actividades económicas a diferentes niveles de tensión. Los sectores industriales bajo estudio no mostraron una demanda de electricidad significativamente sensible a variaciones de precios. Sin embargo, los sectores de alimentos y bebidas, caucho y plástico, así como el sector comercial minorista resultaron ser más sensibles a choques de precios que la industria química o el sector de manufactura de textiles. Dicha inelasticidad podría suavizarse si la información concerniente a precios y cantidades demandadas fuera de conocimiento común, o si la curva forward pudiera ser observable. |
| Keywords: | mercados de electricidad; contratos forward; elasticidad precio de la demanda; modelos SVAR |
| JEL: | D43 D61 L13 L43 Q41 |
| Date: | 2018–01–02 |
| URL: | http://d.repec.org/n?u=RePEc:col:000099:016025&r=ene |
| By: | Nilsson , Jan-Eric Nilsson (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Isacsson , Gunnar (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Haraldsson, Mattias (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Nerhagen, Lena (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Odolinski, Kristofer (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Swärdh, Jan-Erik (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Vierth, Inge (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Yarmukhamedov, Sherzod (CTS - Centre for Transport Studies Stockholm (KTH and VTI)); Österström, Johannes (CTS - Centre for Transport Studies Stockholm (KTH and VTI)) |
| Abstract: | This review summarizes recent information about the marginal costs for using Sweden’s infrastructure and the relationship between the sum of marginal costs and charges for each mode. It is demonstrated that the tax on petrol used by private cars is higher than the marginal costs for emissions, accident risk and road wear and tear. The diesel tax is, on the other hand, not sufficient for internalization of heavy vehicles’ externalities. Neither trains nor aircraft or ships pay for their marginal costs. For railways, this confirms previous observations that Swedish track user charges are low in an international context. Except for a low level of charges, several examples are given of the strong motives for differentiation of charges in time and geography. The rapid technical development makes the cost motive for not differentiating the charges increasingly irrelevant. |
| Keywords: | Marginal cost pricing; roads; railways; waterway infrastructure; air infrastructure |
| JEL: | R10 R40 R41 R48 |
| Date: | 2018–02–19 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ctswps:2018_002&r=ene |
| By: | Germeshausen, Robert |
| Abstract: | I investigate the impact of the European Union Emissions Trading Scheme (EU ETS) on fuel efficiency of fossil fuel power plants using administrative micro data on power plants in Germany from 2003 to 2012. I find positive efficiency effects in fuel use, leading to a decrease in fuel input of 0.4 percent for an increase in carbon cost of one Euro. A back-of-the-envelope calculation suggests that the reduction in fuel use by fossil fuel power plants due to the introduction of the EU ETS translates into reductions in annual carbon emissions within the German electricity sector by around seven million tonnes in 2012. This represents about 2.4 percent of total annual carbon emissions in the German electricity sector and exemplifies the potential magnitude of efficiency improvements as a measure for reducing carbon emissions. |
| Keywords: | EU ETS,Carbon Pricing,Fossil Fuel Power Plants,Treatment Intensity |
| JEL: | D24 L94 Q48 Q58 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:18007&r=ene |
| By: | Gioele Figus (Centre for Energy Policy, University of Strathclyde); Kim Swales (Department of Economics, University of Strathclyde) |
| Abstract: | This paper demonstrates the importance of considering both energy and non-energy efficiency improvements in the provision of energy intensive household services. Using the example of private transport, we analyse whether vehicle efficiency can beat fuel efficiency in cutting fuel use. We find that this ultimately depend on the elasticity of demand for transport, the substitutability between vehicles and fuels and the initial share of fuel use in private transport. The framework also allows to identify ‘multiple benefits’ of technical progress in private transport by considering both the ability of such policy to reduce fuel demand and to increase the consumer’s surplus. We extend the partial equilibrium framework by using computable general equilibrium (CGE) simulations to identify the system-wide impacts on total fuel use of the two alternative efficiency changes. Simulation results suggest that the substitution effects identified in the partial equilibrium analysis are an important element in determining the change in total fuel use resulting from these consumption efficiency changes. However, the identification of associated changes in intermediate fuel demand, plus the potential expansionary effects of the improvements in household efficiency transmitted through the labour market can generate general equilibrium effects that vary substantially from those derived using partial equilibrium analysis. |
| Keywords: | energy services, technical progres,, energy efficiency, partial equilbrium, general equilibrium |
| JEL: | C68 D58 Q43 Q48 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1802&r=ene |
| By: | Vasilev, Aleksandar |
| Abstract: | We introduce a pro-cyclical endogenous utilization rate of physical capital stock into a real-business-cycle model augmented with a detailed government sector. We calibrate the model to Bulgarian data for the period following the introduction of the currency board arrangement (1999-2016). We investigate the quantitative importance of the endogenous depreciation rate, and the capital utilitization mechanism working through the use of energy for cyclical fluctuations in Bulgaria. In particular, a positive shock to energy prices in the model works like a negative technological shock. Allowing for variations in factor utilization and the presence of energy as a factor of production improves the model performance against data, and in addition this extended setup dominates the standard RBC model framework with constant depreciation and a fixed utilization rate of physical capital, e.g., Vasilev (2009). |
| Keywords: | Business fluctuations,capital utilization rate,endogenous depreciation rate,energy prices,Bulgaria |
| JEL: | E32 E22 E37 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:esprep:173966&r=ene |
| By: | Baas, Timo (University of Duisburg-Essen); Belke, Ansgar H. (University of Duisburg-Essen) |
| Abstract: | For more than two decades now, current-account imbalances are a crucial issue in the international policy debate as they threaten the stability of the world economy. More recently, the government debt crisis of the European Union shows that internal current account imbalances inside a currency union may also add to these risks. Oil price fluctuations and a contracting monetary policy that reacts on oil prices, previously discussed to affect the current account may also be a threat to the currency union by changing internal imbalances. Therefore, in this paper, we analyze the impact of oil price shocks on current account imbalances within a currency union. Differences in institutions, especially labor market institutions and trade result in an asymmetric reaction to an otherwise symmetric shock. In this context, we show that oil price shocks can have a long-lasting impact on internal balances, as the exchange rate adjustment mechanism is not available. The common monetary policy authority, however, can reduce such effects by specifying an optimum monetary policy target. Nevertheless, we also show that there is no single best solution. CPI, core CPI or an asymmetric CPI target all come at a cost either regarding an increase in unemployment or increasing imbalances. |
| Keywords: | current account deficit, oil price shocks, DSGE models, search and matching labor market, monetary policy |
| JEL: | E32 F32 Q43 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11252&r=ene |
| By: | Cristina Conflitti (Bank of Italy); Riccardo Cristadoro (Bank of Italy) |
| Abstract: | In line with other recent studies, we find that oil price changes have had a statistically significant impact on long-term inflation expectations in the euro area since the global financial crisis. However, over the same period, (i) oil prices have shifted together with economic indicators, such as stock prices, and (ii) the correlation between short- and long-term expectations has increased. Once these factors are taken into account, the effect of oil prices on long-term inflation expectations is no longer significant. This suggests that the link between oil prices and long-term inflation expectations is not direct, but rather the result of underlying factors: the prolonged feeble economic conditions and the possible de-anchoring of long-term inflation expectations from the objective of price stability. |
| Keywords: | inflation expectations, oil prices, inflation swaps, de-anchoring, monetary policy |
| JEL: | C20 E31 E59 Q41 |
| Date: | 2018–01 |
| URL: | http://d.repec.org/n?u=RePEc:bdi:opques:qef_423_18&r=ene |
| By: | Baas, Timo; Belke, Ansgar |
| Abstract: | For more than two decades now, current-account imbalances are a crucial issue in the international policy debate as they threaten the stability of the world economy. More recently, the government debt crisis of the European Union shows that internal current account imbalances inside a currency union may also add to these risks. Oil price fluctuations and a contracting monetary policy that reacts on oil prices, previously discussed to affect the current account may also be a threat to the currency union by changing internal imbalances. Therefore, in this paper, we analyze the impact of oil price shocks on current account imbalances within a currency union. Differences in institutions, especially labor market institutions and trade result in an asymmetric reaction to an otherwise symmetric shock. In this context, we show that oil price shocks can have a long-lasting impact on internal balances, as the exchange rate adjustment mechanism is not available. The common monetary policy authority, however, can reduce such effects by specifying an optimum monetary policy target. Nevertheless, we also show that there is no single best solution. CPI, core CPI or an asymmetric CPI target all come at a cost either regarding an increase in unemployment or increasing imbalances. |
| Keywords: | current account deficit,oil price shocks,DSGE models,search and matching labor market,monetary policy |
| JEL: | E32 F32 Q43 |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:rwirep:740&r=ene |
| By: | Stavros Degiannakis (Department of Economics and Regional Development, Panteion University of Social and Political Sciences); George Filis (Department of Accounting, Finance and Economics, Bournemouth University); Sofia Panagiotakopoulou (Department of Economics and Regional Development, Panteion University of Social and Political Sciences) |
| Abstract: | This paper investigates the time-varying relationship between economic/financial uncertainty and oil price shocks in the US. A structural VAR (SVAR) model and a time-varying parameter VAR (TVP-VAR) model are estimated, using six indicators that reflect economic and financial uncertainty. The findings from the SVAR model reveal that uncertainty indicators do not respond to supply-side oil shocks, whereas they respond negatively to aggregate demand and oil specific demand shocks. However, the TVP-VAR model shows that the uncertainty responses to the three oil price shocks are heterogeneous both over time and over the different oil price shocks. More specifically, we show that the behaviour of responses changes in the post global financial crisis period, suggesting a shift in the relationship between oil shocks and uncertainty indicators. The findings are important to policy makers and investors, as they provide new insights on the said relationship. |
| Keywords: | Economic policy uncertainty; financial uncertainty; realized volatility; oil price shock; SVAR; TVP-VAR; US |
| JEL: | C32 C51 G15 Q40 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:bam:wpaper:bafes13&r=ene |
| By: | Hilde C. Bjørnland; Leif Anders Thorsrud; Ragnar Torvik |
| Abstract: | In this paper we develop the first model to incorporate the dynamic productivity consequences of both the spending e ect and the resource movement e ect 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 e ect suggests that the growth e ects of natural resources are likely to be positive, turning previous growth results in the literature relying on the spending e ect 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 e ects 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 model |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:bny:wpaper:0062&r=ene |
| By: | Verdolini, Elena; Bak, Céline; Ruet, Joël; Venkatachalam, Anbumozhi |
| Abstract: | The authors recommend that the G20 target innovative green-technology SMEs as an opportunity to promote financial de-risking while addressing Paris Agreement commitments and UN Sustainable Development Goals. This should be achieved by creating signals for private investors through: (1) a reporting system that can help monitor the scale-up of green-technology SMEs; (2) the use of public funds to signal innovative green-technology SMEs to investors; and (3) the inclusion of SMEs in the design of green finance platforms. By implementing these recommendations, the G20 will ensure that innovative, low-carbon SMEs become attractive, low(er)-risk investment opportunities for the private sector. |
| Keywords: | innovation,green technology,eco-efficiency,SMEs,financial de-risking |
| JEL: | O31 Q55 Q58 E60 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifwedp:20188&r=ene |
| By: | Raphael Calel |
| Abstract: | Environmental regulations have consistently been found to spur innovation in ‘clean’ technologies, with one significant exception. Past cap-and-trade programs have encouraged adoption of existing pollution control technologies, but had little effect on innovation. Several explanations have been offered, including secondary market failures and a lack of polluter sophistication. In this paper I argue that it likely has more to do with the state of the technologies. Using a newly constructed panel of British companies, I show that the European carbon market - the world’s largest cap-and-trade program - has, contrary to past experience, encouraged innovation rather than adoption. I discuss how these contrasting findings can be reconciled, and the implications for planned reforms. |
| Keywords: | EU emissions trading system, induced innovation, directed technological change, technology diffusion |
| JEL: | O30 Q55 Q58 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_6847&r=ene |
| By: | Stefano BOSI; David DESMARCHELIER |
| Abstract: | In this article, we embed a model of disease spread into a Ramsey model. A stock of pollution, viewed as a productive externality, affects both the disease transmission and the consumption demand. An ecofriendly government levies a proportional Pigouvian tax on production to depollute. We show the coexistence of two steady states in the long run: a disease-free and an endemic steady state. At the endemic steady state, a higher green-tax rate always reduces the pollution level. In the short run, we show the existence of limit cycles (through a Hopf bifurcation) as well as more complex dynamics of codimension two (a Gavrilov-Guckenheimer bifurcation). We complete the study with a numerical illustration of these bifurcations and a new facet of the Green Paradox: a higher tax rate can allow more scope for cycles by lowering the critical aversion to pollution and, thus, contribute to destabilize the economy and promote intergenerational inequalities. |
| Keywords: | SIS model, Ramsey model, pollution, transcritical bifurcation, Hopf bifurcation, Gavrilov-Guckenheimer bifurcation. |
| JEL: | C61 E32 O44 |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:ulp:sbbeta:2018-11&r=ene |
| By: | Dolphin, G.; Pollitt, M. |
| Abstract: | Globally coordinated climate action has resulted in sub-optimal emissions reductions and unilateral (second-best) climate policies have so far provided the bulk of emissions reductions. This paper argues that the development of new unilateral carbon pricing policies was fostered by international signalling and technological spillover effects. The strength of both effects hinges, for each jurisdiction, on trade relations with other CO2-abating jurisdictions. We provide a stylised theoretical discussion in support of our proposition and investigate it using data on a panel of 121national jurisdictions over the period 1990-2014. Results show a strong positive association between import-weighted exposure to CO2-pricing partners and domestic environmental policy. The analysis also supports the technological spillover channel: trade-weighted installed capacity of wind and solar energy seems to prompt implementation of and more stringent carbon pricing policies. |
| Keywords: | international spillovers, trade, carbon pricing |
| JEL: | F18 Q56 Q58 |
| Date: | 2018–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1803&r=ene |
| By: | Joltreau, Eugénie (Université Paris-Dauphine); Sommerfeld, Katrin (ZEW Mannheim) |
| Abstract: | Environmental policies may have important consequences for firms' competitiveness or profit-ability. However, the empirical literature shows that hardly any statistically significant effects on firms can be detected for the European Union Emissions Trading Scheme (EU ETS). We explain why there are arguably no significant competitiveness effects on firms, at least not during the first two phases of the scheme (2005-2012). We also reason why the third phase (2013-2020) is likely to reveal similar results. We show that the main explanations for this finding are a large over-allocation of emissions allowances leading to a price drop and the ability of firms to pass costs onto consumers in some sectors. Cost pass-through combined with free allocation, in turn, partly generated windfall profits. In addition, the relatively low importance of energy costs indicated by their average share in the budgets of most manufacturing industries may limit the impact of the EU ETS. Finally, small but significant stimulating effects on innovation have been found so far. |
| Keywords: | employment effects, firm-level competitiveness, environmental policies, EU ETS |
| JEL: | Q52 Q58 D22 |
| Date: | 2017–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp11253&r=ene |
| By: | Ke Wang; Zhifu Mi; Yi-Ming Wei |
| Abstract: | Previous studies of the efficiency of Chinese electricity industry have been limited in providing insights regarding policy implications of inherent trade-offs of economic and environmental outcomes. This study proposes a modified data envelopment analysis method combined with materials balance principle to estimate ecological and cost efficiency in the Chinese electricity industry. The economic cost and ecological impact of energy input reallocation strategies for improving efficiency are identified. The possible impacts of pollution taxes upon the levels of sulfur dioxide (SO2) emissions are assessed. Estimation results show that (i) both energy input costs and SO2 could be reduced through increasing technical efficiency. (ii) It is possible to adjust energy input mix to attain ecological efficient, and correspondingly, SO2 would reduce by 15%. (iii) The Chinese electricity industry would reduce its unit cost by 9% if optimal ecological efficiency is attained and reduce its unit pollution by 13% if optimal cost efficiency is attained, implying that there are positive ecological synergy effects associated with energy cost savings and positive economic synergy effects associated with SO2 pollution reductions. (iv) Estimated shadow costs of SO2 reduction are very high, suggesting that, in the short term, the Chinese electricity industry should pursue cost efficient point instead of ecological efficient point, since alternative abatement activities are less costly and some of the abatement cost could be further offset by energy input cost savings. (v) There would be no significant difference between the impacts of pollution discharge fees and pollution taxes on SO2 emissions levels because of the relatively low pollution tax rate. |
| Keywords: | Data envelopment analysis (DEA); Emission reduction; Energy efficiency; Environmental economics; Material balance; Sulfur dioxide (SO2) |
| JEL: | Q54 Q40 |
| Date: | 2018–02–21 |
| URL: | http://d.repec.org/n?u=RePEc:biw:wpaper:114&r=ene |
| By: | Wulandaria, Febi (Jönköping International Business School); Schäfer, Dorothea (German Institute for Economic Research DIW Berlin); Stephan, Andreas (The Ratio Institute); Sun, Chen (CERBE) |
| Abstract: | This study analyses how liquidity risk affects bonds’ yield spreads after controlling for credit risk, bond-specific characteristics and macroeconomic variables. Using two liquidity estimates, LOT liquidity and the bid-ask spread, we find that, in particular, the LOT liquidity measure has explanatory power for the yield spread of green bonds. Overall, however, the impact of LOT decreases over time, implying that, nowadays liquidity risk is negligible for green bonds. |
| Keywords: | Green Bond; Liquidity Risk; Yield Spread; Sustainable Investment; Fixed Income Security; Financial Innovation |
| JEL: | G12 G32 |
| Date: | 2018–01–17 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:ratioi:0305&r=ene |
| By: | Feucht, Yvonne; Zander, Katrin |
| Abstract: | The purchase of products labelled with Carbon footprints is one option for consumers to act climate-friendly and consumers frequently state that they are interested in this kind of labels. But even though various carbon footprint labelling schemes exist throughout Europe, their market relevance is low. In this context, the present research investigates preferences for climate-friendly food and identifies barriers for climate friendly food choices in the European market. Using a mixed methods approach combining an online survey (choice experiments and a questionnaire) with qualitative face-to-face interviews, the preferences and willingness to pay for different carbon labels and a climate-friendly claim were explored in six European countries. While the online survey mainly aimed at eliciting consumer preferences for different ways of communicating climate-friendliness, the face-to-face interviews which were based on the results of the online survey, deepened and broadened the quantitative results. Thereby, consumers' perceptions of climate-friendly food and their information needs with respect to climate-friendly food are elicited. Our results show that the presence of a carbon label on a product increases the purchase probability and that consumers are willing to pay a (small) price premium for a carbon label in all countries under investigation (France, Germany, Italy, Norway, Spain, Germany, UK). However, the contribution of a carbon label to a more climate-friendly consumption will be limited. Main reasons are the lack of knowledge of climate friendly actions, reluctance to change consumption habits (e.g. meat and dairy consumption), time preference and uncertainty regarding the relevance of climate change. Consumers appear to be frequently overstrained with respect to climate-friendly buying decisions. Policy makers and retailers are challenged to set appropriate structures to support climate-friendly consumption. |
| Keywords: | carbon footprint labelling,consumer research,climate change,climate-friendly food,mixed methods,choice experiments,CO2-Labels,Verbraucherforschung,Klimawandel,Klimafreundliche Lebensmittel,Mixed methods,Kaufexperimente |
| Date: | 2017 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:jhtiwp:78&r=ene |