nep-ene New Economics Papers
on Energy Economics
Issue of 2018‒04‒30
forty-two papers chosen by
Roger Fouquet
London School of Economics

  1. Volatility Spillovers in a Long-Memory VAR: an Application to Energy Futures Returns By Lovcha, Yuliya; Pérez Laborda, Àlex
  2. Impacts of shifting China¡¯s final energy consumption to electricity on CO2 emission reduction By Weigang Zhao; Yunfei Cao; Bo Miao; Ke Wang; Yi-Ming Wei
  3. The impact of China’s electricity deregulation on coal and power industries: Two-stage game modeling approach By HuiHui Liu; ZhongXiang Zhang; ZhanMing Chen; DeSheng Dou
  4. Coordinating Separate Markets for Externalities By Jose-Miguel Abito; Christopher R. Knittel; Konstantinos Metaxoglou; André Trindade
  5. Comparative Sustainable Development in Sub-Saharan Africa By Asongu, Simplice
  6. How to road price in a world with electric vehicles and government budget constraints By Wangsness, Paal Brevik
  7. Some reflections on policy mix in the EU low-carbon strategy By Massimiliano Corradini; Valeria Costantini; Anil Markandya; Elena Paglialunga; Giorgia Sforna
  8. Urban planners’ control over earthworks can result in remarkable greenhouse gas reduction By Eeva Säynäjoki; Seppo Junnila
  9. Carbon footprint and rebound of large scale building integrated energy production By Juudit Ottelin; Jussi Vimpari; Seppo Junnila
  10. The demand for global and local environmental protection: Experimental evidence from climate change mitigation in Beijing By Loeschel, Andreas; Pei, Jiansuo; Sturm, Bodo; Wang, Ran; Buchholz, Wolfgang; Zhao, Zhongxiu
  11. Low-Carbon Growth in Northeast Asian Economies: Mirage or Reality? By Georgy Safonov; Sh. Enkhbayar
  12. What Matters for Environmental Quality in the Next-11 Countries: Economic Growth or Income Inequality? By Padhan, Hemachandra; Haouas, Ilham; Sahoo, Bhagaban; Heshmati, Almas
  13. Promoting solar electricity exports from Southern to Central and Northern European countries: Extremadura case study By Ana Raquel Diaz Vazquez; Natalia Caldes Gomez
  14. An Electricity Price Modeling Framework for Renewable-Dominant Markets By Hain, Martin; Schermeyer, Hans; Uhrig-Homburg, Marliese; Fichtner, Wolf
  15. Trust in Government and Effective Nuclear Safety Governance in Great Britain By Lam, J.; Li, V.; Reiner, D.; Han, Y.
  16. Economic drivers of greenhouse gas-emissions in small open economies: A hierarchical structural decomposition analysis By Croner, Daniel; Koller, Wolfgang; Mahlberg, Bernhard
  17. Unintended consequences: The snowball effect of energy communities By Abada, I.; Ehrenmann, A.; Lambin, X.
  18. The role of power-to-gas in the future energy system: how much is needed and who wants to invest? By Lynch, Muireann Á; Devine, Mel; Bertsch, Valentin
  19. Bridging the Gap between Sustainable FM and Sustainable Buildings – Will the Green shift create a friendly restructuring? By Tore Haugen; Dave Collins
  20. The Propagation of Regional Shocks in Housing Markets: Evidence from Oil Price Shocks in Canada By Kilian, Lutz; Zhou, Xiaoqing
  21. Supply Function Equilibrium over a Constrained Transmission Line I: Calculating Equilibria By Ruddell, Keith
  22. Analysing long-term interactions between demand response and different electricity markets using a stochastic market equilibrium model By Bertsch, Valentin; Devine, Mel; Sweeney, Conor; Parnell, Andrew C.
  23. Climate Finance for Canadian Cities: Is Debt Financing a Viable Alternative? By Gustavo Carvalho
  24. Fossil Fuel Subsidy Reform in the Developing World: Who Wins, Who Loses, and Why? By Coxhead, Ian; Grainger, Corbett
  25. Renewable energy consumption and economic growth in Argentina. A multivariate co-integration analysis By Khobai, Hlalefang
  26. The relationship between construction quality and energy efficiency in newly built residential buildings By Agnieszka Zalejska-Jonsson; Rosane Hungria-Gunnelin
  27. Using automated algorithm configuration to improve the optimization of decentralized energy systems modeled as large-scale, two-stage stochastic programs By Schwarz, Hannes; Kotthoff, Lars; Hoos, Holger; Fichtner, Wolf; Bertsch, Valentin
  28. CO 2 mitigation in developing countries: the role of foreign aid By Mohamed Boly
  29. Applying behavioural economics to residential energy efficiency policy By Jiefang Ma; Queena K. Qian; Henk J. Visscher; Kun Song
  30. Including Forestry in an Emissions Trading Scheme: Lessons from New Zealand By Thomas Carver; Patrick Dawson; Suzi Kerr
  31. Measuring Market Power in Gasoline Retailing: A Market- or Station Phenomenon? By Nguyen-Ones, Mai; Steen, Frode
  32. The Public Finance Challenges of Fracking for Local Governments in the United States By Austin Zwick
  33. The impact of pollution abatement investments on production technology: a nonparametric approach By Jean Pierre Huiban; Camilla Mastromarco; Antonio Musolesi; Michel Simioni
  34. Gefahren ionisierender Strahlung für Mensch und Umwelt in Bezug auf kerntechnische Anlagen By Hübner, Felix; Jung, Jennifer Jana; Schultmann, Frank
  35. Moral licensing: Another source of rebound? By Dütschke, Elisabeth; Frondel, Manuel; Schleich, Joachim; Vance, Colin
  36. Decoupling of Emissions and GDP: Evidence from Aggregate and Provincial Chinese Data By Gail Cohen; João Tovar Jalles; Prakash Loungani; Ricardo Marto; Gewei Wang
  37. Determinants of Environmental Degradation under the Perspective of Globalization: A Panel Analysis of Selected MENA Nations By Audi, Marc; Ali, Amjad
  38. How Social Preferences Influence the Stability of a Climate Coalition By Lin, Yu-Hsuan
  39. Environmental Policy, Full-Employment Models, and Employment: A Critical Analysis By Marc A. C. Hafstead; Roberton C. Williams III; Yunguang Chen
  40. Detecting Co-Movements in Noncausal Time Series By Gianluca Cubadda; Alain Hecq; Sean Telg
  41. Smart Markets für regionale Systemdienstleistungen: Entwicklung eines Marktdesigns By Kraft, Sophia
  42. Media attention and crude oil volatility: Is there any 'new' news in the newspaper? By D Aromi; A Clements

  1. By: Lovcha, Yuliya; Pérez Laborda, Àlex
    Abstract: In this paper, we assess volatility spillovers across energy markets accounting for the persistence of the volatility series. To do so, we compute Diebold and Yilmaz (2015) measures of connectedness based on the forecast-error variance decomposition of an estimated fractionally integrated VAR (FIVAR). We use this method to study volatility spills among oil, unleaded gasoline, heating oil, and natural gas. Our main empirical findings are: 1) Accounting for persistence is essential to assess the magnitude of the spillover effects in these markets; 2) The traditional VAR magnifies the other’s contribution to the volatility variance; 3) There are substantial spillover effects across petroleum markets, but the link between these markets and the natural gas market appears to be broken in post 2008-crisis data. Keywords: fractional integration, spillovers, energy commodities. JEL Classification: G1, C5, Q4
    Keywords: Mercats financers, Models economètrics, Energia, 33 - Economia,
    Date: 2018
  2. By: Weigang Zhao; Yunfei Cao; Bo Miao; Ke Wang; Yi-Ming Wei
    Abstract: Electrification is advocated by both academics and the Chinese government to control air pollution and promote productivity. However, the problem remains to be solved of how to achieve the trade-off between reducing CO2 emissions and maintaining economic growth when switching from various fuels to electricity under the policy support. In view of this, after analyzing the effects of exogenous shocks in various fuel demands based on impulse response functions of several vector autoregression models, this paper measures the current and long-term impacts of electrification on GDP and CO2 emissions. Finally, some typical cases of replacement of fossil-fueled appliances by electrical counterparts encouraged by the government are assessed. The main findings are: (1) Almost all of the exogenous shocks in fuel demands have positive effects on both GDP and CO2 emissions, while the gas shock has a slightly negative effect on GDP; (2) Carbon intensity decreases and even CO2 emission reductions with increased GDP are potentially achieved, in both current and permanent periods, for coal-electricity and oil-electricity switching, while gas-electricity switching is not a wise choice in view of CO2 emission reduction in the long run; (3) The alternative electric appliances for electrification have very different impacts on CO2 emission reduction.
    Keywords: Fuel-switching; Inter-fuel substitution; Electrification; CO2 emissions; Economic growth
    JEL: Q54 Q40
    Date: 2018–04–10
  3. By: HuiHui Liu (Academy of Chinese Energy Strategy, China University of Petroleum, Beijing); ZhongXiang Zhang (Ma Yinchu School of Economics and China Academy of Energy, Environmental and Industrial Economics, Tianjin University, Tianjin); ZhanMing Chen (Department of Energy Economics, School of Economics, Renmin University of China, Beijing); DeSheng Dou (Academy of Chinese Energy Strategy, China University of Petroleum, Beijing)
    Abstract: The regulated price mechanism in China’s power industry has attracted much criticism because of its incapability to optimize the allocation of resources. To build an “open, orderly, competitive and complete” power market system, the Chinese government launched an unprecedented marketization reform in 2015 to deregulate the electricity price. This paper examines the impact of the electricity price deregulation in the industry level. We first construct two-stage dynamic game models by taking the coal and coal-fired power industries as the players. Using the models, we compare analytically the equilibriums with and without electricity regulation, and examine the changes in electricity price, electricity generation, coal price and coal traded quantity. The theoretical analyses show that there are three intervals of the regulated electricity sales prices which influence the impact of electricity price deregulation. Next, we collect empirical data to estimate the parameters in the game models, and simulate the influence of electricity deregulation on the two industries in terms of market outcome and industrial profitability. Our results suggest that the actual regulated electricity price falls within the medium interval of the theoretical results, which means the price deregulation will result in higher electricity sales price but lower coal price, less coal traded amount and less electricity generation amount. The robustness analysis shows that our results hold with respect to the electricity generation efficiency and price elasticity of electricity demand.
    Keywords: China, electricity deregulation, reform, coal industry, power industry
    JEL: Q41 Q43 Q48 L94 L98
    Date: 2018–04
  4. By: Jose-Miguel Abito; Christopher R. Knittel; Konstantinos Metaxoglou; André Trindade
    Abstract: We show that inefficiencies from having separate markets to correct an environmental externality are significantly mitigated when firms participate in an integrated product market. Firms take into account the distribution of externality prices and reallocate output from markets with high prices to markets with low prices. Investment in cleaner and more efficient capacity serves as an additional mechanism to reallocate output, which increases the marginal benefit of investment, and consequently improves longer-term outcomes. Using data from an integrated wholesale electricity market, we estimate a dynamic structural model of production and investment to bound the loss from separate markets for carbon dioxide emissions, and quantify the extent to which optimal investment can compensate for the loss. Despite the lack of the “invisible hand” of a single emissions market, profit-maximizing firms can play a crucial role in coordinating otherwise uncoordinated environmental regulations.
    JEL: L2 L5 L94 Q48 Q53 Q54
    Date: 2018–04
  5. By: Asongu, Simplice
    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
  6. By: Wangsness, Paal Brevik (Institute of Transport Economics – Norwegian Centre for Transport Research)
    Abstract: The road transport market has many market imperfections such as local and global pollution, accidents, noise and road wear. Electric vehicles (EVs) avoid some of these by not having any tailpipe CO2 emissions, but they still contribute to external costs such as congestion. Our research questions are: What characterizes the set of secondbest road prices for internalizing external costs from driving EVs and ICEVs when you also have distortionary labor taxes and binding government budget constraints? How are these prices affected by distortions elsewhere in the economy? How does this second-best pricing fit with government set goals of reducing CO2 emissions? This paper further develops an analytical framework for assessing first- and secondbest road prices on vehicle kilometers, extending it to include EVs and externalities that vary geographically and by time of day. Expressions for the optimal road prices are derived analytically, and then solved numerically. We find that optimal road prices largely vary with external cost, giving high prices for driving in cities during peak hours, and relatively low prices for driving in rural areas. We also see that the road prices’ interactions with the rest of the fiscal system have implications for determining the optimal set of road prices. However, the optimal set of road prices leads to little or no reductions in carbon emissions with the currently recommended social cost of carbon estimates. This implies that any required reduction in CO2emissions will require a shadow price that exceeds the current social cost estimate.
    Keywords: road pricing; road transport externalities; electric vehicles; government budget; constraints; tax interaction; CO2 emission constraints
    JEL: H21 H23 Q54 Q58 R41 R48
    Date: 2018–04–11
  7. By: Massimiliano Corradini; Valeria Costantini; Anil Markandya; Elena Paglialunga; Giorgia Sforna
    Abstract: The EU low-carbon strategy includes different complementary policies. Potential interactions between instruments and timing of their implementation can influence the cost and likelihood of achieving the targets. We test the interactions between the three main pillars of the EU strategy through a dynamic CGE model (GDynEP) with a time horizon of 2050. Main results are: i) going for the unilateral EU carbon mitigation target without any complementary technological policy will produce large economic losses; ii) by investing in clean energy technologies (energy efficiency and renewable energy) with a carbon tax revenue recycling mechanism, these losses will substantially decrease; iii) when complementary clean energy technology policies are implemented, the optimal timing of binding targets changes; iv) the higher the contribution to clean energy technologies, the larger the economic gains in early adoption of challenging abatement targets.
    Keywords: EU low-carbon strategy; dynamic CGE model; GTAP; abatement optimal timing; policy mix design; clean energy technologies
    JEL: H21 O32 Q47 Q54
    Date: 2018–04
  8. By: Eeva Säynäjoki; Seppo Junnila
    Abstract: Urban planners are in a unique position to steer and regulate urban regeneration. Given the massive material flows of new construction, it seems evident that the environmental objectives of urban planning should target the immediate development phase as well as the future use phase of the built environment. Nevertheless, the potential of urban planning to contribute to mitigation of climate change is often only considered to lie in the use phase. Densification, improved public transportation infrastructure and new energy efficient buildings are seen to be the core elements of sustainable urban development. However, the gains attributed to reductions in transport and housing emissions contribute to climate change mitigation only after the demerits of new construction are redeemed.Within the current time frame of climate change mitigation targets, the negative effect of the immediate emissions from construction becomes extremely relevant. Multiple studies have stressed the rising importance of the construction phase in a building’s or residential area’s life cycle GHG emissions. In addition to emissions from aboveground construction, earthworks account for a considerable amount of GHG emissions. In Finland, the yearly consumption of natural mineral aggregates is approximately 100 million tonnes, and local depletion of materials gradually lengthens the transport distances. Surpluses of soil and blasted rocks are more often seen as being troublesome to discard as opposed to being useful resource. The purpose of this study was to investigate if reducing the GHG emissions of earthworks could be a relevant part of sustainable urban planning.A single case study was conducted to assess the magnitude of GHG reduction that can be achieved by an urban planner’s control over earthworks. The case area was a 120 hectare wide residential development for 5,000 inhabitants, located in the Northwest corner of Helsinki, the capital of Finland. The case study covered three planning solutions that intended to reduce the transportation of rock and soil materials: (1) local use of blasted stone, (2) a hill made of surplus clay, and (3) minimal refurbishment of a pond. The three planning solutions reduced the GHG emissions of earthworks by 2,360 tonnes. In addition, particle emissions were reduced by 420 kg. The immediate GHG emissions savings were equivalent to 250 inhabitants giving up use of private vehicles for 10 years.
    Keywords: case studies; earthworks; Environmental Sustainability; GHG emissions; Urban Planning
    JEL: R3
    Date: 2017–07–01
  9. By: Juudit Ottelin; Jussi Vimpari; Seppo Junnila
    Abstract: Building integrated renewable energy production, such as solar energy solutions, reduce the greenhouse gas emissions (GHG) caused by operational energy consumption of buildings. What is less understood, however, is how the investment in these sort of energy solutions affects the overall GHG emissions caused by the person or the company that makes the investment.In general, all economic activities cause environmental impacts. Thus, it has been suggested that the boundaries of environmental assessments should not be based on physical boundaries, but rather monetary budgets. For example, carbon footprints of consumers have revealed that investments in energy efficiency do not only reduce the GHG emissions caused by energy consumption, but also the emissions caused by consumption of other goods and services. This is due to the reality that consumers must withdraw the funds for the investment from some other purposes. However, when the investment in energy efficiency starts to make profit, the situation is reversed. The money saved from declining energy consumption is used on goods and services, which again increases the GHG emissions. The phenomenon is called "the environmental rebound effect". The rebound effect caused by an investment is usually negative, meaning additional GHG reductions. The rebound effect caused by (energy) savings is usually positive, meaning additional GHG emissions prompted by the new consumption enabled by the savings.The purpose of this study is to assess the carbon footprint, and demonstrate the rebound effects over time, caused by investments in large scale building integrated solar energy production. The study takes into account the embodied GHG emissions in the new energy system. The rebound effects are estimated with various assumptions about the alternative consumption or investment. The study highlights why the monetary and time dimensions are important, when considering the overall environmental impacts of green investments.
    Keywords: building integrated energy production; carbon footprint; Rebound effect; Solar Energy
    JEL: R3
    Date: 2017–07–01
  10. By: Loeschel, Andreas; Pei, Jiansuo; Sturm, Bodo; Wang, Ran; Buchholz, Wolfgang; Zhao, Zhongxiu
    Abstract: In this study, the real demand for global and local environmental protection in Beijing, China, is elicited and investigated. Participants from Beijing were offered the opportunity to contribute to voluntary climate change mitigation by purchasing permits from two Chinese CO2 emissions trading schemes (ETS). Purchased permits were withdrawn from the ETS. Since CO2 emissions mitigation is inevitably linked to other local benefits like the reduction in emissions of air pollutants, the aim of our study is to establish the demand for local and global environmental protection. To this end, Beijing and Shenzhen ETS permits were offered. The result is that at low prices the demand for Beijing ETS permits is significantly higher than for Shenzhen ETS permits indicating that a substantial part of the revealed demand for voluntary climate change mitigation in Beijing is driven by concerns for local co-benefits of CO2 emissions reduction. Our research identifies the important role of private benefits in the voluntary provision of the global public good climate change mitigation and provides first experimental evidence for China.
    Date: 2018
  11. By: Georgy Safonov (National Research University-Higher School of Economics); Sh. Enkhbayar (Economic Research Institute for Northeast Asia (ERINA))
    Abstract: The Paris Climate Agreement established a new global target of combating global warming above 2 degrees Celsius. Over 180 countries have already committed to reduce or limit carbon emissions by 2030. This climatic goal will lead to the transformation and deep decarbonization of the global economy, with nearly zero carbon emissions soon after 2050. Northeast Asian countries are responsible for 40% of global CO2 emissions, and they have the technological and resource potential for decarbonization both domestically and within regional cooperation projects.
    Keywords: climate change mitigation; deep decarbonization pathways; low-carbon development; Northeast Asia
    JEL: Q43 Q54 Q56 Q58 N15
  12. By: Padhan, Hemachandra (National Institute of Technology (NIT)); Haouas, Ilham (Abu Dhabi University); Sahoo, Bhagaban (Anandapur College); Heshmati, Almas (Jönköping University, Sogang University)
    Abstract: This study uses 1971-2013 panel data to explore the implications of growth, wealth disparities and energy consumption on carbon emissions in a sample of Next-Eleven (N-11) countries. It uses modern econometric techniques to highlight a long-run interplay between selected variables in the carbon emissions function for all the N-11 nations and long-run interactions among the series analyzed. Contrastingly, it also shows that economic growth, income inequalities and energy consumption accelerate CO2 emissions. In addition to examining the effects of the wealth disparities square, the study also uses the Environmental Kuznets Curve hypothesis in the context of the N-11 states. Its findings suggest that policymakers should curb rising income inequalities through effective redistributive measures such as tax transfers (cash transfers) and taking up other expenditure programs for the poor. Moreover, the Indian government should emphasize on an energy-reducing strategy policy to reduce income inequalities and achieve sustainable development.
    Keywords: CO2 emissions, income inequality, panel cointegration, Next-Eleven countries
    JEL: Q50 O15 C23
    Date: 2018–03
  13. By: Ana Raquel Diaz Vazquez (European Commission - JRC); Natalia Caldes Gomez (Ciemat)
    Abstract: In the light of the EU Energy and Climate framework, exporting solar electricity from South to Central and Northern Europe can contribute to various EU strategic objectives. However, as of today, some challenges prevent its materialization. To address some of these obstacles and as part of the Smart Specialization Platform on Energy activities, this policy report provides answers to two key questions: (i) what is the value proposition of solar electricity exports in Europe? (ii) How can these projects be feasible?
    Keywords: Smart Specialisation, Solar partnership, Cooperation mechanisms, Renewable generation a distribution
    Date: 2018–02
  14. By: Hain, Martin; Schermeyer, Hans; Uhrig-Homburg, Marliese; Fichtner, Wolf
    Abstract: Renewables introduce new weather-induced patterns and risks for market participants active in the energy commodity sector. We present a flexible framework for power spot prices that is capable of incorporating a weather model for the joint distribution of local weather conditions. This not only allows us to make use of a long history of local weather data in the calibration procedure but also makes it possible to assess how changes in the renewable generation portfolio impact the characteristics of future wholesale spot prices. Empirical tests demonstrate the model's capability to reproduce salient features of market variables. We furthermore show why our model offers unique benefits for market players compared to existing approaches.
    Date: 2017
  15. By: Lam, J.; Li, V.; Reiner, D.; Han, Y.
    Abstract: Nuclear power can play a role in reducing CO2 emissions and improving energy security. Public attitudes to nuclear safety governance will be critical in whether a large-scale rollout of nuclear power will be successful, so we commissioned a survey of 1,007 members of the British public to understand the determinants of such views. In particular, we focus on the role of trust in government, which has been largely neglected as a subject of study. We find that higher risk perceptions of new nuclear power technologies is associated with lower overall government trustworthiness, while higher engagement levels, being male and intentions to vote Conservative increase trustworthiness. Risk perceptions towards old and the new nuclear technologies do not differ significantly, which raises questions about the view that newer defence-in-depth nuclear technologies can reduce public fear of nuclear power. To build public trust, the UK government must demonstrate its trustworthiness in nuclear safety governance, especially along the dimensions of integrity, reliability and openness. Further, improving stakeholder engagement and thus increasing the levels of public satisfaction towards the government are necessary. Our novel research methodology of determining government trustworthiness in relation to public risk perceptions, technical knowledge, and stakeholder engagement is more broadly applicable and can be transferred to other subject areas and to countries where public concerns over nuclear safety and energy security are significant.
    Keywords: Nuclear power, risk perceptions, government trust, nuclear safety governance
    JEL: D81 Q42 Q48
    Date: 2018–04–11
  16. By: Croner, Daniel; Koller, Wolfgang; Mahlberg, Bernhard
    Abstract: The Paris agreement has prescribed strict Greenhouse Gas (GHG) reduction targets for participating countries. Implementation of climate protection policies is challenging, especially if the economy is export driven. We introduce a hierarchical structural decomposition model in order to investigate the effects of exports, imports, economic structure, consumption patterns, consumption level, outsourcing and insourcing on national GHG emissions. This model is applied to the data of national environmental accounts and to a harmonized and price-deflated series of national input-output tables of Austria for the years 1995, 2000, 2005 and 2010. Over the whole time period, the results indicate that the final demand effect was the main driver of GHG emissions, with exports as most important factor. Surprisingly, emission intensity contributed to an increase of GHG emissions during the period 2000-2005 as well, mostly due to increasing emission intensity in the transport sector.
    Keywords: Leontief Model; Emissions Embodied in Exports; Trade Integration; Economic Structure; CO2-Intensity; Competitiveness
    JEL: C67 L16 Q53 Q56
    Date: 2018–02–15
  17. By: Abada, I.; Ehrenmann, A.; Lambin, X.
    Abstract: Following the development of decentralized generation and smart appliances, energy communities have become a phenomenon of increased interest. While the benefits of such communities have been discussed, there is increasing concern that inadequate grid tariffs may lead to excess adoption of such business models. Furthermore, snowball effects may be observed following the effects these communities have on grid tariffs. We show that restraining the study to a simple cost-benefit analysis is far from satisfactory. Therefore, we use the framework of cooperative game theory to take account of the ability of communities to share gains between members. The interaction between energy communities and the DSO then results in a non-cooperative equilibrium. We provide mathematical formulations and intuitions of such effects, and carry out realistic numerical applications where communities can invest jointly in solar panels and batteries. We show that such a snowball effect may be observed, but its magnitude and its welfare effects will depend on the grid tariff structure that is implemented, leading to possible PV over-investments.
    Keywords: Energy communities, Cooperative game theory, Non-cooperative game theory, Decentralized power production, Consumer participation, Micro-grids
    JEL: C61 C71 C72 D61 O13 Q42 Q49
    Date: 2018–04–18
  18. By: Lynch, Muireann Á; Devine, Mel; Bertsch, Valentin
    Date: 2018
  19. By: Tore Haugen; Dave Collins
    Abstract: The Paris Agreement adopted by a consensus of 195 countries in December 2015 went into effect on the 4th November 2016. In Norway, as one of the countries that had ratified the agreement, the government has introduced the "Green shift – climate and environmentally friendly restructuring" as the way forward to reduce the climate gas emissions in 2050. One of the most important measures is reducing emissions in the building and construction sector.The purpose of this paper is to explore how we can develop a stronger and more integrated approach from the planning and design of sustainable buildings to sustainable facilities management (FM). We have to bridge the traditional gap between design, construction and FM by developing effective solutions analysed over the life cycle perspective of buildings. The answer to the "Green shift" for real estate and facilities management (FM) also needs to be a coordinated approach from the strategic and tactical levels in organisations to the implementation on operational level.Our theoretical framework is based on models for life cycle analysis of buildings, and organisational models for sustainable FM. In the case studies conducted by our Master students over the last two years, they have employed how sustainable FM is being handled strategically and operationally in large public institutions managing their own buildings. The main focus has been on university buildings, but some other institutions representing cooperate real estate have also been included in the studies.This paper takes the form of an exploratory approach based of the different case studies. Our findings indicate that the integrated approach based on an understanding of the life cycle perspective including planning, design, construction and FM are normally present in new construction projects, but the knowledge regarding the environmental impact and reduction of carbon emission gases when designing zero emission buildings are only present in pilot research and development projects.We have looked at how to bridge this gap better from planning to facilities operations and FM, and we see the need to develop better conceptual understanding and communication between the strategic / tactical and operational level in campus operation and development. By way of discovering further exploratory findings, the case studies have been supported by literature research from academic journals as well as documentation from a number of applied projects.
    Keywords: Campus development; Environmental friendly solutions; Life cycle analysis; Sustainable Buildings; Sustainable facilities management
    JEL: R3
    Date: 2017–07–01
  20. By: Kilian, Lutz; Zhou, Xiaoqing
    Abstract: Shocks to the demand for housing that originate in one region may seem important only for that regional housing market. We provide evidence that such shocks can also affect housing markets in other regions. Our analysis focuses on the response of Canadian housing markets to oil price shocks. We document that, at the national level, real oil price shocks account for 11% of the variability in real house price growth over time. At the regional level, we find that unexpected increases in the real price of oil raise real house prices not only in oil-producing regions, but also in other regions. We develop a theoretical model of the propagation of real oil price shocks across regions that helps understand this finding. The model differentiates between oil-producing and non-oil-producing regions and incorporates multiple sectors, trade between provinces, government redistribution, and consumer spending on fuel. We empirically confirm the model prediction that oil price shocks are transmitted to housing markets in non-oil-producing regions by the government redistribution of oil revenue and by increased interprovincial trade.
    Keywords: Canada; Housing; oil price; redistribution; regional heterogeneity; resource boom
    JEL: F43 Q33 Q43 R12 R31
    Date: 2018–04
  21. By: Ruddell, Keith (Research Institute of Industrial Economics (IFN))
    Abstract: Competition between oligopolist electricity generators is inhibited by transmission constraints. I present a supply function equilibrium (SFE) model of an electricity market with a single lossless, but constrained, transmission line. The market admits equilibria in which generator withhold energy in order to induce congestion, which further increases their local market power. Under appropriate assumptions on cost and demand functions, I obtain a planar autonomous system of ordinary differential equations for the SFE. Computational methods are developed to solve the system while respecting monotonicity constraints on the supply functions. Using these methods I can calculate SFE in network markets that range from fully isolated to fully integrated. I also find network markets for which the SFE is not unique.
    Keywords: Supply function equilibrium; Electricity markets; Market power; Locational pricing of electricity
    JEL: C62 C65 D43 L13 L94
    Date: 2018–04–20
  22. By: Bertsch, Valentin; Devine, Mel; Sweeney, Conor; Parnell, Andrew C.
    Date: 2018
  23. By: Gustavo Carvalho (University of Toronto)
    Abstract: Municipalities are crucial stakeholders in the response to climate change. Cities are major sources of greenhouse gas emissions and, due to their higher building and population densities, will bear the brunt of the economic and social costs imposed by extreme weather and the impact of climate change. Ontario municipalities have traditionally funded their investments from property taxes, user fees, and transfers from higher levels of government, but these sources will not be sufficient to fund both current expenditures and future capital needs. This paper explores an alternative: climate finance, the provision of financing by private actors for projects intended to decrease carbon emissions or make cities more resilient to the impacts of climate change. It analyzes four climate financing tools used in other jurisdictions – green bonds, environmental impact bonds, catastrophe bonds, and green banks – and their feasibility under current Ontario regulations. Not all instruments would be equally suitable to Ontario municipalities; each offers trade-offs that must be weighed before implementation. Still, the potential for climate financing is huge and it has a role to play in long-term climate infrastructure projects requiring large upfront investments.
    Keywords: climate finance, debt finance, green bonds, environmental impact bonds, catastrophe bonds, green banks
    JEL: H23 H71 H74 Q54
    Date: 2018–03
  24. By: Coxhead, Ian (University of Wisconsin); Grainger, Corbett (University of Wisconsin)
    Abstract: Fossil fuel subsidies are widespread in developing countries, and reform efforts are often derailed by disputes over the likely distribution of gains and losses. Subsidy reform is transmitted to households through changes in energy prices and prices of other goods and services, but also factor earnings. Most empirical studies focus on consumer expenditures alone, and computable general equilibrium analyses typically report only total effects without decomposing them by source. Meanwhile, analytical models neglect important open-economy characteristics relevant to developing countries. In this paper we develop an analytical model of a small open economy with a pre-existing fossil fuel subsidy and identify direct and indirect impacts of subsidy reform on real household incomes. Our results, illustrated with data from Viet Nam, highlight two important drivers of distributional change: the mix of tradable and nontradable goods, reflecting the structure of a trade-dependent economy, and household heterogeneity in sources of factor income.
    JEL: F18 O25 Q43
    Date: 2018–03
  25. By: Khobai, Hlalefang
    Abstract: This paper applied the ARDL bounds test approach and the VECM test technique to examine the long run relationship and direction of causality between renewable energy consumption and economic growth in Argentina. Quarterly time series data was employed in this study covering a period between 1990 and 2014. Trade openness, capital and employment were included in the study to form a multivariate framework. The results established that there is a long run relationship between the variables. The VECM test technique confirmed a unidirectional causality flowing from economic growth to renewable energy consumption. This implies that energy conservation policies may not harm the economic growth. The study, therefore, suggest that an appropriate and effective energy policy should be implemented in the long run.
    Keywords: Renewable energy consumption, Economic growth, Causality, Argentina
    JEL: C32 D04 Q0 Q01 Q42 Q47
    Date: 2018–03–09
  26. By: Agnieszka Zalejska-Jonsson; Rosane Hungria-Gunnelin
    Abstract: Considering the climate change and urgent need for adaption of a new approach in building design and construction, the feedback from users is a highly valuable data. It is imperative to gather, analyse, and compare data on measured consumption for the purpose to increase our understanding about energy performance. Earlier research results indicate that energy and environmental targets are hard to deliver post-occupancy. It has been suggested that difference in the expected and delivered performance might be related to problems or lack of commissioning, inadequate building operation and even occupants’ behaviour. In this paper, we intent to test the assumption that the quality of the designed building is expressed in its final product. We examine a number of building features where end-users reported problems and discuss their potential effect on the buildings’ energy performance. We investigate if the occurrence of problem varies depending on climate zone, production year, building size and energy performance class. The data for this study was collected through survey. A total of 1,563 letters were posted with regular mail to all chairmen of condominium boards of residential estates built in Sweden between 2006 and 2014. We received 436 responses. We analysed data with help of descriptive statistics, principle component analysis (PCA) and Mann-Whitney test. PCA is used to group factors describing different quality problems and the Mann-Whitney test is used to investigate the significance level of differences in occurrence of specific-feature problems within subgroups. The results suggest that problems which occur in the new produced residential buildings are related to construction quality and may have significant effect on energy performance. The analysis of data suggests that new construction faces problem with building air tightness (especially the quality of windows and doors) and installations (HVAC), which have a direct impact on energy performance. Moreover, we observe that quality varies over time and may be dependent on market conditions.
    Keywords: Condominium apartments; Construction quality; Energy Performance; Residential Real Estate
    JEL: R3
    Date: 2017–07–01
  27. By: Schwarz, Hannes; Kotthoff, Lars; Hoos, Holger; Fichtner, Wolf; Bertsch, Valentin
    Abstract: The optimization of decentralized energy systems is an important practical problem that can be modeled using stochastic programs and solved via their large-scale, deterministic equivalent formulations. Unfortunately, using this approach, even when leveraging a high degree of parallelism on large high-performance computing (HPC) systems, finding close-to-optimal solutions still requires long computation. In this work, we present a procedure to reduce this computational effort substantially, using a stateof-the-art automated algorithm configuration method. We apply this procedure to a well-known example of a residential quarter with photovoltaic systems and storages, modeled as a two-stage stochastic mixed-integer linear program (MILP). We demonstrate substantially reduced computing time and costs of up to 50% achieved by our procedure. Our methodology can be applied to other, similarly-modeled energy systems.
    Keywords: OR in energy,large-scale optimization,stochastic programming,uncertainty modeling,automated algorithm configuration,sequential model-based algorithm configuration
    Date: 2017
  28. By: Mohamed Boly (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper empirically investigates the link between foreign aid and pollution, specifically CO2 emissions in developing countries. We use a more complete and recent dataset to re-assess the environmental impact of foreign aid. Focusing on 112 aid recipient countries over the period 1980 - 2013, we find that the effect of aid depends on the donor, with multilateral aid more likely to reduce pollution than bilateral aid for which we find no effect. However, when we more precisely look at the composition of bilateral aid, we find it has an effect when specifically targeted toward environment. This effect is non-linear, since we observe a pollution-reducing effect only for important amounts of bilateral environmental aid.
    Keywords: CO2 emissions, Foreign aid, Environmental aid, Threshold effect
    Date: 2018–03–22
  29. By: Jiefang Ma; Queena K. Qian; Henk J. Visscher; Kun Song
    Abstract: Overview: Behavioural economics (BE) provides a perspective to better understand and predict the decision-making mechanism of individuals. In the last decades, numerous literature discussed the application of BE in various subjects from both theoretical and practical aspects. There is also an increasing trend for the governments to incorporate the BE approach into the policy-making process.To date, however, research on the role of BE in energy policy are mainly at the academic level. Some critical researchers argue that BE needs to establish its reliability before generalising the laboratory results to policy initiatives.This paper will take a closer look at the influence BE has had on both residential energy efficiency and policy-making, and provide an estimation of further research orientations.Methods: This research will provide a panorama of the literature in BE with an application of the energy efficiency issue, collect examples that integrate BE approach in the making of policy to promote residential energy efficiency worldwide, summarise the generalised principles, tools and models, and accordingly, discuss the future opportunities, challenges and limitations.Results: Research of BE has been widespread in recent years, especially in developed countries, with respect to policy-making. In the field of residential energy efficiency, well-designed BE policies can contribute by providing countermeasures towards, or even taking advantage of individuals’ irrational behaviour and prevalent cognitive biases, and influence residences' behaviour patterns of energy usage. However, interest in research will not automatically translate into actual action steps. More empirical research and rigorous experiments should be carried out to realise the implementation of BE policy.Conclusions: This research highlights the potential of BE to improve the residential energy efficiency. The insights from BE can help policymakers to design effective differentiated policy interventions through the understanding and prediction of consumer behaviour, especially phenomena that neoclassical economics failed to explain, to better achieve the energy efficiency goals. Given the current overall trend and vast scope, the issue of BE is likely to continue and deserves a further attention.
    Keywords: Behavioural Economics; Building Energy Efficiency; energy behaviour; Housing Policy
    JEL: R3
    Date: 2017–07–01
  30. By: Thomas Carver (Motu Economic and Public Policy Research); Patrick Dawson (Motu Economic and Public Policy Research); Suzi Kerr (Motu Economic and Public Policy Research)
    Abstract: New Zealand is the first, and still the only, country to include forest landowners as full and, in some cases, mandatory participants in a greenhouse gas (GHG) emissions trading scheme (ETS), the NZ ETS. Carbon sequestration by forestry continues to be an important part of New Zealand’s contribution to its global obligations to reduce emissions. This paper describes the policy changes to the NZ ETS since 2008 that directly affect forestry; assesses the effectiveness of the scheme; explores who is benefiting from it; and outlines issues facing forestry in the NZ ETS moving forward. We find that forest owners have responded to the financial incentives from the NZ ETS in a rational way. Both afforestation and deforestation decisions appear to have been influenced by the emissions price and/or expectations about the emissions price in the future. However, the scheme has been beset by challenges. The collapse in the global carbon price and, associated with this, the proliferation of international Kyoto credits of questionable environmental integrity, combined with the government decision to delay New Zealand’s delink from international markets until 2015, greatly reduced the price signal for forestry from the NZ ETS from 2012 to 2015. A weak price signal, coupled with ongoing policy uncertainty surrounding the NZ ETS, has limited the effectiveness of the scheme in achieving its forestry goals. Prospects going forward are more positive particularly if the current reform of the ETS can create clear predictable price signals and better manage the complexity of forestry rewards and liabilities, particularly as faced by smaller landowners who are not professional foresters but could potentially participate and reforest.
    Keywords: Water emissions trading, environment, New Zealand, Motu, carbon markets, evaluation
    JEL: Q23 Q54 Q58
    Date: 2017–07
  31. By: Nguyen-Ones, Mai (Dept. of Business and Management Science, Norwegian School of Economics); Steen, Frode (Dept. of Economics, Norwegian School of Economics)
    Abstract: Applying detailed consecutive daily micro data at the gasoline station level from Sweden we estimate a structural model to uncover the degree of competition in the gasoline retail market. We find that retailers do exercise market power, but despite the high upstream concentration, the market power is very limited on the downstream level. The degree of market power varies with both the distance to the nearest station and the local density of gasoline stations. A higher level of service tends to raise a seller’s market power; self-service stations have close to no market power. Contractual form and brand identity also seem to matter. We find a clear result: local station characteristics significantly affect the degree of market power. Our results indicate that local differences in station characteristics can more than offset the average market power found for the whole market.
    Keywords: Gasoline markets; market power; markup estimation; local market competition
    JEL: D22 L13 L25 L81
    Date: 2018–04–19
  32. By: Austin Zwick (University of Toronto)
    Abstract: Fracking has revolutionized international oil and gas markets practically overnight, but its impact on local public finance and governance have largely been overlooked. While operating under federal and state constraints, the key ongoing policy question is whether and to what extent local governments can – and should – have the power to manage the industry’s effects on their communities. This IMFG Paper explores the fiscal health risks associated with the industry, its local revenue generation implications, and what local governments can do to address the spatial and temporal mismatches between the two. As the industry expands internationally, including to Canada, lessons from the United States can inform future regulatory response in other places.
    Keywords: fracking, resource extraction, boom-bust economies, municipal finance
    JEL: H71 H72 H79 Q33 Q38
    Date: 2018–04
  33. By: Jean Pierre Huiban (INRA-ALISS, France); Camilla Mastromarco (University of Salento, Lecce, Italy); Antonio Musolesi (University of Ferrara, Italy); Michel Simioni (INRA, UMR 1110 MOISA, Montpellier, France)
    Abstract: This paper estimates the impact of pollution abatement investments on the production technology of firms by pursuing two new directions. First, we take advantage of recent econometric developments in productivity, effciency analysis and nonparametric kernel regression by adopting a conditional nonparametric frontier analysis. Second, we focus not only on the average effect but also search for potential nonlinearities. We provide new results suggesting that pollution abatement capital affects with a bell-shaped fashion technological catch-up (ineffciency distribution) and does not affect technological change (shifts in the frontier). These results have relevant implications both for modeling and for the purposes of advice on environmentally friendly policy.
    Keywords: Pollution abatement investments, technology, conditional nonparametric frontier analysis, full and partial order frontiers, location-scale nonparametric regression, infinite order cross-validated local polynomial regression, separability condition.
    Date: 2018–09
  34. By: Hübner, Felix; Jung, Jennifer Jana; Schultmann, Frank
    Abstract: Worldwide, nuclear fission is used to produce electricity. On the one hand, the low emission of CO2 is often mentioned as an advantage of this technology. On the other hand, warnings about the dangers of nuclear fission are mentioned. Consequently, an overview about the dangers of ionizing radiation to human beings as well as animals and the environment is important. However, the focus will be on possible health effects for humans with regards to nuclear power plants. In nuclear power plants, both natural types of radiation and artificially produced radiation occur. During normal operation, it is possible that small quantities of this ionizing radiation are released to the environment. In case of nuclear disasters or faults during decommissioning and dismantling processes the consequences of thereby emitted quantities can be even more severe. Reference nuclides vary by reactor type, operating stage and respective incident. At the beginning, different types of radiation and their characteristics and effects on the affected organism are explained. Sensitive organs are emphasized in this context. The individual risk is determined by numerous factors and therefore cannot be predicted. Based on scientific studies and medical publications the hazards of ionizing radiation are compiled. Effects of high exposure of ionizing radiation are well-investigated. Scientists are still divided over the connection between several diseases and the exposure to low doses of ionizing radiation. For this reason, the positions of different international organizations are critically contrasted in this study.
    Date: 2017
  35. By: Dütschke, Elisabeth; Frondel, Manuel; Schleich, Joachim; Vance, Colin
    Abstract: The rebound effect denotes an offset in energy savings that occurs when an individual increases consumption of a good or service following an increase in its efficiency. It has both economic and psychological underpinnings: In addition to the price, income and substitution effects emphasized by economists, psychologists point to the influence of moral licensing, the cognitive process by which individuals justify immoral behavior (e.g. driving more) by having previously engaged in moral behavior (e.g. purchasing a more efficient car). The present review article provides a conceptual and empirical overview of moral licensing, drawing comparisons with economic explanations for the rebound effect. Based on a unifying theoretical model that illustrates how economic and psychological motivations trigger both rebound and moral licensing effects, as well as a review of micro-econometric and experimental evidence, we conclude that consideration of moral licensing is warranted for judging the efficacy of policies targeted at energy consumption and the rebound effect.
    Keywords: substitution effect,income effect,scale effect,moral licensing,moral cleansing
    JEL: D12 Q48
    Date: 2018
  36. By: Gail Cohen; João Tovar Jalles; Prakash Loungani; Ricardo Marto; Gewei Wang
    Abstract: We provide a comprehensive analysis of the relationship between greenhouse gas (GHG) emissions and GDP in China using both aggregate and provincial data. The Kuznets elasticity is about 0.6 for China, higher than that in advanced countries but below that of major emerging markets. The elasticity is somewhat lower for consumption-based emissions than for production-based emissions, providing mild evidence consistent with the “pollution haven” hypothesis. The Kuznets elasticity is much lower for the last three decades than for the three previous decades, suggesting a longer-term trend toward decoupling as China has become richer. Further evidence of this comes from provincial data: richer provinces tend to have smaller Kuznets elasticities than poorer ones. In addition to the trend relationship, we find that the Environmental Okun's Law holds in China.
    Date: 2018–04–11
  37. By: Audi, Marc; Ali, Amjad
    Abstract: This paper has examined the determinants of environmental degradation under the perspective of globalization in the case of selected MENA nations (Jordan, United Arab Emirates, Saudi Arabia, Algeria, Qatar, Lebanon, Egypt, Bahrain, Iran, Morocco, Israel, Kuwait, Oman and Tunisia) over the period of 1980 to 2013. ADF - Fisher Chi-square, Im, Pesaran and Shin W-stat, Levin, Lin & Chu t*, and PP-Fisher Chi-square unit root tests are used for analyzing the stationarity of the variables. This study uses Panel ARDL approach for analyzing the co-integration among the variables. The causality between the variables is checked with the help of Granger Causality/Block Exogeneity Wald Tests. The estimated results of the study show that consumption of energy, economic growth, globalization and density of population have significant and positive relation with quality of environment in case of MENA nations. The results of this study show that most of the independent variables have causal relation with environmental degradation over the selected time period. The study concludes that inverted U-shaped KEC is not existed in the case of MENA nations.
    Keywords: economic development, population density, Globalization, environmental degradation
    JEL: O1 Q53 Q56
    Date: 2018–01
  38. By: Lin, Yu-Hsuan
    Abstract: This study examines the impact of social preferences on the individual incentives of participating in climate coalitions with laboratory experimental evidences. The theoretical result suggests that, when a player was inequality-neutral, a dominant strategy equilibrium could exist. However, individuals with social preference may lead a vacillated coalition formation. Joining or not joining depend on the player was critical or non-critical to an effective coalition respectively. The laboratory experimental result shows that players were inequality-averse and the coalition was usually larger than the equilibrium size but unstable. The inequality-averse attitudes have significantly positive impact on the incentives of participation. Particularly, when they are non-critical players, egalitarians are likely to give up the free riding benefit by joining a coalition. Our findings help to understand the climate coalition formation.
    Keywords: international environmental agreements; social preference; inequality-aversion; experimental design; climate coalition
    JEL: C91 D63 D71 Q54 Q58
    Date: 2018–03
  39. By: Marc A. C. Hafstead; Roberton C. Williams III; Yunguang Chen
    Abstract: This paper assesses the use of full-employment computable-general equilibrium (CGE) models to predict the labor-market effects of environmental policy. Specifically, it compares the predictions of a standard full-employment CGE model with those of a new search-CGE model with labor-search frictions and resulting unemployment (but that is otherwise identical to the full-employment model). The search-CGE captures key labor market details, including a distinction between the extensive margin of labor demand (the number of employees) and the intensive margin (the number of hours each employee works). We find that some key results are robust across the two models, such as the reallocation of labor across sectors in response to a carbon tax and the overall change in total labor demand. However, the full-employment model seriously overestimates the economy-wide net change in the number of jobs (by a factor of more than 2.5 for a carbon tax with revenues returned lump-sum to households, and by a factor of almost 3.5 when carbon tax revenues are used to reduce payroll taxes).
    JEL: E24 H23 J64 Q52 Q58
    Date: 2018–04
  40. By: Gianluca Cubadda (DEF and CEIS, University of Rome "Tor Vergata"); Alain Hecq (Maastricht University); Sean Telg (Maastricht University)
    Abstract: This paper introduces the notion of common noncausal features and proposes tools to detect them in multivariate time series models. We argue that the existence of co-movements might not be detected using the conventional stationary vector autoregressive (VAR) model as the common dynamics are present in the noncausal (i.e. forward-looking) component of the series. In particular, we show that the presence of a reduced rank structure allows to identify purely causal and noncausal VAR processes of order two and higher even in the Gaussian likelihood framework. Hence, usual test statistics and canonical correlation analysis can still be applied, where both lags and leads are used as instruments to determine whether the common features are present in either the backward-or forward-looking dynamics of the series. The proposed definitions of co-movements also valid for the mixed causal-noncausal VAR, with the exception that an approximate non-Gaussian maximum likelihood estimator is necessary for these cases. This means however that one loses the benefits of the simple tools proposed in this paper. An empirical analysis on European Brent and U.S. West Texas Intermediate oil prices illustrates the main findings. Whereas we fail to find any short run co-movements in a conventional causal VAR, they are detected in the growth rates of the series when considering a purely noncausal VAR.
    Keywords: causal and noncausal process, common features, vector autoregressive models, oil prices
    JEL: C12 C32 E32
    Date: 2018–04–23
  41. By: Kraft, Sophia
    Abstract: Die Energiewende in Deutschland bringt große Veränderungen im Stromversorgungssystem mit sich. Auf der einen Seite wächst der Anteil erneuerbarer Energien, insbesondere im Verteilnetz. Auf der anderen Seite verlagern sich Verbrauchsschwerpunkte, beispielsweise durch Elektromobilität. Aufgrund von Einspeise- und Lastspitzen verschärfen sich lokale kritische Netzsituationen und der Bedarf an Systemflexibilität steigt. Gleichzeitig werden konventionelle Kraftwerke von den Erneuerbare-Energien-Anlagen zunehmend vom Netz verdrängt. Folglich können sie nicht mehr wie gewohnt die zur Systemstabilität notwendigen Systemdienstleistungen bereitstellen. Aus diesem Grund bedarf es in Zukunft zur Gewährleistung einer sicheren und stabilen Stromversorgung neuer Rahmenbedingungen hinsichtlich der vier Systemdienstleistungen: Frequenzhaltung, Spannungshaltung, Versorgungswiederaufbau und Betriebsführung. Ziel der vorliegenden Arbeit ist es, die Frage zu klären, wie ein Smart Market-Konzept ausgestaltet sein muss, damit zur Aufrechterhaltung eines sicheren Stromversorgungssystems Anreize für netzdienliches Verhalten von regionalen Anbietern von Systemdienstleistungen gesetzt werden. Die Arbeit zeigt durch ihre Analyse, dass der Bedarf an Systemdienstleistungen insgesamt zunehmen wird. Dieser Bedarf kann zukünftig technisch durch eine alternative Anbieterstruktur gedeckt werden. Für die erforderliche Koordination zwischen Netz und Markt wird das Smart Market-Modell "Flexibilitätsplattform" entworfen. Auf Basis einer vollständig digitalisierten Netzinfrastruktur können über diese Webplattform netzdienliche Flexibilitäten - insbesondere aus unteren Spannungsebenen - bei absehbaren kritischen Netzsituationen gehandelt werden.
    Date: 2018
  42. By: D Aromi; A Clements
    Abstract: In recent years there has been a growing interest in the analysis of large volumes of unscheduled news flow. Such news flow has often been used as an exogenous variable for explaining asset returns and or volatility. This paper examines the dynamic relationship between news flow and asset price dynamics from a different perspective. A novel index of media attention is proposed, and in the context of the crude oil market the linkages between media attention and returns and volatility are examined. It is found that media attention reacts strongly to shocks to volatility whereas there is little impact in the opposite direction. As such media attention seems to inherit the persistence in volatility but offers only a little more in terms of information relevant to future volatility. Therefore media attention does not offer a great deal of new news useful for explaining volatility.
    Keywords: News, media, linguistic analysis, volatility, crude oil
    JEL: C22 G00
    Date: 2018–03–20

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