nep-ene New Economics Papers
on Energy Economics
Issue of 2018‒09‒03
53 papers chosen by
Roger Fouquet
London School of Economics

  1. How much household electricity consumption is actually saved by replacement with Light-Emitting Diodes (LEDs)? By Hiroki Onuma; Shigeru Matsumoto; Toshi H. Arimura
  2. Financing Green Growth By Gregor Semieniuk; Mariana Mazzucato
  3. Russian oil and gas sector in 2017 By Bobylev Yuri
  4. The Effects of Energy Price Shocks on Household Food Security in Low-Income Households By Tuttle, Charlotte; Beatty, Timothy K. M.
  5. Business Models for Energy Suppliers Aggregating Flexible Distributed Assets and Policy Issues Raised By Specht, Jan Martin; Madlener, Reinhard
  6. Household willingness to pay for green electricity in Poland By Anna Kowalska-Pyzalska; David Ramsey
  7. An empirical analysis of green energy adoption among residential consumers in Poland By Anna Kowalska-Pyzalska
  8. Wave after Wave: Contagion Risk from Commodity Markets By Algieri, Bernardina; Leccadito, Arturo
  9. The Role of Fossil Fuels in the U.S. Food System and the American Diet By Canning, Patrick; Rehkamp, Sarah; Waters, Arnold; Etemadnia, Hamideh
  10. Imperfect Competition in Electricity Markets with Renewable Generation: The Role of Renewable Compensation Policies By Brown, David P.; Eckert, Andrew
  11. Emission price, output-based allocation and consumption tax: Optimal climate policy in the presence of another country’s climate policy By Kaushal, Kevin Raj
  12. Losing to Blackouts: Evidence from Firm Level Data By Daniel Gurara; Dawit Tessema
  13. Waste-to-energy innovations powering a circular economy By McCabe, Bernadette
  14. A note on averaging day-ahead electricity price forecasts across calibration windows By Katarzyna Hubicka; Grzegorz Marcjasz; Rafal Weron
  15. Consumers’ attitudes on carbon footprint labelling. Results of the SUSDIET project By Feucht, Yvonne; Zander, Katrin
  16. Price Setting and Volatility: Evidence from Oil Price Volatility Shocks By Matthew Klepacz
  17. Point and Density Forecasts of Oil Returns: The Role of Geopolitical Risks By Vasilios Plakandaras; Rangan Gupta; Wing-Keung Wong
  18. Shadow Pricing of Electric Power Interruptions for Distribution System Operators in Finland By Kufeoglu, S.; Gunduz, N.; Chen, H.; Lehtonen, M.
  19. Economic Evaluation of Maintenance Strategies for Offshore Wind Turbines Based on Condition Monitoring Systems By Walgern, Julia; Peters, Lennart; Madlener, Reinhard
  20. Wind Energy Industry's Contribution to the North Dakota Economy in 2016 By Coon, Randal C.; Hodur, Nancy M.; Bangsund, Dean A.
  21. Wind Energy Industry's Contribution to the North Dakota Economy in 2016 By Coon, Randal C.; Hodur, Nancy M.; Bangsund, Dean A.
  22. Performance-Based Contracts for Energy Efficiency Projects By Ding, Liang; Aflaki, Sam; Kapuscinski, Roman
  23. Vertical Structure and the Risk of Rent Extraction in the Electricity Industry By Boom, Anette; Buehler, Stefan
  24. Have 15-year-olds become “greener” over the years? By Alfonso Echazarra
  25. The Broken Link: Bank Credit and Non-hydrocarbon Output Growth in Oil-Dependent Economies. By Anthony Anyanwu; Christopher Gan; Baiding Hu
  26. Determinants of household’s modern cooking and lighting energy transition in rural India – Exploring household’s activities and its interactions with other households By Gaur, Varun
  27. Heat and Learning By Goodman, Joshua; Hurwitz, Michael; Park, Jisung; Smith, Jonathan
  28. Time-Varying Predictability of Oil Market Movements Over a Century of Data: The Role of US Financial Stress By Rangan Gupta; Patrick Kanda; Aviral Kumar Tiwari; Mark E. Wohar
  29. The dynamic relationship between Financial Development and the Energy Demand in North Cyprus: Evidence from ARDL Bounds and Combine Cointegration Tests By Tursoy, Turgut
  30. Deep Learning for Energy Markets By Michael Polson; Vadim Sokolov
  31. Probabilistic electricity price forecasting with NARX networks: Combine point or probabilistic forecasts? By Grzegorz Marcjasz; Bartosz Uniejewski; Rafal Weron
  32. Emisiones de Gases Efecto Invernadero y Sectores Clave By Gustavo Adolfo HERNANDEZ DIAZ
  33. Efficient forecasting of electricity spot prices with expert and LASSO models By Bartosz Uniejewski; Rafal Weron
  34. General Bayesian Learning in Dynamic Stochastic Models: Estimating the Value of Science Policy By Ivan Rudik; Derek Lemoine; Maxwell Rosenthal
  35. On the direct, indirect and induced impacts of public policies: The European biofuel case. By Gohin, Alexandre
  36. When Do Households Invest in Solar Photovoltaics? An Application of Prospect Theory By Martin Klein; Marc Deissenroth
  37. Oil, Equities, and the Zero Lower Bound By Deepa Dhume Datta; Benjamin K. Johannsen; Hannah Kwon; Robert J. Vigfusson
  38. A rational decentralized generalized Nash equilibrium seeking for energy markets By Lorenzo Nespoli; Matteo Salani; Vasco Medici
  39. Air pollution and health - A provincial level analysis of China By Wei Zheng; Patrick Paul Walsh
  40. U.S. shale producers: a case of dynamic risk management? By Ferriani, Fabrizio; Veronese, Giovanni
  41. Reducing Urban Greenhouse Gas Emissions: Effective Steering Strategies for City Governments By Sara Hughes
  42. One-off subsidies and long-run adoption – Experimental evidence on improved cooking stoves in Senegal By Bensch, Gunther; Peters, Jörg
  43. Synergistic Effects of Environmental Regulations on Carbon Productivity Growth in China's Major Industrial Sectors By Ge Gao; Ke Wang; Chi Zhang; Yi-Ming Wei
  44. Agriculture and Energy: The Interlocking Puzzle By Breimyer, Harold F.
  45. The US Shale Oil Boom, the Oil Export Ban and the Economy: A General Equilibrium Analysis By Nida Cakir Melek
  46. Economic Impact of North Dakota's Ethanol Industry in Fiscal year 2015 By Coon, Randal C.; Hodur, Nancy M.; Bangsund, Dean A.
  47. Rate-of-return regulation to unlock natural gas pipeline deployment: insights from a Mozambican project By Perrotton, F.; Massol, O.
  48. Petroleum Industry's Economic Contribution to North Dakota in 2015 By Bangsund, Dean A.; Hodur, Nancy M.
  49. Technologien für die Energiewende: Technologiebericht - Band 1. Teilbericht 2 zum Teilprojekt A im Rahmen des strategischen BMWi-Leitprojekts "Trends und Perspektiven der Energieforschung" By Viebahn, Peter (Ed.); Zelt, Ole (Ed.); Fischedick, Manfred (Ed.); Wietschel, Martin (Ed.); Hirzel, Simon (Ed.); Horst, Juri (Ed.)
  50. The role of indirect woody biomass sources in the Italian energy sector By Andrighetto, N.; Masiero, M.; Pettenella, D.
  51. Technologien für die Energiewende: Politikbericht. Teilprojekt A im Rahmen des strategischen BMWi-Leitprojekts "Trends und Perspektiven der Energieforschung" By Viebahn, Peter; Zelt, Ole; Fischedick, Manfred; Hildebrand, Jan; Heib, Sascha; Becker, Daniela; Horst, Juri; Wietschel, Martin; Hirzel, Simon; Neumann, Sven
  52. Technologien für die Energiewende: Technologiebericht - Band 2. Teilbericht 2 zum Teilprojekt A im Rahmen des strategischen BMWi-Leitprojekts "Trends und Perspektiven der Energieforschung" By Viebahn, Peter (Ed.); Zelt, Ole (Ed.); Fischedick, Manfred (Ed.); Wietschel, Martin (Ed.); Hirzel, Simon (Ed.); Horst, Juri (Ed.)
  53. Technologien für die Energiewende: Kriterienraster. Teilbericht 1 zum Teilprojekt A im Rahmen des strategischen BMWi-Leitprojekts "Trends und Perspektiven der Energieforschung" By Viebahn, Peter; Kobiela, Georg; Zelt, Ole; Wietschel, Martin; Hirzel, Simon; Horst, Juri; Hildebrand, Jan

  1. By: Hiroki Onuma (Organization for University Research Initiatives, Waseda University, Japan, and Research Institute for Environmental Economics and Management, Waseda University, Japan); Shigeru Matsumoto (Faculty of Economics, Aoyama Gakuin University, Japan, and Research Institute for Environmental Economics and Management, Waseda University, Japan); Toshi H. Arimura (Faculty of Commerce, Waseda University, Tokyo, Japan, and Research Institute for Environmental Economics and Management, Waseda University, Japan)
    Abstract: Many countries have promoted the replacement of conventional lamps with next-generation lamps to reduce electricity usage for lighting. In Japan, the majority of the lamps sold at home appliance mass merchant shops have been changed from incandescent lamps to energy-saving lamps. All conventional lamps are planned to be replaced with light-emitting diodes (LEDs) by 2020. Although the energy saving effect of LEDs has been stressed in many engineering studies, studies have not examined how much electricity has actually been saved by the installation of LEDs. Using micro-level data from the Survey on Carbon Dioxide Emission from Households (SCDEH), we compare monthly electricity usage between households using conventional lamps and those using LEDs. Our empirical result demonstrates that the installation of LEDs can reduce household electricity usage by 2.3%-2.8%. However, this saving rate is smaller than that expected from the engineering calculation. This result suggests the possibility of a rebound effect associated with LED installation. The empirical result further demonstrates that middleincome households have higher price elasticity of electricity demand and are more likely to receive greater benefit from LED installation.
    Keywords: Electricity Usage, Energy Saving, LED, Household-Level Data, Conditional Demand Analysis
    JEL: C23 D12 Q41
    Date: 2018–08
  2. By: Gregor Semieniuk; Mariana Mazzucato (Department of Economics, SOAS University of London, UK)
    Abstract: This paper surveys the current state of financing green growth in the energy sector, based on the insight that there are different qualities of finance. In past transformational changes in other sectors, public monies played a key role across the innovation landscape. Public financing was central also in a number of past national energy transitions, as reviewed here for Iceland (from fossil to geothermal energy), Norway (from mainly non-electricity energy to hydroelectricity), France (from oil to nuclear) and the United States (from conventional to shale gas). In the current transition to low-carbon energy supplies, there is much public activity, most directed and concerted in China, but also reasons to doubt it is enough and applied in the right places to be able to finance the transition to a low carbon sector on time scales consistent with current climate change mitigation targets. A discussion of opportunities and challenges to a more central role for public financing concludes, drawing also on insights from the recent mission-oriented innovation literature.
    Keywords: energy intensity, labor productivity, decoupling, green growth, stylized fact
    JEL: O44 O47 Q43 E17
    Date: 2018–04
  3. By: Bobylev Yuri (Gaidar Institute for Economic Policy)
    Abstract: The oil and gas sector is playing an important role in the income generation for the state budget and Russia’s trade balance. In 2017, the volumes of crude oil production somewhat fell owing to Russia’s commitments to curb production as a result of the oil output cut agreement between some OPEC and non-OPEC countries. Under the so-called tax maneuver in force in the oil industry, refining depth went up, production and export of fuel oil moved down and export of crude oil, a highly lucrative source of state budget revenues, increased. In 2017, natural gas production and export hit an all-time peak. Despite the plunge of oil and gas world prices, the oil and gas sector continues to constitute over a half of Russian exports.
    Keywords: Russian economy, oil and gas sector, oil production, oil prices, oil and gas export
    JEL: L71 L72
    Date: 2018
  4. By: Tuttle, Charlotte; Beatty, Timothy K. M.
    Abstract: Unexpected changes in energy prices, including prices for gasoline and heating fuel (natural gas and electricity), can affect three indicators of food distress, or food access at the household level. This study uses data from the Current Population Survey Food Security Supplement and the U.S. Energy Information Administration to examine the effects of unexpected changes in energy prices on household food security. Findings reveal that an unexpected rise in the prices of gasoline, natural gas, and electricity increases the probability of food access problems, while an unexpected drop in the price of each energy source decreases the probability. The overall estimates from the analysis are small, but the effects of energy price shocks increase in magnitude for low-income households. This effect suggests that low-income households are more vulnerable to unexpected jumps in energy prices than households with higher incomes.
    Keywords: Consumer/Household Economics, Food Security and Poverty, Health Economics and Policy, Resource /Energy Economics and Policy
    Date: 2017–07–13
  5. By: Specht, Jan Martin (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: The ongoing digitalization of the energy sector opens up opportunities for novel business models, which can help to overcome challenges that accompany the transition towards a sustainable energy supply. One necessity in a more decentralized energy system with high shares of renewables is the provision of flexibility. This paper uses the business model generation approach of Osterwalder and Pigneur (2010) to understand the challenges of the transition towards distributed power generation for energy suppliers. The insights gained indicate that the focus of business models in the electricity supply market has to switch to an offer-driven perspective. To this end, the business model of an “Energy Supplier 2.0” as a dedicated aggregator of flexible capacities on the household level is investigated. It is found that the aggregation of flexibilities can provide additional revenue streams, extra customer comfort, support for grid operators, and reduce society’s costs for the sustainable energy transition process. Despite these promising advantages, and even though early movers indicate economic interest, we find that the current regulation and policies bear obstacles for a broad diffusion of this type of business models in the energy sector. We identify several obstacles and suggest solutions how to overcome legislative hurdles where possible.
    Keywords: Energy Supplier 2.0; Utility of the Future; Business Model Generation; Flexibility; Distributed Energy; Virtual Power Plant
    JEL: H23 L94 M21 Q21 Q48
    Date: 2018–04
  6. By: Anna Kowalska-Pyzalska; David Ramsey
    Abstract: This paper analyses the willingness to pay (WTP) for green electricity among residential consumers in Poland. The current share of renewable energy sources (RES) in energy consumption is around 13.5% and is expected to increase. Data were collected through a telephone survey of a representative sample of Poles. The results obtained indicate that - above all - age, income, environmental attitudes, peer support, but also, education and knowledge about RES play the most important role in explaining consumers' WTP for green electricity. Statistical analyses indicate that the mean WTP of Polish consumers is currently very low (around 0.5 USD), which is due to the relatively low GDP per capita, the lack of knowledge about green energy and no past experience with green electricity tariffs.
    Keywords: Green energy; Green electricity tariffs; Willingness to pay; Telephone survey; Contingent valuation method (CVM); Logit regression
    JEL: D12 D90 Q20 Q42 Q48 Q56
    Date: 2018–07–12
  7. By: Anna Kowalska-Pyzalska
    Abstract: This paper investigates the acceptance of green electricity among Polish residential consumers. Our focus was on the socio-economic and environmental attributes of consumers in terms of their willingness to adopt renewable energy sources (RES) and green electricity tariffs. In particular, this study explores the determinants of adoption by examining consumers' willingness to pay (WTP) for green electricity, willingness to switch to green electricity tariffs, and willingness to install small-scale generators in the household. The hypotheses were tested empirically with data collected by means of a standardized telephone survey of 502 household electricity consumers in Poland. Most Polish people accept and support the development of RES, but they do not know how to contribute to this process. Their WTP increases with income, education, pro-environmental attitudes, and knowledge. They also care about social influence. To increase the adoption rate of RES among residential consumers, stable legal regulations, clear procedures, subsidies, social campaigns, and educational trainings are needed. We believe that the findings from this study may be valuable for those involved in marketing green electricity offers and for politicians responsible for the increase of the share of renewables in the Polish power system.
    Keywords: Renewable energy sources; Green electricity tariffs; Consumer adoption; WTP; Prosumers; Social influence; Environmental attitudes; Questionnaire survey
    JEL: D12 D90 Q20 Q42 Q48 Q56
    Date: 2018–04–27
  8. By: Algieri, Bernardina; Leccadito, Arturo
    Abstract: The aim of this study is to investigate the possible contagion risk coming from energy, food and metals commodity markets and to assess risk spillovers from biofuel to food commodity markets and from crude oil to food markets. To this purpose, we use the delta Conditional Value-at-Risk ΔCoVaR) approach recently proposed by Adrian and Brunnermeier (2016) based on quantile regression. This novel methodology allows us first to identify a measure of contagion risk for energy, food and metals commodity markets, then to detect whether the risk contribution for a given market is significant, while distinguishing between tail events driven by financial factors, economic fundamentals or both, and finally, to assess whether the contagion effect of one market is significantly larger than the one of another market. The results show that energy, food and metals commodity markets transmit contagion within markets and there are spillovers from crude oil and biofuel to food markets. In particular, oil is systemically riskier than the other markets in causing economic instability. Oil is also more important than biofuel in affecting food markets. It emerges that contagion risk is mainly triggered by financial factors for energy and metal markets, while financial and economic fundamentals are relevant for food markets.
    Keywords: Agricultural Finance, Financial Economics, Resource /Energy Economics and Policy
    Date: 2017–05–31
  9. By: Canning, Patrick; Rehkamp, Sarah; Waters, Arnold; Etemadnia, Hamideh
    Abstract: The food system accounts for a large share of fossil fuel consumption in the United States, and energy accounts for a substantial and highly variable share of food costs. This intersection between food and energy markets suggests that public and private decisions affecting one market will have spillover effects in the other. For example, would increasing the share of population having diets that align with Federal dietary guidance reduce fossil fuel use in the U.S. food system? Would a carbon dioxide (CO 2 ) tax improve diet quality? To address these issues, we use the most recent data available to integrate the material-flows accounting framework adopted by the United Nations Statistical Commission into the existing food-system accounting structure of the ERS Food Dollar accounts. Then, we use mathematical optimization to model healthy diets. Our research indicates that U.S. agri-food industries are more sensitive to energy price changes than nonfood industries. We find that in 2007, fossil fuels linked to U.S. food consumption produced 13.6 percent of all fossil fuel CO 2 emissions economywide. Our study of alternative diets shows there are many ways to meet the Dietary Guidelines for Americans. If Americans made a minimal dietary shift to eat healthy, we find food-system energy use would decrease by 3 percent. By making greater changes from current consumption, we find food- system energy use could be reduced by as much as 74 percent. A tax on CO 2 emissions from fossil fuels would increase the cost of a typical meal by an average of 1.7 percent, with estimates ranging between 0.2 and 5.4 percent. ----- Errata: On March 8, 2017, ERS corrected a few errors made in the calculation of data reported in Figure 14 (p. 32) and in the calories columns in Table 5 (p. 34). References to these data were updated in the text on pages 31- 33 and p. 42. Also, a superscript on q on p. 89 was changed from a 1 to 0.
    Keywords: Agricultural and Food Policy, Environmental Economics and Policy, Food Consumption/Nutrition/Food Safety, Resource /Energy Economics and Policy
    Date: 2017–01–01
  10. By: Brown, David P. (University of Alberta, Department of Economics); Eckert, Andrew (University of Alberta, Department of Economics)
    Abstract: We analyze the effects of commonly employed renewable compensation policies on firm behavior in an imperfectly competitive market. We consider a model where firms compete for renewable capacity in a procurement auction prior to choosing their forward contract positions and competing in wholesale electricity markets. We focus on fixed and premium-priced feed-in tariff (FIT) compensation policies. We demonstrate that the renewable compensation policy impacts both the types of resources that win the renewable auction and subsequent market competition. While firms have stronger incentives to exercise market power in wholesale markets under a premium-priced FIT, they also have increased incentives to sign pro-competitive forward contracts. Despite these countervailing incentives, in net firms have stronger incentives to exercise market power under the premium-priced policy. We find conditions under which renewable resources that are more correlated with market demand are procured under a premium-priced design, while the opposite occurs under a fixed-priced policy. If the cost efficiencies associated with the "more valuable" renewable resources are sufficiently large, then welfare is larger under the premium-priced policy despite the stronger market power incentives in the wholesale market. Finally, we consider incumbent behavior in the renewable auction when competing against entrants with more valuable resources.
    Keywords: Electricity; Renewables; Market Power; Regulation; Procurement
    JEL: D43 L40 L51 L94 Q48
    Date: 2018–08–24
  11. By: Kaushal, Kevin Raj (School of Economics and Business, Norwegian University of Life Sciences)
    Abstract: The allowances in an emission trading system (ETS) are commonly allocated for free to the sector, e.g., in the form of output-based allocation (OBA). The reason is the risk of carbon leakage exposure such as relocation of emission-intensive and trade-exposed industries (EITE). A prime example of this is the EU ETS, where the policymakers have stated that they will continue this practice. However, lately a third approach, combining OBA with a consumption tax, has been proposed to mitigate carbon leakage, and it has been shown to have an unambiguously global welfare improving effect. This paper presents the potential outcome of climate policy, by examining the Nash equilibrium of a policy instrument game between regions who regulate their emissions separately. In particular, we investigate the case when a policymaker can choose to supplement her ETS with OBA and/or with a consumption tax, based on another policymaker’s optimal choice for her ETS. We show analytically the optimal rate of OBA and consumption tax in the presence of a climate polices in another region. Finally, we present the results from a numerical simulation in the context of the EU ETS and the Chinese ETS.
    Keywords: Emission price; Output-based allocation; Consumption tax; Carbon leakage; Emission trading system; Unilateral policy
    JEL: C70 D61 F18 H23 Q54
    Date: 2018–08–20
  12. By: Daniel Gurara; Dawit Tessema
    Abstract: Many developing economies are often hit by electricity crises either because of supply constraints or lacking in broader energy market reforms. This study uses manufacturing firm census data from Ethiopia to identify productivity losses attributable to power disruptions. Our estimates show that these disruptions, on average, result in productivity losses of about 4–10 percent. We found nonlinear productivity losses at different quantiles along the productivity distribution. Firms at higher quantiles faced higher losses compared to firms around the median. We observed patterns of systematic shutdowns as firms attempt to minimize losses.
    Date: 2018–07–10
  13. By: McCabe, Bernadette
    Abstract: The benefits of better food waste management extend to community-building, liveability and poverty reduction in cities. Waste-to-energy (WtE) technologies provide elegant solutions for food waste management with tangible and usable products including energy and fertiliser, and attractive environmental and social benefits. When combined with food security they provide a powerful case for city and rural communities alike. The majority of waste-to-energy facilities in the world are in Europe, Japan, and the US. In developing countries such as African nations, a very limited share of waste is recovered and reused, and only major or capital cities have waste management systems. In a number of these countries the use of waste to generate electricity could have a significant impact. Waste can make a very high contribution to providing electricity to citizens and alleviating energy poverty, especially in countries with little access to electricity and low electricity consumption per capita. For isolated, rural and less wealthy populations, the benefits of an effective circular economy are even more direct than for a Western urban population. The production of biogas from organic waste via anaerobic digestion is one such technology that fits perfectly in a circular economy and engenders the energy independence needed by these communities. This case study presentation gives an overview of the different waste-to-energy technology options that exist, and highlights some key innovations across the globe. A particular focus is novel approaches that have been used in developing countries, and the impacts on food loss and waste, livelihoods and food security.
    Keywords: Resource /Energy Economics and Policy
    Date: 2016–08–29
  14. By: Katarzyna Hubicka; Grzegorz Marcjasz; Rafal Weron
    Abstract: We propose a novel concept in energy forecasting and show that averaging day-ahead electricity price forecasts of a predictive model across 28- to 728-day calibration windows yields better results than selecting only one 'optimal' window length. Even more significant accuracy gains can be achieved by averaging over a few, carefully selected windows.
    Keywords: Electricity price forecasting; Combining forecasts; Calibration window; Autoregression; NARX neural network; Committee machine; Diebold-Mariano test
    JEL: C14 C22 C45 C51 C53 Q47
    Date: 2018–07–07
  15. 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-riendliness, 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: Agricultural and Food Policy, Crop Production/Industries
    Date: 2017
  16. By: Matthew Klepacz (College of William and Mary)
    Abstract: How do changes in aggregate volatility alter the impulse response of output to monetary policy? To analyze this question, I study whether individual prices in Producer Price Index micro data are more likely to move in the same direction when aggregate volatility is high, which would increase aggregate price flexibility and reduce the effectiveness of monetary policy. Taking advantage of plausibly exogenous oil price volatility shocks and heterogeneity in oil usage across industries, I find that price changes are more dispersed, implying that prices are less likely to move in the same direction when aggregate volatility is high. This contrasts with findings in the literature about idiosyncratic volatility. I use a state-dependent pricing model to interpret my findings. Random menu costs are necessary for the model to match the positive empirical relationship between oil price volatility and price change dispersion. This is the case because random menu costs reduce the extent to which firms with prices far from their optimum all act in a coordinated fashion when volatility increases. The model implies that increases in aggregate volatility do not substantially reduce the ability of monetary policy to stimulate output.
    Date: 2018
  17. By: Vasilios Plakandaras (Department of Economics, Democritus University of Thrace, Greece); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Wing-Keung Wong (Department of Finance, Fintech Center, and Big Data Research Center, Asia University; Department of Medical Research, China Medical University Hospital; Department of Economics and Finance, Hang Seng Management College; Department of Economics, Lingnan University)
    Abstract: We examine the dynamic relationship between oil prices and news-based indices of global geopolitical risks (GPRs), as well as a composite measure of the same for emerging economies, which we develop using Dynamic Model Averaging (DMA). In doing so, we train a number of linear and nonlinear probabilistic models to capture the ability of GPRs in forecasting oil returns. Our empirical findings show that global GPRs associated with wars is the most accurate in forecasting oil returns in the short-run, while composite GPRs emanating from the emerging markets, forecasts oil returns relatively better at medium- to longer-horizons. However, differences across the linear and nonlinear models incorporating information of GPRs are not necessarily markedly different. Given an observe negative relationship between GPRs and oil returns, density forecasts show that increases in GPRs from their initial lower levels, which would imply higher conditional oil returns initially, can predict the resulting increases in oil returns thereafter more accurately compared to the lower end of the conditional distribution, which in turn, corresponds to higher initial levels of GPRs.
    Keywords: Bayesian VAR, Geopolitical Risks, Oil Prices, Dynamic Model Averaging
    JEL: C22 C32 Q41 Q47
    Date: 2018–07
  18. By: Kufeoglu, S.; Gunduz, N.; Chen, H.; Lehtonen, M.
    Abstract: Increasing distributed generation and intermittency, along with the increasing frequency of extreme weather events, pose a serious challenge supply security in the electric power sector. Understanding the costs of interruption is vital for enhancing power system infrastructure and planning the distribution grid. Customer rights and demand response are additional reasons to study the value of power reliability. We make use of the directional distance function and shadow pricing method for a case study from Finland with the aim of calculating the cost of one minute of power interruption from the perspective of the distribution network operator. The sample consists of 78 distribution network operators from Finland based on cost and network information between 2013 and 2015.
    Keywords: power interruption; distribution system operator; interruption cost; shadow price
    JEL: L42
    Date: 2018–08–16
  19. By: Walgern, Julia (RWTH Aachen University); Peters, Lennart (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: An offshore wind farm’s cost of energy is, to a large extent, driven by operation and maintenance costs. Through the optimization of the maintenance strategies for offshore wind farms, the Levelized Cost of Energy (LCOE) will be further reduced, which will ceteris paribus lead to a higher competitiveness of offshore wind farms with other energy sources. This study pro-poses an event-based simulation of an offshore wind farm comprising 400 MW. The aim of the model is to minimize the total cost, and thus to maximize the revenues from the wind farm. Therefore, corrective, condition-based, and scheduled maintenance strategies are compared, and constraints, such as weather conditions and service team shifts, are taken into consideration. When hourly electricity spot prices are applied instead of feed-in tariffs, results show that weekly scheduled maintenance on a Saturday dayshift (starting at 8 am) is the most cost-efficient scenario. Condition monitoring systems have been found to be advantageous and are set as a standard application regarding the turbines. The impact of scheduled maintenance fre-quency, the distance between the offshore site and the coast, the interest rate, and altering reli-ability data are further analyzed.
    Keywords: Offshore wind; Predictive maintenance strategy; LCOE; Condition monitoring
    JEL: M00 Q40 Q55
    Date: 2017–07
  20. By: Coon, Randal C.; Hodur, Nancy M.; Bangsund, Dean A.
    Keywords: Demand and Price Analysis, Environmental Economics and Policy, Production Economics
    Date: 2017–09–28
  21. By: Coon, Randal C.; Hodur, Nancy M.; Bangsund, Dean A.
    Keywords: Demand and Price Analysis, Environmental Economics and Policy, Marketing
    Date: 2017–09–29
  22. By: Ding, Liang; Aflaki, Sam; Kapuscinski, Roman
    Abstract: Energy efficiency projects are often executed by specialized entities, namely energy service companies (ESCOs). A typical ESCO's core business is conducted using performance-based contracts, whereby payment terms depend on the energy savings achieved. Despite their success in public, commercial, and industrial sectors, ESCOs in the residential sector are involved in fewer projects and face several challenges. First, an energy efficiency project often leads to changed consumption behavior; hence it is more difficult to evaluate the energy savings that are due to the project itself. The second challenge is that residential clients are more risk averse and, thus, less willing to contract for projects whose outcomes are uncertain. Third, a lack of monitoring protocols leads to ESCO's moral hazard problems. This paper studies ESCO contract design issues, focusing primarily on the residential market for energy efficiency. As opposed to other sectors, coordinating contracts do not exist. We show, however, that simple piecewise linear contracts work reasonably well. To improve their profitability, ESCOs can reduce uncertainty about the technology employed and/or develop ways of verifying post-project energy efficiency. Since policy makers are understandably keen to promote energy efficiency, we show also how regulations and monetary incentives can reduce inefficiencies in ESCOs' relationships and thereby maximize environmental benefits.
    Keywords: Sustainable Energy; Energy Efficiency; Performance-Based Contracts; Double Moral Hazard
    JEL: C44
    Date: 2017–02–27
  23. By: Boom, Anette (Department of Economics, Copenhagen Business School); Buehler, Stefan
    Abstract: This paper studies how competition and vertical structure jointly determine generating capacities, retail prices, and welfare in the electricity industry. Analyzing a model in which demand is uncertain and retailers must commit to retail prices before they buy electricity in the wholesale market, we show that welfare is highest if competition in generation and retailing is combined with vertical separation. Vertically integrated generators choose excessively high retail prices and capacities to avoid rent extraction in the wholesale market when their retail demand exceeds their capacity. Vertical separation eliminates the risk of rent extraction and yields lower retail prices.
    Keywords: Electricity; Generating Capacities; Vertical Integration; Monopoly; Competition
    JEL: D42 D43 D44 L11 L12 L13
    Date: 2018–08–23
  24. By: Alfonso Echazarra (OECD)
    Abstract: Many (bad) things have happened to our planet since PISA asked students about the environment more than a decade ago. The global temperature increased, glaciers continued to melt, coral reefs became increasingly endangered, sea levels rose about 3 centimeters, garbage continued piling up in oceans and man-made disasters, such as the Deepwater Horizon oil spill and the Fukushima nuclear disaster, have added more strains on our fragile planet’s health. Through national and international initiatives, such as the Paris Climate Conference and agreement – also known as COP21 – governments are trying to co-ordinate efforts to protect the environment; but until society is fully aware of the consequences of inaction, the cost of action may appear too high. So, are students increasingly aware of environmental problems? Have 15-year-olds became more optimistic about the future of Earth? And who are the environmentally aware students?
    Date: 2018–08–30
  25. By: Anthony Anyanwu; Christopher Gan; Baiding Hu
    Abstract: Economies dominated by hydrocarbons possess certain characteristics not shared by other economies because their economic dynamics are mainly determined by the prices of oil and gas at world markets. Over the last decade, oil-dependent countries have been promoting diversification towards the non-oil sector. In particular, significant priority has been given to the financial sector. To this end, this paper explores the impact of bank credit in the growth of oil-rich economies and tests if it differs in the emerging non-oil sectors. The study utilizes both the panel contegration and pooled mean group estimators for 28 oil-dependent countries over the period 1990-2012. The findings suggest that bank credit significantly increases GDP per capita but has no impact on non-oil GDP per capita. The economic potential of non-natural resource sectors is great and the resources remain largely untapped.
    Keywords: Agribusiness, Agricultural Finance, Environmental Economics and Policy, Resource /Energy Economics and Policy
    Date: 2016–08–25
  26. By: Gaur, Varun
    Abstract: The majority of rural Indian households remain dependent on unreliable, inefficient and harmful household energy technologies. Rural households make their energy decisions with respect to the Water-Energy-Food security (WEF) Nexus jointly, however, previous research initiatives have analyzed household energy access problem in isolation. By analyzing household’s activities and its interactions with other households, this paper identified the factors that impact household’s transition to modern energies of different kinds. For the analysis, it utilized logit and zoib (zero-one-inflated beta) regression techniques on the household survey data set from the Uttar Pradesh province of India. The results showed that regular non-agricultural income of household’s male member increases the probability of household’s modern cooking energy and modern lighting transition by 8.6% and 13.6%, respectively. It was found that household’s higher agricultural dependence and resource endowments (more labor and cattle) lead to higher share of traditional bioenergy consumption in the total cooking energy mix. Proximity to markets and high household income were observed to positively influence household modern cooking and lighting transition. Local institutions such as local bio-energy markets and barter trade for labor- bioenergy was observed to have significant influence on household energy choice. Results also showed that government’s policy instrument such as household connection to government LPG scheme is associated with 20.5% increased probability of household using modern cooking energy as its primary cooking fuel. Results also indicated that social factors such as higher female education and young age of household head are associated with household’s increased modern cooking energy consumption in its total cooking energy mix.
    Keywords: Consumer/Household Economics, Research Methods/ Statistical Methods, Resource /Energy Economics and Policy
    Date: 2018–03–29
  27. By: Goodman, Joshua (Harvard U); Hurwitz, Michael (College Board); Park, Jisung (UCLA); Smith, Jonathan (GA State U)
    Abstract: We provide the first evidence that cumulative heat exposure inhibits cognitive skill development and that school air conditioning can mitigate this effect. Student fixed effects models using 10 million PSAT-takers show that hotter school days in the year prior to the test reduce learning, with extreme heat being particularly damaging and larger effects for low income and minority students. Weekend and summer heat has little impact and the effect is not explained by pollution or local economic shocks, suggesting heat directly reduces the productivity of learning inputs. New data providing the first measures of school level air conditioning penetration across the US suggest such infrastructure almost entirely offsets these effects. Without air conditioning, each 1*F increase in school year temperature reduces the amount learned that year by one percent. Our estimates imply that the benefits of school air conditioning likely outweigh the costs in most of the US, particularly given future predicted climate change.
    Date: 2018–05
  28. By: Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Patrick Kanda (THEMA, Université de Cergy-Pontoise); Aviral Kumar Tiwari (Montpellier Business School, Montpellier, France); Mark E. Wohar (College of Business Administration, University of Nebraska at Omaha, Omaha, USA; School of Business and Economics, Loughborough University, Leicestershire, UK.)
    Abstract: In this paper we analyze whether a news-based measure of financial stress index (FSI) in the US can predict West Texas Intermediate oil returns and (realized) volatility over the monthly period of 1889:01 to 2016:12, using a dynamic conditional correlation multivariate generalized autoregressive conditional heteroscedasticity (DCC-MGARCH) model. Our results show that, standard linear Granger causality test fails to detect any evidence of predictability. However, the linear model is found to be misspecified due to structural breaks and nonlinearity, and hence, the result of no causality from FSI to oil returns and volatility cannot be considered reliable. When we use the DCC-MGARCH model, which is robust to such misspecifications, in 75 percent and 80 percent of the sample periods, FSI in fact do strongly predict the oil returns and volatility respectively. Overall, our results highlight that FSI is helpful in predicting oil returns and volatility, when one accounts for nonlinearity and regime changes through a robust time-varying model.
    Keywords: US Financial Stress Index, DCC-MGARCH, WTI Oil Returns, Realized Volatility
    JEL: C32 Q41
    Date: 2018–07
  29. By: Tursoy, Turgut
    Abstract: This paper investigates the dynamic relationship between financial development, energy demands, economic growth and total trade with the ARDL Bounds and Combined cointegration approaches in North Cyprus for the period of 1977Q1 – 2016Q4. The empirical results provide evidences for the long-run and short-run relationship between the concern variables. All the techniques such as cointegration and innovation accounting method supporting the relationship between variables. Positive innovation in GDP is connected with increase in financial development and energy demands. Energy demands response positively for the shocks from GDP and Financial development, and financial development responses just only GDP and itself.
    Keywords: Financial development, GDP, Energy, Trade
    JEL: E44 O43 Q43
    Date: 2018–08–02
  30. By: Michael Polson; Vadim Sokolov
    Abstract: Deep Learning (DL) provides a methodology to predict extreme loads observed in energy grids. Forecasting energy loads and prices is challenging due to sharp peaks and troughs that arise from intraday system constraints due to supply and demand fluctuations. We propose the use of deep spatio-temporal models and extreme value theory (DL-EVT) to capture the tail behavior of load spikes. Deep architectures such as ReLU and LSTM can model generation trends and temporal dependencies, while EVT captures highly volatile load spikes. To illustrate our methodology, we use hourly price and demand data from the PJM interconnection, for 4719 nodes and develop deep predictor. DL-EVT outperforms traditional Fourier and time series methods, both in-and out-of-sample, by capturing the nonlinearities in prices. Finally, we conclude with directions for future research.
    Date: 2018–08
  31. By: Grzegorz Marcjasz; Bartosz Uniejewski; Rafal Weron
    Abstract: A recent electricity price forecasting (EPF) study has shown that the Seasonal Component Artificial Neural Network (SCANN) modeling framework, which consists of decomposing a series of spot prices into a trend-seasonal and a stochastic component, modeling them independently and then combining their forecasts, can yield more accurate point predictions than an approach in which the same non-linear autoregressive NARX-type neural network is calibrated to the prices themselves. Here, considering two novel extensions of the SCANN concept to probabilistic forecasting, we find that (i) efficiently calibrated NARX networks can outperform their autoregressive counterparts, even without combining forecasts from many runs, and that (ii) in terms of accuracy it is better to construct probabilistic forecasts directly from point predictions, however, if speed is a critical issue, running quantile regression on combined point forecasts (i.e., committee machines) may be an option worth considering. Moreover, we confirm an earlier observation that averaging probabilities outperforms averaging quantiles when combining predictive distributions in EPF.
    Keywords: Electricity spot price; Probabilistic forecast; Combining forecasts; Long-term seasonal component; NARX neural network; Quantile regression
    JEL: C14 C22 C45 C51 C53 Q47
    Date: 2018–07–13
  32. By: Gustavo Adolfo HERNANDEZ DIAZ
    Abstract: El incremento de la temperatura en los últimos cincuenta años ha tenido serios efectos sobre la economía, por lo cual es necesario tomar medidas de mitigación y/o adaptación para atenuar sus efectos. En el presente trabajo se realiza un cálculo de multiplicadores de las emisiones, usando la técnica de insumo producto, que sirve como otro instrumento más para la evaluación y análisis de las diferentes alternativas de políticas de mitigación. Los multiplicadores estimados permiten, además de observar cuales son los sectores con mayor efecto sobre las emisiones de GEI, realizar una caracterización de las políticas más eficientes sobre cada uno de los sectores.
    Keywords: Matriz Insumo Producto, Encadenamientos, Emisiones de gases efecto invernadero
    JEL: C67 Q50 Y Q58
    Date: 2018–08–08
  33. By: Bartosz Uniejewski; Rafal Weron
    Abstract: Recent electricity price forecasting (EPF) studies suggest that the least absolute shrinkage and selection operator (LASSO) leads to well performing models, generally better than obtained from other variable selection schemes. Conducting an empirical study involving three expert models, two multi-parameter regression (called baseline) models and four variance stabilizing transformations, we discuss the optimal way of implementing the LASSO. We show that using a complex baseline model and a well chosen variance stabilizing transformation indeed leads to significant accuracy gains compared to the typically used EPF models.
    Keywords: Electricity spot price; Day-ahead market; Long-term seasonal component; LASSO; Automated variable selection; Variance stabilizing transformation
    JEL: C14 C22 C51 C53 Q47
    Date: 2018–06–29
  34. By: Ivan Rudik (Cornell University); Derek Lemoine (University of Arizona); Maxwell Rosenthal (University of Arizona)
    Abstract: We integrate climate scientists into an economic model of climate change by calibrating a statistical model for updating beliefs about the climate's sensitivity to greenhouse gas emissions to the actual history of scientific progress. We find that nonconjugate priors are critical for representing the observed dynamics of scientific knowledge. In order to investigate the implications for policy, we extend recursive dynamic programming methods to allow for nonconjugate learning about an uncertain parameter. We find that today's policymaker must set emission policy without the expectation that new information will enable timely revisions to policy. Improving scientific monitoring and climate modeling to enable faster learning would be worth up to \$XX dollars.
    Date: 2018
  35. By: Gohin, Alexandre
    Abstract: This paper deals with the controversial indirect land use changes of the European biodiesel policy. Two studies sponsored by the European Commission finds significant, but contrasted, land use effects for the different vegetable oils used for biodiesel production. The first study uses an aggregate computable general equilibrium model capturing direct, indirect and induced effects. The second recent study uses a biotechnical partial equilibrium model offering a detailed representation of the indirect effects occurring through the livestock sectors. We develop an original economic emulator to understand the diverging key results of these studies and test their sensitivity. We find that the direct and indirect effects on vegetable oil markets explain most of the differences. We also find that indirect effects on the livestock sector and the induced effects do not significantly influence the biodiesel results. However results are critically sensitive to crop yield responses that are considerably underestimated in both studies. The cropland displacement due to the biodiesel policy computed by the recent study is overestimated by a factor of 5.
    Keywords: Agricultural and Food Policy
    Date: 2017–11–14
  36. By: Martin Klein; Marc Deissenroth
    Abstract: While investments in renewable energy sources (RES) are incentivized around the world, the policy tools that do so are still poorly understood, leading to costly misadjustments in many cases. As a case study, the deployment dynamics of residential solar photovoltaics (PV) invoked by the German feed-in tariff legislation are investigated. Here we report a model showing that the question of when people invest in residential PV systems is found to be not only determined by profitability, but also by profitability's change compared to the status quo. This finding is interpreted in the light of loss aversion, a concept developed in Kahneman and Tversky's Prospect Theory. The model is able to reproduce most of the dynamics of the uptake with only a few financial and behavioral assumptions
    Date: 2018–08
  37. By: Deepa Dhume Datta; Benjamin K. Johannsen; Hannah Kwon; Robert J. Vigfusson
    Abstract: From late 2008 to 2017, oil and equity returns were more positively correlated than in other periods. In addition, we show that both oil and equity returns became more responsive to macroeconomic news. We provide empirical evidence and theoretical justification that these changes resulted from nominal interest rates being constrained by the zero lower bound (ZLB). Although the ZLB alters the economic environment in theory, supportive empirical evidence has been lacking. Our paper provides clear evidence of the ZLB altering the economic environment, with implications for the effectiveness of fiscal and monetary policy.
    Keywords: Equities ; Macroeconomic surprises ; New-keynesian model ; Oil ; Zero lower bound
    JEL: F31 F41 E30 E01 C81
    Date: 2018–08–17
  38. By: Lorenzo Nespoli; Matteo Salani; Vasco Medici
    Abstract: We propose a method to design a decentralized energy market which guarantees individual rationality (IR) in expectation, in the presence of system-level grid constraints. We formulate the market as a welfare maximization problem subject to IR constraints, and we make use of Lagrangian duality to model the problem as a n-person non-cooperative game with a unique generalized Nash equilibrium (GNE). We provide a distributed algorithm which converges to the GNE. The convergence and properties of the algorithm are investigated by means of numerical simulations.
    Date: 2018–06
  39. By: Wei Zheng (School of Economics and Development, Wuhan University, China; School of Politics and International Relations, University College Dublin, Dublin, Ireland); Patrick Paul Walsh (School of Politics and International Relations, University College Dublin, Dublin, Ireland)
    Abstract: During the past 30 years, China has experienced high growth, and its economic expansion has been one of the strongest in world history. The rapid economic growth has accompanied by rapid increases in energy consumption, which has led to considerable air pollution and significantly affected mortality rate. In this study, Grossman Health Function was applied together with satellite-retrieved PM2.5 pollution data to estimate mortality rate caused by PM2.5 from 2001 to 2012. The results show some new evidence of the impact of sociological, economic and environmental factors on mortality rate of the population of China using the fixed effect (FE) and system generalized method of moments (GMM-sys) estimation methods. The PM2.5 has long-term positive significant effects on mortality. China is now experiencing a substantial mortality burden associated with current air pollution. Health care system and people’s education level are important in lowering mortality.
    Keywords: PM2.5, Mortality rate, Temperature
    Date: 2018–07–27
  40. By: Ferriani, Fabrizio; Veronese, Giovanni
    Abstract: Using more than a decade of firm-level data on U.S. oil producers’ hedging portfolios, we document for the first time a strong positive link between net worth and hedging in the oil producing sector. We exploit as quasi-natural experiments two similarly dramatic oil price slumps, in 2008 and in 2014-2015, and we show how a shock to net worth differently affects risk management practices among E&P firms. The link between net worth and hedging decisions holds in both episodes, but in the second oil slump we also find a significant role of leverage and credit constraints in reducing the hedging activity, a result that we attribute to the marked increase in leverage following the diffusion of the shale technology. Finally, we test if collateral constraints also impinge the extensive margin of risk management. Though in this case the effect is less apparent, our results generally points to a more limited use of linear derivative contracts when firms’ net worth increases.
    Keywords: dynamic risk management, hedging, derivatives, shale revolution, oil price collapse
    JEL: D22 G00 G32
    Date: 2018
  41. By: Sara Hughes (University of Toronto)
    Abstract: City governments around the world are pledging to make significant reductions to their greenhouse gas (GHG) emissions, a goal that requires significant changes to urban institutions, infrastructure, and behaviour patterns. Such changes are not easily made, and often fall outside the formal jurisdiction of city governments. However, city governments are taking up this challenge because of the threat of climate change and the opportunity to reap local benefits from GHG emissions reductions. This paper draws on the experiences of three large cities in North America: Toronto, New York City, and Los Angeles. Each city government has set ambitious GHG reduction targets, and developed programs and policies to reach these targets. While the responses are unique to each city, their experiences demonstrate that if city governments are to successfully meet their GHG emissions reductions targets, they must “steer†their cities: leveraging both their formal and informal authorities as well as a range of interventions and partnerships. Three steering strategies have proven effective in all three cities: Building and maintaining coalitions; Aligning incentives with capacity; and Combining institutionalization and innovation. The experiences of these three cities demonstrate that formal powers and political economic context are not good predictors of cities’ success in reducing GHG emissions. Rather, as city governments confront the complex and longterm challenge of reducing GHG emissions, steering strategies that combine the multiple sources of authority and influence held by city governments will generate the outcomes needed to address climate change.
    Keywords: climate change; municipal governance; Los Angeles; Toronto; New York
    Date: 2017–02
  42. By: Bensch, Gunther; Peters, Jörg
    Abstract: Free distribution of a technology can be an effective development policy instrument if its adoption is socially inefficient and hampered by affordability constraints. Improved cookstoves may be such a case: they generate high environmental and public health returns, but adoption is generally low. Based on a randomized controlled trial in rural Senegal, this paper studies whether one-time free cookstove distribution affects households’ willingness to pay (WTP) in the long run. Effects might be negative because people anchor their WTP on the earlier zero price (reference dependence) or positive because information deficits about potential benefits are overcome. We find that households who received a free stove six years back exhibit a higher WTP today compared to control households. Potential reference dependence effects are thus at least compensated by learning effects. Our findings suggest that one-time free distribution does not spoil future prices and might even be a stepping stone for future market establishment.
    Keywords: Consumer/Household Economics, Demand and Price Analysis, Resource /Energy Economics and Policy
    Date: 2017–04–04
  43. By: Ge Gao; Ke Wang; Chi Zhang; Yi-Ming Wei
    Abstract: It is crucial that the implementation of environmental regulations have a positive synergistic effect on carbon productivity growth (i.e., environmentally adjusted productivity growth with the consideration of carbon emissions) for China to realize its sustainable development goals because the country is currently under tripartite pressures of economic growth, carbon emissions control, and environmental pollution reduction. This paper investigates the impact of changes in environmental regulation stringency on industrial-level carbon productivity growth in China. Through utilizing the information entropy method, a new index of environmental regulation stringency is established by taking into account the effects of both pollution reduction consequences and pollution reduction measures. In addition, based on the data envelopment analysis (DEA) method, a Malmquist carbon productivity index is proposed to estimate the industrial carbon productivity growth of 21 major industrial sectors in China¡¯s 30 provinces over 2004-2014. Finally, an econometric regression model is applied to test the synergistic effects of environmental regulations on carbon productivity in China's major industrial sectors. The results show that (i) a stringent environmental regulation is associated with an increase in overall industrial carbon productivity growth in China; (ii) there exist significant pass-through effects in China's major industrial sectors that technology can transmit effectively from leader to follower; (iii) there also exist obvious follow-up effects in China's major industrial sectors, i.e., the industrial sectors that have larger technological gaps with the leaders catch up faster than others; and (iv) the environmental regulations have different effects on industrial sectors with different polluting levels, i.e., there is a positive linear relationship between environmental regulation stringency and industrial-level carbon productivity growth in low-polluting industrial sectors, a parabolic nonlinear relationship between them in high-polluting industrial sectors, and an inverted U-shaped relationship between them in moderate-polluting industrial sectors.
    Keywords: China's industrial sector; environmental regulation; industrial heterogeneity; pollution intensity; total factor carbon productivity
    JEL: Q54 Q40
    Date: 2018–08–18
  44. By: Breimyer, Harold F.
    Keywords: Agricultural and Food Policy, Resource /Energy Economics and Policy
  45. By: Nida Cakir Melek (Federal Reserve Bank of Kansas City)
    Abstract: This paper examines the effects of the U.S. shale oil boom in a two-country DSGE model where countries produce crude oil, refined oil products, and a non-oil good. The model incorporates different types of crude oil that are imperfect substitutes for each other as inputs into the refining sector. The model is calibrated to match oil market and macroeconomic data for the U.S. and the rest of the world (ROW). We investigate the implications of a significant increase in U.S. light crude oil production similar to the shale oil boom. Consistent with the data, our model predicts that light oil prices decline, U.S. imports of light oil fall dramatically, and light oil crowds out the use of medium crude by U.S. refiners. In addition, fuel prices fall and U.S. GDP rises. We then use our model to examine the potential implications of the former U.S. crude oil export ban. The model predicts that the ban was a binding constraint in 2013 through 2015. We find that the distortions introduced by the policy are greatest in the refining sector. Light oil prices become artificially low in the U.S., and U.S. refineries produce inefficiently high amount of refined products, but the impact on refined product prices and GDP are negligible.
    Date: 2018
  46. By: Coon, Randal C.; Hodur, Nancy M.; Bangsund, Dean A.
    Keywords: Demand and Price Analysis, Environmental Economics and Policy, Marketing, Resource /Energy Economics and Policy
    Date: 2017–06–15
  47. By: Perrotton, F.; Massol, O.
    Abstract: This paper examines the deployment of a natural gas pipeline in a developing region where the rate-of-return (RoR) regulation has been implemented to attract investment. We assume that the pipeline firm considers the proven demand emanating from a few large industrial sites but ignores the eventual rise of other domestic-oriented uses. We first assess the magnitude of the overcapitalization generated ex ante at the planning stage by the application of RoR regulation (i.e., the Averch-Johnson effect). We then analyze the ex-post situation when the enlarged domestic demand materializes. We prove that the allowable rate of return can be set to obtain ex ante the degree of overcapitalization needed ex post to serve the enlarged demand in a costefficient manner. We finally discuss whether RoR regulation can fulfill two public policy objectives: optimally building ahead of proven demand and protecting society from monopoly prices.
    Date: 2018
  48. By: Bangsund, Dean A.; Hodur, Nancy M.
    Keywords: Demand and Price Analysis, Environmental Economics and Policy, Land Economics/Use, Production Economics
    Date: 2017–06–15
  49. By: Viebahn, Peter (Ed.); Zelt, Ole (Ed.); Fischedick, Manfred (Ed.); Wietschel, Martin (Ed.); Hirzel, Simon (Ed.); Horst, Juri (Ed.)
    Abstract: Der Teilbericht 2 enthält alle 31 Technologieberichte, die im Forschungsvorhaben "Technologien für die Energiewende" erstellt wurden. Für jedes Technologiefeld wird der Entwicklungsstatus und der Bedarf an Forschung und Entwicklung dargestellt. Die Bewertung erfolgte mittels 12 Bewertungskriterien, die nach dem klimapolitischen und energiewirtschaftlichen Beitrag der jeweiligen Technologien fragen, die Positionierung deutscher Unternehmen im internationalen Kontext betrachten sowie die Systemkompatibilität bewerten. Hinzu kommen Aspekte der gesellschaftlichen Akzeptanz sowie des Standes von F&E im internationalen Vergleich. Band 1 enthält die Technologieberichte aus den Bereichen Erneuerbare Energien, konventionelle Kraftwerke und Infrastruktur.
    Date: 2018
  50. By: Andrighetto, N.; Masiero, M.; Pettenella, D.
    Abstract: This paper aims to describe and analyse available data on the main components stages of the wood energy value chain in Italy, highlighting discrepancies between data about woody biomass consumption and domestic supply. Discrepancies are probably connected to informal harvesting, historically a source if raw material not easily captured by official statistics, and to the lack of information regarding the energy utilization of sources not directly connected to forest operations, like, for example, residues from industrial processing, post-consumer recovered wood and biomass from urban forests. The paper focuses on the role played by these non-forest sources. In other European countries such as Germany, France and the United Kingdom, available information gives evidence that these resources cover an important share of woody biomass sources used for energy production, while in Italy, until now, there are no reliable data on the global availability of non-forest wood resources or their utilization for energy purposes. This paper aims to understand the main factors that can influence the utilization of these sources in Italy, analysing the legislative framework and competition with other market sectors for the same raw material. At the Italian level, the competition with panel production seems to strongly limit the use of recovered material for energy purposes. As in other EU countries, data on wood processing residues are scarce and not well organized, even if the utilization of woody biomass for energy production appears to be a rather common practice.
    Keywords: Agricultural and Food Policy
    Date: 2018–07–21
  51. By: Viebahn, Peter; Zelt, Ole; Fischedick, Manfred; Hildebrand, Jan; Heib, Sascha; Becker, Daniela; Horst, Juri; Wietschel, Martin; Hirzel, Simon; Neumann, Sven
    Abstract: Der Politikbericht ist ein Ergebnis des Forschungsvorhabens "Technologien für die Energiewende", das vom Bundesministerium für Wirtschaft und Energie (BMWi) als Teil des strategischen Leitprojekts "Trends und Perspektiven der Energieforschung" von 2016 bis 2018 gefördert wurde. Er enthält neben einer kurzen deutschen und englischen Einleitung vierseitige Zusammenfassungen zu jedem der 31 analysierten Technologiefelder und eine Kurzdarstellung der Bewertungsmethodik. Die Zusammenfassungen sind gegliedert nach Definition des Technologiefeldes, aktueller Stand der Technologie, ausgewählte Bewertungskriterien und F&E-Empfehlungen.
    Date: 2018
  52. By: Viebahn, Peter (Ed.); Zelt, Ole (Ed.); Fischedick, Manfred (Ed.); Wietschel, Martin (Ed.); Hirzel, Simon (Ed.); Horst, Juri (Ed.)
    Abstract: Der Teilbericht 2 enthält alle 31 Technologieberichte, die im Forschungsvorhaben "Technologien für die Energiewende" erstellt wurden. Für jedes Technologiefeld wird der Entwicklungsstatus und der Bedarf an Forschung und Entwicklung dargestellt. Die Bewertung erfolgte mittels 12 Bewertungskriterien, die nach dem klimapolitischen und energiewirtschaftlichen Beitrag der jeweiligen Technologien fragen, die Positionierung deutscher Unternehmen im internationalen Kontext betrachten sowie die Systemkompatibilität bewerten. Hinzu kommen Aspekte der gesellschaftlichen Akzeptanz sowie des Standes von F&E im internationalen Vergleich. Band 2 enthält die Technologieberichte aus den Bereichen Sektorenkopplung, Energie- und Ressourceneffizienz in Gebäuden sowie in der Industrie und integrative Aspekte.
    Date: 2018
  53. By: Viebahn, Peter; Kobiela, Georg; Zelt, Ole; Wietschel, Martin; Hirzel, Simon; Horst, Juri; Hildebrand, Jan
    Abstract: Der Teilbericht 1 stellt die Methodik dar, die im Forschungsvorhaben "Technologien für die Energiewende" zur multikriteriellen Bewertung von 31 Technologiefeldern verwendet wurde.
    Date: 2018

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