nep-ene New Economics Papers
on Energy Economics
Issue of 2018‒12‒03
35 papers chosen by
Roger Fouquet
London School of Economics

  1. Determinantes del consumo de energía eléctrica del sector residencial en Uruguay By Paula Laureiro
  2. Deploying gas power with CCS: The role of operational flexibility, merit order and the future energy system By Schnellmann, M.; Chyong, C-K.; Reiner, D.; Scott, S.
  3. Renewable Electricity Grids, Battery Storage and Missing Money: An Alberta Case Study By Duan, J.; McKenna, A.; Van Kooten, G.C.; Liu, S.
  4. Energy efficiency programs in the context of increasing block tariffs: The case of residential electricity in Mexico By Hancevic, P.; Lopez-Aguilar, J.
  5. Integrating renewables in mining: Review of business models and policy implications By Galina Alova
  6. Carbon tax in small open economies: an analysis on its economic efficiency By José María Martín-Moreno; Jorge Blázquiez; Rafaela Pérez; Jesús Ruiz
  7. Techno-economic modelling of low-voltage networks: A concept to determine the grid investment required in Germany and the implications for grid utilisation fees By Marwitz, Simon; Elsland, Rainer
  8. Energy for adaptation: connecting the Paris Agreement with the Sustainable Development Goals By Marinella Davide; Enrica De Cian; Alexis Bernigaud
  9. Addressing the climate problem: Choice between allowances, feed-in tariffs and taxes By Amundsen, Eirik S.; Andersen, Peder; Mortensen, Jørgen Birk
  10. Competitive Advantage in the Renewable Energy Industry: Evidence from a Gravity Model By Onno Kuik; FrŽdŽric Branger; Philippe Quirion
  11. Clean power for a cool planet: Electricity infrastructure plans and the Paris Agreement By Mariana Mirabile; Jennifer Calder
  12. Low Emission Zones in cities: how do freight and delivery companies cope? By Laetitia Dablanc; Cecilia Cruz; Antoine Montenon
  13. The Propagation of Regional Shocks in Housing Markets: Evidence from Oil Price Shocks in Canada By Lutz Kilian; Xiaoqing Zhou
  14. Reporting on capacity-building and technology support under the Paris Agreement: Issues and options for guidance By Justine Garrett; Sara Moarif
  15. The role of individual preferences to explain the energy performance gap. By SalomŽ Bakaloglou; DorothŽe Charlier
  16. The value of forecasts: Quantifying the economic gains of accurate quarter-hourly electricity price forecasts By Christopher Kath; Florian Ziel
  17. Towards global SEEA Air Emission Accounts: Description and evaluation of the OECD methodology to estimate SEEA Air Emission Accounts for CO2, CH4 and N2O in Annex-I countries to the UNFCCC By Florian Flachenecker; Emmanuelle Guidetti; Pierre-Alain Pionnier
  18. Institutional framework and financial arrangements for supporting the adoption of Resource Recovery Reuse technologies in South Asia By Bekchanov, Maksud; Evia, Pablo; Hasan, Mohammad Monirul; Adhikari, Narayan; Godhalekar, Daphne
  19. An Advantage of Emission Intensity Regulation for Emission Cap Regulation in a Near-Zero Emission Industry By Hirose, Kosuke; Matsumura, Toshihiro
  20. Climate change: Back to development By Michel Damian; Luigi De Paoli
  21. Pathway to a Low-Carbon Transport Future: The Case of Shenzhen By Jimin Zhao
  22. Fuel prices and road accident outcomes in New Zealand By Rohan Best; Paul J. Burke
  23. Incentives to (not) Disclose Energy Performance Information in the Housing Market By Elisabetta Cornago; Luisa Dressler
  24. Economic impact of energy consumption change caused by global warming By Peter A. Lang; Kenneth B. Gregory
  25. CGE Microsimulation Analysis of Electricity Tariff Increases: The Case of South Africa By Mbanda, Vandudzai; Bonga-Bonga, Lumengo
  26. Oil Price Dynamics and Business Cycles in Nigeria:A Bayesian Time Varying Analysis By Lartey, Abraham
  27. Heterogeneous Impacts of Cost Shocks, Strategic Bidding and Pass-Through: Evidence from the New England Electricity Market By Harim Kim
  28. Accounting for baseline targets in NDCs: Issues and options for guidance By Manasvini Vaidyula; Christina Hood
  29. The Determinants of CO2 Emissions Differentials with Cross-Country Interaction Effects: A Dynamic Spatial Panel Data Bayesian Model Averaging Approach By Lisa Gianmoena; Vicente Rios
  30. Optimal taxation, environment quality, socially responsible firms and investors By Thomas Renström; Luca Spataro
  31. Price and network dynamics in the European carbon market By Andreas Karpf; Antoine Mandel; Stefano Battiston
  32. Cost comparison of climate change mitigation options By Pena-Levano, L.; Taheripour, F.; Tyner, W.
  33. Economics of GHG abatement strategies in Finnish mixed dairy farms By Lankoski, J.; Britz, W.; Lotjonen, S.; Ollikainen, M.
  34. Assessment of Benefits Commercial Customers Can Receive from Their Demand Flexibility in the Power Market of Georgia By Ekaterine Maglakelidze; Maia Veshaguri; Eka Gegeshidze; Natia Kamushadze
  35. Platform Competition: Who Benefits from Multihoming? By Dana Kassem

  1. By: Paula Laureiro (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración.)
    Abstract: This research examines the determinants of residential electricity demand for Uruguay. Using extended demand models, it analyses several socio-economic factors affecting households' electricity consumption -per capita income, household composition, housing characteristic, equipment and the relative participation of some energy uses-. The data belong to the Demand and Use of Electricity Survey of the Urban Residential Sector carried out for Uruguay in 2015. First, using OLS we estimate the effects of the socio-economic variables for the average consumption and these results are compared with those that arise from the estimation of three socioeconomic levels -low, medium and high-. In addition, we study the impact of these variables along the distribution of consumption based on the quantile regression method. The results indicate that per capita income, household composition, housing characteristics, air conditioning and heating possession, are important to explain household electricity consumption. With regard to the share of energy uses, it is observed that those associated with thermal comfort, particularly heating, together with cooking, are those with the greatest effect on the consumption of electrical energy. These results vary depending on the household socioeconomic level and its location in the distribution of consumption of electricity. In particular, household composition variables have a greater impact on households with lower electricity consumption, while the variables associated with housing and heating use show a higher effect on high consumption levels. This is the first study that evaluates the electricity demand throughout the consumption distribution based on the quantile regression method for Uruguay. The existence of differences between the quantiles of consumption indicates the benefits of using this method for the residential demand analysis.
    Keywords: Residential electricity demand, energy uses, quantile regressions
    JEL: D12 C25 C25 Q41
    Date: 2018–05
  2. By: Schnellmann, M.; Chyong, C-K.; Reiner, D.; Scott, S.
    Abstract: Combined cycle gas turbine (CCGT) power plants are an important part of many electricity systems. By fitting them with carbon capture their CO2 emissions could be virtually eliminated. We evaluate CCGT plants with different variations of post combustion capture using amine solvents, covering a range of options, including solvent storage, partial capture and shifting the energy penalty in time. The analysis is based on the UK electricity system in 2025. The behaviour of individual CCGT plants is governed by the plant’s place in the merit order and to a lesser extent by CO2 reduction targets for the electricity system. In the UK, CCGT plants built from 2016 onwards will emit ~90% of the CO2 emissions of the whole CCGT fleet in 2025. The typical ‘base case’ CCGT plant with capture is designed to capture 90% of the CO2 emissions and to operate dynamically with the power plant. Downsizing the capture facility could be attractive for low-merit plants, i.e. plants with high short-run marginal costs. Solvent storage enables electricity generation to be decoupled in time from the energy penalty associated with carbon capture. Beyond a few minutes of solvent storage, substantial tanks would be needed. If solvent storage is to play an important role, it will require definitions of ‘capture ready’ to be expanded to ensure sufficient land is available.
    Keywords: Carbon capture and storage; Flexibility; Combined cycle gas turbine (CCGT); Power plants; Electricity system; Amine solvents
    JEL: L94 Q4
    Date: 2018–11–26
  3. By: Duan, J.; McKenna, A.; Van Kooten, G.C.; Liu, S.
    Abstract: In this study, we simulate a hybrid renewable energy system with battery storage to power the Alberta grid, to meet the province s goal of phasing out coal-fired power plants by 2030. In doing so, we study the optimal generation mix based on wind, solar, and load data, and we consider the so-called missing money problem in determining how Alberta will be able to facilitate a shift away from fossil fuels sustainably. We find that high carbon tax rates allow for higher levels of wind integration and introduce battery storage into the model, while solar energy remains economically infeasible. This allows the grid to depart from using combined-cycle gas plants to meet base load, though we find that combustion gas turbines are still necessary to act as peakers. One of economic consequence of this situation is that missing money problem is exacerbated, and then a compensation mechanism like the capacity market is necessary for the sake of electricity source adequacy and reliability. Despite this, renewable capacity factors in Alberta are potentially high, and as costs decline in the future, renewable energy will play a key role in meeting energy demand. Acknowledgement :
    Keywords: Resource/Energy Economics and Policy
    Date: 2018–07
  4. By: Hancevic, P.; Lopez-Aguilar, J.
    Abstract: Increasing block pricing schemes represent difficulties for applied researchers who try to recover demand parameters, in particular, price and income elasticities. The Mexican residential electricity tariff structure is amongst the most intricate around the globe. In this paper, we estimate the residential electricity demand and use the corresponding structural parameter estimates to simulate an energy efficiency improvement scenario, as suggested by the Energy Transition Law of December 2015. The simulated program consists of a massive replacement of electric appliances (air conditioners, fans, refrigerators, washing machines, and light-bulbs) for more energy-efficient units. The main empirical findings are the following: overall residential electricity consumption decreases 8.9% and the associated expenditure falls 11.1%. Additionally, the electricity subsidy decreases 360 million of USD per year and there is an annual cut in CO2 emissions of 3.5 million of tons. Acknowledgement : We would like to thank seminar participants at CIDE for their helpful comments and suggestions. We are grateful for the much valuable help on data collection by the Subsecretar ?a de Electricidad at the Mexican Energy Ministry (SENER).
    Keywords: Resource/Energy Economics and Policy
    Date: 2018–07
  5. By: Galina Alova
    Abstract: Mining activities are energy-intensive and rely largely on fossil fuels to meet their energy demands. This exposes the mining sector to potential policy and regulatory risks, stemming from government efforts to shift the global economy to a low-emission development pathway, as envisaged by the Paris Agreement. At the same time, renewables have become an increasingly cost-competitive source of power generation. This has resulted in a business case for the adoption of solar and wind energy solutions in the mining sector, to reduce costs as well as carbon footprint of operations. The sector’s energy transition also presents an opportunity for resource-rich countries, including developing economies, to foster the synergistic development of higher value added domestic activities in the renewable energy sector. The shift of the mining industry to low-carbon energy has the potential to contribute to advancing the climate and sustainable development agenda, while also pursuing economic diversification objectives. However, the integration of new technologies into conventional power systems comes with risks and challenges. This paper aims to enhance the understanding of the key drivers for, and obstacles to, renewable energy integration in mining operations, based on a review of over 30 existing projects worldwide. The analysis identifies a need for an enabling policy environment, encompassing among others a competitive energy market structure and adequate energy infrastructure, to overcome current challenges and support the synergies between the development of the mining and renewable energy sectors.
    Keywords: carbon dioxide emissions, energy transition, mining, photovoltaic energy, renewable energy, sustainable development, wind power
    JEL: L72 Q32 Q42
    Date: 2018–11–27
  6. By: José María Martín-Moreno (University of Vigo); Jorge Blázquiez (KARSARC); Rafaela Pérez (University Complutense of Madrid and ICAE); Jesús Ruiz (University Complutense of Madrid and ICAE)
    Abstract: The environmental objectives of the Paris Agreement imply that all policy levers will be eventually used to curb carbon emissions, including a carbon tax and specific taxes on fossil fuels. In this context, we identify the optimal tax-mix for oil, natural gas and coal in order to achieve a specific carbon emissions target for Spain, a competitive and small open economy. In a second step, we compare the optimal tax-mix to a standard carbon tax. This analysis is conducted in a general equilibrium framework. The results of the model suggest that: first, a carbon tax is suboptimal from a second-best point of view. In particular, carbon taxes are an unsatisfactory policy tool for mild environmental targets. Second, governments must always tax coal heavily to reduce CO2 emissions. In addition, subsidizing oil and natural gas could be part of an optimal strategy. This is a counterintuitive and innovative result. Third, we also find that the tax on oil should always be lower than both the tax on natural gas as well as the tax on coal. Fourth, marginal abatement costs of CO2 in terms of social welfare increases as the environmental policy becomes more ambitious. Finally, revenues from a carbon tax are higher than those arising from an optimal tax-mix, which could create a dilemma for policymakers.
    Keywords: carbon tax, CO2 emissions, environmental policy, fossil fuels, optimal taxes.
    JEL: C61 F41 H23
    Date: 2018–11
  7. By: Marwitz, Simon; Elsland, Rainer
    Abstract: The increasing deployment of decentralised rooftop photovoltaic systems (PV systems) and the expected future diffusion of plug-in electric vehicles (PEVs) can have a major influence on the need to expand low-voltage networks in the near future. The associated grid investments are refinanced via grid utilisation fees (GUF). Some of the GUF are passed on from higher to lower voltage lev-els. At the same time, decentralised electricity generation from PV systems is currently exempt from paying GUF in Germany. This study determines the grid investment required based on the example of a low-voltage network in a suburb and the underlying change in electricity demand used to refinance the grid in-vestment. A newly developed modelling concept is introduced to do so. The analysis focuses on the German household sector for the year 2030. Key find-ings from the analysis are that the future penetration of PV systems and the charging capacity of PEVs will have a considerable influence on maximum grid loads and the associated investment requirements. The required grid invest-ment mainly concerns additional lines or (adjustable) local grid transformers. Furthermore, the analysis shows a direct correlation between the self-consumption of decentrally generated power, the increased electricity demand due to PEVs and the required grid investment. This shows that additional grid investment is required from an average penetration rate of 0.5 kW PEV inverter power output per person and 1 kWp installed PV capacity per person in the lo-cal network area. At the same time, GUF can be reduced due to the increase in electricity demand by PEVs. Correspondingly, PV systems reduce the amount of power withdrawn from the grid, which means the specific GUF could increase by up to 2.1 eurocent per kWh by 2030 under the current surcharge mecha-nism. Households with an electric vehicle but without a photovoltaic system contribute roughly four times as much to refinancing the electric grids as com-parable households without an electric vehicle but with a photovoltaic system do.
    Keywords: electric vehicle (PEV),rooftop photovoltaic system
    Date: 2018
  8. By: Marinella Davide (Department of Economics, University Of Venice Cà Foscari; CMCC Foundation - Euro-Mediterranean Center on Climate Change); Enrica De Cian (Department of Economics, University Of Venice Cà Foscari; CMCC Foundation - Euro-Mediterranean Center on Climate Change); Alexis Bernigaud (CMCC Foundation - Euro-Mediterranean Center on Climate Change)
    Abstract: Increased effort to cope with the rapidly emerging impacts of climate change is urgently needed. Whether adaptation bears the risk of inducing a negative feedback loop through its energy requirements has not been investigated. Here we examine the Nationally Determined Contributions submitted by world governments under the Paris Agreement with the aim of identifying the adaptation options associated with energy use and of defining energy use for adaptation. By linking the resulting options to the United Nations' Sustainable Development Goals, through the related targets and indicators, we evaluate the extent to which energy use for adaptation facilitate progress towards sustainability. Drawing from the relevant literature on vulnerability and energy, we provide new evidence on the role that energy plays in the context of adaptation, proposing a framework that connects adaptation, mitigation, and sustainable development through the lens of the energy requirements of adaptation strategies. Results highlight priority policy actions to promote climate-development synergies and indicate where quantitative system models could focus in order to integrate adaptation energy needs in future energy scenarios.
    Keywords: Climate change, Adaptation, energy, sustainable development
    JEL: Q54 Q4 Q01
    Date: 2018
  9. By: Amundsen, Eirik S. (University of Bergen, Department of Economics); Andersen, Peder (Department of Food and Resource Economics, University of Copenhagen); Mortensen, Jørgen Birk (Department of Economics, University of Copenhagen)
    Abstract: Instruments chosen to pursue climate related targets are not always efficient. In this paper we consider an economy with three climate related targets for its electricity generation: a given share of “green” electricity, a given expansion of “green” electricity, and a given reduction of “black” (fossil based) electricity. At its disposal the country has three instruments: an allowance system (tradable green certificates), a subsidy system (feed-in tariffs) and a Pigouvian fossil tax. Each of these instruments may be used to attain any of the given targets. Within the setting of the model it is verified that each kind of the target has only a single efficient instrument under certainty, and that there is a deadweight loss of using other instruments to achieve the target. Similarly, there is also an analysis of instrument choice when several targets are to be attained at the same time. The paper also discusses the case of simultaneous targets as well as the relevance of the various targets.
    Keywords: energy policy; green certificates; subsidies; Pigouvian taxes; climate change
    JEL: C70 Q28 Q42 Q48
    Date: 2018–04–18
  10. By: Onno Kuik (IVM, VU Amsterdam); FrŽdŽric Branger (CIRED); Philippe Quirion (CIRED, CNRS)
    Abstract: Pioneering domestic environmental regulation may foster the creation of new eco-industries. These industries could benefit from a competitive advantage in the global market place. This article examines empirical evidence of the impact of domestic renewable energy policies on the export performance of renewable energy products (wind and solar PV). We use a gravity model of international trade with a balanced dataset of 49 (for wind) and 40 (for PV) countries covering the period 1995-2013. The stringency of renewable energy policies are proxied by installed capacities. Our econometric model shows evidence of competitive advantage positively correlated with domestic renewable energy policies, sustained in the wind industry but brief in the solar PV industry. We suggest that the reason for the dynamic difference lies in the underlying technologies involved in the two industries.
    Keywords: Competitive Advantage, Gravity Model, Wind Industry, Solar PV Industry, Green Growth
    JEL: F14 K32 Q42
    Date: 2018–10
  11. By: Mariana Mirabile (OECD); Jennifer Calder (OECD)
    Abstract: Meeting the temperature goals of the Paris Agreement requires a transformational change in our infrastructure systems. Given the long lifetime of infrastructure, there is an urgency to build more of the right type of it. The failure to do so will lock-in emissions for decades to come, or create stranded assets. This working paper aims to shed light on the extent to which current electricity generation projects under construction at the global level - the "pipeline" - are consistent with what a low-carbon transition requires.
    Keywords: Coal, Electricity Sector, Environment, Gas, Just transition, Political economy, Renewable energy
    JEL: L94 O13 P48 Q4
    Date: 2018–12–03
  12. By: Laetitia Dablanc (IFSTTAR/AME/SPLOTT - Systèmes Productifs, Logistique, Organisation des Transports et Travail - IFSTTAR - Institut Français des Sciences et Technologies des Transports, de l'Aménagement et des Réseaux - Communauté Université Paris-Est); Cecilia Cruz (ThéMA - Théoriser et modéliser pour aménager (UMR 6049) - UB - Université de Bourgogne - CNRS - Centre National de la Recherche Scientifique - UFC - Université de Franche-Comté); Antoine Montenon (IFSTTAR/AME/SPLOTT - Systèmes Productifs, Logistique, Organisation des Transports et Travail - IFSTTAR - Institut Français des Sciences et Technologies des Transports, de l'Aménagement et des Réseaux - Communauté Université Paris-Est)
    Abstract: This paper presents the results from RETMIF project financed by the French Agency for Energy (Ademe). The objective of this research was to understand the evolution of Low Emission Zones and their impact on urban freight transport in order to identify lessons which will be useful pour Paris Low Emission Zone. In order to improve air quality in European cities, public authorities have implemented Low Emission Zones (LEZ) in which access by the most polluting vehicles is banned. We assess the impacts on urban freight companies of implementing a LEZ, through three case studies: London, Berlin and Gothenburg. Two approaches were developed: first we collected quantitative data about freight companies and their activities in the three cities; secondly, we interviewed various stakeholders (local authorities, transport associations, freight companies). We conclude that the implementation of a LEZ tends to reduce the number of freight companies delivering urban areas, while encouraging public and private stakeholders to take action to modernise freight transport sector. Urban freight indeed requires modernisation: a high percentage of old vehicles still operate in many European areas; and many small transport and delivery companies have financial and economic difficulties. Low Emission Zones represent an answer to promote a restructuring of the urban freight market.
    Abstract: Cet article présente des résultats issus du projet de recherche RETMIF (Réduction des émissions du transport de marchandises, scénarios pour l'Île-de-France, 2013-2015) financé par l'ADEME/AACT-AIR, dont l'objectif était de comprendre l'évolution des zones à émissions réduites européennes, et plus particulièrement leur impact sur le transport de marchandises, afin d'en tirer des enseignements qui pourraient servir à la mise en place d'une ZER en région parisienne. Les « zones à émissions réduites » (ZER) sont des parties d'une ville dont l'accès est réservé aux véhicules les moins polluants. Elles sont connues en Europe sous le vocable Low Emission Zones et ont désormais en France le nom de « zones à circulation restreinte » (ZCR) depuis l'adoption de la loi pour la transition énergétique de 2015. Avec plus de 200 d'entre elles déjà opérationnelles, les ZER font désormais partie des principales solutions mises en œuvre par les villes européennes pour améliorer la qualité de l'air. La question de leurs impacts sur la qualité de l'air est traitée par la littérature mais celle de leurs impacts socio-économiques sur le secteur professionnel du transport de marchandises l'est peu. C'est pourquoi nous avons entrepris, par une méthodologie originale, quantitative et qualitative, d'identifier les conséquences pour les activités des entreprises de transport de la mise en place de ZER déjà établies depuis plusieurs années. Nous avons choisi les exemples de Londres, Berlin et Göteborg. Deux approches ont été développées : d'une part, la collecte de données quantitatives sur le secteur du transport de marchandises ; et des entretiens auprès de différents acteurs (autorités locales, fédérations de transporteurs et entreprises de transport) d'autre part. L'analyse de ces données permet de conclure de la façon suivante : la mise en place d'une ZER semble réduire le nombre d'entreprises de transport livrant en ville ; et cette réduction permet aux acteurs – publics et privés – à agir pour sa modernisation. Celle-ci est nécessaire car ce secteur connaît aujourd'hui beaucoup de dysfonctionnements, tant environnementaux du fait de l'utilisation encore importante de véhicules anciens, que sociaux, du fait d'un grand nombre de très petites entreprises ayant des difficultés à maintenir une rentabilité minimale. Les ZER représentent une réponse structurelle favorisant la réorganisation du secteur du transport de marchandises en ville.
    Keywords: low Emission Zone,urban logistics,road transport,public action on air quality,environment,zone à émissions réduites,zones à circulation restreinte,logistique urbaine,transport routier de marchandises,qualité de l’air,environnement
    Date: 2018–10–29
  13. By: Lutz Kilian; Xiaoqing Zhou
    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. Oil price shocks constitute an important source of exogenous regional variation in income in Canada because oil production is highly geographically concentrated. 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 housing demand and 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 propagated to housing markets in non-oil-producing regions by the government redistribution of oil revenue and by increased interprovincial trade.
    Keywords: Econometric and statistical methods, Housing, International topics, Labour markets, Regional economic developments
    JEL: F43 Q33 Q43 R12 R31
    Date: 2018
  14. By: Justine Garrett (OECD); Sara Moarif (International Energy Agency)
    Abstract: The enhanced transparency framework for climate action and support envisaged by the Paris Agreement is to “build on and enhance” current transparency arrangements under the United Nations Framework Convention on Climate Change (UNFCCC). This paper draws lessons from current reporting by Annex I and non-Annex I countries both within and outside the UNFCCC reporting framework to provide options that might inform the development of modalities, procedures and guidelines (MPGs) for reporting of technology transfer and capacity-building support under the Paris Agreement. The paper offers six options for consideration by Parties, with an emphasis on reporting by developing country Parties, given that very limited guidance has been available to these Parties to date. The options include how Parties might provide more guidance for reporting separately on financial, technology and capacity-building support; frame reporting of support needs and support received in the context of nationally determined contributions (NDCs); and facilitate more consistent use of key terminology and clearer reporting.
    Keywords: capacity building, climate change, technology transfer, transparency, UNFCCC
    JEL: F53 O44 Q54 Q56 Q58
    Date: 2018–04–27
  15. By: SalomŽ Bakaloglou (UniversitŽ de Montpellier, CSTB, Chaire Economie du Climat); DorothŽe Charlier (IAE Savoie Mont Blanc)
    Abstract: The aim of this research is to understand the role of socio-economic characteristics and individual preferences to explain the energy performance gap in the residential sector. The gap reflects the difference between theoretical energy consumption of home assessed by engineering models and real energy consumption. Using the ratio of the two consumptions as a measure of the gap, we perform a quantile regression to tease out the effects of preferences on the entire distribution of the energy performance gap spectrum instead of focusing on the conditional average. As a result, this research provides an original contribution: depending on the sense of the gap, our findings suggest that some significant drivers are individual preferences for comfort over economy, explaining until 12% of the gap variability, and poverty. In such a context, some warnings to public authorities are provided regarding the issues of rebound effect and household welfare.
    Keywords: Residential energy consumption, Quantile treatment effect, Quantile regression, Energy Performance Gap, Households Ôpreferences
    JEL: Q41 D12 C26 C21
    Date: 2018–11
  16. By: Christopher Kath; Florian Ziel
    Abstract: We propose a multivariate elastic net regression forecast model for German quarter-hourly electricity spot markets. While the literature is diverse on day-ahead prediction approaches, both the intraday continuous and intraday call-auction prices have not been studied intensively with a clear focus on predictive power. Besides electricity price forecasting, we check for the impact of early day-ahead (DA) EXAA prices on intraday forecasts. Another novelty of this paper is the complementary discussion of economic benefits. A precise estimation is worthless if it cannot be utilized. We elaborate possible trading decisions based upon our forecasting scheme and analyze their monetary effects. We find that even simple electricity trading strategies can lead to substantial economic impact if combined with a decent forecasting technique.
    Date: 2018–11
  17. By: Florian Flachenecker (OECD); Emmanuelle Guidetti (OECD); Pierre-Alain Pionnier (OECD)
    Abstract: This paper describes and evaluates the OECD methodology to estimate Air Emission Accounts (AEAs) for carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O), in line with the System of Environmental Economic Accounting (SEEA).
    Keywords: Air Emission Accounts, Greenhouse Gases, SEEA
    Date: 2018–12–03
  18. By: Bekchanov, Maksud; Evia, Pablo; Hasan, Mohammad Monirul; Adhikari, Narayan; Godhalekar, Daphne
    Abstract: Open dumping of waste and discharging untreated wastewater into environment are key causes of environmental pollution in the developing world, including South Asian countries. Waste and wastewater however can be a source for recovering energy, nutrients and water if properly treated or recycled rather than a cause of pollution and diseases spread. The importance of adopting Resources Recovery and Reuse (RRR) technologies increases under growing demand for food and energy in contrast to depleting fossil fuel mines and groundwater reservoirs. However, institutional framework including the organizations and various stakeholders involved in the waste and wastewater management sectors, government policies and legislation, as well as financial arrangements and incentives to technological change play a pivotal role in adopting and scaling up RRR options. This study therefore focuses on institutional and financial aspects of challenges and opportunities for implementing RRR options in South Asia. It is argued that improving financial capacities, easing to obtain land use permits to expand RRR facilities, maintaining quality of RRR products (compost, biogas), and raising environmental awareness are imperative for the successful performance of the RRR projects in South Asia.
    Keywords: Environmental Economics and Policy, Institutional and Behavioral Economics, Resource /Energy Economics and Policy
    Date: 2018–11–30
  19. By: Hirose, Kosuke; Matsumura, Toshihiro
    Abstract: We revisit command-and-control regulations and compare their efficiencies, in particular, an emission cap regulation that restricts total emissions and an emission intensity regulation that restricts emissions per unit of output under emission equivalence. We find that in both the most stringent target case, when the target emission level is close to zero, and the weakest target case, when the target emission level is close to business as usual, emission intensity yields greater welfare, although the same may not be true in moderate target cases.
    Keywords: near-zero emission industry; emission cap; emission intensity; emission equivalence
    JEL: L13 L51 Q52
    Date: 2018–11–20
  20. By: Michel Damian (GAEL - Laboratoire d'Economie Appliquée de Grenoble - Grenoble INP - Institut polytechnique de Grenoble - Grenoble Institute of Technology - INRA - Institut National de la Recherche Agronomique - CNRS - Centre National de la Recherche Scientifique - UGA - Université Grenoble Alpes); Luigi De Paoli
    Abstract: The Paris Agreement has created a double bifurcation. First, from top-down approach (with an emission limit imposed from above) to a bottom-up approach based on national emissions reduction pledges. And second, from a mitigation-centered policy to a more balanced mitigation and adaptation efforts. The following work proposes, however, that further steps must be taken to bring the theme of development back to the center of the fight against climate change.
    Keywords: climate change,adaptation,mitigation,Paris agreement,sustainable development
    Date: 2018–07
  21. By: Jimin Zhao (Research Associate Professor, Division of Social Science, Hong Kong University of Science and Technology)
    Abstract: Jimin Zhao, Research Associate Professor in the Division of Social Science at the Hong Kong University of Science and Technology, conducted a study to explore the potential for the city to peak its carbon emission in the passenger transport sector. Carbon emissions from the urban passenger transport sector in Shenzhen will more than double by 2050 under current policies. With the right policies, it is possible for Shenzhen to peak its urban passenger transport emissions by 2030. Reducing new car quotas and raising fuel economy standards are essential measures for carbon emission to peak by 2030. Policies needed include raising parking fees, limiting parking supply, increasing EV charging facilities and subway lines, and improving public transport services.
    Keywords: carbon emissions, transport, shenzhen, parking
    Date: 2018–04
  22. By: Rohan Best; Paul J. Burke
    Abstract: Recent years have seen a spike in New Zealand’s road death toll, a phenomenon also seen in some other countries such as Australia. This paper analyses the short-run impact of fuel prices on road accident outcomes in New Zealand, including the numbers of road deaths, accidents, and injuries. Using data for the period 1989–2017, we find a negative relationship between fuel prices and key road-risk outcome variables, including the number of road deaths. There are similar results for models in levels and first differences. The number of serious injuries to cyclists tends to increase when fuel prices are high, however. Lower fuel prices appear to have contributed to New Zealand’s recent uptick in road accidents, pushing against the long-term trend of improved road safety.
    Keywords: fuel price, road accident death, road accident injury
    JEL: Q41 Q48 R41
    Date: 2018–11
  23. By: Elisabetta Cornago; Luisa Dressler
    Abstract: Disclosure of energy performance certificates (EPCs) is often incomplete, which hampers their effectiveness in relieving information asymmetries between landlords and tenants in the housing market. Even when a certificate is available, landlords do not always disclose it. This contradicts the unraveling result, according to which all landlords should disclose quality information unless it is costly to do so. We leverage a cross-sectional dataset of residential rental advertisements from the Belgian region of Brussels to empirically evaluate incentives to disclose an EPC. We find that two fundamental assumptions for the unraveling result are not confirmed in our setting: tenants value energy performance of rental property only when dwellings are of very high quality and do not appear to rationally adjust their expectations when faced with dwellings that withhold their EPC. The paper formulates specific policy advice for reforming EPC mechanisms to increase disclosure rates.
    Keywords: Information Unraveling, Voluntary Information Disclosure, Asymmetric
    Date: 2018–11
  24. By: Peter A. Lang; Kenneth B. Gregory
    Abstract: This paper tests the hypothesis that global warming would be detrimental to the global economy this century. It compares empirical data of energy expenditure and average temperatures of the US states and census divisions against projections using the FUND [1] energy impact functions holding time-dependent parameters, except temperature, constant at 2010 values. It finds that energy expenditure reduces as temperatures increase. This suggests that global warming, by itself, would reduce, not increase, US energy expenditure and so would have a positive, not a negative, impact on US economic growth. Next, these findings are compared against FUND energy expenditure projections for the world for the 21st century. The findings suggest that warming, by itself, would also reduce global energy expenditure. If these findings are correct, and if FUND projections of the non-energy impact sectors are valid, warming would benefit the global economy up to around 4° C increase in average global temperature from 1900. If this is true, the hypothesis is false. In this case, greenhouse gas mitigation policies are detrimental to the global economy. The analysis and conclusions warrant further investigation. We recommend the FUND energy impact functions be modified and recalibrated against empirical data.
    Keywords: Economic impacts, global warming, climate change, energy consumption, empirical evidence, impact function, damage function.
    Date: 2018–10
  25. By: Mbanda, Vandudzai; Bonga-Bonga, Lumengo
    Abstract: This paper analyses the economy-wide and distributional impacts of the increase in electricity tariff in the South African economy. Use is made of CGE-microsimulation to this end. The paper simulates both an actual price increase experienced in the economy and an increase linked to inflation. While the macro results show a negative impact on the economy in terms of a decrease in GDP, an increase in prices and an increase in unemployment, the micro results indicate that poverty, as measured by the headcount rate and poverty incidence curves, declines. This finding is similar to the finding by Boccanfuso et al. (2009) that when a significant proportion of households is connected to the grid, electricity sector reforms in the form of increasing tariffs to expand power generation can lead to poverty reduction.
    Keywords: CGE-microsimulation, electricity, South Africa
    JEL: C63 C68 Q43
    Date: 2018
  26. By: Lartey, Abraham
    Abstract: The study investigated the dynamic relationship between oil prices and Real GDP growth in Nigeria over time by making use of time varying Bayesian VAR with Stochastic volatility. I distinguished between supply and demand shocks by means of a sign restriction. First, the study found that, the response of the Nigerian economy has been varying overtime. Also, GDP growth responds positively to both supply and demand shocks. However, the magnitude of the response to demand shock is larger compared to that of supply shocks. This suggests that overtime an increase in oil prices due to shocks in demand matter most for the Nigerian economy.
    Keywords: Crude oil Price, Real GDP growth, Time Varying Coefficients, Stochastic Volatility
    JEL: E30
    Date: 2018–10–01
  27. By: Harim Kim
    Abstract: Industry-wide shocks can have heterogeneous impacts on firms’ costs due to different firm characteristics. The heterogeneity in these impacts is crucial for understanding the passthrough of the shock, because of its implications on strategic competition. In the context of the gas price shock in the electricity market, I develop a method to identify heterogeneous impacts of the shock and show with a structural analysis that the heterogeneous feature of the shock induces markup adjustments of firms. Pass-through that is estimated without incorporating heterogeneous impacts fails to reflect the change in competition arising from the shock, and is, on average, underestimated.
    Date: 2018–11
  28. By: Manasvini Vaidyula; Christina Hood
    Abstract: Many Parties to the Paris Agreement have expressed greenhouse gas mitigation targets relative to a baseline scenario, or “baseline targets”. Baseline targets in nationally determined contributions (NDCs) could potentially change over time including to update assumptions of emission drivers or reflect improved methodologies. This paper examines issues that can arise under Articles 4 and 6 of the Agreement when baseline targets are updated, such as potential implications of using consistent methodologies throughout the NDC implementation period. The paper also examines transparency-related issues, e.g. information needed for accounting that would be reported and reviewed under Article 13 of the Agreement. Past baseline and reference scenario reporting experience highlights relevant lessons for accounting for baseline targets, including on transparent reporting of baseline scenarios. The paper identifies reporting and accounting guidance options, including when certain types of updates could be applied to baseline targets, that could help Parties address some of these issues.
    Keywords: accounting, baseline targets, guidance, mitigation, NDC, UNFCCC
    Date: 2018–04–27
  29. By: Lisa Gianmoena; Vicente Rios
    Abstract: This study analyzes the importance of a large number of possible determinants of CO2 emissions per capita during the period 1991-2014 for a sample of 123 countries. They key contributions are methodological given that we consider the effect of a great number of economic, institutional, demographic and socio-cultural factors that could affect CO2 emissions employing Spatial Bayesian Model Averaging techniques while accounting for different concepts of cross-country interactions and different spillover processes. Over the different type of interactions considered: geographical, genetic, linguistic and religious we find that traditional geographical interactions outperform the others. Spatial Bayesian Model Averaging analysis enable us to compute the PIPs for the different indicators to generate a probabilistic ranking of relevance for the various CO2 determinants. Our findings suggest that CO2 emissions are mainly determined by economic factors such as the sectoral composition, the prices of gasoline, the intensity of fossil fuels consumption and the level of output. In a intermediate level of importance we find social and demographic factors such as the age composition, the religious attitudes or the social globalization of the population.
    Keywords: Dynamic Spatial Panels, CO2 emissions, Determinants, Spatial Bayesian Model Averaging
    JEL: C1 O13 C23
    Date: 2018–07–01
  30. By: Thomas Renström; Luca Spataro
    Abstract: We characterize the optimal pollution-, capital- and labour-tax structure in a continuous-time growth model in the presence of pollution (resulting from production), both in the first- and second-best, allowing investors to be driven by social responsibility objectives. The social responsibility objective takes the form of warm-glow, as in Andreoni (1990) and Dam (2011), inducing firms to reduce pollution through increased abatement activity. Among the results, the first best pollution tax is still positive under warm-glow, the second-best pollution tax displays the additivity property, and we show the circumstances under which the Chamley-Judd zero capital-income tax result does not hold.
    Keywords: Socially responsible investment, corporate social responsibility, environmental quality, optimal taxation, pollution
    JEL: D21 D53 G11 H21 H23 M14 Q58
    Date: 2018–05–01
  31. By: Andreas Karpf (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Antoine Mandel (CES - Centre d'économie de la Sorbonne - UP1 - Université Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique, PSE - Paris School of Economics); Stefano Battiston (CAMS - Centre d'analyse et de mathématique sociale - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique)
    Abstract: This paper presents an analysis of the European Emission Trading System as a transaction network. It is shown that, given the lack of well-identified trading institutions, industrial actors had to resort to local connections and financial intermediaries to participate in the market. This gave rise to a hierarchical structure in the transaction network. It is then shown that the asymmetries in the network induced market inefficiencies (e.g., increased bid-ask spread) and informational asymmetries, that have been exploited by central agents at the expense of less central ones. Albeit the efficiency of the market has improved from the beginning of Phase II, the asymmetry persists, imposing unnecessary additional costs on agents and reducing the effectiveness of the market as a mitigation instrument.
    Keywords: Network,Carbon market,Climate change,Microstructure
    Date: 2018–09
  32. By: Pena-Levano, L.; Taheripour, F.; Tyner, W.
    Abstract: The global community has reaffirmed its commitment to reduce greenhouse emissions to control the expected increase in the global average temperature. Thus, many governments and private sectors are interested in the cost-efficiency of frequently discussed mitigation methods forest and pasture carbon sequestration (FPCS) subsidy, carbon tax, and biofuels and their impacts on the global economy. We modified our new developed computable general equilibrium for the analysis. We simulate different rates to observe their mitigation potentials. Our results suggest that there is a trade-off between cost-efficiency and emission reduction between policies, where tax can achieve larger emission reductions under the same rate of FPCS but with higher economic costs. Likewise, combining tax and an equivalent subsidy has a larger reduction potential due to the synergistic effects, but food prices increase dramatically. Biofuels proved to be costlier than FPCS or tax. Acknowledgement : We would like to acknowledge and thanks the following institutions: Purdue Research Climate Research Center Ludwig Kruhe Doctoral Fellowship Bilsland Dissertation Doctoral Fellowship For their funding contribution in this research.
    Keywords: Environmental Economics and Policy
    Date: 2018–07
  33. By: Lankoski, J.; Britz, W.; Lotjonen, S.; Ollikainen, M.
    Abstract: We develop a theoretical framework to analyse economically optimal GHG abatement strategies for a mixed farming system with crop and dairy production. Subsequently, it is implemented as a detailed bio-economic optimization model for mixed arable-dairy farms with non-linear crop and milk yield functions and a detailed accounting of Green House Gas emissions, and parameterized to Finnish agricultural and environmental conditions. Focusing on the role of sunk costs of investments and opportunity costs of labour, we analyse optimal farm management decisions under different CO2 tax levels, considering adjustments at the extensive and intensive margin, including changes in manure storage systems and application methods. We find that the amount of GHG abatement responds more strongly to the level of sunk and opportunity costs than the CO2 tax level which underlines the relevance of the planning horizon for that type of analysis. Our findings reveal that low cost abatement options in dairy production are limited. Our model can be easily adjusted to other locations, market and policy conditions and thus provides an interesting starting point for international comparisons. Acknowledgement :
    Keywords: Agricultural and Food Policy
    Date: 2018–07
  34. By: Ekaterine Maglakelidze (The University of Georgia); Maia Veshaguri (Ivane Javakhishvili Tbilisi State University (TSU)); Eka Gegeshidze (The University of Georgia (UG)); Natia Kamushadze (Georgian National Energy and Water Supply Regulatory Commission (GNERC))
    Abstract: The purpose of our study is twofold: the first is to demonstrate that power-intensive commercial entities (with 1,0 MW or more network connection capacities) can benefit from participation in Demand Response (DR) programme(s) by selling excess power generated by them to the balancing market of Georgia if they are permitted to have an access to the electrical grid. The additional benefits come from the avoidance of network charges; and the second is to show that for relatively small power-intensive commercial entities (with 100 kW or less network connection capacities) participation in Demand Response (DR) programme(s) is not equally beneficial but still reasonable. To meet research objectives 4 (four) case studies have been conducted. Study participants were the Hotel (with 1,0 MW network connection capacity) and the private University (with 0,04 MW network connection capacity). Their names cannot be divulged due to the confidentiality requirements. Each of them was offered two DR programme(s) with different schemes for participation. These schemes were approved by DSR participants and adapted to the current needs of National Grid of Georgia. Finally, the cost of each DR programme as well as the expected annual revenues for participants have been calculated based on selected schemes -(a) availability requirement, (b) response time, (c) maximum duration of activation, and (d) estimated number of activations/yr, and on the basis of ESCO?s annual reports reflecting the companies? power consumptions in the year of 2017. Under the study two hypotheses have been tested. The first research hypothesis is following: ?Power-intensive commercial entities (with 1,0 MW or more network connection capacities) can benefit from participation in Demand Response (DR) programme(s) if they are permitted to do so. For these entities more beneficial will be the investments in CCHP (Combined Coolong, Heat, and Power) plant than in PV panels?. The second research hypothesis is following: ?For relatively small power-intensive commercial entities (with 100 kW or less network connection capacities) participation in Demand Response (DR) programme(s) is less profitable but still reasonable. For them it is better to use the generated power for their own purposes than just to sell it to the Balancing Market and make money?. The results of the case studies are presented in the article.
    Keywords: Demand Side Response (DSR), DR programme(s), responsive behavior, demand flexibility, energy efficiency, load management.
    JEL: D22 M31 Q41
    Date: 2018–11
  35. By: Dana Kassem
    Abstract: I ask whether electrification causes industrial development. I combine newly digitized data from the Indonesian state electricity company with rich manufacturing census data. To understand when and how electrification can cause industrial development, I shed light on an important economic mechanism - firm turnover. In particular, I study the effect of the extensive margin of electrification (grid expansion) on the extensive margin of industrial development (firm entry and exit). To deal with endogenous grid placement, I build a hypothetical electric transmission grid based on colonial incumbent infrastructure and geographic cost factors. I find that electrification causes industrial development, represented by an increase in the number of manufacturing firms, manufacturing workers, and manufacturing output. Electrification increases firm entry rates, but also exit rates. Empirical tests show that electrification creates new industrial activity, as opposed to only reorganizing industrial activity across space. Higher turnover rates lead to higher average productivity and induce reallocation towards more productive firms in electrified areas. This is consistent with electrification lowering entry costs, increasing competition and forcing unproductive firms to exit more often. Without the possibility of entry or competitive effects of entry, the effects of electrification are likely to be smaller.
    JEL: D24 L60 O13 O14 Q41
    Date: 2018–11

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