|
on Energy Economics |
| By: | Jonathon E. Hughes (Department of Economics, University of Colorado at Boulder); Ian Lange (Division of Economics and Business, Colorado School of Mines) |
| Abstract: | The movement to deregulate major industries over the past 40 years has produced large efficiency gains. However, distributional effects have been more difficult to assess. In the electricity sector, deregulation has vastly increased information available to market participants through the formation of wholesale markets. We test whether upstream suppliers, specifically railroads that transport coal from mines to power plants, use this information to capture economic rents that would otherwise accrue to electricity generators. Using natural gas prices as a proxy for generators' surplus, we find railroads charge higher markups when rents are larger. This effect is larger for deregulated plants, highlighting an important distributional impact of deregulation. This also means policies that change fuel prices can have substantially different effects on downstream consumers in regulated and deregulated markets. |
| Keywords: | Deregulation, Price Discrimination, Electricity Markets, Procurement Contracts |
| JEL: | L11 L51 Q48 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:mns:wpaper:wp201806&r=all |
| By: | Ilya Stepanov (National Research University Higher School of Economics); Johan Albrecht (National Research University Higher School of Economics) |
| Abstract: | The issue of instrument choice is vital for climate policy. Carbon pricing is used next to a range of traditional energy taxes and renewable energy policies such as feed-in tariffs and minimal renewable generation targets. Several countries introduced carbon taxes alongside existing energy taxes such as excise duties on vehicle fuels. Since 2005, the EU Emissions Trading Scheme (EU ETS) has attached a direct price to the GHG emissions of ETS companies. The combination of multiple instruments and explicit and indirect carbon price signals created a complex and frequently changing institutional landscape that blurs the contribution of each policy instrument. Can the decarbonization of the European economy be attributed to carbon price instruments or to renewable energy policies together with other fiscal instruments? This paper clarifies the relative impact of explicit carbon price instruments (carbon taxes and EU ETS) compared to other instruments, namely renewable energy policies and indirect carbon price signals (general energy taxes). The methodology is based on the calculation of the implicit carbon price in existing fiscal systems. On the basis of panel data for 30 European countries 1995–2016, several fixed-effect regression estimations were performed. The results indicate a greater but decreasing impact of price instruments on carbon intensity compared to renewable energy policies and a greater but decreasing relative impact of indirect price signals compared to explicit ones. |
| Keywords: | energy taxes, carbon tax, cap-and-trade, renewable energy policy, climate change, climate policy |
| JEL: | Q52 Q58 Q48 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:hig:wpaper:211/ec/2019&r=all |
| By: | Waldemar Marz; Frank Goetzke |
| Abstract: | Climate policy instruments in the transportation sector like fuel economy standards (CAFE) and fuel taxes not only affect households’ vehicle choice, but also the urban form in the long run. We introduce household level vehicle choice into the urban economic monocentric city model and run long-term climate policy scenarios to analyze the welfare effects of this urban adjustment in reaching emission goals. This goes beyond more short-term empirical analyses of the rebound effect in driving. We find that stricter CAFE standards lead to an urban expansion and considerable additional welfare costs for certain emission goals, unaccounted for in the previous literature on welfare costs of CAFE. These welfare costs can be reduced roughly by one half through the combination of CAFE with an urban growth boundary. Fuel taxes, in turn, lead to an urban contraction and additional welfare gains. We analyze the sensitivity of the results to changes in model parameters. |
| Keywords: | Fuel economy standards, fuel tax, monocentric city, rebound effect |
| JEL: | H23 L90 Q48 R40 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ifowps:_292&r=all |
| By: | David Glotin (CIRED); Cyril Bourgeois (CIRED); Louis-Gaëtan Giraudet (CIRED, Ecole des Ponts Paristech); Philippe Quirion (CIRED, CNRS) |
| Abstract: | Model-based projections of energy demand are hardly ever confronted with observations. This shortfall threatens the credibility policy-makers might attach to integrated energy-economy models. One reason for it is the lack of historical data against which to calibrate models, a prerequisite for attempting to replicate past trends. In this paper, we (i) assemble piecemeal historical data to reconstruct the energy performance of the residential building stock of 1984 in France; (ii) calibrate Res-IRF, a bottom-up model of residential energy demand in France, against these data and run it to 2012. In a preliminary simulation that only considers the data that were known at the beginning of the simulated period, we find that the model accurately predicts energy consumption per m² aggregated over all dwelling types, with a Mean Absolute Percentage Error below 1.5% and 85% of the variance explained. These figures reach 0.5% and 96% when we consider the best-fit of 1,920 scenarios covering the uncertainty surrounding the parameters of the initial year. Energy demand is unevenly well replicated across fuels, which reveals some limitations in the ability of the model to capture politically-driven trends such as the expansion of the natural-gas distribution network. The overall results however build confidence in the general accuracy of the Res-IRF model. We discuss the directions for data collection which would ease comparison between simulations and observations in future hindcast experiments.? |
| Keywords: | retrospective simulation, backtesting, hindcast, model evaluation, residential sector |
| JEL: | Q47 Q48 Q58 H23 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2019.03&r=all |
| By: | Guzman, Ivan; Salazar, Ricardo |
| Abstract: | This paper presents a theoretical model for the optimization of the decision-making process of power purchase of the electric utility companies of the Dominican Republic, taking into account the demand of end-users of the service, the short-term marginal cost of energy in the wholesale power market, and the budgetary constraints of the utility companies. This model was applied to estimate the short-term price elasticity of electricity demand for the three largest electric utility companies of the Dominican Republic, during the period 2007-2016; this evaluation was made using time series analysis techniques. The elasticities estimated were in the range of -0.012 to -0.018. It is also explored if these values undergo intraday variations. The paper closes outlining some welfare implications of the results obtained as well as policy recommendations. |
| Keywords: | Power Markets; Economics of Regulation; Electricity Demand; Electric Utilities |
| JEL: | L11 L13 L43 L52 L94 |
| Date: | 2017–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:92083&r=all |
| By: | Mohsen Khorasany; Yateendra Mishra; Gerard Ledwich |
| Abstract: | Recent innovations in Information and Communication Technologies (ICT) provide new opportunities and challenges for integration of distributed energy resources (DERs) into the energy supply system as active market players. By increasing integration of DERs, novel market platform should be designed for these new market players. The designed electricity market should maximize market surplus for consumers and suppliers and provide correct incentives for them to join the market and follow market rules. In this paper, a feeder-based market is proposed for local energy trading among prosumers and consumers in the distribution system. In this market, market players are allowed to share energy with other players in the local market and with neighborhood areas. A Two-StepMarket Clearing (2SMC) mechanism is proposed for market clearing, in which in the first step, each local market is cleared independently to determine the market clearing price and in the second step, players can trade energy with neighborhood areas. In comparison to a centralized market, the proposed method is scalable and reduces computation overheads, because instead of clearing market for a large number of players, the market is cleared for a fewer number of players. Also, by applying distributed method and Lagrangian multipliers for market clearing, there is no need for a central computation centre and private information of market players. Case studies demonstrate the efficiency and effectiveness of the proposed market clearing method in increasing social welfare and reducing computation time. |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1902.02869&r=all |
| By: | William Brock; Anastasios Xepapadeas |
| Abstract: | We study climate change policies by using the novel pattern scaling approach of regional transient climate response to develop an economyclimate model under conditions of deep uncertainty associated with: (i) temperature dynamics, (ii) regional climate change damages, and (iii) policy in the form of carbon taxes. We analyze both cooperative and noncooperative outcomes in a regional model. Under deep uncertainty, robust control policies are more conservative regarding emissions, the higher the aversion to ambiguity, while damage uncertainty seems to produce more conservative behavior than climate dynamics uncertainty. Cooperative policies tend to be more conservative than noncooperative policies for similar concerns about uncertainty but, as concerns about uncertainty increase, policies tend to move closer to each other. Asymmetries in concerns about uncertainty tend to produce large deviations in regional emissions policy at the noncooperative solution. If aversion to ambiguity is sufficiently high, optimal regulation aiming to attain a cooperative steady state or a steady state that satisfies conditions for a Nash equilibrium might not be possible. The result is associated with the existence of regional hot spots and temperature spillovers across regions, a situation which emerges in the real world. In such cases, deep uncertainty about the impacts of climate change makes robust regulation infeasible. |
| Keywords: | Regional climate change policy, Regional temperature anomalies, Deep uncertainty, Robust control, Cooperative and noncooperative solutions. |
| JEL: | Q54 Q58 D81 |
| Date: | 2019–01–26 |
| URL: | http://d.repec.org/n?u=RePEc:aue:wpaper:1901&r=all |
| By: | Alex Armand (Institute for Fiscal Studies and University of Navarra (Spain)); Alexander Coutts (Institute for Fiscal Studies); Pedro C. Vicente (Institute for Fiscal Studies); Ines Vilela (Institute for Fiscal Studies) |
| Abstract: | The political resource curse is the idea that natural resources can lead to the deterioration of public policies through corruption and rent-seeking by those closest to political power. One prominent consequence is the emergence of conflict. This paper takes this theory to the data for the case of Mozambique, where a substantial discovery of natural gas recently took place. Focusing on the anticipation of a resource boom and the behavior of local political structures and communities, a large-scale field experiment was designed and implemented to follow the dissemination of information about the newly-discovered resources. Two types of treatments provided variation in the degree of dissemination: one with information targeting only local political leaders, the other with information and deliberation activities targeting communities at large. A wide variety of theory-driven outcomes is measured through surveys, behavioral activities, lab-in-the-field experiments, and georeferenced administrative data about local conflict. Information given only to leaders increases elite capture and rent-seeking, while information and deliberation targeted at citizens increases mobilization and accountability-related outcomes, and decreases violence. While the political resource curse is likely to be in play, the dissemination of information to communities at large has a countervailing effect. |
| Date: | 2019–01–22 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:ifsewp:19/01&r=all |
| By: | Spiliotis, Evangelos; Petropoulos, Fotios; Kourentzes, Nikolaos; Assimakopoulos, Vassilios |
| Abstract: | Achieving high accuracy in load forecasting requires the selection of appropriate forecasting models, able to capture the special characteristics of energy consumption time series. When hierarchies of load from different sources are considered together, the complexity increases further; for example, when forecasting both at system and region level. Not only the model selection problem is expanded to multiple time series, but we also require aggregation consistency of the forecasts across levels. Although hierarchical forecast can address the aggregation consistency concerns, it does not resolve the model selection uncertainty. To address this we rely on Multiple Temporal Aggregation, which has been shown to mitigate the model selection problem for low frequency time series. We propose a modification for high frequency time series and combine conventional cross-sectional hierarchical forecasting with multiple temporal aggregation. The effect of incorporating temporal aggregation in hierarchical forecasting is empirically assessed using a real data set from five bank branches, demonstrating superior accuracy, aggregation consistency and reliable automatic forecasting. |
| Keywords: | Temporal aggregation; Hierarchical forecasting; Electricity load; Exponential smoothing; MAPA |
| JEL: | C4 C53 D8 D81 L94 |
| Date: | 2018–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:91762&r=all |
| By: | Fabien Prieur; Ingmar Schumacher; Martin Quaas |
| Abstract: | The option to tackle climate change by means of Solar Radiation Management (SRM) is mostly thought to reduce efforts of mitigating greenhouse gas emissions. Here we hypothesize that (i) a unilateral threat to employ SRM can induce players to commit to strategies with increased mitigation effort compared to what would be observed at the Nash equilibrium in emission strategies only and (ii) there exists a way to share the burden imposed by commitment to avoid SRM that Pareto dominates an alternative that would involve too high current emission levels then followed by future SRM deployment. To study these hypotheses we develop a two-region, two-stage, two-period game where regions choose mitigation and SRM. While SRM targets regional climate preferences, in line with current scientific evidence its deployment leads to uncertain damages on the other region. We first develop the general theory and then study a more specific linear-quadratic application. Finally we calibrate the model to real-world data and find that hypothesis (ii) holds for plausible values. |
| Keywords: | climate change, solar radiation management, heterogeneous damages, strategic interaction, commitment |
| JEL: | C72 Q54 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:drm:wpaper:2019-3&r=all |
| By: | Bao H. Nguyen; Tatsuyoshi Okimoto; Trung Duc Tran |
| Abstract: | This paper investigates the oil market reaction to its fundamental shocks: supply, aggregate demand and oil-specific demand in different regimes characterised by high versus low uncertainty in the market. We do so by first proposing a novel oil uncertainty index that is measured by the conditional volatility of the unpredictable component of oil prices. Then, we employ a nonlinear model to show that the structural oil market shocks have asymmetric effects. For instance, in relation to real economic activity, we find that both supply shocks and oil-specific demand shocks have negligible impacts in periods of low oil price uncertainty but sizeable effects in periods of high oil price uncertainty. Our model also enables us to evaluate the hypothesis that real economic activity responds asymmetrically to unexpected increases and decreases in oil prices driven by supply and specific demand shocks. We find that the effects of oil supply shocks are asymmetric but oil specific demand shocks are not, which indicates that the (a)symmetric oil market reaction depends on the underlying market shocks. |
| Keywords: | oil price uncertainty, STVAR model, asymmetric effect |
| JEL: | C32 E32 Q4 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:een:camaaa:2019-10&r=all |
| By: | Grant Allan (Department of Economics, University of Strathclyde); Kevin Connolly (Department of Economics, University of Strathclyde); Andrew G Ross (Department of Economics, University of Strathclyde); Peter McGregor (Department of Economics, University of Strathclyde) |
| Abstract: | Two key pillars of the energy quadrilemma (which measure the sustainability of energy policy) are a reduction in greenhouse gas emissions and economic development. Recent worldwide energy policy has focused on the reduction of greenhouse gas emissions to combat climate change, which will influence, and in turn be influenced by, economic activity and energy use. As such, it is critically important to identify and incorporate emissions into macroeconomic models. Typically, emissions are linked to economic activity via the level of output, both calculated at a sectoral level. However, this approach - while consistent with linear models such as Input-Output - assumes that emissions per unit of output remains constant, which can be problematic with more complex economic systems. In this paper we detail a method for incorporating sectoral and aggregate CO2 emissions into a macroeconomic model (CGE) of the UK through the use of sectoral primary energy use. |
| Keywords: | Emissions, macroeconomic models, primary use energy |
| JEL: | Q43 O13 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1818&r=all |
| By: | P Codani; M. Petit (E3S - Supélec Sciences des Systèmes [Gif-sur-Yvette] - SUPELEC); Yannick Perez (LGI - Laboratoire Génie Industriel - EA 2606 - CentraleSupélec, RITM - Réseaux Innovation Territoires et Mondialisation - UP11 - Université Paris-Sud - Paris 11) |
| Abstract: | Abstract (En) Electric Vehicles (EVs) can be used as distributed storage units to provide Transmission System Operators (TSOs) with reserve power. This solution has been demonstrated as viable from an economic perspective. However, market design considerations are rarely taken into account in the studies dealing with this topic. We find that market rules can have a significant impact on the expected revenues of an EV fleet providing TSO reserve. In this paper, the authors are concerned with identifying the most important rules, and numbering their impacts on the possible revenues for an EV fleet. |
| Abstract: | Utiliser les Véhicules Électriques (VE) pour fournir de la réserve de puissance au Gestionnaire de réseau de Transport (GRT) a été démontré comme une solution économiquement viable dans nombre d'expériences internationales. Les VE étant des petites unités de stockage, ils aident le système à s'équilibrer en temps-réel. Cependant, les études menées sur ce sujet prennent rarement en compte les règles économiques mises en place pour organiser la participation des VE aux services système. Ce faisant, nous constatons que ces règles peuvent avoir un impact important sur les revenus escomptés. Ainsi, ce papier modélise l'impact de ces règles sur la capacité des VE à fournir de la réserve de puissance au GRT et estime leur rémunération-ou leur absence-si les règles inefficaces actuelles persistent. |
| Keywords: | Régulation,Vehicle-to-Grid,Mots-clefs Véhicules électriques,Réglage de fréquence,Services système |
| Date: | 2018–06 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-01980639&r=all |
| By: | Demet Yilmazkuday (Department of Economics, Florida International University); Hakan Yilmazkuday (Department of Economics, Florida International University) |
| Abstract: | Consumers face significantly different gasoline prices across gas stations. Using gasoline price data obtained from 98,753 gas stations within the U.S., it is shown that such differences can be explained by a model utilizing the gasoline demand of consumers depending on their income and commuting istance/time, where the pricing strategies of both gas stations and refiners are taken into account. The corresponding welfare analysis shows that there are significant redistributive effects of gasoline price changes among consumers, where the welfare costs of an increase in gasoline prices are found to be higher for lower income consumers. |
| Keywords: | Gasoline Prices, Gas-Station Level Analysis, United States |
| JEL: | L11 L81 Q41 |
| Date: | 2018–10 |
| URL: | http://d.repec.org/n?u=RePEc:fiu:wpaper:1807&r=all |
| By: | Vonsien, Silvia (RWTH Aachen University); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)) |
| Abstract: | Using a self-developed economic model with a technical battery aging component, this paper provides a new approach to evaluating the economic efficiency of Li-ion battery storage. We use our model to quantify the increase in self-consumption of electricity from a solar photovoltaic system by means of a home battery storage system. Regarding battery aging, we find that the longest battery lifetimes can be achieved with the highest state-of-charge limit, which is, however, not economically efficient due to limited self-consumption. Although one of the three battery pooling concepts was identified as not being economically efficient, namely the case of Sonnen, our evaluation shows that economic efficiency can, in principle, be achieved with home battery pooling concepts. In future research, the model-based impacts on self-consumption and batteryaging found here ought to be validated by using real world data from the systems analyzed. |
| Keywords: | Solar photovoltaics; Battery storage; Battery aging; Home battery pooling; Cost effectiveness |
| JEL: | Q40 Q42 |
| Date: | 2018–02 |
| URL: | http://d.repec.org/n?u=RePEc:ris:fcnwpa:2018_002&r=all |
| By: | Giovanni Compiani (Institute for Fiscal Studies); Phil Haile (Institute for Fiscal Studies and Yale University); Marcelo Sant'Anna (Institute for Fiscal Studies) |
| Abstract: | An oil lease auction is the classic example motivating a common values model. However, formal testing for common values has been hindered by unobserved auction-level heterogeneity, which is likely to affect both participation in an auction and bidders' willingness to pay. We develop and apply an empirical approach for fi rst-price sealed bid auctions with affiliated values, unobserved heterogeneity, and endogenous bidder entry. The approach also accommodates spatial dependence and sample selection. Following Haile, Hong and Shum (2003), we specify a reduced form for bidder entry outcomes and rely on an instrument for entry. However, we relax their control function requirements and demonstrate that our specifi cation is generated by a fully speci fied game motivated by our application. We show that important features of the model are nonparametrically identifi ed and propose a semiparametric estimation approach designed to scale well to the moderate sample sizes typically encountered in practice. Our empirical results show that common values, affiliated private information, and unobserved heterogeneity - three distinct phenomena with different implications for policy and empirical work - are all present and important in U.S. offshore oil and gas lease auctions. We find that ignoring unobserved heterogeneity in the empirical model obscures the presence of common values. We also examine the interaction between affiliation, the winner's curse, and the number of bidders in determining the aggressiveness of bidding and seller revenue. |
| Date: | 2018–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:ifs:cemmap:37/18&r=all |
| By: | Adewuyi, Adeolu; Emmanuel, Zachariah |
| Abstract: | This paper provides evidence on the role of corruption in mitigating the effect of electricity outages on firm performance across the six geo-political zones in Nigeria. In addition, this study also assessed effect of self-generation on firm performance across the six geo-political zones and comparison were made as to whether it is more profitable for firms to self-generate electricity during outage periods or bribe electricity officials to mitigates the effect of electricity outages on their performance. Using the World Bank Enterprise Survey (WBES), the study employed a cross sectional Ordinary Least Squares (OLS) and Two-Stage Least Squares (2SLS) techniques and the results of the findings indicate that, bribery does not mitigate the effect of electricity outages on firms across all the geo-political zones in Nigeria with exception of the North-East and the South-East geo-political zones. Although, electricity outage is relatively low in the North-East region, further findings revealed that; firms in the south-east region experience the highest outage intensity of an average of 122.025 times in a typical month, while those in the South-South region experience the lowest outage intensity of an average of 25.845times in a typical month. Lastly, contrary to the arguments in the literature that self-generation during power holidays improves firm performance, evidence from this study suggests otherwise for some geo-political zones in Nigeria. For instance, this study discovered that self-generation is a form of indirect tax which has a negative effect on firm performance especially the North-West, South-West and South-South geo-political zones. Also, while it is more profitable for firms in the North-Central, North East, and South-East regions to self-generate during power holidays, the findings for North-West, South-West and South-South geo-political zones reveal that firms in the zones are better off by relying on electricity supply from the public grid. |
| Keywords: | Electricity Outages; Bribery; Self-Generation; Firm Performance |
| JEL: | D20 L10 Q41 |
| Date: | 2018–12–21 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:92091&r=all |
| By: | Benjamin Böcker; Robin Leisen; Christoph Weber (House of Energy Markets and Finance, University of Duisburg-Essen (Campus Essen)) |
| Abstract: | The modelling of energy systems often has to balance two aspects. High level of detail, e.g. technical constraints on the one hand and analysis of long-term system optimization on the other. When focusing on one of the two aspects, models can be solved in a reasonable time. In order to combine both aspects in one model we use a problem-specific iterative approach. A detailed system model is linked to iterative adjustments of investments. This is based on a subgradient method of optimization. The approach can be described as a detailed dispatch model with adjustments towards an investment model. The results show that the algorithm is quite efficient for a stylized model. For a larger model, performance is not yet sufficient for day-to-day practical use, but several elements for further improvement are identified. |
| Keywords: | energy system modelling, investment |
| JEL: | Q40 Q48 |
| URL: | http://d.repec.org/n?u=RePEc:dui:wpaper:1806&r=all |
| By: | Willem THORBECKE |
| Abstract: | Using three identification strategies, this paper finds that supply-driven oil price increases lowered U.S. stock returns before the Global Financial Crisis in various sectors including industrial machinery, industrial engineering, chemicals, and marine transport but raised them in these sectors after the crisis. It also reports that oil prices are a priced factor in a multi-factor asset pricing model both before and after the crisis. While oil prices mattered in both periods, the beneficial effects of oil price increases on the U.S. economy have risen and the harmful effects have fallen since U.S. oil production soared after 2010. |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:eti:dpaper:19003&r=all |
| By: | Lutz Kilian; Zhou Xiaoqing |
| Abstract: | There has been much interest in the relationship between the price of crude oil, the value of the U.S. dollar, and the U.S. interest rate since the 1980s. For example, the sustained surge in the real price of oil in the 2000s is often attributed to the declining real value of the U.S. dollar as well as low U.S. real interest rates, along with a surge in global real economic activity. Quantifying these effects one at a time is difficult not only because of the close relationship between the interest rate and the exchange rate, but also because demand and supply shocks in the oil market in turn may affect the real value of the dollar and real interest rates. We propose a novel identification strategy for disentangling the causal effects of oil demand and oil supply shocks from the effects of exogenous shocks to the U.S. real interest rate and exogenous shocks to the real value of the U.S. dollar. We empirically evaluate popular views about the role of exogenous real exchange rate shocks in driving the real price of oil, and we examine the extent to which shocks in the global oil market drive the U.S. real exchange rate and U.S. real interest rates. Our evidence for the first time provides direct empirical support for theoretical models of the link between oil prices, exchange rates, and interest rates. |
| Keywords: | exchange rate, interest rate, oil price, global real activity, commodity, carry trade |
| JEL: | E43 F31 F41 Q43 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7484&r=all |
| By: | Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa) |
| Abstract: | This research examines the relevance of inclusive development in modulating the role of governance on environmental degradation. The study focuses on forty-four countries in sub-Saharan Africa for the period 2000-2012. The Generalised Method of Moments is employed as the empirical strategy and CO2 emissions per capita is used to measure environmental pollution. Bundled and unbundled governance dynamics are employed, notably: political governance (consisting of political stability/no violence and “voice and accountability”), economic governance (encompassing government effectiveness and regulation quality), institutional governance (entailing corruption-control and the rule of law), and general governance (a composite measure of political governance, economic governance and institutional governance). The following main findings are established. First, the underlying net effect in the moderating role of inclusive development in the governance-CO2 emissions nexus is not significant in regressions pertaining to political governance and economic governance. Second, there are positive net effects from the relevance of inclusive development in modulating the effects of regulation quality, economic governance and general governance on CO2 emissions. The significant and insignificant effects are elucidated. Policy implications are discussed. |
| Keywords: | CO2 emissions; Governance; Sustainable development; Sub-Saharan Africa |
| JEL: | C52 O38 O40 O55 P37 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:agd:wpaper:19/006&r=all |
| By: | Mariana Conte Grand |
| Abstract: | Un alto porcentaje de las emisiones de gases de efecto invernadero (GEI) del planeta provienen de la producción y el uso de la energía. Argentina no escapa a esta situación ya que, al 2014, 53% de los GEI provienen de dicha fuente. Una de las principales formas de reducir los GEI es a través de eficiencia energética (EE). Según fuentes internacionales, estas tienen tanto potencial de reducción de emisiones como la introducción de energías renovables. Hay más de medio centenar de trabajos en el mundo que han medido la contribución de la EE para morigerar el uso de energía por medio de las llamadas técnicas de descomposición. No hay ningún estudio publicado para Argentina que lo haga. Este documento llena este vacío. Lo que permiten los métodos de descomposición es diferenciar qué parte de los cambios en la demanda energética se deben a variaciones en: la actividad productiva, la estructura productiva, y la intensidad en el consumo de energía. Los resultados encontrados muestran que entre 2004 y 2017 el consumo de energía para uso final subió en gran medida debido a la variación en el nivel de actividad y la disminución en la intensidad energética tuvo un efecto compensador. Ese mismo desacople débil entre energía y actividad se encontró en la industria y en el agro, aunque fue menor en este último caso. Cuando se consideran ambos sectores en su conjunto, se encuentra un muy reducido efecto estructura ya que la composición de la actividad económica ha cambiado poco. En general, los resultados aquí encontrados son similares a la literatura. |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:cem:doctra:678&r=all |
| By: | Andrew G Ross (Department of Economics, University of Strathclyde); Grant Allan (Department of Economics, University of Strathclyde); Gioele Figus (Department of Economics, University of Strathclyde); Peter G McGregor (Department of Economics, University of Strathclyde); J Kim Swales (Department of Economics, University of Strathclyde); Karen Turner (Centre for Energy Policy, University of Strathclyde) |
| Abstract: | The energy system and the economy are inextricably intertwined. While this interdependence is, of course, widely recognised, it has not featured prominently in assessing the likely impact of economic policies. In principle, broad fiscal policies are likely to have a significant influence on key elements of the energy system, the neglect of which may lead to inefficiencies in the design of appropriate energy and economic policies. The importance of this in practice depends on the strength of the spillover effects from fiscal policy instruments to energy policy goals. This is the focus of this paper. We employ a multi-sectoral computable general equilibrium (CGE) approach for the UK which allows us to track the impact of key fiscal policy interventions on key goals of economic and energy policies. Overall, our results suggest that a double dividend - a simultaneous stimulus to the economy and a reduction in emissions – induced by an increase in current public spending or a hike in the income tax rate seem unlikely in the UK context. Nonetheless, there are undoubted differential spillover effects on key components of the energy system from tax and public spending interventions that may prove capable of being exploited through the coordination of fiscal and energy policies. Even if it seems doubtful that fiscal policies would be formulated with a view to improved coordination with energy policies, policymakers should at least be aware of likely direction and scale of fiscal spillover effects to the energy system. |
| Keywords: | Energy policy, fiscal policy, income tax |
| JEL: | C68 D58 Q43 Q48 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:str:wpaper:1820&r=all |
| By: | Delis, Manthos; Iosifidi, Maria |
| Abstract: | The rising environmental awareness induces a changing landscape for policymakers and real economic prospects. We examine the properties of a general equilibrium model with endogenous household preferences (for labor, consumption, and environmental quality) and a negative environmental externality. The endogeneity of labor creates an additional channel of substitution between environmental quality and labor, besides the channel of substitution between environmental quality and consumption. We show that a key requirement for improved output following a positive shock in the weight of environmental quality (household environmental awareness) is that environmental awareness trades off the weight on labor and not the weight on consumption. An interesting feature of the model is that the existence of the environmental externality gives a non-zero capital tax in the long run. |
| Keywords: | Environmental awareness; Environmental quality; Labor; Consumption; Real outcomes |
| JEL: | H3 Q5 |
| Date: | 2019–02–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:92138&r=all |
| By: | Lorena M. D’Agostino (Department of Economics and Management. University of Trento); Rosina Moreno (AQR-IREA Research Group.) |
| Abstract: | Technological innovation is essential to achieve simultaneously economic, environmental and social goals (i.e. the green growth). Indeed, many studies found that environmental innovation spurs overall innovation. However, this topic has not been investigated by taking into account the geographical context. Therefore, our paper seeks to investigate whether ‘green regions’, with an increased public and private commitment in environmental issues, are related to innovation of local firms. Using data on Spanish manufacturing firms and regions, we find that environmental technologies (especially in green energy), environmental investments, and environmental management at the level of regions are positively associated to local firms’ innovation. |
| Keywords: | innovation; region; firm; green patents; environment JEL classification: R11; O31; O44 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:aqr:wpaper:201902&r=all |
| By: | Lidia Vidal-Meliá (LEE & Department of Economics, Universitat Jaume I, Castellón, Spain); Eva Camacho-Cuena (LEE & Department of Economics, Universitat Jaume I, Castellón, Spain); Miguel Ginés-Vilar (LEE & Department of Economics, Universitat Jaume I, Castellón, Spain) |
| Abstract: | This paper analyzes how international trade affects the governments’ decision on their industrial policy in the context of bilateral international trade and imperfect competition. We model an international duopoly with market size asymmetry and product heterogeneity. Each firm produces two different products, one for the domestic market and the other one for the foreign market, where the firms’ production generates local emissions. The findings of our paper show the important role of market asymmetry in determining the optimal industrial policy in a setting where both, firms and regulators, act strategically. The government in each country decides, as industrial policy between two option: an emission tax or a production subsidy. We find that the governments in small countries have incentives to set an environmental tax to the firms competing in international markets with similar size. This is the case even if the government in the large market decided to set a production subsidy, as long as market size asymmetry is low enough. Instead, if firms in a small country compete in large markets, that is, increasing the market size asymmetry between countries, it is then optimal for the government in the small country to give up emission taxes and pay productions subsidies to keep the firms’ competitiveness in the home and foreign markets if the government in the big country subsidizes production. In this case, an increase in the firms’ profits offsets the effects of emission damages on the country social welfare. |
| Keywords: | Environmental tax, Production subsidy, Market size asymmetry, Product heterogeneity, Imperfect markets |
| JEL: | F18 H23 L13 Q56 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:jau:wpaper:2019/01&r=all |
| By: | Gavrilut, Darie |
| Abstract: | Abstract: The importance and the long term added value of innovation are vital to the success and maturing of each region, country and union. The purpose of this paper is to present several topics related to innovation and to assess the differences, if any, between different European regions as regards their innovation output. It is worth stating the obvious: not all innovation is equally important and not all translates into economic and social wellbeing. Even so, a constant flow of research output is vital for the general socio-economic enhancement. The overall efforts are concentrated in the following areas: renewable energy, education, fin-tech, bio-tech and security. How can regions tap and increase their innovative and creative output are elements that shall be dealt with through this paper. |
| Keywords: | innovation; regional development; knowledge; open source |
| JEL: | O31 Q56 R11 |
| Date: | 2018–12–17 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:92084&r=all |
| By: | Kanamura, Takashi |
| Abstract: | This paper studies volumetric risk hedging strategies for solar power under incomplete market settings with a twofold proposal of temperature-based and solar power generation-based models for solar power derivatives and discusses the basis risk arising from solar power volumetric risk hedge with temperature. Based on an indirect modeling of solar power generation using temperature and a direct modeling of solar power generation, we design two types of call options written on the accumulated non cooling degree days (ANCDDs) and the accumulated low solar power generation days (ALSPGDs), respectively, which can hedge cool summer volumetric risk more appropriately than those on well-known accumulated cooling degree days. We offer the pricing formulas of the two options under the good-deal bounds (GDBs) framework, which can consider incompleteness of solar power derivative markets. To calculate the option prices numerically, we derive the partial differential equations for the two options using the GDBs. Empirical studies using Czech solar power generation and Prague temperature estimate the parameters of temperature-based and solar power generation-based models, respectively. We numerically calculate the call option prices on ANCDDs and ALSPGDs, respectively, as the upper and lower price boundaries using the finite difference method. Results show that the call option prices based on a solar power generation process are bigger than the call option prices based on a temperature process. This is consistent with the fact that the solar power generation approach takes into account more comprehensive risk than the temperature approach, resulting in the bigger prices for the solar power generation approach. We finally show that the basis risk premiums, i.e., solar power generation-based call option prices minus temperature-based call option prices, decrease in line with initial temperature greater than around 25 ◦C. This may be because the uncertainty in solar power generation by temperature decreases due to the cancellation between the increase in solar power generation due to the increase in solar radiation and the decrease in solar power generation due to the decrease in solar panel efficiency. |
| Keywords: | Solar power, weather risk, temperature model, basis risk, good-deal bounds |
| JEL: | G13 L94 Q42 |
| Date: | 2019–01–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:92009&r=all |
| By: | Alatorre, José Eduardo; Caballero, Karina; Ferrer, Jimy; Galindo, Luis Miguel |
| Abstract: | El principal objetivo de este estudio es ofrecer una síntesis de los valores del Costo Social del Carbono (CSC) para la construcción de políticas públicas referidas al cambio climático en América Latina. El CSC identifica el costo económico que ocasiona una tonelada adicional de CO2 emitida a la atmosfera para las actividades económicas, el bienestar social y los ecosistemas. En la síntesis de la literatura de los valores del CSC se emplearon diversas técnicas de metaanálisis en las se identificó un costo social del carbono de 25,83 dólares por tonelada. |
| Keywords: | AGENDA 2030 PARA EL DESARROLLO SOSTENIBLE, CAMBIO CLIMATICO, CARBONO, COSTOS, ASPECTOS SOCIALES, POLITICA ECONOMICA, 2030 AGENDA FOR SUSTAINABLE DEVELOPMENT, CLIMATE CHANGE, CARBON, COSTS, SOCIAL ASPECTS, ECONOMIC POLICY |
| Date: | 2019–02–01 |
| URL: | http://d.repec.org/n?u=RePEc:ecr:col022:44423&r=all |