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on Energy Economics |
| By: | Grant Bishop (C.D. Howe Institute) |
| Keywords: | Energy and Natural Resources; Electricity;Environmental Policies and Norms;Role and Efficiency of Government; Fiscal and Tax Policy; Federalism and Constitution |
| JEL: | Q58 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:cdh:ebrief:289&r=all |
| By: | Suzi Kerr (Motu Economic and Public Policy Research); Catherine Leining (Motu Economic and Public Policy Research) |
| Abstract: | New Zealand is facing a challenging low-emission transition, and effective emission pricing needs to be part of the solution. In its pure form, an emissions trading system (ETS) fixes the quantity of emissions in regulated sectors and the market sets the emission price. In New Zealand’s current policy and market context, there is value in managing both unit supply and emission prices under the NZ ETS. While emission price changes in response to policy and market conditions are desirable to drive efficient abatement, excessive price instability can deter low-emission investment. This working paper, which evolved under Motu’s ETS Dialogue process from 2016 to 2018, explores key considerations for emission price management in the context of a specific working model for unit supply in the NZ ETS. Emission price instability can be reduced at its source by reinforcing policy commitment and improving market regulation and development. Emission price instability can be mitigated by incorporating a price ceiling (cost containment reserve backed by a fixed-price option) and a price floor (auction reserve price) into the auction mechanism. Decisions on price management should be coordinated with other decisions affecting unit supply, guided by an indicative ten-year trajectory for both unit supply and emission prices, and informed by independent advice. Two companion working papers address interactions between ETS price management and the choice of cap and linking to overseas markets. The three working papers elaborate on an integrated proposal for managing unit supply, prices, and linking in the NZ ETS that was presented in Kerr et al. (2017). |
| Keywords: | Emissions trading, New Zealand Emissions Trading Scheme, greenhouse gas, climate change mitigation, price ceiling, price floor |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:19_08&r=all |
| By: | Suzi Kerr (Motu Economic and Public Policy Research); Catherine Leining (Motu Economic and Public Policy Research) |
| Abstract: | Purchasing international emission reductions (IERs) can help New Zealand make a more ambitious and cost-effective contribution toward global climate change mitigation and support developing countries in accelerating their low-emission transition. However, New Zealand must avoid past mistakes by ensuring international purchasing does not derail its own decarbonisation pathway. Furthermore, the Paris Agreement has fundamentally changed how countries will trade IERs over the 2021–30 period. This working paper, which evolved under Motu’s ETS Dialogue process from 2016 to 2018, focuses on how we can balance our international and domestic mitigation efforts. It explores how many IERs we may want, how we should integrate international mitigation support with participants’ obligations under the New Zealand Emissions Trading Scheme (NZ ETS), and what mechanisms we can use to fund international mitigation effectively. Fundamentally, the New Zealand government will need to ensure that all IERs counted toward its targets and accepted in the NZ ETS have environmental integrity and are both approved and not double counted by seller and buyer governments. This paper presents a working model for New Zealand’s purchase of IERs, in which the quantity is controlled by government, purchasing is managed by government for the foreseeable future (with potential participation by private entities), and the quantity is factored into decisions on the NZ ETS cap and price management mechanisms. If NZ ETS participants are able to purchase IERs in the future, then a quantity limit should apply as a percentage of the surrender obligation and the volume should offset other supply under the cap. The paper also highlights an innovative “climate team” mechanism for international climate change cooperation that could facilitate purchasing by the New Zealand government. Two companion working papers address interactions between decisions on international purchasing and the choice of NZ ETS cap and price management mechanisms. The three working papers elaborate on an integrated proposal for managing unit supply, prices, and linking in the NZ ETS that was presented in Kerr et al. (2017). |
| Keywords: | Emissions trading, New Zealand Emissions Trading Scheme, greenhouse gas, climate change mitigation, linking |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:19_09&r=all |
| By: | Jan Paul Baginski (Chair for Management Sciences and Energy Economics, University of Duisburg-Essen (Campus Essen)) |
| Abstract: | Solar thermal roof-top installations offer the potential to meet an important share of residential water and space heating demand in Germany. These systems are subsidised with grants under the so-called market incentive program. The political goal is to encourage the adoption of renewable energy and to reduce CO2-emissions in the heating market in view of a low-carbon building stock. Solar thermal adoption levels are currently rather low after a high period in 2008 and 2009. Also, solar thermal adoption rates distinctly vary between regions. This paper tries to disentangle influences governing regional and temporal differences in residential solar thermal uptake. Spatial panel regression models are estimated to capture spatial interactions, while controlling for potential adoption determinants, including economic considerations, household characteristics and climatic suitability. The panel data contain observations for over 1 million solar thermal installations across 402 German regions covering the period from 2001 to 2015. Results indicate that differences in profitability influence the spatial and temporal patterns of solar thermal uptake. Regional diffusion is mainly driven by solar radiation. The development of fossil fuel prices is accountable for different adoption rates over time. New constructions do not seem to foster solar thermal use, indicating that solar heating is easily applied to existing houses. Larger households are more inclined to use solar heating, given that they use more efficiently solar generated heat. Results also show that spatial dependence drives the diffusion of solar thermal systems. These findings imply that there is potential for new policies and business models to increase the geographic and social diversification of solar thermal adoption. |
| Keywords: | solar energy, domestic solar thermal heating, spatial econometrics, panel data |
| JEL: | C23 D12 Q28 Q42 |
| URL: | http://d.repec.org/n?u=RePEc:dui:wpaper:1904&r=all |
| By: | Marc Ringel; Roufaida Laidi; Djamel Djenouri |
| Abstract: | From both global and local perspectives, there are strong reasons to promote energy efficiency. These reasons have prompted leaders in the European Union (EU) and countries of the Middle East and North Africa (MENA) to adopt policies to move their citizenry toward more efficient energy consumption. Energy efficiency policy is typically framed at the national, or transnational level. Policy makers then aim to incentivize microeconomic actors to align their decisions with macroeconomic policy. We suggest another path towards greater energy efficiency: Highlighting individual benefits at microeconomic level. By simulating lighting, heating and cooling operations in a model single-family home equipped with modest automation, we show that individual actors can be led to pursue energy efficiency out of enlightened self-interest. We apply simple-to-use, easily, scalable impact indicators that can be made available to homeowners and serve as intrinsic economic, environmental and social motivators for pursuing energy efficiency. The indicators reveal tangible homeowner benefits realizable under both the market-based pricing structure for energy in Germany and the state-subsidized pricing structure in Algeria. Benefits accrue under both the continental climate regime of Germany and the Mediterranean regime of Algeria, notably in the case that cooling energy needs are considered. Our findings show that smart home technology provides an attractive path for advancing energy efficiency goals. The indicators we assemble can help policy makers both to promote tangible benefits of energy efficiency to individual homeowners, and to identify those investments of public funds that best support individual pursuit of national and transnational energy goals. |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1904.11496&r=all |
| By: | Lucas Bretschger (ETH Zurich, Switzerland) |
| Abstract: | To reconsider the Malthusian predictions of natural limits to economic development, the paper develops a multi-sector growth model with exhaustible resource extraction, investments in physical and knowledge capital, climate change, and endogenous fertility. Economic growth is driven by endogenous innovations which increase in the availability and productivity of research labour. Poor substitution of natural resources triggers sectoral change. Climate change is the result of polluting resource use which is, like consumption and investments, based on the intertemporal optimization of the households. Highlighting the importance of bounded resource supply and of rational extraction decisions I show that climate change is independent of population growth in steady state and there is no causal relationship between climate and population during transition to steady state. The consumption per capita growth rate rises in the innovation rate and the output elasticities of labour and capital in the different sectors. Unlike climate policy, population policy is not warranted; it may be counterproductive because labour is crucial for the research sector. |
| Keywords: | Population growth, climate change, endogenous innovation, sectoral change, fertility choice |
| JEL: | Q43 O47 Q56 O41 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:eth:wpswif:19-320&r=all |
| By: | Dominic White (Motu Economic and Public Policy Research); Niven Winchester (Motu Economic and Public Policy Research) |
| Abstract: | As New Zealand charts its course toward a low-emissions economy, the quality of energy-sector and multi-sector modelling is becoming increasingly important. This paper outlines why models are useful for answering complex questions, provides a stocktake of energy-sector and multi-sector models used for climate change mitigation modelling in New Zealand, and makes suggestions for improving future modelling work. While New Zealand is fortunate to have a range of different modelling tools, these have historically been used in a sporadic and ad hoc way, and underlying datasets are deficient in some areas. As the foundation for a more strategic development of New Zealand’s modelling capability, this paper profiles some of the energy-sector and multi-sector models and datasets currently applied in New Zealand. New Zealand’s modelling capability could be strengthened by collecting and sharing data more effectively; building understanding of underlying relationships informed by primary research; creating more collaborative and transparent processes for applying common datasets; increasing international collaboration; and conducting more integrated modelling across environmental issues. These improvements will require strategic policies and processes for refining model development; providing increased, predictable and sustained funding for modelling activities, underlying data collection and primary research; and strengthening networks across modellers inside and outside of government. Many of the suggested improvements could be realised by creating an integrated framework for climate change mitigation modelling in New Zealand. This framework would bring together a suite of models and a network of researchers to assess climate change mitigation policies regularly. Core elements of the framework would include a central repository of data, input assumptions and scenarios, and a “dashboard” that synthesises results from different models to allow decision-makers to understand and apply the insights from the models more easily. |
| Keywords: | Applied general equilibrium, Electricity, Greenhouse gases, Policy analysis, Transportation |
| JEL: | C31 D58 Q4 Q54 |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:18_15&r=all |
| By: | Catherine Leining (Motu Economic and Public Policy Research); Suzi Kerr (Motu Economic and Public Policy Research) |
| Abstract: | The fundamental purpose of an emissions trading system (ETS) is to constrain emissions and enable the market to set an emissions price path that facilitates an effective transition to a low-emissions economy. In a conventional ETS, the emissions constraint is defined by a cap (a fixed limit) on tradable, government-issued emission units together with a quantity limit on any external units allowed in the system (e.g. via an offsets mechanism). Essentially, an ETS cap underpins the ambition, cost-effectiveness, distributional implications, and credibility of a jurisdiction’s approach to decarbonisation. From 2008 to mid-2015, the New Zealand Emissions Trading Scheme (NZ ETS) broke from convention by linking to the global Kyoto cap without its own limit on domestic emissions. NZ ETS participants met compliance obligations using unlimited overseas units at low prices and faced little incentive to reduce their own emissions. The NZ ETS delinked from the Kyoto market in mid-2015, creating uncertainty over the future of domestic unit supply and an efficient price path for domestic decarbonisation. This working paper, which evolved under Motu’s ETS Dialogue process from 2016 to 2018, explores key considerations for ETS cap setting and proposes the design for a cap on units auctioned and freely allocated in the NZ ETS. The recommendations focus on issues of cap architecture rather than ambition. The proposed cap is defined in tonnes of emissions per year, fixed for five years in advance, extended by one year each year, and guided by an indicative ten-year cap trajectory. The fixed cap and cap trajectory need to reflect consideration of New Zealand’s domestic decarbonisation objectives, international targets, mitigation potential and costs in both ETS and non-ETS sectors, and prospects for cost-effective investment in overseas emission reductions. Two companion working papers address how the choice of cap will interact with decisions on ETS price management mechanisms and linking to overseas markets. The three working papers elaborate on an integrated proposal for managing unit supply, prices, and linking in the NZ ETS that was presented in Kerr et al. (2017). |
| Keywords: | Emissions trading, New Zealand Emissions Trading Scheme, cap, greenhouse gas, climate change mitigation |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:19_07&r=all |
| By: | Lassi Ahlvik; Matti Liski |
| Abstract: | It is tricky to design local regulations on global externalities, especially so if firms are mobile. We show that when costs and outside options are firms’ private information, the threat of firm relocation leads to local regulations that are stricter, not looser. This result is general and follows because policy-driven information rents act as targeted compensations to firms that can efficiently limit the externality. The optimal mechanism supplements this strict local regulation with a looser opt-in scheme, creating a global cap for externalities for a subset of firms. We illustrate the magnitude of these effects by providing a quantification of the optimal mechanism for the key sectors in the EU emissions trading system. |
| Keywords: | externalities, mechanism design, private information, climate change, emissions trading, carbon leakage |
| JEL: | D82 L51 Q54 Q58 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7597&r=all |
| By: | Eftichios S. Sartzetakis (Bank of Greece) |
| Abstract: | The present paper examines the role that green bonds can play in financing the transition to low carbon economy. We first establish the need for central banks to respond to climate change challenges and we present the main ways in which they can get involved. We explain why green bonds should be used to instrument of choice for financing the low carbon transition, based, on the one hand, on the theoretical argument of intergenerational burden sharing and, on the other hand, on the practical need of large long-term infrastructure investments. After defining green bonds, we present their main characteristics. We then summarize the development of the green bond market in the last decade. We conclude by presenting ways in which to respond to existing challenges and barriers, so that the green bonds market develops further. |
| Keywords: | Green bonds; climate change;low carbon transition |
| JEL: | Q54 G12 G28 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:bog:wpaper:258&r=all |
| By: | David A Fleming (Motu Economic and Public Policy Research); Kate Preston (Motu Economic and Public Policy Research) |
| Abstract: | Evaluating the benefits of publicly funded research is always a challenging task. This paper cannot produce air-tight quantification of the benefits of Sustainable Land Management and Climate Change (SLMACC) research. We do, however, demonstrate the key building blocks of significant impact have been obtained. First, it is clear that public funding has contributed importantly to New Zealand’s positioning itself as one of the leading global contributors to agricultural mitigation research. Second, the prominence of the research combined with the low likelihood of research occurring on this scale without public support suggests strongly that the results would not have been obtained absent public funding. Finally, though the realization of ultimate environmental and/or economic benefits will depend on the evolution of farming practices and climate change policy settings, the advances in genetic markers for low CH4 animals and identification of emission-reducing management practices have the potential for GHG emission reductions that would be significant in environmental terms, and whose value at likely carbon pricing levels would be in the hundreds of millions of dollars. Although the results discussed are conditional on several factors such as future policy implementation, adoption rates and the practical availability of mitigation options and practices for different farm landscapes; the impacts, economic and environmental values attached to mitigation research cannot be overlooked and provide important insights to the benefits that public investments can make to the development of a more sustainable agricultural system for the country. |
| Keywords: | Agricultural greenhouse gas mitigation; public funding analysis, science policy, climate change |
| JEL: | Q15 Q16 Q51 Q54 |
| Date: | 2018–09 |
| URL: | http://d.repec.org/n?u=RePEc:mtu:wpaper:18_11&r=all |
| By: | Saban Nazlioglu (Department of International Trade and Finance, Faculty of Economics and Administrative Sciences, Pamukkale University, Denizli, Turkey); Rangan Gupta (Department of Economics, University of Pretoria, Pretoria, South Africa); Elie Bouri (USEK Business School, Holy Spirit University of Kaslik, Jounieh, Lebanon) |
| Abstract: | In this paper, we analyze daily data-based price transmission and volatility spillovers between crude oil and bond markets of major oil exporters and importers, by accounting for structural shifts as a smooth process in causality and volatility spillover estimations. In general, we find that, oil prices tend to predict bond prices in majority of oil exporting countries, and for the two major oil importers of India and China. But, the feedback from bond to oil prices is weak, and is detected for China and USA. Regarding volatility spillovers, oil volatility affects the bond market volatility of some major oil exporters (Kuwait, Norway and Russia), and an importer (France). However, the most prominent volatility spillovers are from bond to oil, except for Kuwait and Saudi Arabia. We also reveal that taking into account for smooth structural shifts - accounting for structural breaks - strengthens our findings and particularly is important for volatility spillover analysis. Our results have important implications for academics, investors, and policy makers. |
| Keywords: | Bond and oil markets, price and volatility spillovers, major oil exporters and importers, structural changes |
| JEL: | C32 G12 Q02 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:pre:wpaper:201935&r=all |
| By: | Hisham Aidi |
| Abstract: | Scholars of European state formation have long underlined the connection between taxation and political development, noting that revenue collection can promote institution-building and accountability. This argument goes back at least to Joseph Schumpeter (1918) who spoke of the “tax state,” describing how a country’s tax system shapes the relationship between a state and its citizenry. But scholars of the post-colonial world observe that the process of state formation in Europe occurred in a specific context; whereas state-building in the contemporary era occurs in a context where there is an abundance of natural resources and strategic rents at the international level, which rulers can access. Different theoretical tools are therefore required to understand political development in the non-West. The diffusion of rents at the international level and its effect on state structures would give rise to “rentier state theory,” introduced by economist Hussein Madhavy in 1970, to understand the political economy of Iran specifically, but more generally of states that derive a substantial part of their national revenue from the “rent” of local resources to external actors. Giacomo Luciani and Hazem Al Beblawi would elaborate on this thesis adding that rentier states also lack a strong domestic productive sector, and that only a small segment of their labor force is employed in the generation of the rent. |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:ocp:ppaper:pb19-03&r=all |
| By: | Zhang, Xin (Beijing Normal University); Chen, Xi (Yale University); Zhang, Xiaobo (Peking University) |
| Abstract: | This paper studies the impact of six main air pollutants on three key dimensions of subjective well-being (SWB) – life satisfaction, hedonic happiness and mental health. We match a nationally representative survey in China with local air quality and rich weather conditions according to the exact date and county of each interview. By making use of variations in exposures to air pollution across similar respondents living in the same county, we find that PM2.5 reduces hedonic happiness and increases the rate of depressive symptoms, but does not affect life satisfaction. Our results show that the benefits of reducing air pollution would be higher if the hidden costs of air pollution on SWB in China are taken into account. |
| Keywords: | life satisfaction, hedonic happiness, depressive symptoms, air pollution, China |
| JEL: | I31 Q51 Q53 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12313&r=all |
| By: | Asongu, Simplice; Odhiambo, Nicholas |
| 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:pra:mprapa:93530&r=all |
| By: | Hwang, In Chang; Son, Wonik |
| Abstract: | There is an increasing concern on particulate matter (PM) management in Seoul. The annual mean PM concentration of Seoul is far higher than the World Health Organization guideline and its decreasing rate has been slowed since 2012. Seoul Metropolitan Government has made various efforts to solve the problem. In particular, after an open forum held in June 2017, the Ten Measures for Fine Particles were established. Since the management of fine particles would enforce a huge budget (annual mean of 146 million US dollar) it requires a legitimate validation by the benefit analysis. This paper aims to estimate the benefit of the management policy of Seoul on airborne particulate matter. The benefit is estimated by the contingent valuation method. The estimation by the Spike model shows that the annual willingness to pay (WTP) per household for the management of airborne particulate matter is 126 US dollar (or 138,107 Korean won) (95% confidence interval of 114 to 137 US dollar). The applications of the other statistical models are also analyzed. Considering the total number of households, annual benefit of the management policy of Seoul on airborne particulate matter is 492 million US dollar annually (95% confidence interval of 446 to 537 million US dollar). A simple comparison shows that the benefit of the management of airborne particulate matter in Seoul is 3~4 times higher than the incurred expense. |
| Keywords: | Air pollution; Contingent valuation; Particulate matter; Willingness to pay |
| JEL: | H7 Q51 Q53 |
| Date: | 2019–05–02 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:93613&r=all |
| By: | Alex Marten |
| Abstract: | Understanding the distribution of regulatory costs is key to evaluating whether a rulemaking exacerbates or ameliorates preexisting economic disparities and is of stated interest to many stakeholders and policy makers. Previous studies on the incidence of command-and-control environmental regulations have predominantly focused on the distribution of costs through final goods prices (the use side). However, the impact of regulations on household income (the source side) can be of first-order importance in determining the overall incidence. Using a detailed computable general equilibrium model of the U.S. economy we study the incidence of single-sector technology mandates across a broad set of industrial sectors. We find the use-side incidence is notably regressive but the source-side effects are progressive on average and tend to dominate the overall incidence of costs. This occurs as a significant share of regulatory costs is passed on through lower returns to capital and natural resources, which predominantly affects upper-income households, while indexed transfer payments partially shields the purchasing power of low-income households from increases in output prices. However, when the regulated sector predominantly produces final goods with inelastic demand and low trade exposure (e.g., utility services) we find that the use-side incidence can dominate leading to regressive distribution of regulatory costs. Finally, we find that the common practice of vintage differentiation, whereby only new sources of pollution are covered, can cause a significantly more regressive distribution of costs, all else equal. |
| Keywords: | environmental regulation, incidence, general equilibrium |
| JEL: | Q52 C68 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:nev:wpaper:wp201903&r=all |
| By: | Deschenes, Olivier (University of California, Santa Barbara); Wang, Huixia (Hunan University); Wang, Si (Hunan University); Zhang, Peng (Hong Kong Polytechnic University) |
| Abstract: | We provide the first study estimating the causal effect of air pollution on body weight. Using the China Health and Nutrition Survey, which provides detailed longitudinal health and socioeconomic information for 13,226 adult individuals over 1989-2011, we find significant positive effects of air pollution, instrumented by thermal inversions, on body mass index (BMI). Specifically, a 1 μg/m3 (1.59%) increase in average PM2.5 concentrations in the past 12 months increases BMI by 0.31%, and further increases the overweight and obesity rates by 0.89 and 0.19 percentage points, respectively. Our paper identifies a new cause of obesity, and sheds new light on the morbidity cost of air pollution. |
| Keywords: | air pollution, obesity, weight gain, China |
| JEL: | I12 I15 Q53 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp12296&r=all |
| By: | Ram Mohan, M.P.; Kini, Els Reynaers |
| Abstract: | This working paper is focused on trying to interpret the meaning of “latent defects” and analysing how a case were to unfold if an operator of nuclear installation were to exercise its right of recourse against a supplier in the event of supply of equipment or material with latent defects, as envisaged under the unique Section 17(b) of the Civil Liability for Nuclear Damage Act, 2010 (CLND Act), as adopted by the Indian Parliament. Therefore, this paper presumes and builds on the assumption of some prior knowledge of general nuclear law principles as well as the CLND Act and related debates. We welcome comments on any part of the paper. |
| Date: | 2019–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:14606&r=all |
| By: | Plambeck, Erica (Stanford Graduate School of Business) |
| Date: | 2018–11 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:3739&r=all |
| By: | Ton S. van den Bremer; Rick van der Ploeg |
| Abstract: | We use perturbation methods to derive a rule for the optimal risk-adjusted social cost of carbon (SCC) that incorporates the effects of uncertainties associated with climate and the economy from a calibrated DSGE model. We allow for different aversions to risk and intertemporal fluctuations, convex damages, uncertainties in economic growth, atmospheric carbon, climate sensitivity and damages, their correlations, and distributions that are skewed in the longer run to capture long-run climate feedbacks. Our non-certainty-equivalent rule for the SCC incorporates precaution, risk insurance, and climate sensitivity and damage rate hedging effects to deal with future economic and climatic and damage risks. |
| Keywords: | precaution, insurance, hedging, economic, climatic and damage uncertainties, skewness, mean reversion, correlated risks, risk aversion, intergenerational inequality aversion, convex damages |
| JEL: | H21 Q51 Q54 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_7592&r=all |
| By: | Larcker, David F. (Graduate School of Business, Stanford University and Rock Center for Corporate Governance); Watts, Edward M. (Graduate School of Business, Stanford University) |
| Abstract: | This study investigates whether investors are willing to trade-off wealth for societal benefits. We take advantage of unique institutional features of the municipal securities market to provide insight into this question. Since 2013, over $23 billion Green Bonds have been issued to fund eco-friendly projects. Comparing Green securities to nearly identical securities issued for non-Green purposes by the same issuers on the same day, we observe economically identical pricing for Green and non-Green issues. In contrast to a number of recent theoretical and experimental studies, we find that in real market settings investors appear entirely unwilling to forgo wealth to invest in environmentally sustainable projects. When risk and payoffs are held constant, municipal investors view Green and non-Green securities by the same issuer as almost exact substitutes. Thus, the “greenium†is essentially zero. |
| JEL: | G12 G14 G20 |
| Date: | 2019–02 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:3766&r=all |
| By: | Ahlfeldt, Gabriel M.; Feddersen, Arne |
| Abstract: | We analyze the economic impact of the German high-speed rail (HSR) connecting Cologne and Frankfurt, which provides plausibly exogenous variation in access to surrounding economic mass. We find a causal effect of about 8.5% on average of the HSR on the GDP of three counties with intermediate stops. We make further use of the variation in bilateral transport costs between all counties in our study area induced by the HSR to identify the strength and spatial scope of agglomeration forces. Our most careful estimate points to an elasticity of output with respect to market potential of 12.5%. The strength of the spillover declines by 50% every 30 minutes of travel time, diminishing to 1% after about 200 minutes. Our results further imply an elasticity of per-worker output with respect to economic density of 3.8%, although the effects seem driven by worker and firm selection. |
| Keywords: | accessibility; agglomeration; density; high-speed rail; market potential; transport policy; productivity |
| JEL: | R12 R38 R48 |
| Date: | 2018–03–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:69763&r=all |
| By: | Garanina, Olga; Abramova, Abramova |
| Abstract: | The paper is focused on detailed analysis of the expansion challenges of Russian MNEs under the sanctions. The present research aims to understand how the shifts in global governance affect Russian multinationals (MNEs) inclusion into GVCs. We focus on energy and ICT industries. The research is based on multiple case study. Cases from energy and ICT sectors are examined in order to demonstrate the challenges for Russian MNEs inclusion in GVCs in context of sanctions and opportunities connected to the emergence of new governance institutions supporting Russian MNEs expansion towards Asia. Expected results are the following: a structured overview of external policy constraints and opportunities for Russian MNCs inclusion into GVCs; analysis of possible options for expansion of Russian MNEs in GVCs in Europe and in Asia. |
| Date: | 2018 |
| URL: | http://d.repec.org/n?u=RePEc:sps:cpaper:15472&r=all |
| By: | Füchtenhans, M.; Grosse, E. H.; Glock, C. H. |
| Date: | 2019–04–25 |
| URL: | http://d.repec.org/n?u=RePEc:dar:wpaper:112931&r=all |
| By: | Fabio Mariani (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)); Agustin Perez Barahona (University of Cergy-Pontoise and Ecole Polytechnique); Natacha Raffin (Normandie Univ, UNIROUEN, CREAM and EconomiX, University Paris Nanterre) |
| Abstract: | This paper explores the interplay between population and environmental quality. After reviewing the existing literature, we set up a theoretical framework suitable to analyze two major endogenous forces of demographic change - fertility and life expectancy - and their dynamic interaction with human capital and environmental conditions. We thus revisit and encompass in a unified model some key results of the literature, and gain new insight on the consequences of policy intervention on environmental dynamics and economic development. In particular, we highlight (i) the possible perverse effects of pollution control, (ii) a demographic explanation of the environmental Kuznets curve, (iii) the opportunity of relying on educational subsidies to alleviate the pressure on natural resources, and (iv) the existence of poverty traps related to human capital and environmental quality. |
| Keywords: | Environmental quality; Life expectancy; Education; Fertility |
| JEL: | J11 O44 Q56 |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:ctl:louvir:2019008&r=all |
| By: | Babayev, Bahruz |
| Abstract: | Building a successful innovation ecosystem is a key factor in innovation, growth, and development, and it can be an alternative to reducing Azerbaijan’s dependency on oil exports. Formation of a favorable innovation ecosystem remains an essential policy priority for the government of Azerbaijan too. President of the Republic of Azerbaijan signed a decree on the establishment of the Innovation Agency under the Ministry of Transport, Communications and High Technologies of the Republic of Azerbaijan on November 6th, 2018. The Innovation Agency to be established in 2019 will be a coordinating body to draft and implement an innovation roadmap of an Azerbaijani ecosystem. This paper reviews world practice, including an Israeli practice of success to deduct results and models to build an ecosystem in Azerbaijan. The aim is to determine factors that made the Israeli ecosystem successful and study if these factors can be applied to the development and implementation of similar benchmarks in Azerbaijan. The methodology that is used for this research is the case study from Israel. Through systematic analysis and logical generalization, the paper analytically discusses and deducts conclusions from Israel’s experience to spell out some key public policy lessons. |
| Keywords: | Business model, Ecosystem, Innovation, Innovation ecosystem, non-oil economy |
| JEL: | O3 O38 O4 |
| Date: | 2019–04–30 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:93600&r=all |
| By: | Fedesarrollo |
| Abstract: | Realizar una evaluación de los impactos causados en las regiones productoras de hidrocarburos y minerales con el actual Sistema General de Regalías que permita evaluar su funcionamiento, fórmulas de distribución de las regalías, e identificar los aspectos por mejorar y los cambios a incorporar en la composición y esquema de distribución actual. |
| Keywords: | Regalías, Sistema General de Regalías, Evaluación de Impacto, Análisis Costo-Beneficio, Economía Regional, Hidrocarburos, Minería, Colombia |
| JEL: | L71 F43 O47 R11 E60 |
| Date: | 2018–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:col:000124:017258&r=all |