nep-ene New Economics Papers
on Energy Economics
Issue of 2019‒06‒10
thirty-six papers chosen by
Roger Fouquet
London School of Economics

  1. Policies to Reduce CO2 Emissions: Fallacies and Evidence from the United States and California By José A. Tapia Granados; Clive L. Spash
  2. The use of revenues from carbon pricing By Melanie Marten; Kurt van Dender
  3. Evidence of the Environmental Kuznets Curve in Emerging Eastern European Economies By Grytten, Ola Honningdal; Koilo, Viktoriia
  4. Projection of fossil fuel demands in Vietnam to 2050 and climate change implications By Quang Minh Tran
  5. A modelling approach for the German gas grid using highly resolved spatial, temporal and sectoral data (GAMAMOD-DE) By Hauser, Philipp
  6. California Climate Change Target Setting: A Workshop Report and Recommendations to the State of California Based on the Third California Climate Policy Modeling Dialogue and Workshop By Brown, Austin; Fulton, Lewis; Dominguez-Faus, Rosa
  7. Taxing vehicles, fuels, and road use: Opportunities for improving transport tax practice By Kurt van Dender
  8. The Consequences of Uncertainty: Climate Sensitivity and Economic Sensitivity to the Climate By Hassler, John; Krusell, Per; Olovsson, Conny
  9. The Future of U.S. Carbon-Pricing Policy: Normative Assessment and Positive Prognosis By Stavins, Robert N.
  10. Environmental Degradation and Inclusive Human Development in sub†Saharan Africa By Simplice A. Asongu; Nicholas M. Odhiambo
  11. The Impact of Unilateral Carbon Taxes on Cross-Border Electricity Trading By Guo, B.; Newbery, D.; Gissey, G.
  12. Multiple Regime Interactions, Conversion, and South Africa’s Liquefied Natural Gas By Marie Blanche Ting
  13. Demographic change and climate change By Rauscher, Michael
  14. Evaluating the Cost to Industry of Electricity Outages By Majid Hashemi; Glenn P. Jenkins; Roop Jyoti; Aygul Ozbafli
  15. Can We Reconcile French People with the Carbon Tax? Disentangling Beliefs from Preferences By Thomas Douenne; Adrien Fabre
  16. Elecxit: The Cost of Bilaterally Uncoupling British-EU Electricity Trade By Geske, J.; Green, R.; Staffell, I.
  17. Energy Consumption of Bitcoin Mining By Küfeoğlu, S.; Özkuran, M.
  18. Perception towards Electric Vehicles and the Impact on Consumers' Preference By Milad Ghasri; Ali Ardeshiri; Taha Rashidi
  19. Russia’s economy and regional spillovers By Becker, Torbjörn
  20. Evaluating the Impact of Brexit on Natural Gas Trade between the UK and the EU – A Spatial Equilibrium Analysis By Yakubu Abdul-Salam
  21. Political Economy of Reform and Regulation in the Electricity Sector of Sub-Saharan Africa By Imam, M.; Jamasb, T.; Llorca, M.
  22. India's depleting groundwater: When science meets policy By Namrata Chindarkar and R. Quentin Grafton
  23. Green Technology and Patents in the Presence of Green Consumers By Langinier, Corinne; Ray Chaudhuri, A.
  24. Valuing the loss and damage from climate change: a review of some current issues By Jean-Michel Salles
  25. Oil Price Uncertainty and the Macroeconomy By Triantafyllou, Athanasios; Vlastakis, Nikolaos; Kellard, Neil
  26. What Remains after the Oil Boom Is Over? By Jelnov, Pavel
  27. Inclusive development in environmental sustainability in sub-Saharan Africa: insights from governance mechanisms By Simplice A. Asongu; Nicholas M. Odhiambo
  28. Testing the Asymmetric Effects of Exchange Rate and Oil Price Pass-Through in BRICS Countries: Does the state of the economy matter? By Mehmet Balcilar; David Roubaud; Ojonugwa Usman; Mark E. Wohar
  29. Search and equilibrium prices: Theory and evidence from retail diesel By Cabral, Luís M. B.; Schober, Dominik; Woll, Oliver
  30. Inanspruchnahme von Landwirtschaftsfläche durch Photovoltaik-Freiflächenanlagen 2015 bis 2018 By Tietz, Andreas
  31. Estimating monetary policy rules in small open economies By Michael S. Lee-Browne
  32. The impacts of environmental regulations on competitiveness By Dechezlepretre, Antoine; Sato, Misato
  33. Corporate Social Responsibility in Nigeria and Rural Youths in Sustainable Traditional Industries Livelihood in Oil Producing Communities By Joseph I. Uduji; Elda N. Okolo-Obasi
  34. A Zero-Emission Vehicle Registration Fee is Not a Sustainable Funding Source for Maintaining California’s Roadways By Jenn, Alan; Fleming, Kelly
  35. Economic Development Thresholds for a Green Economy in Sub-Saharan Africa By Simplice A. Asongu; Nicholas M. Odhiambo
  36. "How to Pay for the Green New Deal" By Yeva Nersisyan; L. Randall Wray

  1. By: José A. Tapia Granados; Clive L. Spash
    Abstract: Since the 1990s, advocates of policy to prevent catastrophic climate change have been divided over the appropriate economic instruments to curb CO2 emissions—carbon taxes or schemes of emission trading. Barack Obama claimed that policies implemented during his presidency set in motion irreversible trends toward a clean-energy economy, with the years 2008-2015 given as evidence of decoupling between CO2 emissions and economic growth. This is despite California being the only state in the USA that has implemented a specific policy to curb emissions, a cap-and-trade scheme in place since 2013. To assess Obama’s claims and the effectiveness of policies to reduce CO2 emissions, we analyze national and state-level data from the USA over the period 1990-2015. We find: (a) annual changes in emissions strongly correlated with the growth conditions of the economy; (b) no evidence for decoupling; and (c) a trajectory of CO2 emissions in California which does not at all support the claim that the cap-and-trade system implemented there has reduced CO2 emissions.
    Keywords: Climate change, Cap-and-trade, Carbon emissions trading, Decoupling, Economic growth
    Date: 2019
  2. By: Melanie Marten; Kurt van Dender
    Abstract: The paper collects comprehensive and detailed data on what 40 OECD and G20 economies do with the revenues from carbon taxes, emissions trading systems, and excise taxes on energy use. It notes that constraints – which can take the form of political commitments or legal earmarks – on revenue use differ between carbon taxes, emissions trading systems, and excise taxes. Constraints are less common for excise taxes, which also raise the most revenue. Carbon tax revenues are relatively often associated with environmental tax reforms, involving reductions in personal or corporate income taxes. Revenues from emissions trading systems are frequently directed towards green spending. The results may be relevant to the political economy of ambitious carbon pricing schemes in the sense that the political expedience of choices on revenue use may depend on the amount of revenue raised.
    Keywords: carbon pricing, climate change, effective carbon rates, environmental tax reform, external costs
    JEL: H21 H23 Q41 Q48 Q54 Q58
    Date: 2019–06–05
  3. By: Grytten, Ola Honningdal (Dept. of Economics, Norwegian School of Economics and Business Administration); Koilo, Viktoriia (Hauge School of Management, NLA University College, Norway)
    Abstract: This study aims to investigate the relationship of economic development, measured as economic growth, energy use, trade and foreign direct investment one the one hand and environmental degradation (carbon dioxide (hereafter CO2) emissions) on the other hand, in eleven emerging Eastern European countries during the period of 1990 to 2014. The empirical results support a carbon emission’s Kuznets curve hypothesis for Eastern Europe. The current income level indicates that not every country has reached the turning point for CO2 emissions reduction goal. In addition, the study proves a positive effect of foreign direct investment (FDI) on CO2 emissions in Eastern European countries. Also the results show that there is a negative effect of total energy consumption on environment as it increases CO2 emissions. Hence, there is a significant need of reforming the electricity markets that requires necessary improvement and attraction of investment, strong central political support, thorough preparation and continuous development. Income elasticities for CO2 are positive for all 11 countries. The paper concludes that within the group Ukraine and Kazakhstan has the most sensitive change in economic growth in respect to its CO2. It is expected that the innovative transition to a low-carbon economy offers great opportunities for economic growth and job creation. Technological leadership should be accompanied by the development and introduction of new technologies throughout Eastern European countries, hence, the paradigm of “sustainable development” should be considered. This requires the unification of the research, industry and financial sectors, as well as the support of state bodies.
    Keywords: Environmental Kuznets curve (EKC); carbon emissions; energy intensive industry; income elasticity of CO2; U-shaped relationship.
    JEL: O13 Q53 Q56
    Date: 2019–05–29
  4. By: Quang Minh Tran
    Abstract: Over the past decade, Vietnam has emerged as one of the world's fastest growing economies. Fossil fuel use, which is a dominant energy source and vital for economic growth, have been increasing considerably. Undoubtedly, the projection of fossil fuel demand is essential for a better understanding of energy needs, fuel mix, and Vietnam's strategic development. This paper provides an outlook for coal, oil, and gas demand in Vietnam to 2050. The projection is based on the calibrated results from a hybrid model (that combines a GTAP†R version for resources, and a micro simulation approach) and an energy database. Under the baseline scenario (business as usual), from 2018 to 2050, the demand for coal, oil products, and gas are expected to increase by a factor of 2.47†fold, 2.14†fold, and 1.67†fold, respectively. Emissions are also projected to increase. Because fossil fuels are the dominant source of carbon emissions in Vietnam, it follows, going forward, that an effective fuel†mix strategy that encourages the development of renewables and energy efficiency is essential.
    Keywords: climate change, emissions, fossil fuels demand, projection, Vietnam
    Date: 2019–06–07
  5. By: Hauser, Philipp
    Abstract: Natural gas is the fossil fuel with lowest CO2-emissions, compared to coal, lignite or oil. Regarding the ongoing energy transition in Germany, the extend usage of natural gas provide advantages that might be built a bridge to a low carbon energy system until 2050. Against this backdrop, this paper introduces a model for the German natural gas market (GAMAMOD-DE) with focus on infrastructure utilisation. Following a linear optimization approach, the model considers a highly resolved grid structure of pipelines, storages and cross-border connections to neighbouring countries. The spatial and temporal resolved gas demand is divided into three different sectors: industry, heating and electricity. An application for the year 2012 shows the performance and validation of the proposed model. Results show the utilisation of infrastructure and enable an assessment of the level of security of supply during the considered time frame. In addition, the findings suggest that although European customers suffered on cold winter days in 2012, from a system part of view, the security of supply (SoS) was always ensured. Further research should focus on analysing SoS and resilience of gas networks in the mid- and long-term, especially when sector coupling between electricity and gas is far advanced.
    Keywords: Linear problem optimization,gas grid Germany,sectoral, temporal, and spatial resolved demand,energy security
    JEL: D61 L95 Q32 Q41 Q54
    Date: 2019
  6. By: Brown, Austin; Fulton, Lewis; Dominguez-Faus, Rosa
    Abstract: California has a range of existing and proposed targets toward a low carbon future. This paper summarizes an analytical review, focused on modeling approaches and what is known about their feasibility and cost. The findings in this paper are based on the Climate Change Policy Modeling (CCPM) forum, which included modelers, policy makers and stakeholders evaluating targets and pathways to low-carbon futures and identifying required policies to achieve goals. The third forum, CCPM-3, was on May 14th, 2018, at the University of California, Davis and provided critical discussion and a gathering of the key experts in this topic area This report builds on the findings of CCPM and integrates with other literature where possible. It includes a review of the CO2-relevant targets, discussion of studies and modeling efforts to assess meeting such targets, including feasibility and cost. This includes analysis in the transportation and energy sectors, as well as land use and carbon sequestration.
    Keywords: Engineering, Law, Social and Behavioral Sciences, Zero emission vehicles, greenhouse gas emissions, policy, travel demand, mathematical models, climate change
    Date: 2019–04–01
  7. By: Kurt van Dender
    Abstract: This paper discusses the main external costs related to road transport and the design of taxes to manage them. It provides an overview of evolving tax practice in the European Union and the United States and identifies opportunities for better alignment of transport taxes with external costs. There is considerable scope for improving transport tax practice, notably by increasing the use of taxes based on road use. Distance charges offer great promise in delivering more efficient road transport. In heavily congested areas, targeted charges are a cost-effective way of reducing congestion. Fiscal objectives provide an impetus for change as improving vehicle fuel efficiency and fleet penetration of alternative fuel vehicles erode traditional tax bases, particularly those relating to fossil fuel use. A gradual shift from an energy-based approach towards distance-based transport taxes has the potential to establish a stable tax base in the road transport sector in the long run.
    Keywords: congestion, congestion charging, distance-charges, external costs, fuel taxes, pollution, road transport
    JEL: H23 Q58 R4 R41 R48
    Date: 2019–06–05
  8. By: Hassler, John (IIES, Stockholm University, University of Gothenburgh, CEPR and SEM); Krusell, Per (IIES, Stockholm University, University of Gothenburg, CEPR and NBER); Olovsson, Conny (Research Department, Central Bank of Sweden)
    Abstract: We construct an integrated assessment model with multiple energy sources-two fossil fuels and “green energy" - and use it to evaluate ranges of plausible estimates for the climate sensitivity as well as for the sensitivity of the economy to climate change. Rather than focusing on uncertainty explicitly, we look at extreme scenarios defined by the upper and lower limits given in available studies in the literature. We compare optimal policy with laissez faire and we point to the possible policy errors that could arise. By far the largest policy error arises when the climate policy is “overly passive"; “overly zealous" climate policy (i.e., a high carbon tax applied when climate change and its negative on the economy are very limited) does not hurt the economy much as there is considerable substitutability between fossil and non-fossil energy sources.
    Keywords: Climate change; integrated assessment model; uncertainty
    JEL: E60 H23 O44 Q43 Q54
    Date: 2019–03–01
  9. By: Stavins, Robert N. (John F. Kennedy School of Government, Harvard University)
    Abstract: There is widespread agreement among economists--and a diverse set of other policy analysts--that at least in the long run, an economy-wide carbon pricing system will be an essential element of any national policy that can achieve meaningful reductions of CO2 emissions cost-effectively in the United States. There is less agreement, however, among economists and others in the policy community regarding the choice of specific carbon-pricing policy instrument, with some supporting carbon taxes and others favoring cap-and-trade mechanisms. This prompts two important questions. How do the two major approaches to carbon pricing compare on relevant dimensions, including but not limited to efficiency, cost-effectiveness, and distributional equity? And which of the two approaches is more likely to be adopted in the future in the United States? This paper addresses these questions by drawing on both normative and positive theories of policy instrument choice as they apply to U.S. climate change policy, and draws extensively on relevant empirical evidence. The paper concludes with a look at the path ahead, including an assessment of how the two carbon-pricing instruments can be made more politically acceptable.
    JEL: Q40 Q48 Q54 Q58
    Date: 2019–05
  10. By: Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: In the light of challenges to sustainable development in the post-2015 development agenda, this study assesses how increasing carbon dioxide (CO2) emissions affect inclusive human development in 44 countries in sub-Saharan Africa for the period 2000-2012. The following findings are established from Fixed Effects and Tobit regressions. First, unconditional effects and conditional impacts are respectively positive and negative from CO2 emissions per capita, CO2 emissions from liquid fuel consumption and CO2 intensity. This implies a Kuznets shaped curve because of consistent decreasing returns. Second, the corresponding net effects are consistently positive. The following findings are apparent from Generalised Method of Moments (GMM) regressions. First, unconditional effects and conditional impacts are respectively negative and positive from CO2 emissions per capita, CO2 emissions from liquid fuel consumption and CO2 intensity. This implies a U-shaped curve because of consistent increasing returns. Second, the corresponding net effects are overwhelmingly negative. Based on the robust findings and choice of best estimator, the net effect of increasing CO2 emissions on inclusive human development is negative. Policy implications are discussed.
    Keywords: CO2 emissions; Sustainable development; Inclusiveness; Environmental policy; Africa
    JEL: C52 O38 O40 O55 P37
    Date: 2018–01
  11. By: Guo, B.; Newbery, D.; Gissey, G.
    Abstract: Market coupling makes efficient use of interconnectors by ensuring lower-price markets import until prices are equated or interconnectors constrained. A carbon tax in one of the market can distort trade and reduce price convergence. This paper uses econometrics to investigate the impact of the British Carbon Price Support (CPS, an extra carbon tax) on GB’s cross-border electricity trading with France (through IFA) and the Netherlands (through BritNed). Over 2015-2018 the CPS led to GB importing 18 TWh more electricity, thereby reducing carbon tax revenue by e74.4 million. Congestion revenue increased by e252 million, half of which was transferred to foreign interconnector owners, and the unilateral CPS created e18 million of deadweight loss. About 60% (s.e.=12%) of the CPS was passed through to the GB day-ahead prices, with 9% of this having been passed through to France and 11% to the Netherlands.
    Keywords: Carbon tax, Interconnectors, Market Coupling, Cost-benefit analysis, MGARCH
    JEL: Q48 F14 D61 C13
    Date: 2019–06–03
  12. By: Marie Blanche Ting (SPRU, University of Sussex. UK)
    Abstract: Increasingly it is recognised that regimes in transitions can promote niches rather than resist them. Using a combination of the Multi-Level Perspective (MLP) and institutional theory, this paper contributes to the transitions literature on multiple regime interactions, by providing a more nuanced understanding of why and how regimes interact over time. Using semistructured interviews, the case study explored South Africa's development of its Liquefied Natural Gas (LNG) for power generation and industrial use together considered as the niche. The two regimes were the coal-based electricity and liquid fuels. This case study revealed the co-evolutionary nature of multiple regime interactions, through repurposing existing institutions in response to increasing landscape pressures and regime tension over time. However, repurposing of existing rules was neither spontaneous nor automatic but required a series of cohesive efforts for linkages between the two regimes. These efforts involved the ongoing interface between a broad base community with interests for the LNG niche, which over time provided a supportive environment in which to complement shared resources. Understanding multiple regime interactions, has potential implications on ‘acceleration’ of niche development, whereby new institutions are not necessarily created, but rather repurpose existing ones to serve new goals or interests. The paper also reflects on temporal policy overlaps aimed at sustainability transitions, whereby a policy instrument initially used for renewables could be co-opted by more powerful actors in a direction that may strengthen 2 a fossil fuel based system. Thus, special attention is needed on the relationship between the flexibility of some policy instruments and the dominant groups, which may leverage them for its own interests.
    Date: 2019–05
  13. By: Rauscher, Michael
    Abstract: The paper uses a continuous-time overlapping-generations model with endogenous growth and pollution accumulation over time to study the link between longevity and global warming. It is seen that increasing longevity accelerates climate change in a business-as-usual scenario without climate policy. If a binding emission target is set exogenously and implemented via a cap-and-trade system, the price of emission permits is increasing in longevity. Longevity has no effect on the optimal solution of the climate problem if perfect intergenerational transfers are feasible. If these transfers are absent, the impact of longevity is ambiguous.
    Date: 2019
  14. By: Majid Hashemi (Department of Economics, Clemson University, Clemson, SC, USA); Glenn P. Jenkins (Department of Economics, Queen's University, Kingston, Canada and Eastern Mediterranean University, North Cyprus); Roop Jyoti (Vice-Chairman of Jyoti Group of Companies, Nepal); Aygul Ozbafli (Senior Financial Analyst, African Development Bank)
    Abstract: The unreliability of electricity supplies is a major cause of the high cost of manufacturing in developing countries. In this paper we propose a more accurate approach, the contribution method, to measure the cost imposed by power outages. We employ a rich, if not unique, set of data from the detailed operating accounts of three large manufacturing enterprises in Nepal. Estimating the true opportunity costs to the enterprises from lost production caused by power outages sheds light on the issue of cost measurement that is critical for the determination of the feasibility of mitigating measures. Furthermore, having such micro-based information on the value of lost load per kWh by firm or sector is critical for reducing the economic costs of planned outages by the electric utility.
    Keywords: Electricity, Reliability, Outages, Opportunity Costs, Industry.
    JEL: L94 Q41 Q48
    Date: 2018
  15. By: Thomas Douenne (Paris School of Economics – Université Paris 1 Panthéon Sorbonne); Adrien Fabre (Paris School of Economics – Université Paris 1 Panthéon Sorbonne)
    Abstract: Using a new survey and National households' survey data, we investigate French perception over carbon taxation. We find that French people largely reject a tax and dividend policy where revenues of the tax would be redistributed uniformly. However, their perception about the properties of the tax are biased: people overestimate the negative impact on their purchasing power, wrongly think the scheme is regressive, and do not perceive it as environmentally effective. Our econometric analysis shows that correcting these three bias would suffice to generate majority acceptance. Yet, we find that people's beliefs are persistent and their revisions biased towards pessimism, so that only few can be convinced.
    Keywords: Climate Policy, Carbon tax, Bias, Beliefs Preferences
    JEL: D72 D91 H23 H31 Q58
  16. By: Geske, J.; Green, R.; Staffell, I.
    Abstract: The UK’s withdrawal from the European Union could mean that it leaves the EU Single Market for electricity (Elecxit). This paper develops methods to study the longer-term consequences of this electricity market disintegration, and in particular the end of market coupling. Before European electricity markets were coupled, different market closing times forced traders to commit to cross-border trading volumes based on anticipated market prices. Interconnector capacity was often under-used, and power sometimes flowed from high- to low-price areas. A model of these market frictions is developed, empirically verified on 2009 data (before market coupling) and applied to estimate the costs of market uncoupling in 2030. A less efficient market and the abandonment of some planned interconnectors would raise generation costs by €560m a year (1.5%) compared to remaining in the Single Electricity Market. Sixty percent (€300m) of these welfare losses occur in Great Britain.
    Keywords: Electricity Trading, Market Coupling, Brexit
    JEL: L94 F13 F15
    Date: 2019–04–12
  17. By: Küfeoğlu, S.; Özkuran, M.
    Abstract: After its introduction in 2008, increasing Bitcoin prices and a booming number of other cryptocurrencies lead to a growing discussion of how much energy is consumed during the production of these currencies. Being the most expensive and the most popular cryptocurrency, both the business world and the research community have started to question the energy intensity of bitcoin mining. This paper only focuses on computational power demand during the proof-of-work process rather than estimating the whole energy intensity of mining. We make use of 160 GB of bitcoin blockchain data to estimate the energy consumption and power demand of bitcoin mining. We considered the performance of 269 different hardware models (CPU, GPU, FPGA, and ASIC). For estimations, we defined two metrics, namely; minimum consumption and maximum consumption. The targeted time span for the analysis was from 3 January 2009 to 5 June 2018. We show that the historical peak of power consumption of bitcoin mining took place during the bi-weekly period commencing on 18 December 2017 with a demand of between 1.3 and 14.8 GW. This maximum demand figure was between the installed capacities of Finland (~16 GW) and Denmark (~14 GW). We also show that, during June 2018, energy consumption of bitcoin mining from difficulty recalculation was between 15.47 and 50.24 TWh per year.
    Keywords: bitcoin, mining, blockchain, energy, consumption
    JEL: Q47
    Date: 2019–05–24
  18. By: Milad Ghasri; Ali Ardeshiri; Taha Rashidi
    Abstract: Relative advantage, or the degree to which a new technology is perceived to be better than an existing technology which is being replaced, has a significant impact on individuals decisions on when, how and to what extent to adopt. An integrated choice and latent variable model is used, in this paper, to explicitly investigate the cognitive process underlying the formation of electric vehicles perceived advantages over the conventional internal combustion engine vehicles. The analysed data is obtained from a stated preference survey including 1,076 residents in New South Wales, Australia. According to the results, the latent component of the model disentangles the perceived advantages across three dimensions of vehicle design, impact on the environment, and safety. These latent variables are interacted with price, driving range and body type, respectively, to capture the impact of perception on preference. The developed model is then used to examine different scenarios, in order to explore the effectiveness of several support schemes. The results show higher probability of adopting electric vehicles for generation Y, compared to generation X and Z. Generation Y is found to be the least sensitive cohort to purchase price, and generation X to be the most sensitive cohort to this attribute. People are more sensitive to incentives for the initial price compared to ongoing incentives for operating costs. Also, offering financial incentives to consumers as a rebate on the purchase price is more effective than allocating the same incentive to manufactories to reduce the purchase price.
    Date: 2019–05
  19. By: Becker, Torbjörn (Stockholm Institute of Transition Economics)
    Abstract: This paper looks at how the Russian economy has developed under the leadership of Putin and how it spills over to its neighbours in the CIS region. It stresses the importance of international oil prices as a determinant of policies and outcomes in Russia and highlights how this has impacted macroeconomic performance during Putin’s different terms in office. Although Russia is not an economic superpower globally, the size and importance of Russia for the CIS region is significant and thus oil price changes also drive the economic development of non-fuel exporting CIS countries to a significant degree.
    Keywords: Russia; Putin; macroeconomis; CIS; transition
    JEL: E60 F40 O52
    Date: 2019–06–04
  20. By: Yakubu Abdul-Salam (Centre for Energy Economics Research and Policy, Heriot-Watt University)
    Abstract: The United Kingdom (UK) and the European Union (EU) engage in significant natural gas trade through the Internal Energy Market (IEM). As the UK exits from the EU however, it is likely to also exit from the IEM given the seemingly intractable positions of both parties. Exit of the UK from the IEM would likely cause an increase in natural gas trade costs between the two. The increased trade costs result from a number of channels including (1) loss in trade efficiency arising from loss of EU financing previously aimed at improving efficiencies in trade between the two; (2) loss in trade efficiency arising from loss in the sophistication of financial instruments that are linked to the UK’s membership of the EU and the IEM; (3) rising costs of doing business in the UK for many EU energy companies due to the effects of possible regulatory divergence between the UK and the EU; etc. We use a spatial equilibrium model to examine the trade flow, price and welfare implications of these cost effects on global natural gas trade, with a focus on the UK and the EU. We find that cost increases in the UK-EU natural gas trade links would result significant trade flow changes, with the UK and the EU reducing overall exports and increasing internal trade. As a result, there would be significant underutilisation of existing pipelines linking both parties. The Republic of Ireland would also form a significant number of new trade links to compensate for its reduction in imports from the UK. Total welfare losses in the UK and the EU are in the order of $479million and $602million respectively, which is equivalent to about 3.69% and 0.59% of the total value of natural gas trade for the respective parties in 2017. In the UK, the producer welfare loss is significantly higher, highlighting the vulnerability of the UK natural gas industry to cost increases in trade with the EU.
    Keywords: Brexit; Natural gas; Trade; Spatial equilibrium; Welfare
    JEL: F13 O24 P28
    Date: 2019–05
  21. By: Imam, M.; Jamasb, T.; Llorca, M.
    Abstract: As part of their electricity sector reforms, Sub-Saharan African countries have established independent regulatory agencies to signal legal and political commitment to end self-regulation and provision of service by the state. The reforms aimed to encourage private investments, improve efficiency, and extend the service to the millions who lacked access to it. However, after nearly two and half decades of reforms, these expectations have not been met and the electricity sectors of these countries remain undeveloped. There are anecdotes that these outcomes are due to poor design, non-credible, unpredictable regulations, and political interference. This paper investigates the performance of the reforms in the context of government political ideology. We use a dynamic panel estimator and data from 45 countries from 2000 to 2015 to analyse the role of ideological differences in the effect of independent sector regulation on access to electricity and installed capacity. We find negative impact from independent regulatory agencies on installed capacity in countries with left-wing governments, while in countries with right-wing governments we find positive effects on capacity. Also, we find negative impact on access in countries with left-wing governments, while we find no significant impact for countries with right-wing governments. The results have interesting policy implications for private sector participation, increased generation capacity and access rates especially in countries with left-wing governments.
    Keywords: independent regulation, electricity sector reform, government ideology, dynamic GMM, Sub-Saharan Africa
    JEL: D73 Q48 L51 L94 O55 P16
    Date: 2019–05–19
  22. By: Namrata Chindarkar and R. Quentin Grafton
    Abstract: A commonly applied policy to India's ongoing depletion of groundwater is feeder separation. Introduced in Gujarat as the Jyotigram Yojana (JGY) scheme, it provides a separate and rationed electricity supply to farmers and an unrationed power supply to non†agricultural users. JGY is claimed to increase groundwater storage. By using Gujarat district†level data from 1996 to 2011 and by separately applying difference†in†differences and Bayesian regressions, we find that groundwater storage has continued to decrease with JGY. We contend that our empirical results show that JGY has been implemented without adequate consideration of (1) a publication bias whereby researchers have a greater likelihood of having their results published if they are statistically significant and show a positive outcome and (2) a ‘barrier’ effect such that communicating evidence across science and policy divides means that evidence may not be accepted, even when true, and this limits policy advice and options.
    Keywords: Bayesian regression, difference in differences, disciplinary divides, energy-water nexus, groundwater, Jyotigram Yojana
    Date: 2019–01–22
  23. By: Langinier, Corinne; Ray Chaudhuri, A. (Tilburg University, Center For Economic Research)
    Abstract: We develop a theoretical framework to investigate the impact of patent policies and emission taxes on green innovation that reduces the emission output ratio, and on the emission level. In the absence of green consumers, the introduction of patents results in a paradox whereby increasing emission tax beyond a certain threshold leads to a discrete increase in the emission level, which may be avoided by reducing the patenting cost. In the presence of green consumers, this paradox is restricted to an intermediate range of tax rates, and at sufficiently high tax rates, reducing the patenting cost may increase the emission level. Also, higher emission taxes increase green investment only if the fraction of green consumers is sufficiently small, and the magnitude of this effect decreases as this fraction increases.Moreover, a stricter patentability requirement is only effective at reducing emissions if the fraction of green consumers is sufficiently small.
    Keywords: patent; clean technologies; environmentally friendly consumers
    JEL: O34 L13 Q50
    Date: 2019
  24. By: Jean-Michel Salles (CEE-M - Centre d'Economie de l'Environnement - Montpellier - FRE2010 - INRA - Institut National de la Recherche Agronomique - UM - Université de Montpellier - CNRS - Centre National de la Recherche Scientifique - Montpellier SupAgro - Institut national d’études supérieures agronomiques de Montpellier)
    Abstract: From an economic perspective, damage and loss valuation aims first at justifying climate change mitigation efforts. But the difficulties related to the heterogeneity of the damage and the time horizon of the impacts make the results very contingent of the computation hypotheses.The debate thus focused on the social cost of carbon, driven by the idea of basing climate change policies on emission pricing. But damage assessment could also be used as a basis for compensating victims. Although the idea of climate justice is struggling to establish the basis for this compensation, international negotiations have begun to lay the groundwork for it through the Warsaw Mechanism, which remains however far from this goal.
    Abstract: Dans une perspective économique, l'évaluation des pertes et dommages vise d'abord à justifier les efforts d'atténuation du changement climatique. Mais les difficultés liées à l'hétérogénéité des dommages et l'horizon temporel des impacts rendent les résultats très contingents des hypothèses de calcul. Le débat s'est ainsi focalisé sur le coût social du carbone, porté par l'idée de baser les politiques de lutte contre le changement climatique sur une tarification des émissions. Mais l'évaluation des dommages pourrait aussi servir de base à une compensation des victimes. Même si l'idée d'une justice climatique peine à établir les bases de cette compensation, les négociations internationales ont commencé à en poser des jalons à travers le Mécanisme de Varsovie qui reste cependant loin de cet objectif.
    Keywords: eEconomic valuation,Climate change,Compensation,Economic valuation,Loss and damage,Social cost of carbon,coût social du carbone,pertes et préjudices,évaluation économique,changement climatique
    Date: 2019
  25. By: Triantafyllou, Athanasios; Vlastakis, Nikolaos; Kellard, Neil
    Abstract: This paper examines the impact of oil price uncertainty shocks on economic activity. To do so, we define the uncertainty shock as the unanticipated component of oil price fluctuations. We find that this unanticipated component has a significantly negative and long-lasting impact on economic activity, with its cumulative effect on the US macroeconomy being much larger compared to that of popular uncertainty proxies such as stock market volatility and Economic Policy Uncertainty. Unlike our preferred measure of oil price uncertainty, volatility and the price spikes in oil futures prices present only a small and transitory effect on the real economy. Overall, our findings show that the US economy is significantly impaired when the degree of oil price unpredictability rises, while it is relatively immune to predictable fluctuations in the oil market.
    Keywords: Oil market, Uncertainty, Realized Variance, Economic Activity
    Date: 2019–05–23
  26. By: Jelnov, Pavel (Leibniz University of Hannover)
    Abstract: This paper links between Beckerian literature that shows that marriage is a normal good with respect to male income and the literature that explores cultural changes as a result of exogenous events. I use the oil crisis of the 1970s as a positive shock on some males. The analyzed outcome is marital status at early twenties for women and at mid and late twenties for men. The probability to be never-married decreases in the American oil-producing areas immediately after the shock. This effect persists after the oil boom is over but longer for men than for women.
    Keywords: oil, age of marriage
    JEL: J12
    Date: 2019–04
  27. 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
  28. By: Mehmet Balcilar (Department of Economics, Eastern Mediterranean University, North Cyprus); David Roubaud (Montpellier Business School, Montpellier, France); Ojonugwa Usman (Department of Economics, Eastern Mediterranean University, North Cyprus); Mark E. Wohar (Department of Economics, University of Nebraska-Omaha, USA)
    Abstract: This paper investigates not only the question of whether there is exchange rate and oil price pass-through (EROPPT) but also the extent to which the pass-through is asymmetric or state dependent in the BRICS countries. Using monthly data and the nonlinear Vector Smooth Transition Autoregressive (VSTAR) model, we find evidence of period specific pass-through between the upper and lower regime periods, governed by the selected transition variables. We also find asymmetric pass-through in all the countries with strong evidence of higher pass-through when the size of the shocks to the transition variable moves the system above a threshold level. The result further divulges that output growth asymmetrically reacts to the shocks. The implication of these findings is that the pass-through is strongly affected by the state of the economy.
    Keywords: Exchange rate pass-through, Oil price pass-through, Inflation, VSTAR
    JEL: C22 C58 E31
    Date: 2019–07
  29. By: Cabral, Luís M. B.; Schober, Dominik; Woll, Oliver
    Abstract: We examine the relation between consumer search and equilibrium prices when collusion is endogenously determined. We develop a theoretical model and show that average price is a U-shaped function of the measure of searchers: prices are highest when there are no searchers (local monopoly power) or when there are many searchers (and sellers opt to collude). We test this prediction with diesel retail prices in Dortmund, Germany. We estimate a U-shaped relation with statistical precision and a €.025/liter price variation due to the variation in the measure of searchers.
    Keywords: Collusion,Cartelization,Fuel Retailing,Search,Competitive Intensity
    JEL: L1 L4 L5 L9
    Date: 2019
  30. By: Tietz, Andreas
    Abstract: Der Bericht analysiert die Inanspruchnahme von Freiflächen, insbesondere Landwirtschaftsfläche, durch Photovoltaik-Anlagen, die im Rahmen des Gesetzes für den Ausbau erneuerbarer Energien (EEG 2017) eine Förderberechtigung erhielten. Die Analyse beruht auf Einzeldaten der in zwölf Ausschreibungsrunden in den Jahren 2015 bis 2018 bezuschlagten Gebote sowie aller bis November 2018 in Betrieb genommenen Anlagen. Damit werden die Ergebnisse der entsprechenden Berichte aus 2016 und 2017 fortgeschrieben. Aus den drei Ausschreibungen im Jahr 2018 resultiert eine voraussichtliche Inanspruchnahme von 807 ha Freifläche durch die geplanten Anlagen. Davon entfallen vermutlich etwa 449 ha auf Landwirtschaftsfläche. Jedoch werden die Zuschläge häufig auf andere, vom Gebot abweichende Standorte übertragen. Somit ist die Abschätzung der in Anspruch genommenen Landwirtschaftsfläche anhand der Zuschlagsdaten mit großen Unsicherheiten verbunden. Es sollte geprüft werden, ob mithilfe von Fernerkundungsdaten zukünftig aussagekräftigere Ergebnisse über die tatsächliche Inanspruchnahme von Landwirtschaftsfläche gewonnen werden können.
    Keywords: Erneuerbare Energien,Solaranlagen,Flächenverbrauch,Deutschland,renewable energies,photovoltaics,land take,Germany
    JEL: O13 Q42 R14
    Date: 2019
  31. By: Michael S. Lee-Browne (The George Washington University)
    Abstract: This paper presents an approach for empirically estimating long-run monetary policy rules in small open economies. The approach utilizes the cointegrated VAR methodology and statistical tests on long- and short-run relations, and investigates policy responses. An application is presented for the case of Trinidad and Tobago. The analysis reveals an empirically supported long-run monetary policy rule for the nominal exchange rate, and provides empirical evidence that oil price shocks are transmitted through the TT economy in part via the effects on US prices. Dynamic specification of the nominal exchange rate reveals significant adjustment towards the target equilibrium level, and significant effects from foreign and domestic variables save for the exchange rate. Forecast analysis reveals the significance of oil-price forecasts, and forecast-errors, on monetary policy. The parsimonious model and its parameter estimates are empirically constant and generate reliable forecasts that provide important implications for using estimated policy rules.
    Keywords: Cointegration, exogeneity, Fisher open parity, forecast-encompassing, monetary policy, PPP, small open economies, Trinidad and Tobago, UIP
    JEL: C51 C52 E52 E58 F31 F41
    Date: 2019–05
  32. By: Dechezlepretre, Antoine; Sato, Misato
    Abstract: This article reviews the empirical literature on the impacts of environmental regulations on firms’ competitiveness, as measured by trade, industry location, employment, productivity and innovation. The evidence shows that environmental regulations can lead to statistically significant adverse effects on trade, employment, plant location and productivity in the short run, in particular in a well-identified subset of pollution- and energy-intensive sectors, but that these impacts are small relative to general trends in production. At the same time, there is evidence that environmental regulations induce innovation in clean technologies, but the resulting benefits do not appear to be large enough to outweigh the costs of regulations for the regulated entities. As measures to address competitiveness impacts are increasingly incorporated into the design of environmental regulations, future research will be needed to assess the validity and effectiveness of such measures, and to ensure they are compatible with the environmental objectives of the policies.
    JEL: J1
    Date: 2017–07
  33. By: Joseph I. Uduji (University of Nigeria, Nsukka, Nigeria); Elda N. Okolo-Obasi (University of Nigeria, Nsukka, Nigeria)
    Abstract: Since the first oil well was drilled in Nigeria, traditional economies have suffered neglect, and rural youths do not see a future for themselves in traditional industries livelihood (TIL). We examine the impact of corporate social responsibility (CSR) of multinational oil companies (MOCs) on youths’ participation in TIL. A total of 1200 youths were sampled across the rural Niger Delta. Results from the use of a logit model indicate a significant relationship between CSR and TIL. The findings suggest increased general memorandum of understanding (GMoU) interventions in canoe-carving, pottery-making, cloth-weaving, mat-making, and basket-weaving to revive the traditional economic activities in Nigeria.
    Keywords: corporate social responsibility; multinational oil companies
    JEL: J43 O40 O55 Q10
    Date: 2019–01
  34. By: Jenn, Alan; Fleming, Kelly
    Keywords: Engineering
    Date: 2019–05–01
  35. By: Simplice A. Asongu (Yaoundé/Cameroon); Nicholas M. Odhiambo (Pretoria, South Africa)
    Abstract: This study investigates how increasing economic development affects the green economy in terms of CO2 emissions, using data from 44 countries in the SSA for the period 2000-2012. The Generalised Method of Moments (GMM) is used for the empirical analysis. The following main findings are established. First, relative to CO2 emissions, enhancing economic growth and population growth engenders a U-shaped pattern whereas increasing inclusive human development shows a Kuznets curve. Second, increasing GDP growth beyond 25% of annual growth is unfavorable for a green economy. Third, a population growth rate of above 3.089% (i.e. annual %) has a positive effect of CO2 emissions. Fourth, an inequality-adjusted human development index (IHDI) of above 0.4969 is beneficial for a green economy because it is associated with a reduction in CO2 emissions. The established critical masses have policy relevance because they are situated within the policy ranges of adopted economic development dynamics.
    Keywords: CO2 emissions; Economic development; Africa
    JEL: C52 O38 O40 O55 P37
    Date: 2019–01
  36. By: Yeva Nersisyan; L. Randall Wray
    Abstract: This paper follows the methodology developed by J. M. Keynes in his How to Pay for the War pamphlet to estimate the "costs" of the Green New Deal (GND) in terms of resource requirements. Instead of simply adding up estimates of the government spending that would be required, we assess resource availability that can be devoted to implementing GND projects. This includes mobilizing unutilized and underutilized resources, as well as shifting resources from current destructive and inefficient uses to GND projects. We argue that financial affordability cannot be an issue for the sovereign US government. Rather, the problem will be inflation if sufficient resources cannot be diverted to the GND. And if inflation is likely, we need to put in place anti-inflationary measures, such as well-targeted taxes, wage and price controls, rationing, and voluntary saving. Following Keynes, we recommend deferred consumption as our first choice should inflation pressures arise. We conclude that it is likely that the GND can be phased in without inflation, but if price pressures do appear, deferring a small amount of consumption will be sufficient to attenuate them.
    Keywords: Green New Deal; Keynes; How to Pay for the War; Modern Money Theory
    JEL: B50 E0 E2 E3 E6 H6 Q0
    Date: 2019–05

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