|
on Energy Economics |
| By: | Marion Leroutier (Paris School of Economics (PSE), Université Paris I-Panthéon-Sorbonne, Centre International de Recherche pour l'Environnement et le Développement (CIRED)) |
| Abstract: | The electricity and heat generation sector represents about 40 % of global greenhouse gas (GHG) emissions in 2016. Policy-makers have implemented a variety of instruments to decarbonise their power sector. This paper examines the UK Carbon Price Floor (CPF), a novel carbon pricing instrument implemented in the United Kingdom in 2013. After describing the potential mechanisms behind the recent UK power sector decarbonisation, I apply the synthetic control method on country-level data to estimate the impact of the CPF on per capita emissions. I discuss the importance of potential confounders and the amount of net electricity imports imputable to the policy. Depending on the specification, the abatement associated with the introduction of the CPF range from 106 to 185 millions tons of equivalent CO2 over the 2013-2017 period. This implies a reduction of between 41% and 49% of total power sector emissions by 2017. Several placebo tests suggest that these estimates capture a causal impact. This paper shows that a carbon levy on high-emitting inputs used for electricity generation can lead to successful decarbonisation. |
| Keywords: | carbon tax, electricity generation, synthetic control method |
| JEL: | D22 H23 Q41 Q48 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2019.12&r=all |
| By: | Adrien Fabre (Paris School of Economics, Université Paris 1 Panthéon-Sorbonne) |
| Abstract: | The EROI –for Energy Returned On Invested– of an energy technology measures its ability to provide energy efficiently. Previous studies draw a link between the affluence of a society and the EROI of its energy system, and show that EROIs of renewables are lower than those of fossil fuels. Logically, concerns have been expressed that system-wide EROI may decrease during a renewable energy transition. First, I explain theoretically that the EROIs of renewables themselves could then decrease as energy-efficient fossil fuels would be replaced by less energy-efficient renewables in the supply-chain. Then, using the multiregional input-output model THEMIS, I estimate the evolution of EROIs and prices of electric technologies from 2010 to 2050 for different scenarios. Global EROI of electricity is predicted to go from 12 in 2010 to 11 in 2050 in a business-as-usual scenario, but down to 6 in a 100% renewable one. Finally, I study the economic implication of a declining EROI. An inverse relation between EROI and price is suggested empirically, even though theory shows that both quantities may move in the same direction. |
| Keywords: | EROI, input-output, energy transition, MRIO, sustainability |
| JEL: | Q40 Q47 Q49 |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:fae:ppaper:2018.09&r=all |
| By: | Quentin Perrier (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech); Céline Guivarch (CIRED - Centre International de Recherche sur l'Environnement et le Développement - CNRS - Centre National de la Recherche Scientifique - ENPC - École des Ponts ParisTech - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech); Olivier Boucher (LOA - Laboratoire d’Optique Atmosphérique - UMR 8518 - INSU - CNRS - Institut national des sciences de l'Univers - CNRS - Centre National de la Recherche Scientifique - Université de Lille) |
| Abstract: | In the context of climate change mitigation and the Paris Agreement, it is critical to monitor and understand the dynamics of greenhouse gas emissions over different regions of the world. In this study, we quantify the contributions of different drivers behind the observed emission decrease in Europe between 2009 and 2014. To this end, we build a novel dataset of deflated input-output tables for each of the 28 EU countries. This dataset enables us to conduct the first Structural Decomposition Analysis of emissions in European countries since the economic crisis. Our results show that the largest drivers of emissions have been the improvement in carbon intensity (−394 MtCO 2 e), largely offset by the economic recovery (+285 MtCO 2 e). However, other less intuitive drivers also played a significant role in the emission decline: changes in the production system (−104 MtCO 2 e), mostly driven by an increase in imports; the evolution of final demand patterns (−101 MtCO 2 e); a decrease in emissions due to household heating (−83 MtCO 2 e) and private transport (−24 MtCO 2 e), with a small offset from population growth (+39 MtCO 2 e). However, these aggregate figures mask significant variations between EU countries which we also document. This study highlights the importance of including changes in consumption patterns, trade and temperature anomalies in tracking and fostering progress towards the Paris Agreement goals. |
| Keywords: | GHG emissions,Structural decomposition analysis,European Union |
| Date: | 2019–06–19 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-02161008&r=all |
| By: | Colas, Mark (Federal Reserve Bank of Minneapolis); Morehouse, John M. (University of Oregon) |
| Abstract: | Cities with cleaner power plants and lower energy demand have stricter land use restrictions; these restrictions increase housing prices and disincentivize living in these lower polluting cities. We use a spatial equilibrium model to quantify the effect of land use restrictions on household carbon emissions. Our model features heterogeneous households, cities that vary by power plant technology and the benefits of energy usage, as well as endogenous wages and rents. Relaxing restrictions in California to the national median leads to a 2.3% drop in national carbon emissions. The burden of a carbon tax differs substantially across locations. |
| Keywords: | Greenhouse gasses; Local labor markets; Spatial equilibrium |
| JEL: | Q4 R13 R31 |
| Date: | 2019–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmoi:0020&r=all |
| By: | Jiaxing Wang (Department of Economics, Aoyama Gakuin University. 4-4-25 Shibuya, Shibuya-ku, Tokyo, 150-8366, Japan.); Shigeru Matsumoto (Department of Economics, Aoyama Gakuin University. 4-4-25 Shibuya, Shibuya-ku, Tokyo, 150-8366, Japan.) |
| Abstract: | Although many countries have implemented subsidy programs for next-generation vehicles in order to reduce energy consumption and greenhouse gas emissions from the transportation sector, the effect of such programs has not yet been fully investigated in terms of their influence of households f vehicle selection. The Japanese government introduced a subsidy program entitled gEco-car h during 2009 and 2012. In this study, we apply multinomial logit models to micro-level data of vehicle selection from the National Survey of Family Income and Expenditure in order to identify the types of households who switched from conventional gasoline vehicles to hybrid electric vehicles (HEVs) using this subsidy program. Our analyses demonstrate that higher income households who used compact gasoline vehicles (CGVs) before the Eco-car program switched to HEVs using the subsidy, whereas those who used regular gasoline vehicles (RGVs) did not switched to HEVs. Although seniors chose HEVs over CGVs before the Eco-car program, younger consumers began choosing HEVs over CGVs after the Eco-car program. We also find that gasoline price became a less important factor on HEV purchase after the Eco-car program. |
| Keywords: | Eco-car program, Hybrid electric vehicles, Micro-level data, Multinomial logit model |
| JEL: | H23 Q55 C25 |
| URL: | http://d.repec.org/n?u=RePEc:was:dpaper:1904&r=all |
| By: | Werthschulte, Madeline; Löschel, Andreas |
| Abstract: | The aim of this study is to link variation in energy cost misperceptions to variation in households' energy consumption. The focus is on two sorts of misperceptions: First, present biased discounting of future energy costs and second, biased energy price beliefs. By running an artefactual field experiment with a representative sample of 711 participants, we gather incentivized measures of these two misper- ceptions and observe participant's revealed electricity consumption. Our main finding is that participants with present bias are predicted to consume on average 9% more electricity than participants with time-consistent discounting. Our results further suggest that neither the true marginal electricity price nor the expected marginal electricity price can predict electricity consumption. Taken together our results raise doubt in the effectiveness of classical price based policies in reducing households' energy consumption. |
| Keywords: | energy consumption,present bias,price beliefs,field experiment |
| JEL: | C93 D81 D91 Q49 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cawmdp:111&r=all |
| By: | Dominioni, Goran; Romano, Alessandro; Sotis, Chiari |
| Abstract: | In this article we apply an integrable nonautonomous Lotka-Volterra model to study the 2 relationship among oil and renewable energy stock prices between 2006 and 2016. The advantage 3 of this innovative approach is that it allows us to study the simultaneous interaction among n stock 4 indices at any point in time. In line with previous studies, we find that the relationship between oil 5 and renewables is characterized by major structural breaks taking place in 2008 and around 2013. 6 The first structural break might be caused by the financial crisis, whereas more studies are required 7 to advance a hypothesis on the causes behind the second structural break. Our main finding is that 8 oil is always in a predator-prey relationship with wind, whereas it proceeds in mutualism with solar 9 after 2012. Moreover, we find that solar and wind proceed in mutualism between 2008 and 2013, but 10 have a rivalrous interaction before (competition) and after (predator-prey) that period. We explore 11 the possible reasons behind these patterns and their policy implications. |
| Keywords: | Lotka-Volterra; oil prices; renewable energy |
| JEL: | N0 |
| Date: | 2019–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:100548&r=all |
| By: | Kerr, Suzi; Leining, Catherine |
| 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: | Demand and Price Analysis, Risk and Uncertainty |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:motuwp:290396&r=all |
| By: | Opeyemi Akinyemi (Covenant University, Ota, Nigeria); Uchenna Efobi (Covenant University, Ota, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon); Evans S. Osabuohien (Covenant University, Ota, Nigeria) |
| Abstract: | The paper investigates the dynamic relationship between renewable energy usage and trade performance in sub-Saharan Africa (SSA), while considering the conditioning role of corruption control, regulatory quality, and the private sector access to finance. Focusing on 42 SSA countries for the period 2004-2016, and engaging the System generalized method of moments (GMM) technique for its estimation, this study found a negative relationship between renewable energy usage and the indicators of trade performance. However, with corruption control, improved regulatory framework, and better finance for the private sector, there are potentials for a positive net impact of renewable energy usage on manufacturing export. For renewable energy and total trade nexus, we find that improved regulatory framework and better finance for the private sector are important conditioning structures. These findings are significant because they highlight the different important structures of SSA countries that improve the effect of renewable energy use on trade outcomes. For instance, the consideration of the financial, institutional and regulatory frameworks in SSA countries in conditioning the renewable energy-trade nexus stipulates a clear policy pathway for countries in this region as the debate for transition to the use of renewable energy progresses. |
| Keywords: | Environment; Green growth; Trade performance; Pollution; Renewable energy; sub-Saharan Africa |
| JEL: | C5 F1 Q4 Q5 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:19/032&r=all |
| By: | Costa, Helia; Veiga, Linda |
| Abstract: | Investment in wind power has grown remarkably in the past decades in Portugal. Although economic development is an argument for investment incentive policies, little evidence exists as to their net impact on local-level unemployment. Using a panel of all 278 Portuguese mainland municipalities for the years 1997-2017, we assess the existence, distribution and duration of local level labor impacts of wind power investment. Our results show there are short term effects during the construction phase. We estimate a decrease of 0.05 percentage points in the total unemployment rate for each KW per capita installed. These effects are confined to unskilled labor and male workers. Further analysis of spatial interaction finds positive spatial spillovers for municipalities that are 30km or less away but not farther, implying workers are willing to commute but not migrate. We find no evidence of sustained effects or impact during the operations and maintenance phase, despite both short and long term impacts in municipalities' revenues. |
| Keywords: | Wind power; labor effectsf panel data |
| Date: | 2019–07–04 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:123160&r=all |
| By: | Aviral Kumar Tiwari (Montpellier Business School, Montpellier, France.); Leena Mary Eapen (Indian Institute of Management, Kozhikode); Sthanu R Nair (Indian Institute of Management, Kozhikode) |
| Abstract: | As the Indian economy is one of the fastest growing economies in the world, the demand for energy is very high. In this context, it is crucial to understand the long run relationship between energy consumption and economic growth in the Indian economy. This study is an attempt to examine the existence and direction of causal relationship between electricity consumption and economic growth among seventeen major states of India during the period 1960-61 to 2014-15 both at the aggregate and sectoral level. The study employs the panel cointegration tests of Pedroni (2004) and Westerlund & Edgerton (2008) with the level break/shift to the data set. The results provide evidence of a long run equilibrium relationship between economic growth and electricity consumption. For the overall state economy, the empirical results have established the existence of bidirectional causality running from electricity consumption to state income (economic) growth. At the sectoral level, there is evidence of unidirectional causal relationship between electricity consumption and growth in both the agriculture and domestic sectors. However, in case of industrial sector, a unidirectional causal relation from electricity consumption to industrial growth was witnessed. |
| Keywords: | Economic growth; Energy consumption; Panel cointegration; Panel causality; Indian States |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:iik:wpaper:334&r=all |
| By: | Kerr, Suzi; Leining, Catherine |
| 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: | Environmental Economics and Policy |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:motuwp:290397&r=all |
| By: | Justin Leroux (Department of Applied Economics HEC Montréal & CIRANO & CRÉ); Daniel Spiro (Oslo Business School, Oslo Akershus University College of Applied Sciences & CREE) |
| Abstract: | Arctic oil extraction is inconsistent with the 2°C target. We study unilateral strategies by climate-concerned Arctic countries to deter extraction by others. Contradicting common theoretical assumptions about climate-change mitigation, our setting is one where countries may fundamentally disagree about whether mitigation by others is beneficial. Arctic extraction requires specific R&D, hence entry by one country expands the extraction-technology market, decreasing costs for others. Less environmentally-concerned countries (preferring maximum entry) have a first-mover advantage but, being reliant on entry by others, can be deterred if environmentally-concerned countries (preferring no entry) credibly coordinate on not following. Furthermore, using a pooling strategy, an environmentally-concerned country can deter entry by credibly “pretending” to be environmentally adamant, thus expected to not follow. A rough calibration, accounting for recent developments in U.S. politics, suggests a country like Norway, or prospects of a green future U.S. administration, could be pivotal in determining whether the Arctic will be explored. |
| Keywords: | arctic region, oil exploration, climate change, geopolitics, unilateral action |
| JEL: | D82 F50 O33 Q30 Q54 |
| Date: | 2017–08 |
| URL: | http://d.repec.org/n?u=RePEc:oml:wpaper:201705&r=all |
| By: | Marina Friedrich; Michael Pahle |
| Abstract: | The Emissions Trading Scheme of the European Union is a central instrument of EU's climate policy. Looking at the development of allowance prices shows that prices have been low for a long time and previous research indicates that a link to fundamental price drivers is hard to establish. Only recently, prices have started to increase. This new price development has received a lot of attention in political discussions in which it has been attributed to the recent reform of the EU ETS -- the strengthening of the Market Stability Reserve through cancellation. It is, however, challenging to find empirical evidence which can link the two, or more generally, to provide evidence about the true cause of the upward trend. In this paper, we obtain first empirical results pointing in the direction of a period of exuberance in EUA prices. This period overlaps with the recent upward trend in prices. We further investigate several abatement-related fundamentals and show that they do not display explosive behavior which could have driven the allowance price movements. We conjecture that this price exuberance could either be caused by an adaption process or an overreaction of prices to the announcement of the reform. In addition, we revisit the effects of fundamental price drivers, such as coal prices, gas prices and measures of economic activity, on allowance prices in the EU ETS using a time-varying coefficient regression model. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1906.10572&r=all |
| By: | Dietz, Simon; Venmans, Frank |
| Abstract: | We exploit recent advances in climate science to develop a physically consistent, yet surprisingly simple, model of climate policy. It seems that key economic models have greatly overestimated the delay between carbon emissions and warming, and ignored the saturation of carbon sinks that takes place when the atmospheric concentration of carbon dioxide rises. This has important implications for climate policy. If carbon emissions are abated, damages are avoided almost immediately. Therefore it is optimal to reduce emissions significantly in the near term and bring about a slow transition to optimal peak warming, even if optimal steady-state/peak warming is high. The optimal carbon price should start relatively high and grow relatively fast. |
| JEL: | N0 |
| Date: | 2019–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:100733&r=all |
| By: | Küfeoğlu, S.; Liu, G.; Anaya, K.; Pollitt, M. |
| Abstract: | This paper reviews digitalisation in energy sector by looking at the business models of 40 interesting new start-up energy companies from around the world. These start-ups have been facilitated by the rise of distributed generation, much of it intermittent in nature. We review Artificial Intelligence (AI), Machine Learning, Deep Learning and Blockchain applications in energy sector. We discuss the rise of prosumers and small-scale renewable generation, highlighting the role of Feed-in-Tariffs (FITs), the Distribution System Platform concept and the potential for Peer-to-Peer (P2P) trading. Our aim is to help energy regulators calibrate their support new business models. |
| Keywords: | Feed-in tariff, Distribution System Platform, Peer-to-Peer, Blockchain |
| JEL: | L94 |
| Date: | 2019–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:cam:camdae:1956&r=all |
| By: | Leining, Catherine; Kerr, Suzi |
| 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: | Environmental Economics and Policy |
| Date: | 2019–04 |
| URL: | http://d.repec.org/n?u=RePEc:ags:motuwp:290395&r=all |
| By: | Dolores de la Mata (CAF-Development Bank of Latin America); Carlos Felipe Gaviria Garces (Universidad de Antioquia) |
| Abstract: | We study the impact of air pollution exposure (CO, O3 and Pm10) during pregnancy and early years of life on infant health for a sample of children attending public kinder- gartens in Bogota, Colombia. The study uses a unique database that gathers information on children health which allows to combine information of residential location of the mother with information from the city air quality monitors. To overcome endogeneity problems due to residential sorting we identify pairs of siblings in the dataset and imple- ment panel data models with mother xed e ects. Results show evidence that mothers, who are exposed to higher levels of CO and O3 during pregnancy, have a higher proba- bility of their babies being born with a low birth weight. Furthermore, a child exposed in-utero to higher levels of O3 has a higher probability of being diagnosed with a lung- related disease. Our ndings advocate for more strict environmental regulations as a way to improve human capital in developing countries. |
| Keywords: | Air Pollution, Infant Health, Mother-Family Fixed Effects, Panel Data |
| JEL: | C33 J13 Q53 |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:duh:wpaper:1902&r=all |
| By: | Holmberg, Pär (Research Institute of Industrial Economics (IFN)); Ritz, Robert A. (Energy Policy Research Group (EPRG), Judge Business School, University of Cambridge) |
| Abstract: | Capacity mechanisms are increasingly used in electricity market design around the world yet their role remains hotly debated. In this paper, we introduce a new benchmark model of a capacity mechanism in a competitive electricity market with many different generation technologies. We consider two policy instruments, a wholesale price cap and a capacity payment, and show which combinations of these instruments induce socially-optimal investment by the market. Changing the price cap or capacity payment affects investment only in peak generation plant, with no equilibrium impact on baseload or mid-merit plant. We obtain a rationale for a capacity mechanism based on the internalization of a system-cost externality – even where the price cap is set at the value of lost load. In extensions, we show how increasing renewables penetration enhances the need for a capacity mechanism, and outline an optimal design of a strategic reserve with a discriminatory capacity payment. |
| Keywords: | Investment; Wholesale electricity market; Capacity mechanism; Capacity auction; Strategic reserve |
| JEL: | D41 L94 |
| Date: | 2019–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:iuiwop:1292&r=all |
| By: | Rasmus Fatum (University of Alberta); Guozhong Zhu (University of Alberta); Wenjie Hui (wenjiehui@pku.edu.cn) |
| Abstract: | We develop a dynamic stochastic optimization model with oil price shocks to show that countries with certain combinations of oil endowment and productivity have strong precautionary incentives to accumulate foreign reserves in response to oil price shocks. Using the Simulated Method of Moments to estimate the model we demonstrate how oil price shocks are absorbed by changes in foreign reserves which, in turn, leads to less variation in aggregate consumption. Along with productivity and oil endowment, we also consider as determinants of reserves holding conventional variables such as trade- to-GDP ratio and capital openness. Overall, our results suggest that productivity and oil endowment are potentially important determinants of foreign reserves that for some countries should be considered as complements to conventional determinants. |
| Keywords: | foreign reserves, oil price shocks, precautionary demand |
| JEL: | E21 F40 Q43 |
| URL: | http://d.repec.org/n?u=RePEc:cth:wpaper:gru_2016_027&r=all |
| By: | Russo, Marianna; Devine, Mel T. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb201908&r=all |
| By: | Eduardo H. Saavedra (Universidad Alberto Hurtado, Tribunal de Defensa de la Libre Competencia de Chile); Mauricio R. Stern (Estudiante de Doctorado en Economía, Universidad de Texas) |
| Abstract: | Este trabajo desestima que el desplome del precio del barril de petróleo en 2014-15 se explique por la desarticulación del cartel de la OPEP. Por el contrario, este fenómeno se explica principalmente por la mayor producción de shale oil y otras innovaciones extractivas de crudo fuera del cartel. La racionalidad de este resultado se sustenta en un modelo teórico que caracteriza a un mercado con estructura productiva dual, donde productores cartelizados compiten con productores precio aceptante (fringe). Para efectos de la calibración empírica, se supone que el fringe consta tanto de productores no estratégicos como de otros que tienen la capacidad de innovar y así, de tener éxito, expandir su producción. Como es incierto si las eventuales caídas en el precio del petróleo se deben a desviaciones del acuerdo, shocks de demanda y/o incrementos en la oferta del fringe,, no necesariamente una caída en su precio romperá el acuerdo colusivo. El modelo es calibrado para dos escenarios posibles: producción cartelizada de los miembros de la OPEP y competencia a la Cournot de estos, ambos tomando en cuenta la competencia e innovaciones del fringe. Los precios y producción observados entre 2000 y 2017 son consistentes con una oferta dominada por el cartel de la OPEP, siendo razonable que la caída del precio del crudo se deba a la fuerte expansión de la oferta de shale oil de Estados Unidos entre 2011 y 2014 |
| Keywords: | Cartel, Estabilidad, Fringe, Innovación, Petróleo, Shale Oil, OPEP |
| Date: | 2018–12 |
| URL: | http://d.repec.org/n?u=RePEc:ila:ilades:inv325&r=all |
| By: | Brendan Hoover; Richard S. Middleton; Sean Yaw |
| Abstract: | Cost Surfaces are a quantitative means of assigning social, environmental, and engineering costs that impact movement across landscapes. Cost surfaces are a crucial aspect of route optimization and least cost path (LCP) calculations and are used in a wide range of disciplines including computer science, landscape ecology, and energy infrastructure modeling. Linear features present a key weakness to traditional routing calculations along costs surfaces because they cannot identify whether moving from a cell to its adjacent neighbors constitutes crossing a linear barrier (increased cost) or following a corridor (reduced cost). Following and avoiding linear features can drastically change predicted routes. In this paper, we introduce an approach to address this "adjacency" issue using a search kernel that identifies these critical barriers and corridors. We have built this approach into a new Java-based open-source software package called CostMAP (cost surface multi-layer aggregation program), which calculates cost surfaces and cost networks using the search kernel. CostMAP not only includes the new adjacency capability, it is also a versatile multi-platform package that allows users to input multiple GIS data layers and to set weights and rules for developing a weighted-cost network. We compare CostMAP performance with traditional cost surface approaches and show significant performance gains, both following corridors and avoiding barriers, using examples in a movement ecology framework and pipeline routing for carbon capture, and storage (CCS). We also demonstrate that the new software can straightforwardly calculate cost surfaces on a national scale. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1906.08872&r=all |
| By: | Nicolas Taconet (CIRED, ENPC); Céline Guivarch (CIRED, ENPC); Antonin Pottier (EHESS) |
| Abstract: | Carbon dioxide emissions impose a social cost on economies, owing to the damages they will cause in the future. In particular, emissions increase global temperature that may reach tipping points in the climate or economic system, triggering large economic shocks. Tipping points are uncertain by nature, they induce higher expected damages but also dispersion of possible damages, that is risk. Both dimensions increase the Social Cost of Carbon (SCC). However, the respective contributions of higher expected damages and risk have not been disentangled. We develop a simple method to compare how much expected damages explain the SCC, compared to the risk induced by a stochastic tipping point. We find that expected damages account for more than 90% of the SCC with productivity shocks lower than 10%, the high end of the range of damages commonly assumed in Integrated Assessment Models. It takes both high productivity shock and high risk aversion for risk to have a significant effect. Our results also shed light on the observation that risk aversion plays a modest role in determining the SCC (the ''risk aversion puzzle''): they suggest that too low levels of damages considered in previous studies could be responsible for the low influence of risk aversion. |
| Keywords: | Climate Change, Tipping points, Expected Utility, Integrated Assessment Models |
| JEL: | C61 H41 Q54 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:fae:wpaper:2019.11&r=all |
| By: | Mohamed Boly (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique); Jean-Louis Combes (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Pascale Combes-Motel (CERDI - Centre d'Études et de Recherches sur le Développement International - Clermont Auvergne - UCA - Université Clermont Auvergne - CNRS - Centre National de la Recherche Scientifique); Maxime Menuet (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Alexandru Minea (CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique); Patrick Villieu (LEO - Laboratoire d'Economie d'Orléans - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique) |
| Abstract: | The article explores the relationship between public debt and environmental debt. The latter is defined as the difference between the "virgin state" which is the maximum stock of environmental quality that can be kept intact with natural regenerations and the current quality of the environment. A theoretical model of endogenous growth is built. We show that there is a unique well-determined balanced-growth path. The public debt and the environmental debt are substitute in the short-run but complementary in the long-run. Indeed, budget deficit provides additional resources to finance pollution abatement spending, but generate also unproductive expenditures (the debt burden). This hypothesis is tested on a sample of 22 countries for the period 1990-2011. The environmental debt is measured by the cumulative CO2 emissions per capita. We use panel time-series estimators which allow for heterogeneity in the slope coefficients between countries. It appears mainly that, in the long term, an increase of 100% in public debt ratio leads to an increase of 74% in cumulative CO2 per capita. In addition, this positive long-run relationship is still present at the country and the sub-sample level, despite some differences in the short-term dynamics. |
| Keywords: | environmental debt,public debt,heterogenous panel data model |
| Date: | 2019–06–25 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-02165453&r=all |
| By: | Nicholas Z. Muller |
| Abstract: | The present study gathers prices for firewood and estimates the premium paid for dry fuel, relative to green wood, on a monthly basis from 1922 to 1935. This premium conveys consumers’ willingness-to-pay for a good available for immediate consumption relative to the same good ready for use after roughly one year. Embedded in this premium are consumers’ time preferences. The paper documents time series variation in the dry fuel premium and associated time preference spanning the macroeconomic shocks before, during, and after the Great Depression. The dry fuel premium increased by a factor of four during the recession of 1923 to 1924, and fell by a factor of two following the Great Crash of October 1929. Key factors in determining the premium for dry fuel were variation in wages, inflation, stock market returns, and bond yields. This paper supports the uncertainty hypothesis as an explanation for the precipitous fall in consumption expenditures following the Great Crash of 1929. |
| JEL: | N12 N72 Q23 Q41 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:25997&r=all |
| By: | Bercholz, Maxime; Roantree, Barra |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:bp2020/1&r=all |
| By: | Martin Kegnenlezom; Patrice Takam Soh; Antoine-Marie Bogso; Yves Emvudu Wono |
| Abstract: | We propose a new model for electricity pricing based on the price cap principle. The particularity of the model is that the asset price is an exponential functional of a jump L\'evy process. This model can capture both mean reversion and jumps which are observed in electricity market. It is shown that the value of an European option of this asset is the unique viscosity solution of a partial integro-differential equation (PIDE). A numerical approximation of this solution by the finite differences method is provided. The consistency, stability and convergence results of the scheme are given. Numerical simulations are performed under a smooth initial condition. |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:1906.10888&r=all |
| By: | Kluschke, Philipp; Uebel, Maren; Wietschel, Martin |
| Abstract: | Angesichts des Klimawandels werden Maßnahmen zur CO2-Reduktion dringend benötigt und viel diskutiert. Der Verkehrssektor spielt dabei mit einem Anteil von etwa 20 % an den Gesamt-CO2-Emissionen in Deutschland eine zentrale Rolle. Neben Pkw sind vor allem schwere Lkw im Güterfernverkehr durch hohe Fahrleistungen und hohen Energieverbrauch die Hauptverursacher der CO2-Emissionen. Eine Umstellung der Antriebsstruktur hin zu CO2-neutralen Technologien in diesem Sektor kann somit einen hohen Beitrag zur Emissionsreduktion und damit zur Umwelt- und Klimaentlastung leisten. Eine solche Umstellung kann nur erfolgreich sein, wenn sie im Sinne der täglichen Nutzer stattfindet. Um alternative Antriebstechnologien gemäß den Anforderungen von Nutzern im schweren Güterfernverkehr gestalten zu können, werden in dieser Studie Nutzeranforderungen an Fahrzeuge und die Infrastruktur ermittelt und quantifiziert. Dazu wird aufbauend auf einer qualitativen Untersuchung, in der ökonomische, ökologische und technische Nutzeranforderungen identifiziert wurden, eine quantitative Forschungsmethode angewendet. Hierbei wird in einem ersten Schritt ein webbasierter Fragebogen entworfen und die Datenerhebung durchgeführt. Die erhobenen Daten werden daraufhin deskriptiv und korrelativ analysiert. Insgesamt konnten 70 Teilnehmer bzw. Unternehmen für die Studie gewonnen werden. Die Analysen zeigen eine hohe Relevanz der ökonomischen Anforderungen, insbesondere die der Gesamtkosten und Zuverlässigkeit. In der Speditions- und Logistikbranche gibt es durch hohen Wettbewerb und Kostendruck kaum finanziellen Spielraum, insbesondere für die Umsetzung umweltfreundlicher Maßnahmen. Bei den ökologischen Nutzeranforderungen gehen die Meinungen der Nutzer stark auseinander. Die Befragung zu Infrastrukturanforderungen ergibt, dass viele Nutzer durchaus bereit sind längere Tank- oder Ladezeiten (zwischen 10 und 30 Minuten) bzw. Umwege (bis zu 20 km) in Kauf zu nehmen. Insgesamt zeigen sich die Nutzer überwiegend offen und können sich vorstellen auf alternative Antriebe umzusteigen. Regressionsanalysen zeigen, dass Nutzer eher bereit sind auf alternative Antriebe umzusteigen, wenn sie die gesamten Nutzungskosten über die Fahrzeuglebensdauer priorisieren, weil hier alternative Antriebe oft Vorteile durch geringere Energiekosten aufweisen. Die Umsteigebereitschaft sinkt hingegen, wenn sie Investitionen stärker gewichten - alternative Antriebe sind häufig durch einen höheren Anschaffungspreis charakterisiert. Korrelationsanalysen zeigen zusätzlich, dass größere Unternehmen und Nutzer mit Kenntnissen bezüglich alternativer Antriebe eher umsteigebereit sind. |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:fisisi:s052019&r=all |
| By: | Singh Gaur, Ankita; Fitiwi, Desta; Curtis, John |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:wp627&r=all |
| By: | Kreickemeier, Udo; Richter, Philipp M. |
| Abstract: | In this paper, we analyse the effects of a unilateral change in an emissions tax in a model of international trade with heterogeneous firms. We find a positive effect of tighter environmental policy on average productivity in the reforming country through reallocation of labour towards exporting firms. Domestic aggregate emissions fall, due to both a scale and a technique effect, but we show that the reduction in emissions following the tax increase is smaller than in autarky. Moreover, general equilibrium effects through changes in the foreign wage rate lead to a reduction in foreign emissions and, hence, to negative emissions leakage in case of transboundary pollution. |
| Keywords: | Trade and environment,Heterogeneous firms,Unilateral environmental policy,Emissions leakage |
| JEL: | F18 F12 F15 Q58 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:cegedp:373&r=all |
| By: | Kerr, Suzi; Lippert, Steffen; Lou, Edmund |
| Abstract: | We investigate the impact of side-payments to countries that have a low net benefit from participating in efficient climate cooperation in a repeated games framework with investment in different technologies. We consider different timings of these payments and different degrees of commitment. If countries cannot commit ex ante to transfer funds to low-benefit participants to an agreement, then there is a trade-off. Investment based agreements, where transfers occur before emissions are realized, but after investments have been committed, maximize the scope of cooperation. Results-based agreements minimize transfers whenever these agreements implement cooperation. If countries can commit to transfer funds, then agreements in which countries with high benefits of climate cooperation pre-commit to results-based payments to countries with low benefits both maximize the scope of cooperation and minimize transfers. |
| Keywords: | Environmental Economics and Policy |
| Date: | 2019–03 |
| URL: | http://d.repec.org/n?u=RePEc:ags:motuwp:290394&r=all |
| By: | Cabrales, Antonio; Kendall, Ryan; Sánchez, Angel |
| Abstract: | We consider a situation where driverless cars operate on the same roads as human-driven cars. What policies effectively discourage unsafe (fast) drivers in this mixed-agency environment? We develop a game theoretic model where driverless cars are the slowest and safest choice whereas faster driving speeds lead to higher potential payoffs but higher probabilities of accidents. Faster speeds also have a negative externality on the population. The model is used to create four experimental policy conditions. We findt hat the most effective policy is a mechanism where the level of punishment (to fast drivers) is determined endogenously within the driving population. |
| JEL: | C90 D62 D63 |
| Date: | 2019–06 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:13784&r=all |
| By: | Joseph I. Uduji (University of Nigeria, Nsukka, Nigeria); Elda N. Okolo-Obasi (University of Nigeria, Nsukka, Nigeria); Simplice A. Asongu (Yaoundé, Cameroon) |
| Abstract: | We assess the impact of corporate social responsibility (CSR) of multinational oil companies (MOCs) on HIV/AIDS prevalence in Nigeria’s oil producing communities. One thousand, two hundred households were sampled across the rural communities of Niger Delta. Using logit model, the main result indicates that General Memorandum of Understandings (GMoUs) have not significantly impacted on factors behind the spread of HIV/AIDS in rural communities. This implies that the impact of the disease on MOCs business, employees and their families, contractors, business partners and the oil communities has not inclined downward. The findings suggest that CSR offers an opportunity for MOCs to help address HIV/AIDS prevalence through a business case for stakeholders’ health in the region. It calls for MOCs to improve GMoUs health intervention on sensitization campaigns, funding testing and counselling centers, subsidizing anti-retroviral drugs, prevention of mother-to-child transmission, rehabilitation of orphaned and vulnerable children and other cares for people living with AIDS. |
| Keywords: | corporate social responsibility; multinational oil companies |
| JEL: | J43 O40 O55 Q10 |
| Date: | 2019–01 |
| URL: | http://d.repec.org/n?u=RePEc:exs:wpaper:19/012&r=all |
| By: | Lynch, Muireann Á.; Devine, Mel |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:esr:wpaper:rb201911&r=all |