nep-ene New Economics Papers
on Energy Economics
Issue of 2019‒12‒02
63 papers chosen by
Roger Fouquet
London School of Economics

  1. The Costs and Gains of Coordinating Electricity Generation in the Gulf Cooperation Council Utilizing the Interconnector By David Wogan; Frederic Murphy; Axel Pierru
  2. The Value of Saving Oil in Saudi Arabia By Jorge Blazquez; Baltasar Manzano; Lester C. Hunt; Axel Pierru
  3. Electric Vehicle Deployment and Carbon Emissions in Saudi Arabia: A Power System Perspective By Amro Elshurafa; Nawaz Peerbocus
  4. Short run effects of carbon policy on U.S. electricity markets By Dahlke, Steven
  5. Assessing the Impact of Natural Gas on Natural Gas Liquids: Policy Challenges and Imperatives By Rami Shabaneh; Kang Wu
  6. Vehicle Retirement and Replacement Policy: Assessing Impact and Cost-Effectiveness By Tamara Sheldon; Rubal Dua
  7. Assessing Energy Policy Instruments: LNG Imports Into Saudi Arabia By Rami Shabaneh; Maxime Schenckery
  8. After the Crash - Oil Price Recovery and LNG Project Viability By Omoregie, Uyiosa
  9. The Politics of European Union Climate Governance By Paul Mollet; Saleh Al Muhanna; AlJawhara Al Quayid
  10. Economic Growth and Carbon Emissions: The Road to `Hothouse Earth` is Paved with Good Intentions By Servaas Storm; Enno Schroder
  11. Identifying the Roadblocks for Energy Access: A Case Study for Eastern Africa’s Gas By Rami Shabaneh; Anne-Sophie Corbeau; Fernando Tomas Nhantumbo
  12. Measuring the CostEffectiveness of Clean Vehicle Subsidies By Tamara Sheldon; Rubal Dua
  13. Policy Pathways to Meet Saudi Arabia’s Contribution to the Paris Agreement By David Wogan; Elizabeth Carey; Douglas Cooke
  14. Policy Lessons From China’s CCS Experience By Xiaoling Yang; Wolfgang Heidug; Douglas Cooke
  15. The Political Feasibility of Enhancing Greenhouse Gas Emissions Targets in the European Union’s Mid-Century Strategy By AlJawhara Al Quayid; Saleh Al Muhanna; Paul Mollet
  16. A Comparison of Alternative Programs for Climate Policies By Tarek Atalla; Simona Bigerna; Carlo Andrea Bollino
  17. Households’ Demand Response to Changes in Electricity Prices: A Microeconomic-Physical Approach By Walid Matar
  18. Oman Electricity Sector: Features, Challenges and Opportunities for Market Integration By Shahid Hasan; Turki Al-Aqeel; Yagyavalk Bhatt
  19. An Economic Analysis of China’s Domestic Crude Oil Supply Policies By Bertrand Rioux; Philipp Galkin; Kang Wu
  20. Assessment of the Political Feasibility of Developing a GCC Power Market By Paul Mollet; Imtenan Al-Mubarak; Brian Efird; Saleh Al Muhanna; Omar Al-Ubaydil
  21. Modeling and forecasting demand for electricity in Zimbabwe using the Box-Jenkins ARIMA technique By NYONI, THABANI
  22. Economic Cycles and the Responsiveness of Natural Gas Demand in China’s Residential Sector By Noha Razek
  23. Improvement and Integration of Electricity Policy Impact Assessment Model-Enabling Estimation of Japanese Prefecture based Local Electricity and Ancillary Service Supply, Demand and Currency Flow in Kyushu Area (Japanese) By KAINOU Kazunari
  24. Gas Demand Growth Beyond Power Generation By Kaushik Deb
  25. Potential Effects of Trade Liberalization on China’s Imports of Plastics From the GCC By Philipp Galkin; Carlo Andrea Bollino; Rami Shabaneh
  26. Using Insurance to Manage Reliability in the Distributed Electricity Sector: Insights From an Agent-Based Model By Rolando Fuentes; Abhijit Sengupta
  27. Directed Technical Change, Environmental Sustainability, and Population Growth By Peter K. Kruse-Andersen
  28. A Mechanism for CCS in the Post-Paris Era By Paul Zakkour; Wolfgang Heidug
  29. India’s Balancing Act to Address Climate Change Under the Paris Agreement By Yagyavalk Bhatt; AlJawhara Al Quayid; Nourah Al Hosain; Paul Mollet
  30. OPEC Oil Production Data: The Role of Secondary Sources By Paul Mollet; Saleh Al Muhanna
  31. Reorganizing Power Markets: A Reliability insurance Business Model for Utilities By Rolando Fuentes; Jorge Blazquez; Iqbal Adjali
  32. Environmental Governance and Environmental Performance By Chang, Chun-Ping; Dong, Minyi; Liu, Jiliang
  33. Assessing Politics in Market Projections-Restarting Japanese Nuclear Reactors and Global Gas Markets By Saleh Al Muhanna; Imtenan Al-Mubarak; Brian Efird; Faisal Al-Ghamdi
  34. Polluting Emissions and GDP: Decoupling Evidence from Brazilian States By João Tovar Jalles
  35. Options for wind power in Vietnam by 2030 By Minh Ha-Duong; Sven Teske; Dimitri Pescia; Mentari Pujantoro
  36. The Economic Impact of Price Controls on China’s Natural Gas Supply Chain By Bertrand Rioux; Philipp Galkin; Frederic Murphy; Axel Pierru; Artem Malov; Felipe Feijoo Palacios; Yan Li; Kang Wu
  37. The Potential of Distributed Solar PV Capacity in Riyadh: A GIS-Assisted Study By Abdelrahman Muhsen; Amro Elshurafa
  38. Drivers of New Light-Duty Vehicle Fleet Fuel Economy in Saudi Arabia By Rubal Dua; Tamara Sheldon
  39. The Challenges Facing India on its Road to a Gas-Based Economy By Anne-Sophie Corbeau; Shahid Hasan; Swati Dsouza
  40. Efficiency investment and curtailment action: complements or substitutes By Shigeru Matsumoto; Hajime Sugeta
  41. The Policymaking Process to Restart Japanese Nuclear Power Plants By Brian Efird; Saleh Al Muhanna; Imtenan Al-Mubarak; Shahad Turkistani; Faisal Al-Ghamadi
  42. Finding a Viable Path to Reducing Greenhouse Gas Emissions By David Hobbs; Eric Williams; Adam Sieminski; Keigo Akimoto; Jun Arima; Mustafa Babiker; Mark Caine; Hiroyuki Tezuka; Nico Stehr; Eija-Riitta Korhola; Masakazu Toyoda
  43. An Estimation of the Drivers Behind OPEC’s Quota Decisions By Philipp Galkin; Tarek Atalla; Zhongyuan Ren
  44. Linking permit markets multilaterally By Doda, Baran; Quemin, Simon; Taschini, Luca
  45. Impact of Co-firing Straw for Power Generation to Air Quality: A Case Study in Two Coal Power Plants in Vietnam By A. H. Truong; Minh Ha-Duong
  46. Political Feasibility of Enhancing India’s Midcentury Target for Emissions Intensity By Aljawhara Al Quayid; Nourah Al Hosain; Yagyavalk Bhatt; Paul Mollet
  47. Persistence of solid fuel use despite increases in LPG ownership: New survey evidence from rural north India By Gupta, Aashish; Vyas, Sangita; Hathi, Payal; Khalid, Nazar; Srivastav, Nikhil; Spears, Dean; Coffey, Diane
  48. Charged up? Preferences for Electric Vehicle Charging and Implications for Charging Infrastructure Planning By Wolff, Stefanie; Madlener, Reinhard
  49. The European Internal Energy Market’s Worth to the UK By Gasmi, Farid; Hanspach, Philip
  50. OPEC's crude game By Even Comfort Hvinden
  51. Modelling and forecasting wind drought By Gunnar Bårdsen; Stan Hurn; Kenneth Lindsay
  52. Modeling the electricity spot price with switching regime semi-nonparametric distributions By Alfredo Trespalacios; Lina M. Cortés; Javier Perote
  53. Modeling, Forecasting, and Nowcasting U.S. CO2 Emissions Using Many Macroeconomic Predictors By Mikkel Bennedsen; Eric Hillebrand; Siem Jan Koopman
  54. Do agglomeration economies are lower for polluting sectors? By Emmanuelle Leturque; Mathieu Sanch-Maritan
  55. The tragedy of climate change By McLachlan, Robert
  56. Fusion Energy for Peace Building - A Trinity Test-Level Critical Juncture By Draper, John; Bhaneja, Bill
  57. Exchange Rate Movements and Fundamentals: Impact of Oil Prices and the People’s Republic of China’s Growth By Chen, Hongyi; Cao, Shuo
  58. Where there is smoke: Solid fuel externalities, gender, and adult respiratory health in India By Gupta, Aashish
  59. Energy Governance in China: The Structures and Processes of Government Decision-Making By Dongmei Chen; Paul Mollet; Brian Efird
  60. Journal of the History of Economic Thought Preprints – Review of Nature in the History of Economic Thought: how natural resources became an economic concept By Franco, Marco Paulo Vianna
  61. Does Pollution Drive Achievement? The Effect of Traffic Pollution on Academic Performance By Heissel, Jennifer; Persico, Claudia; Simon, David
  62. Experimental evidence of an environmental attitude-behavior gap in high-cost situations By Farjam, Mike; Nikolaychuk, Olexandr; Bravo, Giangiacomo
  63. Modelos de transporte por carretera y emisiones de carbono aplicables en las ciudades y su entorno By Pablo Martín Urbano; Juan Ignacio Sánchez Gutiérrez; Abril Yuriko Herrera Ríos

  1. By: David Wogan; Frederic Murphy; Axel Pierru (King Abdullah Petroleum Studies and Research Center)
    Abstract: Countries in the Gulf Cooperation Council (GCC) have installed a network of high-voltage transmission lines, known as the GCC Interconnector, which links the member states of Saudi Arabia, Bahrain, Kuwait, Oman, Qatar and the United Arab Emirates (UAE). The Interconnector has successfully provided reliable services to GCC countries but has not yet realized its full potential as a platform to fully integrate individual electricity systems. This paper analyzes the potential costs and gains of electricity exchange among the GCC countries. Given the current political climate, it does not consider electricity exchange with Qatar, except as a sensitivity case.
    Keywords: Crude oil, Electricity, Electricity exchange, Electricity systems, Fuel subsidies, GCC interconnector, Natural gas, Policy development, Vision 2030, Water sector
    Date: 2018–06
  2. By: Jorge Blazquez; Baltasar Manzano; Lester C. Hunt; Axel Pierru (King Abdullah Petroleum Studies and Research Center)
    Abstract: What is the value of saving a barrel of oil that would otherwise had been consumed domestically? This study explores the question, taking a long-run perspective into a general equilibrium approach. In the case of Saudi Arabia, the difference between the domestic price of oil and the international price represents an opportunity to improve economic efficiency across different activities and sectors. In this context, we study different policies aimed to reduce the domestic consumption of oil.
    Keywords: Carbon emissions, Domestic oil consumption, Dynamic general equillibrium model, Fuel efficiency, Intenational oil price, Natural gas, Oil consumption, Oil exports, Policy development, Power generation, Renewable energy, Social welfare
    Date: 2018–03
  3. By: Amro Elshurafa; Nawaz Peerbocus (King Abdullah Petroleum Studies and Research Center)
    Abstract: A power system model for Saudi Arabia was built to quantify the carbon emission implications of deploying electric vehicles (EVs) within the Kingdom. The model represented the four operating regions in the Kingdom as segmented by the electricity regulator.
    Keywords: Carbon Emissions, Electric Vehicles, Power Systems
    Date: 2019–10–09
  4. By: Dahlke, Steven
    Abstract: This paper presents estimates of short run impacts of a carbon price on the electricity industry using a cost-minimizing mathematical model of the U.S. market. Prices of 25 and 50 dollars per ton of carbon dioxide equivalent emissions cause electricity emissions reductions of 17% and 22% from present levels, respectively. This suggests significant electricity sector emissions reductions can be achieved quickly from a modest carbon tax. Short run effects refer to operational changes at existing U.S. power plants, mostly by switching production from coal plants to natural gas plants. The results do not include long run emissions reductions related to 1) new investments and retirements of electricity production assets, and 2) demand response as regulated electricity suppliers pass cost changes to retail customers. A state-level analysis of the results leads to the following conclusions: 1) most emissions reductions come from high coal-consuming states in the Mid-Atlantic and Midwest regions, 2) fifteen states increase emissions because their natural gas consumption offsets coal consumption in neighboring states, and 3) a flat per-capita rebate of tax revenue leads to wealth transfers across states.
    Date: 2019–04–30
  5. By: Rami Shabaneh; Kang Wu (King Abdullah Petroleum Studies and Research Center)
    Abstract: The supply growth of natural gas liquids (NGLs) globally within the last decade is unprecedented. The future global demand growth for NGLs is expected to be strong in areas where relevant industries are garnering robust investment and policymakers support the use of NGLs. However, NGLs are hostage to the fate of natural gas markets, as their production is largely tied to the future production of natural gas. Competition from cheaper coal, calls to rein in carbon emissions from fossil energy, and the rapidly declining costs of renewable technologies imply that natural gas has to fight for its place in the future fuel mix. NGLs may present a silver lining to the future of natural gas, given their close links. The power sector is usually considered the principal driver of future demand growth. However, natural gas is likely to have a bigger role to play in future, given the essential role of NGLs in displacing polluting fuels for cooking and heating, as a feedstock for petrochemical plants that produce thousands of consumer goods.
    Keywords: Natural Gas Liquids (NGLs), Oil supply, Natural Gas
    Date: 2018–11
  6. By: Tamara Sheldon; Rubal Dua (King Abdullah Petroleum Studies and Research Center)
    Abstract: Governments across the world, motivated by air quality improvement or by climate change mitigation goals, are trying to accelerate the turnover of older, higher-emitting vehicles and replace these with lower emission vehicles. One approach is to encourage consumers to scrap their old, inefficient and more polluting vehicles and buy new ones, typically plug-in electric vehicles (PEVs) and hybrid electric vehicles (HEVs). This can be expensive on a per-additional-vehicle basis if fixed subsidy programs allow those owners who would have replaced their vehicles with a low emission vehicle anyway to obtain these subsidies. It is important that all parties — whether invested in conventional internal combustion engine (ICE), hybrid electric or newer, fully electric powertrains — understand the scope for more economically efficient policy to avoid incorrectly estimating the barriers to entry for new vehicle technologies. Previous KAPSARC research used counterfactual simulations to highlight the fact that policymakers might increasingly switch to targeted subsidy designs to improve the cost-effectiveness of low emission vehicle subsidies. This study, however, explores the effectiveness of a real-world targeted subsidy policy, California’s ‘Replace Your Ride’ (RYR) program. RYR gives targeted subsidies to lower-income households living in districts with poor local air quality to retire older vehicles and replace them with newer, cleaner vehicles. The effectiveness of the RYR policy is measured using new vehicle registration and sociodemographic data in a difference-in-difference analysis framework.
    Keywords: Battery Electric Vehicles (BEV), Climate change, Hybrid electric vehicles, Plug-in electric vehicles, Subsidies, Targeted subsidy design, Vehicle retirement
    Date: 2018–05
  7. By: Rami Shabaneh; Maxime Schenckery (King Abdullah Petroleum Studies and Research Center)
    Abstract: Natural gas is already playing a prominent role in diversifying Saudi Arabia’s power mix away from a heavy reliance on oil-based fuels. Between 2010 and 2017, the share of natural gas used in power generation in Saudi Arabia grew from 44% to 54%. The country’s gas fields are being developed to increase domestic gas supplies. However, imported liquefied natural gas (LNG) could remedy the near-term scarcity of gas from domestic sources and provide the support needed to integrate more renewable and other alternative sources of energy into the country’s power mix. Developments in global gas markets in recent years, including procurement and technological innovations in LNG, have unlocked value for producers and consumers.
    Keywords: Liquified Natural Gas, Natural Gas
    Date: 2019–09–02
  8. By: Omoregie, Uyiosa
    Abstract: Crude oil prices fell below the 2009-2014 five-year average in early September 2014. The drastic fall in price was from a monthly peak of $112 per barrel (bbl) in June 2014, falling to $62/bbl in December. Since 2016 the oil and gas market has gone through a period of rebalancing, resulting in modest recovery in prices. Oil price recovery reached a peak of $85/bbl in October 2018. Gas prices have also achieved similar modest price recovery. The industry has now entered an expansion phase: the five largest international oil companies exceeded expectations for 2018. The outlook for gas is encouraging. It is projected that gas will supply the largest share of energy demand growth, supplying over 40% of additional demand by 2035. Also, the United Nations 2015 Paris Agreement on climate change has led to a re-emphasis on gas as a ‘transition’ ‘cleaner’ fuel. A window of opportunity exists for new LNG projects to commence production in anticipation of an undersupplied market (2025-2035). LNG projects provide long and stable dividends for shareholder companies, certain risks found in tight oil and upstream projects are absent.
    Date: 2019–04–10
  9. By: Paul Mollet; Saleh Al Muhanna; AlJawhara Al Quayid (King Abdullah Petroleum Studies and Research Center)
    Abstract: The European Union (EU) is facing a critical period as the European Commission draws up a 2050 climate strategy roadmap that is likely to form the basis for the EU’s next nationally determined contribution to the COP21 Paris Agreement. Until recently, the UK was the undisputed leader of the coalition of EU member states (the Green Growth Group) seeking more ambitious climate targets. Brexit, however, is likely to put an end to the UK-driven focus on market instruments to achieve climate targets. Instead, the Commission is now likely to turn to policies prioritizing emissions and energy targets.
    Keywords: Brexit, Climate governance, Climate change, Climate policy,
    Date: 2018–10
  10. By: Servaas Storm (Delft University of Technology, The Netherlands); Enno Schroder (Delft University of Technology, The Netherlands)
    Abstract: All IPCC (2018) pathways to restrict future global warming to 1.5 degrees C (and well below an already dangerous 2 degrees C) involve radical cuts in global carbon emissions. Such de-carbonization, while being technically feasible, may impose a `limit` or `planetary boundary` to growth, depending on whether or not human society can decouple economic growth from carbon emissions. Decoupling is regarded viable in global and national policy discourses on the Paris Agreement and claimed to be already happening in real time: witness the recent declines in territorial CO2 emissions in a group of more than 20 economies. However, some scholars argue that radical de-carbonization will not be possible while increasing the size of the economy. This paper contributes to this debate as well as to the larger literature on climate change and sustainability. First, we develop a prognosis of climate-constrained global growth for 2014-2050 using the Kaya sum rule. Second, we use the Carbon-Kuznets-Curve (CKC) framework to empirically assess the effect of economic growth on CO2 emissions using measures of both territorial (production-based) emissions and consumption-based (trade- adjusted) emissions. We run panel data regressions using OECD ICIO CO2 emissions data for 61 countries during 1995-2011; to check the robustness of our findings we construct and use panel samples sourced from alternative databases (Eora; Exio; and WIOD). Even if we find evidence suggesting a decoupling of production-based CO2 emissions and growth, consumption-based CO2 emissions are monotonically increasing with per capita GDP (within our sample). We draw out the implications of these findings for climate policy and binding emission reduction obligations.
    Keywords: Carbon Kuznets Curve; Climate change; Economic growth; Production-based CO2 emissions, Consumption-based CO2 emissions; Decoupling; Kaya Identity; Paris Agreement.
    JEL: F64 Q54 Q55 Q56
    Date: 2018–11
  11. By: Rami Shabaneh; Anne-Sophie Corbeau; Fernando Tomas Nhantumbo (King Abdullah Petroleum Studies and Research Center)
    Abstract: Natural gas resources in Tanzania and Mozambique have emerged as a new source of gas supply. While they are poised for export to global gas markets, they can also provide a key source of energy to the rest of Eastern Africa (defined in this paper to include Burundi, Ethiopia, Kenya, Malawi, Mozambique, Rwanda, South Africa, Tanzania, and Uganda), where millions of inhabitants are currently living without access to electricity and clean cooking. Natural gas could also potentially be a driver for industrialization and economic growth. But before delving into the potential gas demand and opportunities for gas utilization in the region, it is important to take a step back to analyze the current energy picture in Eastern Africa and look into the social and development plans in place in the region. Despite large natural resource potential across the region of Eastern Africa (except South Africa), low electricity access and energy access rates have hampered economic growth and increased dependency on traditional biomass. This scoping study investigates energy access issues in the residential, industrial and transport sectors.
    Keywords: Coal, Electricity, Electricity access, Energy access, Energy efficiency, Energy mix, Industrial sector, Infrastructure development, Infrastructure Investment, Natural gas, Natural resource development, Population growth, Power capacity, Prepaid meters, Renewable energy, Transportation, Uranium, Urbanization, Utility Revenues
    Date: 2018–05
  12. By: Tamara Sheldon; Rubal Dua (King Abdullah Petroleum Studies and Research Center)
    Abstract: Demand-side policies, including rebates, sales tax exemptions, and tax credits promote clean vehicle adoption, with the goal of reducing local air pollution and greenhouse gas (GHG) emissions. Limited research to date on their cost-effectiveness and efficiency suggests such subsidies are unsustainably expensive, but this may not tell the whole story. KAPSARC used a nationally representative sample of new car purchases in the United States and developed a vehicle choice model-based simulation to assess the scope for reducing the costs of subsidy policies.
    Keywords: Air pollution, Battery capacity, Battery electric vehicles (BEV), Carbon dioxide emissions, Clean vehicle adoption, Economic modeling, Greenhouse Gas Emissions (GHG), Hybrid electric vehicles, Plug-in electric vehicles, Policy simulation, Targeted subsidy design
    Date: 2018–05
  13. By: David Wogan; Elizabeth Carey; Douglas Cooke (King Abdullah Petroleum Studies and Research Center)
    Abstract: The 2015 Paris Agreement on Climate Change fundamentally altered the nature of global climate governance by introducing a new framework based on a bottom-up system of nationally determined contributions (NDCs). As a signatory Party to the Agreement, the Kingdom of Saudi Arabia communicated its intended nationally determined contribution (which became its first NDC) in November 2015. This included a goal of avoiding up to 130 million tonnes of carbon dioxide (CO2) equivalent emissions per annum by 2030. This paper evaluates several supply-side policy approaches to mitigate CO2 emissions from the Saudi Arabian power and water sectors, which together account for more than 40% of the Kingdom’s greenhouse gas emissions. The paper aims to help inform the policymaking process in the Kingdom ahead of the communication of its second NDC in 2020.
    Keywords: Carbon Dioxide Emissions (CO2), Climate Change, Climate Change Policy, KAPSARC Energy Model (KEM), Paris Agreement
    Date: 2019–02–27
  14. By: Xiaoling Yang; Wolfgang Heidug; Douglas Cooke (King Abdullah Petroleum Studies and Research Center)
    Abstract: China’s political leadership has taken an increasingly public and proactive stance on climate change since 2014. This includes a commitment that Chinese carbon dioxide (CO2) emissions will peak before 2030 and enacting measures through the 13th Five-Year Plan to support energy efficiency, clean energy technology, and carbon management. Chinese policymakers consider carbon capture and storage (CCS) a critical bridging technology to help accelerate the decarbonization of its economy. This paper reviews and analyses Chinese CCS support policies from the perspective of an adaptive policymaking framework, recognizing uncertainty as an inherent element of the policymaking process, and draws more general lessons for responding to changing circumstances.
    Keywords: Adaptive policy framework, Carbon Capture and Storage (CCS), Carbon pricing, Carbon tax, Climate change, Decarbonization, Enhanced oil recovery, Infrastructure investment, Policy development, Renewable energy, Subsidies
    Date: 2018–07
  15. By: AlJawhara Al Quayid; Saleh Al Muhanna; Paul Mollet (King Abdullah Petroleum Studies and Research Center)
    Abstract: Article 4.19 of the 2015 Paris Agreement calls on signatories to formulate and communicate “long-term low greenhouse gas development strategies,” widely known as the mid-century strategy (MCS). Any enhancement of the European Union’s (EU’s) targets in its MCS depends on a new long-term EU climate policy subject to ongoing negotiations between member states. The EU submits one nationally determined contribution (NDC) for all 28 member states, likely soon to be 27 following the proposed departure of the United Kingdom (U.K.) from the EU (Brexit). In 2011 the European Commission outlined an indicative 80% emissions reduction target in its 2050 low carbon economy roadmap compared to 1990 levels. In a move away from a target-centered approach, the European Commission’s most recent communication entitled “A Clean Planet for all – A European strategic long-term vision for a prosperous, modern, competitive and climate neutral economy” calls for carbon neutrality by 2050 but avoids any mention of targets. It instead outlines scenarios that offer policy pathways for EU member states. This paper shows that in mid-2018, EU members were unwilling to commit to higher targets, which could provide an insight into what was an unexpected shift in European Commission policy.
    Keywords: Climate Change, European Union, Geopolitics, Nationally determined contributions, Paris agreement
    Date: 2019–08–22
  16. By: Tarek Atalla; Simona Bigerna; Carlo Andrea Bollino (King Abdullah Petroleum Studies and Research Center)
    Abstract: This research paper compares the relative welfare impact of different options for allocating the financing burden of climate change mitigation policies. Focusing on efficient ways to finance policies aimed at climate change mitigation, not only at direct carbon reduction, could delink the issue of carbon taxation from carbon emissions. A Pigouvian tax is the traditional way of correcting for negative externalities, or the undesirable consequences for society arising from the actions of a company or industry sector, by levying additional taxes on that activity. Pigouvian taxation corrects society’s welfare loss, however, from the viewpoint of the private sector, such taxation imposes a deadweight economic loss with respect to the original private equilibrium. As an alternative, we evaluate a methodology that could fund investments to reduce carbon dioxide (CO2) emissions, and we show that the policy we consider to be optimal from a tax standpoint – Ramsey pricing can both improve world welfare and be politically more acceptable than other pricing options. Rather than focus directly on emissions reduction by taxing energy, a Ramsey pricing solution can be designed to minimize distortions while raising funds for investment in climate change mitigation.
    Keywords: Climate Change, Pigouvian tax, Ramsey pricing, Social Welfare
    Date: 2018–12
  17. By: Walid Matar (King Abdullah Petroleum Studies and Research Center)
    Abstract: Energy economists are interested in how a change in electricity prices prompts a response by way of end-user power demand. It is difficult to estimate price elasticities statistically if historical prices are low and change infrequently, especially in the short run. This paper extends a previous analysis by Matar (2018) that explored the merger of a residential building energy model and a utility maximization component by incorporating more demand-reducing measures within a utility-maximization framework for households. The framework is informed by the physical equations that govern how electricity is consumed.
    Keywords: Electricity demand, Consumer Energy Use, Electricity consumption, Electricity prices
    Date: 2019–02
  18. By: Shahid Hasan; Turki Al-Aqeel; Yagyavalk Bhatt (King Abdullah Petroleum Studies and Research Center)
    Abstract: This discussion paper is part of a KAPSARC research project initiated to develop insights that can facilitate the creation of a well-functioning integrated electricity market comprising the member states of the Gulf Cooperation Council (GCC). The project identifies and examines the key issues affecting electricity market integration within the GCC and the wider Middle East and North Africa (MENA) region and suggests the enablers needed to facilitate market integration. This report focuses on Oman’s electricity sector, the liberalization of which started in 2004. The country’s power reforms are now poised to move to the next level, with the aim of creating a more competitive electricity industry in the Sultanate.
    Keywords: Electricity Market Design, Energy Regulators, Gulf Cooperation Council, Power Markets
    Date: 2019–05–29
  19. By: Bertrand Rioux; Philipp Galkin; Kang Wu (King Abdullah Petroleum Studies and Research Center)
    Abstract: China’s domestic oil production has lagged the rapid growth in the country’s oil consumption since 2000, leading to a large, and growing, reliance on crude imports to meet demand. Factors including China’s current market structure and regulatory environment impede further development of the country’s oil industry, despite a number of policies aimed at protecting domestic producers. Using a short-run equilibrium model of China’s oil and gas supply industry, calibrated to 2016 data, the authors assessed the impact of market access barriers on China’s domestic production.
    Keywords: Crude Oil Trade, Fossil Fuel Policy, Market Deregulation, Oil Production
    Date: 2019–05–28
  20. By: Paul Mollet; Imtenan Al-Mubarak; Brian Efird; Saleh Al Muhanna; Omar Al-Ubaydil (King Abdullah Petroleum Studies and Research Center)
    Abstract: Countries in the Cooperation Council for the Arab States of the Gulf, commonly known as the Gulf Cooperation Council (GCC), established a regional power grid to support member countries’ high voltage networks in 2001 but, to date, the system has remained underutilized. The intended purpose of the grid was to provide backup electricity during emergencies caused by power system outages, especially during the summer, and to share spinning reserves, optimize capital investments in electricity and reduce fuel costs. The grid has been fully operational since 2011 and has satisfied its intended purpose. However, GCC member states have largely failed to take advantage of options associated with the grid to trade electricity. This paper uses the KAPSARC Toolkit for Behavioral Analysis platform, a model of collective decision-making processes developed at KAPSARC, to examine the political feasibility of expanding the utilization of the GCC grid to include trading electricity.
    Keywords: Electricity grid, Electricity market, Gulf Cooperation Council (GCC)
    Date: 2018–09
    Abstract: This study, which is the first of its kind in Zimbabwe, uses annual time series data on electricity demand in Zimbabwe from 1971 to 2014, to model and forecast the demand for electricity using the Box-Jenkins ARIMA framework. The study is guided by three objectives and these are: to analyze electricity consumption trends in Zimbabwe over the study period, to develop a reliable electricity demand forecasting model for Zimbabwe based on the Box-Jenkins ARIMA technique and last but not least, to project electricity demand in Zimbabwe over the next decade (2015 – 2025). Diagnostic tests indicate that X is an I (1) variable. Based on Theil’s U, the study presents the ARIMA (1, 1, 6) model, the diagnostic tests further show that this model is stable and hence suitable for forecasting electricity demand in Zimbabwe. The selected optimal model, the ARIMA (1, 1, 6) model proves beyond any reasonable doubt that in the next 10 years (2015 – 2025), demand for electricity in Zimbabwe will continue to fall. Amongst other policy recommendations, the study advocates for the liberalization of the electricity power sector in Zimbabwe in order to pave way for more efficient private investment whose potential is envisaged to adequately meet the existing demand for electricity.
    Keywords: ARIMA; electricity consumption; electricity demand; energy; forecasting; Zimbabwe
    JEL: P28 P48 Q41 Q43 Q47
    Date: 2019–11–05
  22. By: Noha Razek (King Abdullah Petroleum Studies and Research Center)
    Abstract: An important question for global gas markets is the extent to which China’s demand for natural gas will grow, particularly in light of the perceived overbuild of liquefied natural gas (LNG) supply capacity. China’s current 13th Five-Year Plan endorses the use of natural gas to reduce coal consumption and achieve a cleaner energy mix. In this paper we examine household natural gas demand, taking account of economic cycles, and provide insights relating to China’s gas supply and demand balances that could have global consequences.
    Keywords: Coal,Economic modeling, Coal consumption, Energy demand, Energy mix, infrastructure development, Liquified Natural Gas (LNG), Natural gas, Natural gas demand, Price reforms, Unobserve Components Model (UCM), Urbanization,
    Date: 2018–03
  23. By: KAINOU Kazunari
    Abstract: Since 2016, Japanese Government finalized regulatory reform of Electricity industry and liberalized the power generation and retail sales sector of Electricity for all market segment. So Electricity Policy related discussions are emerged to change its focus on rather establishment of Ancillary service market and market regulation, economic welfare improvement of Electricity transmission sector that remains regulated even after the legal de-bundling planned in 2020, than conventional Electricity demand and supply related discussion. This paper explains the improvement of Electricity Policy Impact Assessment Model developed by the author in 2016 enabling the estimation of stochastic Electricity and Ancillary service demand and supply at once by estimating scale and probability of Electricity demand fluctuation, uncertainty of renewable energy supply and accident of power generators from factual data for 24 hours by 10 domestic regions. And in addition to that, forecasting the future policy discussions on the Electricity transmission sector, the author improved the model enabling the estimation of regional Prefectural based Electricity and Ancillary service transmission currency and LMC; Local Marginal Cost of Electricity supply from Prefectural based Electricity demand statistics and detailed location of power generators. As a demonstration of the improved model, the author used factual data from 2016 to 2018 by various official statistics such as "Denki-Yoho" (Electricity Demand and Supply Forecast Report) provided by regional Electricity company and estimated demand, supply and equilibrium price for Kyushu region for 365 days and 24 hours, and converted the demand and supply into local currency flow style among the seven Kyushu Prefectures. This paper provides evidence for the usefulness of estimation and evaluation by the improved model such as checking potential problems of local Electricity and Ancillary service demand and supply, estimating LMC of Electricity and impact evaluation of construction of new transmission line and so on. Hereafter the author further plans to develop and improve the model such as expanding the coverage to all 47 Japanese Prefectures and so on, and expects contribution to the practical Electricity related policy impact analysis.
    Date: 2019–10
  24. By: Kaushik Deb (King Abdullah Petroleum Studies and Research Center)
    Abstract: Highlighting the main trends that have made natural gas the world’s fastest growing fossil fuel, this paper identifies sectors and regions where gas demand is likely to grow in the coming years — especially outside of the power generation sector — in the industrial, petrochemicals, road and maritime transportation sectors, and in non-OECD countries. Highlighting advances in China and India, the paper shows that long-term government support, anchored around environmental standards, could enable gas to further increase its market share.
    Keywords: Energy Demand, Gas Markets, Natural Gas Demand, United States
    Date: 2019–05–31
  25. By: Philipp Galkin; Carlo Andrea Bollino; Rami Shabaneh (King Abdullah Petroleum Studies and Research Center)
    Abstract: Energy economists are interested in how a change in electricity prices prompts a response by way of end-user power demand. It is difficult to estimate price elasticities statistically if historical prices are low and change infrequently, especially in the short run. This paper extends a previous analysis by Matar (2018) that explored the merger of a residential building energy model and a utility maximization component by incorporating more demand-reducing measures within a utility-maximization framework for households. The framework is informed by the physical equations that govern how electricity is consumed.
    Keywords: Consumer Behavior, Consumer Energy Use, Domestic energy consumption, Electricity
    Date: 2018–06
  26. By: Rolando Fuentes; Abhijit Sengupta (King Abdullah Petroleum Studies and Research Center)
    Abstract: Our results suggest that consumers would transfer some of the inherent risks of a blackout to the utility for a price lower than their willingness to pay to achieve their desired level of protection, creating economic value. The purchase of insurance would help most consumers avoid a complete loss of power. Our simulations show that of those households that would otherwise experience a complete loss of power, on average between 1% and 15% can fully cover their excess energy needs through insurance. Between 50% and 70% of these households are budget constrained but would still be able to partially cover their excess energy needs.
    Keywords: Agent based models, Distributed energy resources, New business models in electricity, Reliability Insurance, Utility death spiral
    Date: 2019–07–21
  27. By: Peter K. Kruse-Andersen (Department of Economics, University of Copenhagen, Denmark)
    Abstract: Population growth has two potentially counteracting effects on pollution emissions:(i) more people implies more production and thereby more emissions, and (ii) more people implies a larger research capacity which might reduce the emission intensity of production, depending on the direction of research. This paper investigates how to achieve a given climate goal in the presence of these two effects. A growth model featuring both directed technical change and population growth is developed. The model allows for simultaneous research in polluting and non-polluting technologies. Both analytical and numerical results indicate that population growth is a burden on the environment, even when all research efforts are directed toward non-polluting technologies. Thus research subsidies alone cannot ensure environmental sustainability. Instead, the analysis shows that environmental sustainability requires pollution taxes and/or population control policies.
    Keywords: Directed technical change, endogenous growth, environmental policy, environmental sustainability, climate change, population growth
    JEL: J11 O30 O41 Q54 Q55 Q58
    Date: 2019–11–19
  28. By: Paul Zakkour; Wolfgang Heidug (King Abdullah Petroleum Studies and Research Center)
    Abstract: The Paris Agreement committed ratifying Parties to hold the increase in the global average temperature to much less than 2°C above pre-industrial levels and to pursue efforts to limit the increase to 1.5°C. The Agreement also committed Parties to achieving net-zero emissions in the second half of this century. Technologies involving carbon capture and storage (CCS) are seen as a critical part of a portfolio of low-carbon technologies capable of delivering deep cuts in anthropogenic greenhouse gas emissions, in line with the Paris Agreement goals. This paper proposes a new, transformative, incentive mechanism for CCS, forged by a ‘club’ of Parties to the Paris Agreement with a common interest: the pursuit of cleaner fossil fuels. A new CCS-specific technology mechanism is suggested as a means by which to unify the club’s actions, built upon a new tradable asset class specific to CCS: a carbon storage unit (CSU). A CSU would represent a verified tonne of carbon securely stored or sequestered in a geological reservoir i.e., a verified record of carbon stock addition to the geosphere, but with no intrinsic emission reduction or removal value. The authors argue that their proposed storage crediting scheme can complement and supplement carbon pricing, unlock new layers of climate finance for CCS, and overcome barriers historically faced by the technology.
    Keywords: Carbon Capture and Storage (CCS), Carbon Dioxide Emissions (CO2) Carbon Emission Mitigation, Markeets, Paris Agreement
    Date: 2019–04
  29. By: Yagyavalk Bhatt; AlJawhara Al Quayid; Nourah Al Hosain; Paul Mollet (King Abdullah Petroleum Studies and Research Center)
    Abstract: As an emerging economy, a major part of India’s nationally determined contribution (NDC) under the Paris Agreement is an emissions intensity target. With its current policies, India is on track to achieve its climate targets under the Agreement. However, the Indian government is balancing a complicated set of domestic priorities and constraints against its wish to be seen as a global leader on climate change.
    Keywords: Climate Change, KAPSARC Toolkit for Behavioral Analysis (KTAB), Paris Agreement, Greenhouse Gas Emissions (GHG)
    Date: 2018–12
  30. By: Paul Mollet; Saleh Al Muhanna (King Abdullah Petroleum Studies and Research Center)
    Abstract: OPEC oil production data is a key to understanding not just global energy balances but also the international oil market. Historically, most OPEC oil production figures are opaque as governments either consider them to be confidential and do not publish the data or publish numbers that many analysts consider to be unreliable. The OPEC Secretariat publishes production data on the basis of estimates produced by ‘secondary sources.’ These include S&P Global Platts, Argus Media, Energy Intelligence Group, IHS-Markit, the Energy Information Administration (EIA) and the International Energy Agency (IEA). Even though the OPEC Secretariat makes it clear that its data comes from such secondary sources, its production figures are often mistaken as primary data.
    Keywords: Oil production, OPEC, Secondary sources
    Date: 2018–11
  31. By: Rolando Fuentes; Jorge Blazquez; Iqbal Adjali (King Abdullah Petroleum Studies and Research Center)
    Abstract: A market in which individuals pursue their own self-interest normally maximizes aggregate economic well-being. But households that install Distributed Energy Resources (DERs) in order to obtain savings in their electricity bill, impose an external cost on other customers. At scale, their actions can lead to higher electricity tariffs for utility customers and, in the extreme case, a utility death spiral. In this paper, we propose a market mechanism that may ameliorate this potential distortion based on the creation of a market for risk. Utilities would provide reliability insurance services to households to protect them against the failure of their own DER systems. Creating such an insurance market would allow customers to choose a premium according to their preference for reliability. It could also limit the potential utility death spiral efficiently, as the path would be driven by market mechanisms that arise after reassigning property rights and liabilities between utilities and their customers.
    Keywords: Distributed energy resources (DER), Electric power, Power markets, Utilities
    Date: 2018–11
  32. By: Chang, Chun-Ping (Asian Development Bank Institute); Dong, Minyi (Asian Development Bank Institute); Liu, Jiliang (Asian Development Bank Institute)
    Abstract: Along with the continuous development of the global economy, environmental deterioration has been widely recognized as a pressing issue nowadays, bringing environmental governance to the forefront of human survival. Asia, the largest continent in world in terms of both landmass size and population, has long been facing the exhaustive challenge of environmental pollution. We empirically prove that the level of environmental governance, proxied by government expenditure on environmental protection as a share of gross domestic product (GDP), exerts significant impacts on environmental conditions among Asian countries. For Asian countries, basically three main conclusions can be drawn that may be useful for improving the condition of environmental quality: (i) the authority should increase the share of government expenditure on environmental protection, since it contributes significantly to the reduction of CO2 emissions and the promotion of energy efficiency; (ii) the government should make an effort to control the overheating economic growth, since excessive economic growth is detrimental to the environment, and increasing GDP per capita leads to increasing CO2 emissions, decreasing energy efficiency, and decreasing comprehensive environmental performance; and (iii) although foreign direct investment has no impact on CO2 emissions and the Environmental Performance Index, it exerts a significantly negative impact on energy intensity and thus promotes an effect on energy efficiency; therefore, we recommend that the government should implement relevant policies to attract more foreign investment.
    Keywords: environmental performance; environmental governance; government expenditure
    JEL: H11 Q56 Q58
    Date: 2019–03–25
  33. By: Saleh Al Muhanna; Imtenan Al-Mubarak; Brian Efird; Faisal Al-Ghamdi (King Abdullah Petroleum Studies and Research Center)
    Abstract: This study assesses whether there are politically plausible paths to more quickly gain support for restarting Japanese nuclear power plants and considers alternative scenarios. It builds on the 2018 KAPSARC discussion paper, “The Policymaking Process to Restart Japanese Nuclear Power,” which detailed a baseline scenario for the political feasibility of restarting Japanese nuclear power plants.
    Keywords: Collective Decision-Making Processes (CDMPs), KAPSARC Toolkit for Behavioral Analysis (KTAB), Nuclear Power, Electric Power
    Date: 2019–10–23
  34. By: João Tovar Jalles
    Abstract: We provide a comprehensive analysis of the relationship between greenhouse gas (GHG) emissions and GDP in Brazil using both aggregate and state-level data. The trend or Kuznets elasticity is about 0.8 for Brazil, higher than that in advanced countries but below that of major emerging markets. The elasticity is somewhat higher for consumption-based emissions than for production-based emissions, providing evidence against the “pollution haven” hypothesis. Additional evidence comes from state-level data analysis where one can observe a great deal of heterogeneity but also some hope as far as decoupling is concerned. In addition to the trend relationship between emissions and output, we find that there does not seem to exist a cyclical relationship holding in Brazil at the aggregate level (despite having become more procyclical over time), but it does exist in a few states.
    Keywords: Green House Gas, Cycle, Environmental Kuznets Curve, Brazil, Regional analysis, Detrending, Filtering
    JEL: E32 O44 Q43 Q54 Q56
    Date: 2019–11
  35. By: Minh Ha-Duong (VIET - Vietnam Initiative for Energy Transition, CIRED - Centre International de Recherche sur l'Environnement et le Développement - CIRAD - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique); Sven Teske (UTS - University of Technology Sydney); Dimitri Pescia (Agora Energiewende); Mentari Pujantoro
    Abstract: Vietnam has an excellent wind resource, and the cost of producing electricity from wind has decreased continuously over the last decade. After the feed in tariff for onshore wind power was raised to 8.5 UScents / kWh in 2018, the sector is finally taking off. The inventory of existing onshore wind power projects in Vietnam shows that the sector is on track to meet the government targets for 2020 and 2025. We explored three scenarios for wind power development in Vietnam up to 2030 and conclude that the wind power installed capacity by that year could be 12-15 GW onshore, 10-12 GW offshore. The policy implications are that first, the next power development plan of Vietnam provides an important opportunity to increase at low costs the level of ambition of wind power development. Second, flexibility should be the guiding principle of that plan. Third, to realize the large potential of offshore wind power, infrastructure planning has to start soon.
    Keywords: wind energy,Vietnam,scenarios 1
    Date: 2019–10–23
  36. By: Bertrand Rioux; Philipp Galkin; Frederic Murphy; Axel Pierru; Artem Malov; Felipe Feijoo Palacios; Yan Li; Kang Wu (King Abdullah Petroleum Studies and Research Center)
    Abstract: Despite significant progress made by China in liberalizing its natural gas market, certain key areas such as market access and pricing mechanisms remain heavily monopolized or controlled by the government. To assess how such distortions impact the market, we developed a Mixed Complementarity Problem model of China’s natural gas supply industry, calibrated to 2015 data.
    Keywords: Energy Mix, Liquified Natural Gas (LNG), Mixed Complimentarity Problem (MCP) Model, National Oil Companies (NOCs), Natural Gas, Economic Modeling, Price Caps, Price Reform
    Date: 2018–05
  37. By: Abdelrahman Muhsen; Amro Elshurafa (King Abdullah Petroleum Studies and Research Center)
    Abstract: Rooftop solar photovoltaic (PV) systems, commonly referred to as distributed generation (DG) solar systems, can play a central role in the energy mix for sustainable cities. As with all forms of power generation, DG carries technical, financial, policy, and market implications that impact utilities, governments, businesses and other stakeholders.
    Keywords: Distributed Energy Generation (DEG), Rooftop solar, Solar PV
    Date: 2019–10–01
  38. By: Rubal Dua; Tamara Sheldon (King Abdullah Petroleum Studies and Research Center)
    Abstract: This paper investigates the drivers of recent improvements in Saudi Arabia’s new light-duty vehicle fleet fuel economy. A vehicle choice model is estimated using aggregate and disaggregate new vehicle purchase data. The estimates are used to simulate counterfactual policy scenarios.
    Keywords: Automobile Transport, Fuel Efficient Vehicles, Fuel Price, Gasoline Consumption, Gasoline Demand
    Date: 2019–04–30
  39. By: Anne-Sophie Corbeau; Shahid Hasan; Swati Dsouza (King Abdullah Petroleum Studies and Research Center)
    Abstract: Indian policymakers have stressed the role and relevance of natural gas in India’s overall energy mix in the 21st century but expectations of its share have been scaled back. For example, the Hydrocarbon Vision 2025, released in 1999, projected the share of gas would reach 20 percent of the primary energy mix by 2025, while India’s current vision puts this target at 15 percent by 2030. Now, however, India’s climate change pledge at the United Nations Conference of Parties 21 (COP21) is set to reverse this with policies to promote gas in industry and transportation as well as its complementary role in achieving ambitious renewable energy targets in the long term.
    Keywords: Gas markets, Liquified Natural Gas (LNG), Natural Gas
    Date: 2018–10
  40. By: Shigeru Matsumoto; Hajime Sugeta
    Abstract: Households. energy-saving activities are often categorized into efficiency investment and curtailment action. Although households use these two activities simultaneously, previous studies have analyzed these two activities separately. In this study, we develop an energy-saving model based on a household production framework to show how these two activities are related. We assume that a household allocates time among market work, leisure, and curtailment action. We further assume that the household spends income on purchasing market goods, energy efficiency investment, and energy service. The household receives utility from entertainment activity and energy service but both market goods and leisure time are necessary for entertainment activity. If the household spends time on curtailment action, then leisure time form entertainment activity will be reduced. In contrast, if the household spend money for efficiency investment, then market goods available for entertainment activity will be reduced. With this household production framework, we show that a household can use energy efficiency investment and curtailment action jointly; namely, a household who invest heavily in energy efficiency will spend more time on curtailment action. In the empirical section, we use microlevel data from the Survey on Carbon Dioxide Emission from Households (SCDEH) to examine the validity of this prediction in a real world setting. SCDDH contains a wide variety of information related to household's energy usage, and both curtailment actions of households and vintage of appliances that households own were surveyed. Using this information, we examine whether the intensity of curtailment action varies between households owning new and old appliances. We show that households using an old television (TV) turn off the main switch of TV more frequently but those using a new refrigerator (REF) adjust the temperature according to the season and avoid overstuffing to maintain cooling efficiency. Furthermore, we show that households installing light emitting diode (LED) lamps control brightness of rooms and those using a new air conditioner (AC) set room temperature higher. Therefore, we observe that respondents jointly use efficiency investment and curtailment action, except in the case of a TV switch-off. This result predicts that the promotion of energy saving products will not hinder the households' voluntary energy saving practice.
    Date: 2019–08
  41. By: Brian Efird; Saleh Al Muhanna; Imtenan Al-Mubarak; Shahad Turkistani; Faisal Al-Ghamadi (King Abdullah Petroleum Studies and Research Center)
    Abstract: The Japanese government’s decision to continue restarting nuclear power is shaped by a combination of domestic political concerns, energy security challenges, and its ability to meet climate change commitments and targets. Nuclear power plants have started to come back online, but there is still a question regarding the scope and timing for restarting the remaining reactors. In this paper, we apply a model of collective decision-making processes (CDMPs) to assess the political will for restarting nuclear power plants in Japan.
    Keywords: Collective Decision Making Processes (CDMPs), Electric Power, Nuclear Power, KAPSARC Toolkit for Behavioral Analysis (KTAB)
    Date: 2018–12
  42. By: David Hobbs; Eric Williams; Adam Sieminski; Keigo Akimoto; Jun Arima; Mustafa Babiker; Mark Caine; Hiroyuki Tezuka; Nico Stehr; Eija-Riitta Korhola; Masakazu Toyoda (King Abdullah Petroleum Studies and Research Center)
    Abstract: A viable, least-cost pathway to a low greenhouse gas (GHG) emissions future must lie within the United Nations Framework Convention on Climate Change (UNFCCC) Paris Agreement. The rulebook for the Agreement was in many ways rewritten at the 2018 United Nations Climate Change Conference (COP24) in Katowice, Poland. The flexible nature of the Agreement allows the international community to shift course as necessary.
    Keywords: Climate Change, Climate change policy, Paris agreement, Technology Innovation, Technology policy
    Date: 2019–08–29
  43. By: Philipp Galkin; Tarek Atalla; Zhongyuan Ren (King Abdullah Petroleum Studies and Research Center)
    Abstract: This paper identifies key determinants that appear to shape OPEC’s quota strategy and implementation. Using econometric estimations, it examines the factors that seem to most influence members’ adherence to their production commitments in the short term and what drives the organization’s quota decisions and level of compliance in the longer term.
    Keywords: Crude oil, External shocks, Gulf Cooperation Council (GCC), Oil demand, OPEC, Petroleum industry and trade, Spare capacity
    Date: 2018–07
  44. By: Doda, Baran; Quemin, Simon; Taschini, Luca
    Abstract: We formally study the determinants, magnitude and distribution of efficiency gains generated in multilateral linkages between permit markets. We provide two novel decomposition results for these gains, characterize individual preferences over linking groups and show that our results are largely unaltered with strategic domestic emissions cap selection or when banking and borrowing are allowed. Using the Paris Agreement pledges and power sector emissions data of five countries which all use or considered using both emissions trading and linking, we quantify the efficiency gains. We find that the computed gains can be sizable and are split roughly equally between effort and risk sharing.
    Keywords: Climate change policy; International emissions trading systems; Multilateral linking; Effort sharing; Risk sharing; ES/K006576/1
    JEL: Q58 H23 F15
    Date: 2019–09–13
  45. By: A. H. Truong (Centre for Research and Technology Transfer - VAST - Vietnam Academy of Science and Technology); Minh Ha-Duong (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)
    Abstract: Open field burning of rice straw regularly contributes to severe air quality issues affecting millions of inhabitants in the city of Ha Noi. We examine how much replacing open field burning by co-firing mitigates local air pollutants and greenhouse gases emissions. We select two coal power plants located in the North of Vietnam as specific examples. Our findings show that co-firing straw in these plants at 5% mixing ratio on heat basis can reduce greenhouse gas emission as well as air pollutant emissions (SO 2 , PM10 and NO x) from 3% up to 13%. We examined the social value of these emission reductions using external costs factors. The health benefits of improving air quality by disposing of straw at a large coal power plant instead of open field burning are over ten million USD per year. This is the same order of magnitude as the technical costs of co-firing. Greenhouse gas emissions reduction benefits appear smaller.
    Date: 2018
  46. By: Aljawhara Al Quayid; Nourah Al Hosain; Yagyavalk Bhatt; Paul Mollet (King Abdullah Petroleum Studies and Research Center)
    Abstract: India’s greenhouse gas emissions have grown along with its rapid economic growth, making it the world’s third-largest emitter after China and the United States. Under the Paris Agreement, India has committed to reduce its emissions intensity relative to its GDP by 33-35% by 2030, compared with its 2005 level. In this study, we assess the evolving political will to enhance India’s stated commitment to combat climate change.
    Keywords: India, Green House Gas Emissions (GHGs), Paris Agreement, Climate Change
    Date: 2019–09–18
  47. By: Gupta, Aashish; Vyas, Sangita; Hathi, Payal; Khalid, Nazar; Srivastav, Nikhil; Spears, Dean; Coffey, Diane
    Abstract: Solid fuel use is an important contributor to air pollution and disease burden in India. We present survey evidence documenting LPG ownership and cooking fuel use in rural north India. LPG ownership has increased rapidly, substantially driven by the Ujjwala Yojana. Three-quarters of rural households in Bihar, Madhya Pradesh, Rajasthan, and Uttar Pradesh now have LPG. Almost all of these households also have a stove that uses solid fuels, and among those owning both, almost three-quarters used solid fuels the day before the survey. Household economic status, relative costs of cooking fuels, gender inequality, and beliefs regarding the ease, food taste, and health impacts of cooking with solid fuels versus LPG are important contributors to high solid fuel use despite LPG ownership. Households that continue to use solid fuels continue to expose themselves and their neighbours to harmful air pollution. To realize the full health benefits of Ujjwala’s expansion in LPG ownership, attention must now be turned towards discouraging the use of solid fuels and promoting exclusive use of LPG. This is an urgent priority for research, policy, and action.
    Date: 2019–03–29
  48. By: Wolff, Stefanie (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN)); Madlener, Reinhard (E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN))
    Abstract: This study assesses respondents’ preferences for privately-used passenger electric vehicle (EV) charging with respect to the six attributes: (1) place of charging; (2) charging duration (full charge); (3) charging technology; (4) waiting time for charging spot to become available; (5) share of renewables in the electricity mix used for vehicle charging; and (6) total cost for the whole bundle of attributes per month. Due to the low number of current EV users in Germany, investigating consumers’ EV charging infrastructure preferences and their willingness to pay (WTP) for it based on real usage data is challenging. In addition, the results would not be directly transferable to the development of sound business cases since the sample size is too small. Therefore, we gathered data through a Discrete Choice Experiment (DCE) conducted in Germany (N = 4,101). Our DCE measures the preferences for certain attributes of EV charging infrastructures indirectly by confronting participants with hypothetical choice bundles. We analyze the data using conditional logit models, including fixed effects at the participant level, in order to gain actionable insights into the expected charging behavior of current and future EV drivers. We predict tendencies of consumer behavior and show that locational and time attributes are highly appreciated. Respondents are willing to pay, on average, around 22 €/month more for charging at home rather than at work and 46.26 €/month more for charging at home rather than on the roadside. For a reduction in charging time from 8 h to 7 h, respondents are willing to pay around 8 €/month; whereas from 8 h to 10 min, respondents are willing to pay around 70 €/month for all monthly charging processes. We also find WTP of five specific consumer categories (environmentalists, EV owners, EV experts, at-home charger, and home owners). Our results could be useful for charging point operators.
    Keywords: Electric mobility charging behavior; Discrete choice experiment; Econometric modeling; Willingness to pay
    JEL: C25 D12 M38 Q58 R40
    Date: 2019–03–01
  49. By: Gasmi, Farid; Hanspach, Philip
    Abstract: This article proposes a two-country model of electricity trade under peak-load pricing. We apply the model to France and the UK to assess the benefit to the UK of trade within the European internal energy market (IEM). Calibration and simulations of the model aimed at simulating bilateral trade in the market coupling process at electricity exchanges show the following. First, the occurrence of gains from trade for both countries is highly dependent on whether imported electricity affects the price in the local market and whether imports alleviate scarcity. Second, the main effect of importing electricity is a shift in welfare from domestic producers to domestic consumers of the importing country. Finally, the UK’s membership in the IEM generates additional welfare for the UK of up to 900 M€ per year across a range of scenarios in which the number of on-peak periods are exogenously varied in a conservative way relative to the actual data.
    Keywords: Electricity, Market Coupling, Brexit, Calibration, Simulation.
    Date: 2019–11
  50. By: Even Comfort Hvinden
    Abstract: The market behavior nationalized oil companies in the Organization of Petroleum Exporting Countries (OPEC) is starkly time-varying. I rationalize OPEC's behavior in an infinitely repeated game of Cournot competition with imperfect monitoring, capacity constraints to output, and demand evolving as a Markov chain. I adapt the methodology of Abreu, Pearce, and Stacchetti (1990) to derive optimal symmetric equilibria. High powered incentives are created by the threat of output wars, the severity of which is endogenously determined by current and future expected market conditions. Implied price elasticities of supply increase in magnitude and may change sign under constrained incentive creation. The key empirical implication is that unanticipated changes to OPEC's strategic environment will persistently alter their behavior and create breaks in the joint stochastic distribution of equilibrium prices and quantities.
    Date: 2019–11
  51. By: Gunnar Bårdsen (Department of Economics, Norwegian University of Science and Technology); Stan Hurn (School of Economics and Finance, QUT, Australia); Kenneth Lindsay (Department of Mathematics, University of Glasgow, Scotland)
    Abstract: The paper examines several simple dynamic probit models in terms of their usefulness in forecasting wind drought, defined as 5 or more hours of wind speed less than 3.5 m/sec during the busiest periods of the day for the demand for electricity. Dynamic probit models work well in terms of their ability to forecast and are robust by comparison with an approach based on modelling counts. There seems little advantage to moving to modelling counts unless there is added advantage to market participants in knowing the actual prediction for the number of hours of low wind. Future research should focus on the problem of identifying the first day in a series of days with slow winds, and the first day of reasonable wind after a spell of drought. Both the probit and count models could be improved in this regard.
    JEL: C22 G00
    Date: 2019–11–15
  52. By: Alfredo Trespalacios; Lina M. Cortés; Javier Perote
    Date: 2019–11–22
  53. By: Mikkel Bennedsen (Aarhus University and CREATES); Eric Hillebrand (Aarhus University and CREATES); Siem Jan Koopman (Vrije Universiteit Amsterdam and CREATES)
    Abstract: We propose a structural augmented dynamic factor model for U.S. CO2 emissions. Variable selection techniques applied to a large set of annual macroeconomic time series indicate that CO2 emissions are best explained by industrial production indices covering manufacturing and residential utilities sectors. We employ a dynamic factor structure to explain, forecast, and nowcast the industrial production indices and thus, by way of the structural equation, emissions. We show that our model has good in-sample properties and out-of-sample performance in comparison with univariate and multivariate competitor models. Based on data through September 2019, our model nowcasts a reduction of about 2.6% in U.S. CO2 emissions in 2019 compared to 2018 as the result of a reduction in industrial production in residential utilities.
    Keywords: CO2 emissions, macroeconomic variables, dynamic factor model, variable selection, forecasting, nowcasting
    JEL: C01 C13 C32 C51 C52 C53 C55 C82 Q43 Q47
    Date: 2019–11–27
  54. By: Emmanuelle Leturque (LEDi - Laboratoire d'Economie de Dijon - UB - Université de Bourgogne - CNRS - Centre National de la Recherche Scientifique); Mathieu Sanch-Maritan (CREAM - Centre de Recherche en Economie Appliquée à la Mondialisation - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université)
    Abstract: This article explore how the relation between productivity and local city-size can be mitigated by pollution. More specifically, we estimate agglomeration economies considering a new source of heterogeneity among industries: the degree of pollution. Due to pollution perception acting as a dispersion force, we expect net agglomeration economies to be lower for polluting firms. In fact, polluting firms may anticipate that households and other firms are reluctant to locate near sources of pollution. In this paper, we exploit spatial data on sectoral emissions for a large number of air pollutants. We define a continuous variable of pollution that varies across sectors and employment zones. Our finding are twofold. First we find that agglomeration economies are lower for polluting sectors. Second we find that negative agglomeration are observed for some key pollutant such as carbon dioxide, nitrogen dioxide, lead or sulfur dioxide.
    Keywords: Agglomeration economies,Polluting sectors,Negative externalities
    Date: 2019–11–01
  55. By: McLachlan, Robert
    Abstract: Reviews the discovery of the phenomenon of the tragedy of the commons, from Marco Polo, through William Foster Lloyd in 1833, H Scott Gordon in 1954, and Garrett Hardin in 1968; it is argued that the first known realization that anthropogenic climate change is a global tragedy of the commons by Chen, Winter, and Bergman in 1980, was ahead of its time and was, sadly, insufficiently recognized. It is argued that the tragedy of the commons framing was slow to be discovered, to be appreciated, and has yet to achieve widespread popular recognition. Its contemporary relevance is illustrated through a discussion of recent work of Thomas Hale.
    Date: 2019–06–03
  56. By: Draper, John; Bhaneja, Bill
    Abstract: This article analyses the development of nuclear fusion energy, now projected to be commercialized around 2030, and its implications for worsening conflicts and for peace-building. To do so, we apply Glenn D. Paige’s (2009) nonkilling global political science (NKGPS) conceptual framework and Carayannis and Campbell’s (2010) Quintuple Helix innovation ecosystem. The arrival of nuclear fusion energy will be an event nearly unprecedented in human history, the closest parallel being the Trinity Test which heralded the Atomic Age, the implications of which for perpetuating conflict and potentially for peace-building were keenly understood. As with fission, fusion energy can and likely will be weaponized as it possesses an intrinsic benefit compared to nuclear fission, namely the lower level of radiation involved. However, the innovation that is leading to nuclear fusion energy is not taking place in a vacuum. Unlike the Trinity Test, which was conducted in secret in wartime without any civilian or media contribution, nuclear fusion will be developed in peacetime in the glare of civil society and the global media, including social media, i.e., in a Quadruple Helix innovation ecosystem. Immediately following the Second World War, despite initial progress, the USSR rejected the US Baruch Plan to put atomic energy and weapons under the United Nations to stifle a nuclear arms race, due to an insufficient political imperative to cooperate with the US, and vice versa. The result was the Cold War. However, the much cleaner nuclear fusion energy, once developed, can be rapidly applied to address climate change, i.e., the Quintuple Helix. As such, a unique opportunity will emerge to leverage a new normative nuclear order via a new Baruch Plan, with the IAEA overseeing the development and applications of fusion energy, the United Nations working towards a universal peace treaty to end war, and humanity re-prioritising its goals.
    Date: 2019–01–01
  57. By: Chen, Hongyi (Asian Development Bank Institute); Cao, Shuo (Asian Development Bank Institute)
    Abstract: We identify five factors that can capture 95% of the variance across 39 United States (US) dollar exchange rates based on the principal component method. We use a time-varying parameter factor-augmented vector autoregressive model to analyze the determinants of movements in these exchange rates, and reveal that their impact on global oil prices and the People’s Republic of China’s growth has increased significantly since 2008. In particular, the variance of US dollar exchange rates has mainly been driven by these two shocks in recent years. The impact of monetary policy shocks on the currency pairs is comparatively small.
    Keywords: exchange rates; commodity prices; People’s Republic of China’s growth; monetary policy; factor model; TVP-FAVAR; Bayesian methods
    JEL: C11 C22 F31 G12
    Date: 2019–03–27
  58. By: Gupta, Aashish
    Abstract: Chronic respiratory conditions are a leading cause of death in the world. Using data on lung obstruction from the WHO Survey of Global AGEing and Adult Health (WHO-SAGE 2007-08), this paper studies the determinants of respiratory health in India, home to a third of all deaths from Chronic Obstructive Pulmonary Disease. First, we find that smokers and members of households that use solid fuels (wood, biomass, coal or dung) for cooking have higher lung obstruction. Second, even if a respondent's household uses clean fuels, their lung obstruction is higher if their neighbors use solid fuels. In neighborhoods with high solid fuel use, the lungs of members of households that use clean fuels can be as obstructed as lungs of members of households that use solid fuels. These negative externalities of solid fuel use are robust to additional controls for neighborhood socioeconomic status, falsification tests, tests with placebo measures, and tests using alternative measures of respiratory health as outcomes. Third, the influence of the determinants is patterned by gender. Smoking tobacco is an important influence on lung obstruction among men. Confirming non-linear dose-response relationships, we find that women from households that use solid fuels are the only group not further harmed by neighborhood solid fuel smoke, possibly because of high exposure to pollutants while cooking. The study improves our understanding of behavioral, social, and environmental determinants of respiratory health in India. Importantly, it makes a case for greater public investments to promote the adoption and use of cleaner fuels.
    Date: 2019–06–04
  59. By: Dongmei Chen; Paul Mollet; Brian Efird (King Abdullah Petroleum Studies and Research Center)
    Abstract: This paper describes the current governance structure of China’s energy sector. The interplay between central government, the Communist Party, regional governments and key economic actors within the framework of China’s five-year planning processes are complex and constantly evolving. As such, the structure and processes for energy governance are similarly complex. The oversight and process for governing China’s energy sector will continue to change as the country transitions from an emerging to a mature economy. This paper provides an overview of how key decisions in the energy sector are currently made, implemented and monitored in China as the country is consolidating its policy and decision making processes. The paper’s aim is to provide insights for those outside China who wish to better understand Chinese energy governance, from policymakers, researchers and academics, to diplomats, or corporations wishing to invest in the country.
    Keywords: China Belt and Road Inititative (BRI), Energy Policy, Energy Policy Analysis, Foreign Direct Investment
    Date: 2019–03–14
  60. By: Franco, Marco Paulo Vianna
    Abstract: A review of Nathaniel Wolloch's Nature in the History of Economic Thought: how natural resources became an economic concept
    Date: 2019–01–23
  61. By: Heissel, Jennifer (Naval Postgraduate School); Persico, Claudia (American University); Simon, David (University of Connecticut)
    Abstract: We examine the effect of school traffic pollution on student outcomes by leveraging variation in wind patterns for schools the same distance from major highways. We compare within-student achievement for students transitioning between schools near highways, where one school has had greater levels of pollution because it is downwind of a highway. Students who move from an elementary/middle school that feeds into a "downwind" middle/high school in the same zip code experience decreases in test scores, more behavioral incidents, and more absences, relative to when they transition to an upwind school. Even within zip codes, microclimates can contribute to inequality.
    Keywords: air pollution, academic achievement, child health
    JEL: Q53 I24 I14
    Date: 2019–11
  62. By: Farjam, Mike; Nikolaychuk, Olexandr; Bravo, Giangiacomo
    Abstract: So far, there has been mixed evidence in the literature regarding the relation between environmental attitudes and actual ``green'' actions, something known as attitude-behavior gap. This raises the question of when attitudes can actually work as a lever to promote environmental objectives, such as climate change mitigation, and, conversely, when other factors would be more effective. We tested the effect of environmental attitudes on behavior in an online experiment with real money at stake and real-world consequences. We found that environmental attitudes affected behavior in low-cost situations while increasing contribution costs generally reduced their effect. This finding is consistent with the low-cost hypothesis of environmental behavior and has important consequences for the design of more effective climate policies in a democratic context.
    Date: 2019–03–13
  63. By: Pablo Martín Urbano; Juan Ignacio Sánchez Gutiérrez; Abril Yuriko Herrera Ríos
    Abstract: Este artículo explica los modelos básicos de transporte por carretera, centrado especialmente en las conexiones dentro de las ciudades, con el propósito de presentar un panorama amplio de los principales planteamientos de modelización de emisiones de carbono. Aquí se desarrollan los aspectos teóricos generales que enmarcan este tipo de herramientas y se revisa la importancia de los modelos para la evaluación de las emisiones de carbono causadas por la movilidad urbana. Asimismo, se plantea una tipología de modelos de transporte carretero, algunos métodos de cálculo de emisiones comúnmente utilizados y sus limitaciones.
    Keywords: Trasporte, emisiones, modelos de transporte.
    JEL: Q51 Q52 R40
    Date: 2019–10–01

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